MIAMI, June 20, 2017
/PRNewswire/ --
- Net earnings of $213.6
million, or $0.91 per diluted
share, compared to net earnings of $218.5
million, or $0.95 per
diluted share
- Deliveries of 7,710 homes – up 15%
- New orders of 8,898 homes – up 12%; new orders dollar value
of $3.4 billion – up 17%
- Backlog of 10,201 homes – up 13%; backlog dollar value of
$4.0 billion – up 20%
- Revenues of $3.3 billion – up
19%
- Lennar Homebuilding operating earnings of $332.6 million, compared to $342.7 million
- Gross margin on home sales of 21.5%, compared to 23.1%,
improved sequentially 40 basis points from Q1 2017
- S,G&A expenses as a % of revenues from home sales of
9.3%, consistent with Q2 2016, improved sequentially 100 basis
points from Q1 2017
- Operating margin on home sales of 12.1%, compared to 13.9%,
improved sequentially 130 basis points from Q1 2017
- Lennar Financial Services operating earnings of $43.7 million, compared to $44.1 million
- Rialto operating earnings (net of noncontrolling interests)
of $6.2 million, compared to an
operating loss (net of noncontrolling interests) of
$13.8 million
- Lennar Multifamily operating earnings of $6.5 million, compared to $14.9 million
- Lennar Homebuilding cash and cash equivalents of
$748 million
- Lennar issued $650 million of
4.50% senior notes due 2024 and retired its 12.25% senior notes
due 2017
- Lennar increased its credit facility to $2.0 billion
- Lennar Homebuilding debt to total capital, net of cash and
cash equivalents, of 40.7%
Lennar Corporation (NYSE: LEN and LEN.B), one
of the nation's largest homebuilders, today reported results
for its second quarter ended May 31,
2017. Second quarter net earnings attributable to Lennar in
2017 were $213.6 million, or
$0.91 per diluted share, compared to
second quarter net earnings attributable to Lennar in 2016 of
$218.5 million, or $0.95 per diluted share.
Stuart Miller, Chief Executive
Officer of Lennar Corporation, said, "We are pleased to announce
our second quarter results as we achieved net earnings of
$213.6 million, or $0.91 per diluted share. These strong results
were supported by an improved macroeconomic environment, renewed
optimism, wage and job growth, and increased consumer confidence.
We are now seeing, contrary to recent reports on housing starts and
building permits, more of a reversion to normal in the housing
market than the slow and steady recovery pace of the last several
years.
Mr. Miller continued, "The overall market improvement was
supported by our highest quarterly new orders in the last ten years
of 8,898 homes, a 12% increase year over year. Home deliveries and
revenues from home sales increased 15% and 18%, respectively, year
over year, while our backlog dollar value increased 20% to
$4.0 billion.
"Our core homebuilding business continued to produce solid
operating results in the second quarter as our gross margin and
operating margin on home sales were 21.5% and 12.1%, respectively.
Even with 20 basis points of WCI transaction-related expenses, our
SG&A as a percentage of revenues from home sales of
9.3% matched the lowest second quarter SG&A percentage in our
history, primarily due to improved operating leverage and our
continued focus on investing in new technologies.
"Complementing our homebuilding business, our Financial Services
business reported strong earnings of $43.7
million in our second quarter, consistent with the prior
year, despite a significant decrease in refinance transactions
because of higher interest rates. This decrease was primarily
offset by higher profit per transaction in our title
operations.
"Our Multifamily business generated $6.5
million of earnings in the second quarter of 2017, driven by
the sale of an apartment property by one of its joint ventures
under its merchant build program. With its geographically
diversified pipeline of multifamily product and increased activity
in our Lennar Multifamily Venture, this segment continues to grow
while capitalizing on future development opportunities.
"Our Rialto business generated $6.2
million of earnings in the second quarter of 2017. During
the quarter, our investment management platform performed well,
while our mortgage finance business continued its consistent
program of producing strong results.
"Finally, FivePoint completed its initial public offering in
May 2017, of which we now own
approximately 40%. As a now public company with quarterly
filings, Lennar shareholders will have greater transparency into
FivePoint, which will provide an even better understanding of our
strategic investment.
Mr. Miller concluded, "With a strong balance sheet, a solid
backlog and carefully-crafted strategies in our core and ancillary
businesses, we are well positioned to continue our strong
performance for 2017."
RESULTS OF OPERATIONS
THREE MONTHS ENDED MAY
31, 2017 COMPARED TO
THREE MONTHS ENDED
MAY 31, 2016
As previously announced on February
10, 2017, Lennar Corporation completed its acquisition of
WCI Communities, Inc. ("WCI"). Prior year information
includes only stand-alone data for Lennar Corporation for the three
months ended May 31, 2016.
