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Lennar Reports Fourth Quarter EPS of $0.16

MIAMI, Jan. 11, 2012 /PRNewswire/ --

2011 Fourth Quarter

  • Revenues of $952.7 million – up 11%
  • Net earnings of $30.3 million, or $0.16 per diluted share, compared to $32.0 million, or $0.17 per diluted share
  • Lennar Homebuilding operating earnings of $25.2 million, compared to $27.0 million
  • Gross margin on home sales:
    • 21.6% (excluding valuation adjustments of $17.9 million) - improved 80 basis points
    • 19.4% (including valuation adjustments) - improved 170 basis points
  • S,G&A expenses as a % of revenues from home sales of 13.8%, improved 30 basis points
  • Operating margin on home sales:
    • 7.8% (excluding valuation adjustments of $17.9 million) - improved 110 basis points
    • 5.6% (including valuation adjustments) - improved 190 basis points
  • Lennar Financial Services operating earnings of $9.1 million, compared to $11.7 million
  • Rialto Investments operating earnings totaled $8.0 million (including $2.0 million of net loss attributable to noncontrolling interests), compared to $12.4 million (net of $12.7 million of net earnings attributable to noncontrolling interests)
  • Rialto Investments operating earnings include mark-to-market unrealized losses of $7.6 million related to the AB PPIP fund, compared to mark-to-market unrealized gains of $4.7 million in Q4 2010.
  • Deliveries of 3,375 homes – up 9%
  • New orders of 3,027 homes – up 20%
  • Cancellation rate of 20%
  • Backlog of 2,171 homes – up 35%
  • Lennar Homebuilding cash and cash equivalents of $1.0 billion
  • Lennar Homebuilding debt to total capital, net of cash and cash equivalents, of 46.4%

2011 Fiscal Year

  • Revenues of $3.1 billion – up 1%
  • Net earnings of $92.2 million, or $0.48 per diluted share, compared to $95.3 million, or $0.51 per diluted share
  • Deliveries of 10,845 homes –down 1%
  • New orders of 11,412 homes – up 4%

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, 2011. Fourth quarter net earnings attributable to Lennar in 2011 were $30.3 million, or $0.16 per diluted share, compared to fourth quarter net earnings attributable to Lennar in 2010 of $32.0 million, or $0.17 per diluted share. Net earnings attributable to Lennar for the year ended November 30, 2011 were $92.2 million, or $0.48 per diluted share, compared to net earnings attributable to Lennar for the year ended November 30, 2010 of $95.3 million, or $0.51 per diluted share.

Stuart Miller, Chief Executive Officer of Lennar Corporation, said, "We are pleased to report EPS of $0.16 for our fourth fiscal quarter of 2011, making this our seventh consecutive quarter of profitability. Despite operating in a challenging real estate market, we achieved profitability in all of our business segments."

"During the quarter, we continued to manage our homebuilding business carefully with tight controls over our costs and a focus on improving our gross margins. We benefited greatly from our strategic capital investments in new higher margin communities, which helped us produce a 21.6% gross margin, excluding valuation adjustments, in the fourth quarter."

Mr. Miller continued, "As we come to the end of 2011 and head into 2012, we have seen the market start to stabilize, driven by a combination of low home prices and low interest rates, making the decision to purchase a new home more attractive, compared to the heated rental market. These factors are reflected in our new orders and sales backlog, which increased 20% and 35%, respectively, from the prior year quarter."

"On the Rialto side of our business, our first real estate fund successfully raised $700 million and is now contributing management fees and investment income to our bottom line results. We continue to see significant opportunities to invest in distressed assets for our Rialto business."

Mr. Miller concluded, "Our balance sheet strength will allow us to capitalize on future opportunities as they present themselves, and we believe that our Homebuilding and Rialto segments are well positioned to lead the way to a third consecutive profitable year in 2012."

