MIAMI, Jan. 10, 2018 /PRNewswire/ --
2017 Fourth Quarter
- Net earnings of $309.6
million, or $1.29 per diluted
share, compared to $313.5 million, or
$1.31 per diluted share, as adjusted
for Class B stock dividend
- Strategic, one-time transaction projected in Q4
2017 shifted into Q1 2018, thereby benefiting from a
lower federal tax rate
- Deliveries of 8,633 homes – up 5%
- New orders of 7,357 homes – up 12%; new orders dollar value
of $2.8 billion – up 18%
- Backlog of 8,935 homes – up 17%; backlog dollar value of
$3.6 billion – up 23%
- Revenues of $3.8 billion – up
12%
- Lennar Homebuilding operating earnings of $478.8 million, compared to $436.7 million
- Gross margin on home sales of 22.4%, compared to
23.3%
- S,G&A expenses as a % of revenues from home sales
improved to 8.4%, compared to 8.7%
- Operating margin on home sales of 14.0%, compared to
14.6%
- Lennar Financial Services operating earnings of $42.1 million, compared to $51.4 million
- Rialto operating earnings (net of noncontrolling interests)
of $2.2 million, compared to
$8.0 million
- Lennar Multifamily operating earnings of $38.6 million, compared to $41.4 million
- Lennar Homebuilding cash and cash equivalents of
$2.3 billion
- Lennar issued $300 million of
2.95% senior notes due 2020 and $900
million of 4.750% senior notes due 2027 primarily to fund
cash portion of proposed CalAtlantic merger
- No outstanding borrowings under the $2.0 billion credit facility
- Lennar Homebuilding debt to total capital, net of cash and
cash equivalents, of 34.4%
2017 Fiscal Year
- Net earnings of $810.5
million, or $3.38 per diluted
share, compared to net earnings of $911.8
million, or $3.86 per diluted
share, as adjusted for Class B stock dividend
- Lennar Homebuilding pretax loss due to litigation of
$140 million
- Deliveries of 29,394 homes – up 11%
- New orders of 30,348 homes – up 11%
- Revenues of $12.6 billion – up
15%
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, 2017. Fourth quarter net earnings
attributable to Lennar in 2017 were $309.6
million, or $1.29 per diluted
share, compared to $313.5 million, or
$1.31 per diluted share in the fourth
quarter of 2016, as adjusted for Class B stock dividend. Net
earnings attributable to Lennar for the year ended November 30, 2017 were $810.5 million, or $3.38 per diluted share, compared to $911.8 million, or $3.86 per diluted share for the year ended
November 30, 2016, as adjusted for
Class B stock dividend.
Stuart Miller, Chief Executive
Officer of Lennar Corporation, said, "We are pleased to announce a
strong fourth quarter and fiscal 2017, as we continued to execute
on our strategies in all of our operating businesses. Although we
missed fourth quarter, bottom-line guidance because a single,
strategic transaction shifted into the first quarter of 2018, our
core operating performance exceeded expectations. The proceeds
from the shifted transaction will now benefit from a much
lower federal tax rate."
Mr. Miller continued, "Our fourth quarter operating success
was driven by focused execution in the field, favorable
economic conditions in our markets and by managing a quick
rebound from the two major hurricanes we experienced at the
beginning of the quarter. Our results also benefitted from strong
demand for homes, low unemployment, favorable interest rates and
increased consumer confidence. General enthusiasm for the
strength of the economy, combined with the added tailwinds of
recent tax law changes, continue to propel the housing market
forward."
"Our homebuilding operating strategies produced strong results
in the fourth quarter as our gross and operating margins were 22.4%
and 14.0%, respectively, while our home deliveries and new orders
increased 5% and 12%, respectively, compared to last
year. Additionally, we continue to focus on stragetic
innovation in every aspect of our business to drive down S,G&A
expenses and improve profitability."
"Complementing our homebuilding business, our Financial Services
business reported earnings of $42.1
million in our fourth quarter. Although these results
are down 18% from the prior year, the decrease was primarily due to
a significantly lower number of refinance transactions."
"Our Multifamily business generated $38.6
million of earnings in the fourth quarter, driven by the
sale of two apartment properties by its joint ventures. With its
$9.1 billion geographically
diversified pipeline of multifamily product, this segment continues
to grow while capitalizing on future development
opportunities."
"Our homebuilding business and financial services operations
continue to be the primary drivers of our quarterly results and
earnings growth, while our ancillary segments continue to mature as
independent businesses and create significant value."
Mr. Miller concluded, "Our company is very well positioned for
future growth and we look forward to another strong year in
2018. Our pending strategic combination with CalAtlantic,
which is scheduled to close on February
12, 2018, will add to the future growth of our company as we
strategically combine two great companies in markets that we know
well with products that we know well, to create the leading
homebuilder in the country."