Lennar Homebuilding
Revenues from home sales increased 18% in the second quarter of
2017 to $2.9 billion from
$2.4 billion in the second quarter of
2016. Revenues were higher primarily due to a 15% increase in the
number of home deliveries, excluding unconsolidated entities, and a
3% increase in the average sales price of homes delivered. New home
deliveries, excluding unconsolidated entities, increased to 7,687
homes in the second quarter of 2017 from 6,711 homes in the second
quarter of 2016. There was an increase in home deliveries in all of
the Company's Homebuilding segments and Homebuilding Other. The
average sales price of homes delivered was $374,000 in the second quarter of 2017, compared
to $362,000 in the second quarter of
2016. Sales incentives offered to homebuyers were $22,700 per home delivered in the second quarter
of 2017, or 5.7% as a percentage of home sales revenue, compared to
$21,800 per home delivered in the
second quarter of 2016, or 5.7% as a percentage of home sales
revenue, and $22,700 per home
delivered in the first quarter of 2017, or 5.9% as a percentage of
home sales revenue.
Gross margins on home sales were $616.9
million, or 21.5%, in the second quarter of 2017, compared
to $561.5 million, or 23.1%, in the
second quarter of 2016. Gross margin percentage on home sales
decreased compared to the second quarter of 2016 primarily due to
an increase in construction and land costs per home.
Selling, general and administrative expenses were $268.4 million in the second quarter of 2017,
compared to $224.8 million in the
second quarter of 2016. As a percentage of revenues from home
sales, selling, general and administrative expenses were 9.3% in
the second quarter of 2017, consistent with the second quarter of
2016. WCI transaction-related expenses had a negative 20 basis
point impact to selling, general and administrative expenses as a
percentage of revenues from home sales in the second quarter of
2017.
Lennar Homebuilding equity in loss from unconsolidated entities
was $21.5 million in the second
quarter of 2017, compared to $9.6
million in the second quarter of 2016. In the second quarter
of 2017, Lennar Homebuilding equity in loss from unconsolidated
entities was primarily attributable to the Company's share of net
operating losses from its unconsolidated entities. The operating
losses from the Company's unconsolidated entities were primarily
driven by general and administrative expenses, as there were no
significant land sale transactions during the second quarter of
2017. In the second quarter of 2016, Lennar Homebuilding equity in
loss from unconsolidated entities was primarily attributable to the
Company's share of costs associated with the FivePoint combination.
This was partially offset by $6.7
million of equity in earnings from one of the Company's
unconsolidated entities primarily due to sales of homesites to
third parties.
Lennar Homebuilding other income, net, was $3.8 million in the second quarter of 2017,
compared to $13.7 million in the
second quarter of 2016. Other income, net, in the second quarter of
2016 was primarily related to a profit participation received by
one of Lennar Homebuilding's consolidated joint ventures.
Lennar Homebuilding interest expense was $71.9 million in the second quarter of 2017
($69.9 million was included in costs
of homes sold, $0.7 million in costs
of land sold and $1.3 million in
other income, net), compared to $63.9
million in the second quarter of 2016 ($62.1 million was included in costs of homes
sold, $0.6 million in costs of land
sold and $1.2 million in other
income, net). Interest expense included in costs of homes sold
increased primarily due to an increase in home deliveries.
Lennar Financial Services
Operating earnings for the Lennar Financial Services segment
were $43.7 million in the second
quarter of 2017, compared to $44.1
million in the second quarter of 2016. Operating earnings
were impacted by a significant decrease in refinance
transactions, offset by higher profit per transaction in the
segment's title operations.
Rialto
Operating earnings for the Rialto segment were $6.2 million in the second quarter of 2017 (which
included a $6.5 million operating
loss and an add back of $12.6 million
of net loss attributable to noncontrolling interests). Operating
loss in the second quarter of 2016 was $13.8
million (which included an $18.1
million operating loss and an add back of $4.3 million of net loss attributable to
noncontrolling interests). The increase in operating earnings is
primarily due to an increase in incentive income related to carried
interest distributions from the Rialto real estate funds, partially
offset by an increase in general and administrative expenses and
real estate owned impairments. In addition, the second quarter of
2016 included a $16.0 million
write-off of uncollectible receivables related to a hospital, which
was acquired through the resolution of one of Rialto's loans from a
2010 portfolio.
Lennar Multifamily
Operating earnings for the Lennar Multifamily segment were
$6.5 million in the second quarter of
2017, primarily due to the segment's $11.4
million share of a gain as a result of the sale of an
operating property by one of Lennar Multifamily's unconsolidated
entities, partially offset by general and administrative expenses.
In the second quarter of 2016, the Lennar Multifamily segment had
operating earnings of $14.9 million
primarily due to the segment's $15.4
million share of a gain as a result of the sale of an
operating property by one of its unconsolidated entities and a gain
of $5.2 million on a third-party land
sale.