RESULTS OF OPERATIONS

THREE MONTHS ENDED NOVEMBER 30, 2011 COMPARED TO
THREE MONTHS ENDED NOVEMBER 30, 2010

Lennar Homebuilding
Revenues from home sales increased 13% in the fourth quarter of 2011 to $816.5 million from $725.8 million in the fourth quarter of 2010. Revenues were higher primarily due to a 10% increase in the number of home deliveries, excluding unconsolidated entities and a 2% increase in the average sales price of homes delivered. New home deliveries, excluding unconsolidated entities, increased to 3,359 homes in the fourth quarter of 2011 from 3,060 homes last year. The average sales price of homes delivered increased to $243,000 in the fourth quarter of 2011 from $238,000 in the same period last year. Sales incentives offered to homebuyers were $33,900 per home delivered in the fourth quarter of 2011, or 12.2% as a percentage of home sales revenue, compared to $33,700 per home delivered in the fourth quarter of 2010, or 12.4% as a percentage of home sales revenue. 

Gross margins on home sales were $158.4 million, or 19.4%, in the fourth quarter of 2011, which included $17.9 million of valuation adjustments, compared to gross margins on home sales of $128.7 million, or 17.7%, in the fourth quarter of 2010, which included $22.3 million of valuation adjustments. Gross margin percentage on home sales improved compared to last year primarily due to a reduction in valuation adjustments.

Gross profits on land sales totaled $0.8 million in the fourth quarter of 2011, net of $0.4 million of write-offs of deposits and pre-acquisition costs, compared to gross profits on land sales of $13.7 million in the fourth quarter of 2010, which included a $14.1 million reduction of an obligation related to a profit participation agreement, partially offset by $3.1 million in write-offs of deposits and pre-acquisition costs.

Selling, general and administrative expenses were $112.5 million and $102.0 million, respectively, in the fourth quarter of 2011 and 2010.  Selling, general and administrative expenses as a percentage of revenues from home sales improved 30 basis points to 13.8% in the fourth quarter of 2011, compared to 14.1% in the fourth quarter of 2010.

Lennar Homebuilding equity in loss from unconsolidated entities was $69.2 million in the fourth quarter of 2011, which primarily included the Company's share of valuation adjustments of $57.6 million related to an asset distribution from a Lennar Homebuilding unconsolidated entity as the result of a linked transaction. This was offset by a pre-tax gain of $62.3 million included in Lennar Homebuilding other income, net, related to that unconsolidated entity's net asset distribution. The transaction resulted in a net pre-tax gain of $4.7 million. Lennar Homebuilding equity in loss from unconsolidated entities was $1.7 million in the fourth quarter of 2010.

Lennar Homebuilding other income, net, totaled $69.7 million in the fourth quarter of 2011, which included the $62.3 million pre-tax gain discussed above. Lennar Homebuilding other income, net, totaled $4.9 million in the fourth quarter of 2010, net of $1.2 million of valuation adjustments to the Company's investments in unconsolidated entities.

Homebuilding interest expense was $43.2 million in the fourth quarter of 2011 ($20.9 million was included in cost of homes sold, $0.3 million in cost of land sold and $22.0 million in other interest expense), compared to $36.9 million in the fourth quarter of 2010 ($19.7 million was included in cost of homes sold, $0.6 million in cost of land sold and $16.6 million in other interest expense). Interest expense increased primarily due to an increase in the Company's outstanding debt compared to the same period last year.

Lennar Financial Services
Operating earnings for the Lennar Financial Services segment was $9.1 million in the fourth quarter of 2011, compared to operating earnings of $11.7 million in the same period last year. The decrease in profitability was due primarily to decreased volume in the segment's mortgage operations.

Rialto Investments
In the fourth quarter of 2011, operating earnings for the Rialto Investments segment were $6.0 million (net of $2.0 million of net loss attributable to noncontrolling interests), compared to operating earnings of $25.1 million (which included $12.7 million of net earnings attributable to noncontrolling interests) in the same period last year. In the fourth quarter of 2011, revenues in this segment were $46.5 million, which consisted primarily of accretable interest income associated with the segment's portfolio of real estate loans and fees for managing and servicing assets, compared to revenues of $19.7 million in the same period last year, which consisted primarily of accretable interest income associated with the segment's portfolio of real estate loans. In the fourth quarter of 2011, Rialto Investments other income, net, was $0.9 million, which consisted primarily of gains from acquisition of real estate owned through foreclosure as well as gains from real estate sales, offset by expenses related to owning and maintaining real estate owned assets. In the fourth quarter of 2010, Rialto Investments other income, net, was $17.3 million, which consisted primarily of gains from acquisition of real estate owned through foreclosure as well as gains from real estate sales.