Corporate General and Administrative Expenses
Corporate general and administrative expenses were $66.8 million, or 2.0% as a percentage of total
revenues, in the second quarter of 2017, compared to $55.8 million, or 2.0% as a percentage of total
revenues, in the second quarter of 2016.
Noncontrolling Interests
Net earnings (loss) attributable to noncontrolling interests
were ($12.9) million and $5.6 million in the second quarter of 2017 and
2016, respectively. Net loss attributable to noncontrolling
interests during the second quarter of 2017 was primarily
attributable to a net loss related to the FDIC's interest in the
portfolio of real estate loans that the Company acquired in
partnership with the FDIC. Net earnings attributable to
noncontrolling interests in the second quarter of 2016 were
primarily attributable to earnings related to Lennar Homebuilding
consolidated joint ventures, partially offset by a net loss related
to the FDIC's interest in the portfolio of real estate loans that
the Company acquired in partnership with the FDIC.
RESULTS OF OPERATIONS
SIX MONTHS ENDED MAY
31, 2017 COMPARED TO
SIX MONTHS ENDED MAY 31, 2016
As previously announced on February
10, 2017, Lennar Corporation completed its acquisition of
WCI. The results of operations include activity related to WCI from
February 10, 2017 to May 31, 2017. Prior year information includes
only stand-alone data for Lennar Corporation for the six months
ended May 31, 2016.
Lennar Homebuilding
Revenues from home sales increased 16% in the six months ended
May 31, 2017 to $4.9 billion from $4.2
billion in the six months ended May
31, 2016. Revenues were higher primarily due to a 14%
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 13,120 homes in the six months ended May 31, 2017 from 11,517 homes in the six months
ended May 31, 2016. There was an
increase in home deliveries in all of the Company's Homebuilding
segments and Homebuilding Other. The average sales price of homes
delivered was $370,000 in the six
months ended May 31, 2017, compared
to $363,000 in the six months ended
May 31, 2016. Sales incentives
offered to homebuyers were $22,700
per home delivered in the six months ended May 31, 2017, or 5.8% as a percentage of home
sales revenue, compared to $21,700
per home delivered in the six months ended May 31, 2016, or 5.6% as a percentage of home
sales revenue.
Gross margins on home sales were $1.0
billion, or 21.3%, in the six months ended May 31, 2017, compared to $960.5 million, or 23.0%, in the six months ended
May 31, 2016. Gross margin percentage
on home sales decreased compared to the six months ended
May 31, 2016 primarily due to an
increase in construction and land costs per home. Gross profits on
land sales were $3.7 million in the
six months ended May 31, 2017,
compared to $11.0 million in the six
months ended May 31, 2016.
Selling, general and administrative expenses were $472.4 million in the six months ended
May 31, 2017, compared to
$414.6 million in the six months
ended May 31, 2016. As a percentage
of revenues from home sales, selling, general and administrative
expenses improved to 9.7% in the six months ended May 31, 2017, from 9.9% in the six months ended
May 31, 2016, due to improved
operating leverage as a result of an increase in home deliveries.
In addition, WCI transaction-related expenses had a negative 30
basis point impact to selling, general and administrative expenses
as a percentage of revenues from home sales in the six months ended
May 31, 2017.
Lennar Homebuilding equity in loss from unconsolidated entities
was $33.0 million in the six months
ended May 31, 2017, compared to
$6.6 million in the six months ended
May 31, 2016. In the six months ended
May 31, 2017, Lennar Homebuilding
equity in loss from unconsolidated entities was attributable to the
Company's share of net operating losses from its unconsolidated
entities, which was primarily driven by general and administrative
expenses, as there were no significant land sale transactions
during the six months ended May 31,
2017. In the six months ended May 31,
2016, Lennar Homebuilding equity in loss from unconsolidated
entities was primarily attributable to the Company's share of costs
associated with the FivePoint combination. This was partially
offset by $12.7 million of equity in
earnings from one of the Company's unconsolidated entities
primarily due to sales of homesites to third parties.
Lennar Homebuilding other income, net, was $9.6 million in the six months ended May 31, 2017, compared to $13.1 million in the six months ended
May 31, 2016. In the six months ended
May 31, 2016, other income, net,
included a profit participation received by one of Lennar
Homebuilding's consolidated joint ventures.
Lennar Homebuilding loss due to litigation of $140 million was related to an accrual recorded
in the six months ended May 31, 2017,
which represented the high end of the range of expected liability
associated with litigation regarding a contract the Company entered
into in 2005 to purchase property in Maryland.
Lennar Homebuilding interest expense was $124.3 million in the six months ended
May 31, 2017 ($118.6 million was included in costs of homes
sold, $3.1 million in costs of land
sold and $2.5 million in other
income, net), compared to $109.1
million in the six months ended May
31, 2016 ($105.4 million was
included in costs of homes sold, $1.3
million in costs of land sold and $2.4 million in other income, net). Interest
expense included in costs of homes sold increased primarily due to
an increase in home deliveries.
Lennar Financial Services
Operating earnings for the Lennar Financial Services segment
were $64.4 million in the six months
ended May 31, 2017, compared to
$59.0 million in the six months ended
May 31, 2016. The increase in
profitability was primarily due to increased profitability in the
segment's title operations, partially offset by a decrease in
refinance transactions.
Rialto
Operating earnings for the Rialto segment were $18.2 million in the six months ended
May 31, 2017 (which included a
$7.3 million operating loss and an
add back of $25.5 million of net loss
attributable to noncontrolling interests). Operating loss for the
six months ended May 31, 2016 was
$11.8 million (which included a
$16.5 million operating loss and an
add back of $4.6 million of net loss
attributable to noncontrolling interests). The increase in
operating earnings is primarily related to an increase in Rialto
Mortgage Finance earnings as a result of higher securitization
margins as well as an increase in incentive income related to
carried interest distributions from the Rialto real estate funds.
This was partially offset by an increase in loan impairments, real
estate owned impairments and general and administrative expenses.
In addition, the six months ended May 31,
2016 included a $16.0 million
write-off of uncollectible receivables related to the hospital.
Lennar Multifamily
Operating earnings for the Lennar Multifamily segment were
$25.7 million in the six months ended
May 31, 2017, primarily due to the
segment's $37.4 million share of
gains as a result of the sale of three operating properties by
Lennar Multifamily's unconsolidated entities, partially offset by
general and administrative expenses. In the six months ended
May 31, 2016, the Lennar Multifamily
segment had operating earnings of $27.1
million primarily due to the segment's $35.8 million share of gains as a result of the
sale of two operating properties by its unconsolidated entities and
a gain of $5.2 million on a
third-party land sale.
Corporate General and Administrative Expenses
Corporate general and administrative expenses were $127.5 million, or 2.3% as a percentage of total
revenues, in the six months ended May 31,
2017, compared to $103.5
million, or 2.2% as a percentage of total revenues, in the
six months ended May 31, 2016.
Noncontrolling Interests
Net earnings (loss) attributable to noncontrolling interests
were ($21.3) million and $6.9 million in the six months ended May 31, 2017 and 2016, respectively. Net loss
attributable to noncontrolling interests during the six months
ended May 31, 2017 was primarily
attributable to a net loss related 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 earnings related
to the Lennar Homebuilding consolidated joint ventures. Net
earnings attributable to noncontrolling interests in the six months
ended May 31, 2016 were primarily
attributable to earnings related to Lennar Homebuilding
consolidated joint ventures, partially offset by a net loss related
to the FDIC's interest in the portfolio of real estate loans that
the Company acquired in partnership with the FDIC.
OTHER TRANSACTIONS
Credit Facility
In May 2017, the Company amended
the credit agreement governing its unsecured revolving credit
facility (the "Credit Facility") to increase the maximum borrowings
from $1.8 billion to $2.0 billion and extend the maturity on
$1.4 billion of the Credit Facility
from June 2020 to June 2022. The $2.0
billion includes a $403
million accordion feature, subject to additional
commitments.
Debt Transactions
In April 2017, the Company issued
$650 million aggregate principal
amount of 4.50% senior notes due 2024. The Company used a portion
of the net proceeds of this offering for the retirement
of its 12.25% senior notes due 2017 for 100% of the $400 million outstanding principal amount, plus
accrued and unpaid interest. The Company intends to use the balance
of the net proceeds together with cash on hand for general
corporate purposes, which may include the redemption of its 6.875%
senior notes due 2021.
About Lennar
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's Financial Services segment provides
mortgage financing, title insurance and closing services for both
buyers of the Company's homes and others. Lennar's Rialto segment
is a vertically integrated asset management platform focused on
investing throughout the commercial real estate capital structure.
Lennar's Multifamily segment is a nationwide developer of
high-quality multifamily rental properties. 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.