The segment also had equity in earnings (loss) from unconsolidated entities of ($3.0) million in the fourth quarter of 2011, consisting primarily of $7.6 million of unrealized losses related to the Company's share of the mark-to-market adjustments of the investment portfolio underlying the AllianceBernstein L.P. ("AB") fund formed under the Federal government's Public-Private Investment Program ("PPIP"), partially offset by interest income earned by the AB PPIP fund and equity in earnings related to the Rialto Investments Real Estate Fund. This compares to equity in earnings (loss) from unconsolidated entities of $9.0 million in the same period last year, which included $4.7 million of unrealized gains related to the Company's share of the mark-to-market adjustments of AB PPIP investments. In the fourth quarter of 2011, expenses in this segment were $38.4 million, which consisted primarily of costs related to its portfolio operations, due diligence expenses related to both completed and abandoned transactions, and other general and administrative expenses, compared to expenses of $20.8 million in the same period last year.

Corporate General and Administrative Expenses
Corporate general and administrative expenses were $28.5 million, or 3.0% as a percentage of total revenues, in the fourth quarter of 2011, compared to $25.1 million, or 2.9% as a percentage of total revenues, in the fourth quarter of 2010.

Noncontrolling Interests
Net earnings (loss) attributable to noncontrolling interests were ($4.8) million and $10.5 million, respectively, in the fourth quarter of 2011 and 2010. Net loss attributable to noncontrolling interests during the fourth quarter of 2011 was attributable to noncontrolling interests related to the Company's homebuilding and Rialto Investments operations. Net earnings attributable to noncontrolling interests during the fourth quarter of 2010 was primarily related to net earnings attributable to the FDIC's interest in the portfolio of real estate loans that the Company acquired in partnership with the FDIC, partially offset by net loss attributable to noncontrolling interests related to the Company's homebuilding operations.

Change in Reportable Segments

The Company has disaggregated its Southeast Florida homebuilding division from its Homebuilding East reportable segment and has presented Homebuilding Southeast Florida as a separate reportable segment due to the division currently achieving one of the quantitative thresholds set forth in Accounting Standard Codification Topic 280, Segment Reporting, ("ASC 280"). In addition, the Company reclassified the homebuilding activities in the states of Georgia, North Carolina and South Carolina from Homebuilding Other to the Homebuilding East reportable segment because these states currently meet the reportable segment aggregation criteria in ASC 280. All prior year segment information has been restated to conform to the quarterly and fiscal year 2011 presentation, and have no effect on the Company's consolidated financial position, results of operations or cash flows for such periods.

Debt Transactions
In October 2011, the Company retired the remaining $113.2 million of its 5.95% senior notes due October 2011 for 100% of the outstanding principal amount plus accrued and unpaid interest as of the maturity date. In November 2011, the Company issued $350 million of 3.25% convertible senior notes due 2021 in a private offering under SEC Rule 144A. Subsequent to November 30, 2011, the Company issued an additional $50.0 million of the 3.25% convertible senior notes due 2021 to cover over-allotments.

YEAR ENDED NOVEMBER 30, 2011 COMPARED TO
YEAR ENDED NOVEMBER 30, 2010

Lennar Homebuilding
For both the years ended November 30, 2011 and 2010, revenues from home sales were $2.6 billion. There was a 1% increase in the average sales price of homes delivered, offset by a 1% decrease in the number of home deliveries, excluding unconsolidated entities. New home deliveries, excluding unconsolidated entities, decreased to 10,746 homes in the year ended November 30, 2011 from 10,859 homes last year. The average sales price of homes delivered increased to $244,000 in the year ended November 30, 2011 from $243,000 in the same period last year. Sales incentives offered to homebuyers were $33,700 per home delivered in the year ended November 30, 2011, or 12.1% as a percentage of home sales revenue, compared to $32,800 per home delivered in the same period last year, or 11.9% as a percentage of home sales revenue.