Note Regarding Forward-Looking Statements: 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, including statements regarding our belief regarding
the growth of the Multifamily segment, our belief that we are well
positioned to continue our strong performance in 2017, our belief
regarding the homebuilding market and other markets in which we
participate, and our belief regarding how we are positioned to take
advantage of opportunities, or to avoid problems, in those markets
and to advance the future growth of our businesses. 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. Accordingly, these
forward-looking statements should be evaluated with consideration
given to the many risks and uncertainties inherent in our business
that could cause actual results and events to differ materially
from those anticipated by the forward-looking statements. Important
factors that could cause such differences include increases in
operating costs, including costs related to real estate taxes,
construction materials, labor and insurance, and our inability to
manage our cost structure, both in our Lennar Homebuilding and
Lennar Multifamily businesses; the possibility of a slowdown in the
real estate markets across the nation, including a slowdown in the
market for single family homes or the multifamily rental market;
unfavorable losses in legal proceedings; our inability to maximize
returns on the assets that we acquired in the WCI acquisition;
decreased demand for our homes or Lennar Multifamily rental
properties, and our inability to successfully sell our apartments;
natural disasters or catastrophic events for which our insurance
may not provide adequate coverage; our inability to successfully
execute our strategies; a decline in the value of the land and home
inventories we maintain or possible future write-downs of the
carrying value of our real estate assets; the inability of the
Rialto segment to profit from the investments it makes; the
inability of Rialto to sell mortgages it originates into
securitizations on favorable terms; reduced availability of
mortgage financing or increased interest rates; conditions in the
capital, credit and financial markets; changes in laws, regulations
or the regulatory environment affecting our business, and the risks
described in our filings with the Securities and Exchange
Commission, including our Form 10-K for the fiscal year ended
November 30, 2016. We undertake no
obligation to update or revise any forward-looking statements,
whether as a result of new information, future events, or
otherwise.
A conference call to discuss the Company's second quarter
earnings will be held at 11:00 a.m. Eastern
Time on Tuesday, June 20, 2017. 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 402-998-1675 and
entering 5723593 as the confirmation number.
LENNAR CORPORATION
AND SUBSIDIARIES
|
Selected Revenues and
Operating Information
|
(In thousands, except
per share amounts)
|
(unaudited)
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
May
31,
|
|
May
31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Revenues:
|
|
|
|
|
|
|
|
Lennar
Homebuilding
|
$
|
2,885,741
|
|
|
2,450,885
|
|
|
4,904,435
|
|
|
4,237,366
|
|
Lennar Financial
Services
|
208,363
|
|
|
175,940
|
|
|
356,406
|
|
|
299,896
|
|
Rialto
|
67,988
|
|
|
44,838
|
|
|
149,994
|
|
|
88,549
|
|
Lennar
Multifamily
|
99,800
|
|
|
74,152
|
|
|
188,485
|
|
|
113,668
|
|
Total
revenues
|
$
|
3,261,892
|
|
|
2,745,815
|
|
|
5,599,320
|
|
|
4,739,479
|
|
|
|
|
|
|
|
|
|
Lennar Homebuilding
operating earnings
|
$
|
332,580
|
|
|
342,696
|
|
|
403,918
|
|
|
563,334
|
|
Lennar Financial
Services operating earnings
|
43,727
|
|
|
44,088
|
|
|
64,391
|
|
|
59,019
|
|
Rialto operating
loss
|
(6,462)
|
|
|
(18,086)
|
|
|
(7,305)
|
|
|
(16,476)
|
|
Lennar Multifamily
operating earnings
|
6,529
|
|
|
14,943
|
|
|
25,712
|
|
|
27,125
|
|
Corporate general and
administrative expenses
|
(66,774)
|
|
|
(55,802)
|
|
|
(127,473)
|
|
|
(103,470)
|
|
Earnings before
income taxes
|
309,600
|
|
|
327,839
|
|
|
359,243
|
|
|
529,532
|
|
Provision for income
taxes
|
(108,892)
|
|
|
(103,801)
|
|
|
(128,861)
|
|
|
(160,042)
|
|
Net earnings
(including net earnings (loss) attributable to
noncontrolling interests)
|
200,708
|
|
|
224,038
|
|
|
230,382
|
|
|
369,490
|
|
Less: Net earnings
(loss) attributable to noncontrolling interests
|
(12,937)
|
|
|
5,569
|
|
|
(21,343)
|
|
|
6,941
|
|
Net earnings
attributable to Lennar
|
$
|
213,645
|
|
|
218,469
|
|
|
251,725
|
|
|
362,549
|
|
|
|
|
|
|
|
|
|
Average shares
outstanding:
|
|
|
|
|
|
|
|
Basic
|
232,217
|
|
|
213,601
|
|
|
232,206
|
|
|
211,947
|
|
Diluted
|
232,219
|
|
|
229,917
|
|
|
232,207
|
|
|
229,417
|
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
Basic
|
$
|
0.91
|
|
|
1.01
|
|
|
1.07
|
|
|
1.69
|
|
Diluted
(1)
|
$
|
0.91
|
|
|
0.95
|
|
|
1.07
|
|
|
1.58
|
|
|
|
|
|
|
|
|
|
Supplemental
information:
|
|
|
|
|
|
|
|
Interest incurred
(2)
|
$
|
79,222
|
|
|
71,857
|
|
|
148,913
|
|
|
143,447
|
|
|
|
|
|
|
|
|
|
EBIT
(3):
|
|
|
|
|
|
|
|
Net earnings
attributable to Lennar
|
$
|
213,645
|
|
|
218,469
|
|
|
251,725
|
|
|
362,549
|
|
Provision for income
taxes
|
108,892
|
|
|
103,801
|
|
|
128,861
|
|
|
160,042
|
|
Interest
expense
|
71,916
|
|
|
63,866
|
|
|
124,277
|
|
|
109,090
|
|
EBIT
|
$
|
394,453
|
|
|
386,136
|
|
|
504,863
|
|
|
631,681
|
|
|
|
(1)
|
For the three and six
months ended May 31, 2016, diluted earnings per share includes an
add back of interest of $1.9 million and $3.9 million,
respectively, related to the Company's 3.25% convertible senior
notes.