Gross margins on home sales were $523.4 million, or 19.9%, in the year ended November 30, 2011, which included $35.7 million of valuation adjustments, compared to gross margins on home sales of $517.9 million, or 19.7%, in the year ended November 30, 2010, which included $44.7 million of valuation adjustments.

Gross profits on land sales totaled $7.7 million in the year ended November 30, 2011, net of $0.5 million of valuation adjustments and $1.8 million in write-offs of deposits and pre-acquisition costs, compared to gross profits on land sales of $21.4 million in the year ended November 30, 2010, primarily due to a $14.1 million reduction of an obligation related to a profit participation agreement. Gross profits on land sales for the year ended November 30, 2010 were net of $3.4 million valuation adjustments and $3.1 million in write-offs of deposits and pre-acquisition costs.

Selling, general and administrative expenses were $384.8 million in the year ended November 30, 2011, which included $8.4 million related to expenses associated with remedying pre-existing liabilities of a previously acquired company, offset by $8.0 million related to the receipt of a settlement discussed below. Selling, general and administrative expenses were $377.0 million in the year ended November 30, 2010. Selling, general and administrative expenses as a percentage of revenues from home sales increased to 14.7% in the year ended November 30, 2011, from 14.3% in 2010.

Lennar Homebuilding equity in loss from unconsolidated entities was $62.7 million in the year ended November 30, 2011, which primarily included the Company's share of valuation adjustments of $57.6 million related to an asset distribution from a Lennar Homebuilding unconsolidated entity as the result of a linked transaction. This was offset by a pre-tax gain of $62.3 million included in Lennar Homebuilding other income, net, related to that unconsolidated entity's net asset distribution. The transaction resulted in a net pre-tax gain of $4.7 million. In addition, Lennar Homebuilding equity in loss from unconsolidated entities included $8.9 million of valuation adjustments related to assets of Lennar Homebuilding's unconsolidated entities, offset by the Company's share of a gain on debt extinguishment at one of Lennar Homebuilding's unconsolidated entities totaling $15.4 million. In the year ended November 30, 2010, Lennar Homebuilding equity in loss from unconsolidated entities was $11.0 million, which included $10.5 million of valuation adjustments related to assets of Lennar Homebuilding unconsolidated entities, partially offset by a net pre-tax gain of $7.7 million as a result of a transaction by one of Lennar Homebuilding's unconsolidated entities.

Lennar Homebuilding other income, net, totaled $116.1 million in the year ended November 30, 2011, which included the $62.3 million pre-tax gain discussed above and $29.5 million related to the receipt of a settlement. The parties to certain litigation in which the Company was plaintiff entered into a settlement agreement in which they agreed the Company may make the following statement: "Lennar recently settled litigation against a third party in connection with Lennar's ongoing dispute with Nicolas Marsch, III and his affiliates. As a result of the settlement, the third party paid Lennar total cash consideration of $37.5 million and that the terms are confidential." Lennar Homebuilding other income, net, in the year ended November 30, 2011 also included $5.1 million related to the favorable resolution of a joint venture and the recognition of $10.0 million of deferred management fees related to management services previously performed for one of Lennar Homebuilding's unconsolidated entities. These amounts were partially offset by $10.5 million of valuation adjustments to the Company's investments in Lennar Homebuilding's unconsolidated entities. In the year ended November 30, 2010, Lennar Homebuilding other income, net, was $19.1 million, which included a $19.4 million pre-tax gain on the extinguishment of other debt and other income, partially offset by a pre-tax loss of $10.8 million related to the repurchase of senior notes through a tender offer.

Homebuilding interest expense was $163.0 million in the year ended November 30, 2011 ($70.7 million was included in cost of homes sold, $1.6 million in cost of land sold and $90.7 million in other interest expense), compared to $143.9 million in the year ended November 30, 2010 ($71.5 million was included in cost of homes sold, $2.0 million in cost of land sold and $70.4 million in other interest expense). Interest expense increased primarily due to an increase in the Company's outstanding debt compared to the same period last year.

Lennar Financial Services
Operating earnings for the Lennar Financial Services segment were $20.7 million in the year ended November 30, 2011, compared to operating earnings of $31.3 million in the same period last year. The decrease in profitability was due primarily to decreased volume in the segment's mortgage operations. In addition, in the year ended November 30, 2010, the Lennar Financial Services segment received $5.1 million of proceeds from the previous sale of a cable system.

Rialto Investments
In the year ended November 30, 2011, operating earnings for the Rialto Investments segment were $63.5 million (which included $28.9 million of net earnings attributable to noncontrolling interests), compared to operating earnings of $57.3 million (which included $33.2 million of net earnings attributable to noncontrolling interests) in the same period last year. In the year ended November 30, 2011, revenues in this segment were $164.7 million, which consisted primarily of accretable interest income associated with the segment's portfolio of real estate loans and fees for managing and servicing assets, compared to revenues of $92.6 million in the same period last year. In the year ended November 30, 2011, Rialto Investments other income, net, was $39.2 million, which consisted primarily of gains from acquisition of real estate owned through foreclosure, as well as gains from real estate sales, partially offset by expenses related to owning and maintaining those assets, and a $4.7 million gain on the sale of investment securities. In the year ended November 30, 2010, Rialto Investments other income, net, was $17.3 million, which consisted primarily of gains from acquisition of real estate owned through foreclosure as well as gains from real estate sales.

The segment also had equity in earnings (loss) from unconsolidated entities of ($7.9) million in the year ended November 30, 2011, consisting primarily of $21.4 million of unrealized losses related to the Company's share of the mark-to-market adjustments of the investment portfolio underlying the AB PPIP fund, partially offset by interest income earned by the AB PPIP fund and equity in earnings related to the Rialto Investments Real Estate Fund.  This compares to equity in earnings (loss) from unconsolidated entities of $15.4 million in the same period last year, which included $9.3 million of unrealized gains related to the Company's share of the mark-to-market adjustments of AB PPIP investments. In the year ended November 30, 2011, expenses in this segment were $132.6 million, which consisted primarily of costs related to its portfolio operations, due diligence expenses related to both completed and abandoned transactions, and other general and administrative expenses, compared to expenses of $67.9 million in the same period last year.

Corporate General and Administrative Expenses
Corporate general and administrative expenses were $95.3 million, or 3.1% as a percentage of total revenues, in the year ended November 30, 2011, compared to $93.9 million, or 3.1% as a percentage of total revenues, in the year ended November 30, 2010.

Noncontrolling Interests
Net earnings (loss) attributable to noncontrolling interests were $20.3 million and $25.2 million, respectively, in the year ended November 30, 2011 and 2010. Net earnings attributable to noncontrolling interests during both the years ended November 30, 2011 and 2010 were primarily related to the FDIC's interest in the portfolio of real estate loans that the Company acquired in partnership with the FDIC.

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.  Lennar's Rialto Investments segment is focused on distressed real estate asset investments, asset management and workout strategies. 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, 2010.  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 Wednesday, January 11, 2012.  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 203-369-3765 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,

 

 

 

 

2011

 

2010

 

2011

 

2010

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

Lennar Homebuilding

 

$

834,185

 

761,386

 

2,675,124

 

2,705,639

 

Lennar Financial Services

 

 

72,009

 

79,059

 

255,518

 

275,786

 

Rialto Investments

 

 

46,460

 

19,679

 

164,743

 

92,597

 

 

  Total revenues

 

$

952,654

 

860,124

 

3,095,385

 

3,074,022

 

 

 

 

 

 

 

 

 

 

 

 

Lennar Homebuilding operating earnings 

 

$

25,205

 

27,008

 

109,044

 

100,060

Lennar Financial Services operating earnings 

 

 

9,063

 

11,719

 

20,729

 

31,284

Rialto Investments operating earnings 

 

 

6,036

 

25,112

 

63,457

 

57,307

Corporate general and administrative expenses

 

 

(28,530)

 

(25,058)

 

(95,256)

 

(93,926)

Earnings before income taxes

 

 

11,774

 

38,781

 

97,974

 

94,725

Benefit for income taxes

 

 

13,697

 

3,737

 

14,570

 