|
(2)
|
Amount represents
interest incurred related to Lennar Homebuilding debt.
|
(3)
|
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
|
|
Six Months
Ended
|
|
May
31,
|
|
May
31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Lennar
Homebuilding revenues:
|
|
|
|
|
|
|
|
Sales of
homes
|
$
|
2,870,352
|
|
|
2,429,568
|
|
|
4,854,140
|
|
|
4,184,259
|
|
Sales of
land
|
15,389
|
|
|
21,317
|
|
|
50,295
|
|
|
53,107
|
|
Total
revenues
|
2,885,741
|
|
|
2,450,885
|
|
|
4,904,435
|
|
|
4,237,366
|
|
|
|
|
|
|
|
|
|
Lennar
Homebuilding costs and expenses:
|
|
|
|
|
|
|
|
Costs of homes
sold
|
2,253,477
|
|
|
1,868,045
|
|
|
3,818,100
|
|
|
3,223,790
|
|
Costs of land
sold
|
13,651
|
|
|
19,468
|
|
|
46,575
|
|
|
42,080
|
|
Selling, general and
administrative
|
268,355
|
|
|
224,775
|
|
|
472,369
|
|
|
414,623
|
|
Total
costs and expenses
|
2,535,483
|
|
|
2,112,288
|
|
|
4,337,044
|
|
|
3,680,493
|
|
Lennar
Homebuilding operating margins
|
350,258
|
|
|
338,597
|
|
|
567,391
|
|
|
556,873
|
|
Lennar Homebuilding
equity in loss from unconsolidated entities
|
(21,506)
|
|
|
(9,633)
|
|
|
(33,040)
|
|
|
(6,633)
|
|
Lennar Homebuilding
other income, net
|
3,828
|
|
|
13,732
|
|
|
9,567
|
|
|
13,094
|
|
Lennar Homebuilding
loss due to litigation
|
—
|
|
|
—
|
|
|
(140,000)
|
|
|
—
|
|
Lennar
Homebuilding operating earnings
|
$
|
332,580
|
|
|
342,696
|
|
|
403,918
|
|
|
563,334
|
|
|
|
|
|
|
|
|
|
Lennar Financial
Services revenues
|
$
|
208,363
|
|
|
175,940
|
|
|
356,406
|
|
|
299,896
|
|
Lennar Financial
Services costs and expenses
|
164,636
|
|
|
131,852
|
|
|
292,015
|
|
|
240,877
|
|
Lennar Financial
Services operating earnings
|
$
|
43,727
|
|
|
44,088
|
|
|
64,391
|
|
|
59,019
|
|
|
|
|
|
|
|
|
|
Rialto
revenues
|
$
|
67,988
|
|
|
44,838
|
|
|
149,994
|
|
|
88,549
|
|
Rialto costs and
expenses
|
59,076
|
|
|
50,203
|
|
|
125,989
|
|
|
93,110
|
|
Rialto equity in
earnings from unconsolidated entities
|
5,730
|
|
|
6,864
|
|
|
6,452
|
|
|
8,361
|
|
Rialto other expense,
net
|
(21,104)
|
|
|
(19,585)
|
|
|
(37,762)
|
|
|
(20,276)
|
|
Rialto operating
loss
|
$
|
(6,462)
|
|
|
(18,086)
|
|
|
(7,305)
|
|
|
(16,476)
|
|
|
|
|
|
|
|
|
|
Lennar Multifamily
revenues
|
$
|
99,800
|
|
|
74,152
|
|
|
188,485
|
|
|
113,668
|
|
Lennar Multifamily
costs and expenses
|
102,698
|
|
|
73,217
|
|
|
195,347
|
|
|
120,237
|
|
Lennar Multifamily
equity in earnings from unconsolidated entities
|
9,427
|
|
|
14,008
|
|
|
32,574
|
|
|
33,694
|
|
Lennar Multifamily
operating earnings
|
$
|
6,529
|
|
|
14,943
|
|
|
25,712
|
|
|
27,125
|
|
LENNAR CORPORATION
AND SUBSIDIARIES
|
Summary of Deliveries
and New Orders
|
(Dollars in
thousands, except average sales price)
|
(unaudited)
|
|
|
For the Three
Months Ended May 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Deliveries:
|
Homes
|
|
Dollar
Value
|
|
Average Sales
Price
|
East
|
3,621
|
|
|
3,032
|
|
|
$
|
1,194,677
|
|
|
953,671
|
|
|
$
|
330,000
|
|
|
315,000
|
|
Central
|
2,008
|
|
|
1,830
|
|
|
672,182
|
|
|
591,356
|
|
|
335,000
|
|
|
323,000
|
|
West
|
1,570
|
|
|
1,503
|
|
|
780,995
|
|
|
727,384
|
|
|
497,000
|
|
|
484,000
|
|
Other
|
511
|
|
|
359
|
|
|
237,198
|
|
|
166,832
|
|
|
464,000
|
|
|
465,000
|
|
Total
|
7,710
|
|
|
6,724
|
|
|
$
|
2,885,052
|
|
|
2,439,243
|
|
|
$
|
374,000
|
|
|
363,000
|
|
Of the total homes delivered listed above, 23 homes with a
dollar value of $14.7 million and an
average sales price of $639,000
represent home deliveries from unconsolidated entities for the six
months ended May 31, 2017, compared
to 13 home deliveries with a dollar value of $9.7 million and an average sales price of
$744,000 for the six months ended
May 31, 2016.