25,734

Net earnings (including net earnings (loss)

 

 

 

 

 

 

 

 

 

 

 

attributable to noncontrolling interests)

 

 

25,471

 

42,518

 

112,544

 

120,459

 

Less: Net earnings (loss) attributable to 

 

 

 

 

 

 

 

 

 

 

 

noncontrolling interests

 

 

(4,807)

 

10,488

 

20,345

 

25,198

Net earnings attributable to Lennar 

 

$

30,278

 

32,030

 

92,199

 

95,261

 

 

 

 

 

 

 

 

 

 

 

 

Average shares outstanding:

 

 

 

 

 

 

 

 

 

 

Basic

 

 

184,723

 

183,102

 

184,541

 

182,960

 

Diluted

 

 

195,425

 

193,239

 

195,185

 

188,857

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.16

 

0.17

 

0.49

 

0.51

 

Diluted

 

$

0.16

 

0.17

 

0.48

 

0.51

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental information:

 

 

 

 

 

 

 

 

 

 

Interest incurred (1)

 

$

50,406

 

45,405

 

201,401

 

181,480

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBIT (2):

 

 

 

 

 

 

 

 

 

 

 

Net earnings attributable to Lennar

 

$

30,278

 

32,030

 

92,199

 

95,261

 

 

Benefit for income taxes

 

 

(13,697)

 

(3,737)

 

(14,570)

 

(25,734)

 

 

Interest expense

 

 

43,221

 

36,907

 

162,970

 

143,946

 

 

EBIT

 

 

$

59,802

 

65,200

 

240,599

 

213,473

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Amount represents interest incurred related to Lennar Homebuilding debt.

(2)

EBIT is a non-GAAP financial measure defined as earnings before interest and taxes.  This financial measure has been presented because the Company finds it important and 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. Although management finds EBIT 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. Management compensates for the limitations of using EBIT by using this non-GAAP measure only to supplement the Company's GAAP results. Due to the limitations discussed, EBIT should not be viewed in isolation, as it is not a substitute for GAAP measures.

    

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LENNAR CORPORATION AND SUBSIDIARIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Information

 

(In thousands)

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Years Ended

 

 

 

 

 

 

November 30,

 

November 30,

 

 

 

 

 

 

2011

 

2010

 

2011

 

2010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lennar Homebuilding revenues:

 

 

 

 

 

 

 

 

 

 

Sales of homes

$

816,523

 

725,795

 

2,624,785

 

2,631,314

 

 

Sales of land 

 

17,662

 

35,591

 

50,339

 

74,325

 

 

 

Total revenues

 

834,185

 

761,386

 

2,675,124

 

2,705,639

 

 

 

 

 

 

 

 

 

 

 

Lennar Homebuilding costs and expenses:

 

 

 

 

 

 

 

 

 

 

Cost of homes sold

 

658,152

 

597,080

 

2,101,414

 

2,113,393

 

 

Cost of land sold

 

16,826

 

21,878

 

42,611

 

52,968

 

 

Selling, general and administrative

 

112,462

 

102,049

 

384,798

 

376,962

 

 

Total costs and expenses

 

787,440

 

721,007

 

2,528,823

 

2,543,323

 

Lennar Homebuilding operating margins

 

46,745

 

40,379

 

146,301

 

162,316

 

Lennar Homebuilding equity in loss

 from unconsolidated entities

 

(69,242)

 

(1,656)

 

(62,716)

 

(10,966)

 

Lennar Homebuilding other income, net 

 

69,698

 

4,861

 

116,109

 

19,135

 

Other interest expense

 

(21,996)

 

(16,576)

 

(90,650)

 

(70,425)

 

Lennar Homebuilding operating earnings 

$

25,205

 

27,008

 

109,044

 

100,060

 

Lennar Financial Services revenues

$

72,009

 

79,059

 

255,518

 

275,786

 

Lennar Financial Services costs and expenses

 

62,946

 

67,340

 

234,789

 

244,502

 

Lennar Financial Services operating earnings 

$

9,063

 

11,719

 

20,729

 

31,284

 

 

 

 

 

 

 

 

 

 

 

Rialto Investments revenues

$

46,460

 

19,679

 

164,743

 

92,597

 

Rialto Investments costs and expenses

 

38,399

 

20,831

 

132,583

 

67,904

 

Rialto Investments equity in earnings (loss)

 from unconsolidated entities

 

(2,961)

 

9,013

 

(7,914)

 

15,363

 

Rialto Investments other income, net

 

936

 

17,251

 

39,211

 

17,251

 

Rialto Investments operating earnings 

$

6,036

 

25,112

 

63,457

 

57,307

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LENNAR CORPORATION AND SUBSIDIARIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Summary of Deliveries and New Orders 

 

(Dollars in thousands)

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Years Ended

 

 

 

 

 

 

 

 

 

November 30,

 

November 30,

 

 

 

 

 

 

 

 

 

2011

 

2010

 

2011

 

2010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deliveries - Homes:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

East

 

 

 

 

1,413

 

1,393

 

4,576

 

4,539

 

 

 

Central

 

 

 

 

474

 

422

 

1,661

 

1,682

 

 

 

West

 

 

 

 

580

 

490

 

1,846

 

2,079

 

 

 

Southeast Florida

 

 

 

 

331

 

240

 

904

 

536

 

 

 

Houston

 

 

 

 

466

 

428

 

1,411

 

1,645

 

 

 

Other

 

 

 

 

111

 

116

 

447

 

474

 

 

 

 

Total

 

 

 

 

3,375

 

3,089

 

10,845

 

10,955

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Of the total home deliveries listed above, 16 and 99, respectively, represent home deliveries from unconsolidated entities for the three months and year ended November 30, 2011,compared to 29 and 96 home deliveries from unconsolidated entities in the same periods last year. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deliveries - Dollar Value:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

East

 

 

 

 

$ 313,706

 

294,335

 

1,009,750

 

970,355

 

 

 

Central

 

 

 

 

100,096

 

86,789

 

355,350

 

348,486

 

 

 

West

 

 

 

 

182,182

 

163,582

 

598,202

 

711,822

 

 

 

Southeast Florida

 

 

 

 

85,824

 

62,800

 

239,607

 

131,091

 

 

 

Houston

 

 

 

 

106,369

 

92,915

 

321,908

 

357,590

 

 

 

Other

 

 

 

 

37,638

 

43,212

 

166,186

 

172,948

 

 

 

 

Total

 

 

 

 

$ 825,815

 

743,633

 

2,691,003

 

2,692,292

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Of the total dollar value of home deliveries listed above, $9.3 million and $66.2 million, respectively, represent the dollar value of home deliveries from unconsolidated entities for the three months and year ended November 30, 2011, compared to $17.8 million and $61.0 million dollar value of home deliveries from unconsolidated entities in the same periods last year. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

New Orders - Homes:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

East

 

 

 

 

1,258

 

1,024

 

4,769

 

4,509

 

 

 

Central

 

 

 

 

402

 

425

 

1,716

 

1,769

 

 

 

West

 

 

 

 

526

 

394

 

1,965

 

1,922

 

 

 

Southeast Florida

 

 

 

 

303

 

168

 

947

 

614

 

 

 

Houston

 

 

 

 

418

 

397

 

1,521

 

1,641

 

 

 

Other

 

 

 

 

120

 

112

 

494

 

473

 

 

 

 

Total

 

 

 

 

3,027

 

2,520

 

11,412

 

10,928

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Of the total new orders listed above, 12 and 98, respectively, represent new orders from unconsolidated entities for the three months and year ended November 30, 2011, compared to 24 and 90 new orders from unconsolidated entities in the same periods last year.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

New Orders - Dollar Value:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

East

 

 

 

 

$ 275,378

 

213,507

 

1,051,624

 

954,255

 

 

 

Central

 

 

 

 

84,428

 

85,237

 

367,274

 

365,667

 

 

 

West

 

 

 

 

162,165

 

119,533

 

638,418

 

625,469

 

 

 

Southeast Florida

 

 

 

 

79,762

 

42,168

 

254,632

 

156,424

 

 

 

Houston

 

 

 

 

94,465

 

84,538

 

342,836

 

355,771

 

 

 

Other

 

 

 

 

48,500

 

40,535

 

189,658

 

169,025

 

 

 

 

Total

 

 

 

 

$ 744,698

 

585,518

 

2,844,442

 

2,626,611

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Of the total dollar value of new orders listed above, $6.7 million and $65.1 million, respectively, represent the dollar value of new orders from unconsolidated entities for the three months and year ended November 30, 2011, compared to $14.2 million and $55.9 million dollar value of new orders from unconsolidated entities in the same periods last year.