New
Orders:
|
Homes
|
|
Dollar
Value
|
|
Average Sales
Price
|
East
|
4,271
|
|
|
3,568
|
|
|
$
|
1,388,165
|
|
|
1,109,894
|
|
|
$
|
325,000
|
|
|
311,000
|
|
Central
|
2,077
|
|
|
2,140
|
|
|
703,300
|
|
|
716,028
|
|
|
339,000
|
|
|
335,000
|
|
West
|
2,035
|
|
|
1,781
|
|
|
1,025,456
|
|
|
834,569
|
|
|
504,000
|
|
|
469,000
|
|
Other
|
515
|
|
|
473
|
|
|
248,841
|
|
|
221,393
|
|
|
483,000
|
|
|
468,000
|
|
Total
|
8,898
|
|
|
7,962
|
|
|
$
|
3,365,762
|
|
|
2,881,884
|
|
|
$
|
378,000
|
|
|
362,000
|
|
Of the total new orders listed above, 16 homes with a dollar
value of $11.2 million and an average
sales price of $698,000 represent new
orders from unconsolidated entities for the six months ended
May 31, 2017, compared to nine new
orders with a dollar value of $5.4
million and an average sales price of $597,000 for the six months ended May 31, 2016.
|
For the Six Months
Ended May 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Deliveries:
|
Homes
|
|
Dollar
Value
|
|
Average Sales
Price
|
East
|
6,091
|
|
|
5,096
|
|
|
$
|
1,962,137
|
|
|
1,601,426
|
|
|
$
|
322,000
|
|
|
314,000
|
|
Central
|
3,447
|
|
|
3,111
|
|
|
1,160,923
|
|
|
991,793
|
|
|
337,000
|
|
|
319,000
|
|
West
|
2,724
|
|
|
2,671
|
|
|
1,341,748
|
|
|
1,286,918
|
|
|
493,000
|
|
|
482,000
|
|
Other
|
901
|
|
|
678
|
|
|
416,137
|
|
|
327,870
|
|
|
462,000
|
|
|
484,000
|
|
Total
|
13,163
|
|
|
11,556
|
|
|
$
|
4,880,945
|
|
|
4,208,007
|
|
|
$
|
371,000
|
|
|
364,000
|
|
Of the total homes delivered listed above, 43 homes with a
dollar value of $26.8 million and an
average sales price of $623,000
represent home deliveries from unconsolidated entities for the six
months ended May 31, 2017, compared
to 39 home deliveries with a dollar value of $23.7 million and an average sales price of
$609,000 for the six months ended
May 31, 2016.
New
Orders:
|
Homes
|
|
Dollar
Value
|
|
Average Sales
Price
|
East
|
7,215
|
|
|
6,096
|
|
|
$
|
2,322,953
|
|
|
1,907,942
|
|
|
$
|
322,000
|
|
|
313,000
|
|
Central
|
3,697
|
|
|
3,770
|
|
|
1,248,166
|
|
|
1,246,198
|
|
|
338,000
|
|
|
331,000
|
|
West
|
3,585
|
|
|
3,071
|
|
|
1,814,070
|
|
|
1,458,418
|
|
|
506,000
|
|
|
475,000
|
|
Other
|
884
|
|
|
819
|
|
|
420,985
|
|
|
377,195
|
|
|
476,000
|
|
|
461,000
|
|
Total
|
15,381
|
|
|
13,756
|
|
|
$
|
5,806,174
|
|
|
4,989,753
|
|
|
$
|
377,000
|
|
|
363,000
|
|
Of the total new orders listed above, 21 homes with a dollar
value of $15.4 million and an average
sales price of $734,000 represent new
orders from unconsolidated entities for the six months ended
May 31, 2017, compared to 24 new
orders with a dollar value of $14.1
million and an average sales price of $588,000 for the six months ended May 31, 2016.