 

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LENNAR CORPORATION AND SUBSIDIARIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Summary of Backlog 

 

(Dollars in thousands)

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

November 30,

 

 

 

 

 

 

 

 

 

 

 

 

 

2011

 

2010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Backlog - Homes:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

East

 

 

 

 

 

 

 

 

948

 

755

 

 

 

Central

 

 

 

 

 

 

 

 

309

 

254

 

 

 

West

 

 

 

 

 

 

 

 

298

 

179

 

 

 

Southeast Florida

 

 

 

 

 

 

 

 

166

 

123

 

 

 

Houston

 

 

 

 

 

 

 

 

355

 

245

 

 

 

Other

 

 

 

 

 

 

 

 

95

 

48

 

 

 

Total

 

 

 

 

 

 

 

 

2,171

 

1,604

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Of the total homes in backlog listed above, 2 homes represents the backlog from unconsolidated entities at November 30, 2011, compared to 3 homes in backlog from unconsolidated entities at November 30, 2010.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Backlog - Dollar Value:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

East

 

 

 

 

 

 

 

 

$    220,974

 

176,588

 

 

 

Central

 

 

 

 

 

 

 

 

65,256

 

52,923

 

 

 

West

 

 

 

 

 

 

 

 

97,292

 

58,072

 

 

 

Southeast Florida

 

 

 

 

 

 

 

 

52,013

 

39,035

 

 

 

Houston

 

 

 

 

 

 

 

 

79,800

 

58,822

 

 

 

Other

 

 

 

 

 

 

 

 

45,324

 

21,852

 

 

 

Total

 

 

 

 

 

 

 

 

$    560,659

 

407,292

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Of the total dollar value of homes in backlog listed above, $1.0 million represents the backlog dollar value from unconsolidated entities at November 30, 2011, compared to $2.1 million of backlog dollar value from unconsolidated entities at November 30, 2010.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

East:

 

Florida(1), Georgia, Maryland, New Jersey, North Carolina, South Carolina and Virginia

 

 

 

 

Central:

 

Arizona, Colorado and Texas(2)

 

 

 

 

West:

 

California and Nevada

 

 

 

 

Southeast Florida:

 

Southeast Florida

 

 

 

 

Houston:

 

Houston, Texas

 

 

 

 

Other:

 

Illinois and Minnesota 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Florida in the East reportable segment excludes Southeast Florida, which is its own reportable segment.

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Data

 

(Dollars in thousands)

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

November 30,

 

 

 

 

 

 

 

 

 

 

 

 

 

2011

 

2010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lennar Homebuilding debt

 

 

 

 

 

 

 

 

$ 3,362,759

 

3,128,154

 

 

Total stockholders' equity

 

 

 

 

 

 

 

 

2,696,468

 

2,608,949

 

 

 

Total capital

 

 

 

 

 

 

 

 

$ 6,059,227

 

5,737,103

 

 

Lennar Homebuilding debt to total capital

 

 

 

 

 

 

 

55.5%

 

54.5%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lennar Homebuilding debt

 

 

 

 

 

 

 

 

$ 3,362,759

 

3,128,154

 

 

Less: Lennar Homebuilding cash and cash equivalents

 

 

 

 

 

 

1,024,212

 

1,207,247

 

 

 

Net Lennar Homebuilding debt

 

 

 

 

 

 

 

 

$ 2,338,547

 

1,920,907

 

 

Net Lennar Homebuilding debt to total capital (1)

 

 

 

 

 

 

46.4%

 

42.4%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

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

 

 

 

 

SOURCE Lennar Corporation

Diane Bessette, Vice President and Treasurer, Lennar Corporation, +1-305-229-6419

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