LENNAR CORPORATION
AND SUBSIDIARIES
|
Summary of
Backlog
|
(Dollars in
thousands, except average sales price)
|
(unaudited)
|
|
|
May
31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Backlog:
|
Homes
|
|
Dollar
Value
|
|
Average Sales
Price
|
East (1)
|
4,727
|
|
|
3,963
|
|
|
$
|
1,612,757
|
|
|
1,287,728
|
|
|
$
|
341,000
|
|
|
325,000
|
|
Central
|
2,571
|
|
|
2,727
|
|
|
908,712
|
|
|
940,070
|
|
|
353,000
|
|
|
345,000
|
|
West
|
2,391
|
|
|
1,754
|
|
|
1,220,758
|
|
|
843,871
|
|
|
511,000
|
|
|
481,000
|
|
Other (2)
|
512
|
|
|
570
|
|
|
260,696
|
|
|
264,101
|
|
|
509,000
|
|
|
463,000
|
|
Total
|
10,201
|
|
|
9,014
|
|
|
$
|
4,002,923
|
|
|
3,335,770
|
|
|
$
|
392,000
|
|
|
370,000
|
|
|
Of the total homes in
backlog listed above, eight homes with a backlog dollar value of
$4.6 million and an average sales price of $574,000 represent the
backlog from unconsolidated entities at May 31, 2017, compared
to 74 homes with a backlog dollar value of $52.8 million and an
average sales price of $713,000 at May 31, 2016.
|
|
(1)
|
During the six months
ended May 31, 2017, the Company acquired 360 homes in backlog
related to the WCI acquisition. During the six months ended May 31,
2016, the Company acquired 111 homes in backlog from other
homebuilders.
|
(2)
|
During the six months
ended May 31, 2016, the Company acquired 57 homes in
backlog.
|
|
Lennar's reportable
homebuilding segments and all other homebuilding operations not
required to be reported separately have divisions located
in:
|
|
East: Florida,
Georgia, Maryland, New Jersey, North Carolina, South Carolina and
Virginia
|
Central:
Arizona, Colorado and Texas
|
West:
California and Nevada
|
Other:
Illinois, Minnesota, Oregon, Tennessee and Washington
|
LENNAR CORPORATION
AND SUBSIDIARIES
|
Supplemental
Data
|
(Dollars in
thousands)
|
(unaudited)
|
|
|
May
31,
|
|
November
30,
|
|
May
31,
|
|
2017
|
|
2016
|
|
2016
|
Lennar Homebuilding
debt
|
$
|
5,767,689
|
|
|
4,575,977
|
|
|
5,316,235
|
|
Stockholders'
equity
|
7,322,571
|
|
|
7,026,042
|
|
|
6,118,366
|
|
Total
capital
|
$
|
13,090,260
|
|
|
11,602,019
|
|
|
11,434,601
|
|
Lennar
Homebuilding debt to total capital
|
44.1
|
%
|
|
39.4
|
%
|
|
46.5
|
%
|
|
|
|
|
|
|
Lennar Homebuilding
debt
|
$
|
5,767,689
|
|
|
4,575,977
|
|
|
5,316,235
|
|
Less: Lennar
Homebuilding cash and cash equivalents
|
747,652
|
|
|
1,050,138
|
|
|
601,192
|
|
Net Lennar
Homebuilding debt
|
$
|
5,020,037
|
|
|
3,525,839
|
|
|
4,715,043
|
|
Net Lennar
Homebuilding debt to total capital (1)
|
40.7
|
%
|
|
33.4
|
%
|
|
43.5
|
%
|
|
|
(1)
|
Net Lennar
Homebuilding debt to total capital is a non-GAAP financial measure
defined as net Lennar Homebuilding debt (Lennar Homebuilding debt
less Lennar Homebuilding cash and cash equivalents) divided by
total capital (net Lennar Homebuilding debt plus stockholders'
equity). The Company believes the ratio of net Lennar Homebuilding
debt to total capital is a relevant and a useful financial measure
to investors in understanding the leverage employed in Lennar
Homebuilding operations. However, because net Lennar Homebuilding
debt to total capital is not calculated in accordance with GAAP,
this financial measure should not be considered in isolation or as
an alternative to financial measures prescribed by GAAP. Rather,
this non-GAAP financial measure should be used to supplement the
Company's GAAP results.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/lennar-reports-second-quarter-eps-of-091-300476307.html
SOURCE Lennar Corporation