RESULTS OF OPERATIONS
THREE MONTHS ENDED NOVEMBER 30, 2017 COMPARED TO
THREE
MONTHS ENDED NOVEMBER 30,
2016
Lennar Homebuilding
Revenues from home sales increased 14% in the fourth quarter of
2017 to $3.3 billion from
$2.9 billion in the fourth quarter of
2016. Revenues were higher primarily due to a 5% increase in the
number of home deliveries, excluding unconsolidated entities, and
an 8% increase in the average sales price of homes delivered. New
home deliveries, excluding unconsolidated entities, increased to
8,614 homes in the fourth quarter of 2017 from 8,206 homes in the
fourth quarter of 2016. There was an increase in home deliveries in
all of the Company's Homebuilding segments and Homebuilding Other,
except Homebuilding East that was slightly down from prior year due
to the impact of Hurricane Irma on deliveries in the fourth
quarter. The average sales price of homes delivered, excluding
unconsolidated entities, increased to $387,000 in the fourth quarter of 2017 from
$357,000 in the fourth quarter of
2016. Sales incentives offered to homebuyers were $23,500 per home delivered in the fourth quarter
of 2017, or 5.7% as a percentage of home sales revenue, compared to
$23,700 per home delivered in the
same period last year, or 6.2% as a percentage of home sales
revenue. The improvement in sales incentives was primarily due
to the Homebuilding West segment.
Gross margins on home sales were $747.5
million, or 22.4%, in the fourth quarter of 2017, compared
to $683.5 million, or 23.3%, in the
fourth quarter of 2016. Gross margin percentage on home sales
decreased compared to the fourth quarter of 2016 primarily due to
an increase in land and construction costs per home, partially
offset by an increase in the average sales price of homes
delivered.
Selling, general and administrative expenses were $281.0 million in the fourth quarter of 2017,
compared to $256.2 million in the
fourth quarter of 2016. As a percentage of revenues from home
sales, selling, general and administrative expenses improved to
8.4% in the fourth quarter of 2017, from 8.7% in the fourth quarter
of 2016, primarily due to a decrease in external broker commissions
as a percentage of revenues from home sales and improved operating
leverage.
Gross profits on land sales were $21.0
million in the fourth quarter of 2017, compared to
$24.3 million in the fourth quarter
of 2016.
Lennar Homebuilding equity in loss from unconsolidated entities
was $19.0 million in the fourth
quarter of 2017, compared to $24.6
million in the fourth quarter of 2016. In the fourth quarter
of 2017, Lennar Homebuilding equity in loss from unconsolidated
entities was primarily attributable to the Company's share of
valuation adjustments related to assets of Lennar Homebuilding's
unconsolidated entities. In the fourth quarter of 2016, Lennar
Homebuilding equity in loss from unconsolidated entities was
primarily attributable to the Company's share of net operating
losses associated with the new FivePoint unconsolidated entity
formed as the result of the FivePoint combination in the second
quarter of fiscal 2016.
Lennar Homebuilding other income, net, was $10.4 million in the fourth quarter of 2017,
compared to $9.7 million in the
fourth quarter of 2016.
Lennar Homebuilding interest expense was $81.7 million in the fourth quarter of 2017
($73.4 million was included in costs
of homes sold, $5.9 million in costs
of land sold and $2.4 million in
other interest expense), compared to $73.3
million in the fourth quarter of 2016 ($69.4 million was included in costs of homes
sold, $2.6 million in costs of land
sold and $1.3 million in other
interest expense). 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 $42.1 million in the fourth
quarter of 2017, compared to $51.4
million in the fourth quarter of 2016. Operating earnings
decreased primarily due to decreased profitability in the segment's
mortgage operations as a result of a significant decline in
refinance transactions, which led to both lower
origination volume and profit per loan.
Rialto
Operating earnings for the Rialto segment were $2.2 million in the fourth quarter of 2017 (which
included $12.0 million
of operating loss and an add back of $14.2 million of net loss attributable to
noncontrolling interests). Operating earnings in the fourth quarter
of 2016 were $8.0 million (which
included $0.2 million of operating
loss and an add back of $8.2 million
of net loss attributable to noncontrolling interests). The decrease
in operating earnings was primarily due to a decrease in Rialto
Mortgage Finance ("RMF") securitization revenues as a result of
lower volume and an increase in REO and loan impairments,
partially offset by an increase in interest income, incentive
income related to carried interest distributions from the Rialto
real estate funds and a decrease in general and administrative
expenses.
Lennar Multifamily
Operating earnings for the Lennar Multifamily segment were
$38.6 million in the fourth quarter
of 2017, compared to $41.4 million in
the fourth quarter of 2016. The decrease in profitability was
primarily due to the segment's $43.8
million share of gains related to the sale of two operating
properties by Lennar Multifamily's unconsolidated entities in the
fourth quarter of 2017, compared to the segment's $47.2 million share of gains related to the sale
of four operating properties by Lennar Multifamily's unconsolidated
entities in the fourth quarter of 2016.
Corporate General and Administrative Expenses
Corporate general and administrative expenses were $85.6 million, or 2.3% as a percentage of total
revenues, in the fourth quarter of 2017, compared to $67.9 million, or 2.0% as a percentage of total
revenues, in the fourth quarter of 2016. The increase was primarily
due to personnel and related expenses and professional expenses
related to technology investments.
Noncontrolling Interests
Net loss attributable to noncontrolling interests was
$11.8 million and $3.0 million in the fourth quarter of 2017 and
2016, respectively. Net loss attributable to noncontrolling
interests during the fourth quarter of 2017 and 2016 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 in 2010, partially offset by net earnings
related to the Lennar Homebuilding consolidated joint ventures.
YEAR ENDED NOVEMBER 30,
2017 COMPARED TO
YEAR ENDED NOVEMBER 30, 2016
Lennar Homebuilding
Revenues from home sales increased 15% in the year ended
November 30, 2017 to $11.0 billion from $9.6
billion in the year ended November
30, 2016. Revenues were higher primarily due to an 11%
increase in the number of home deliveries, excluding unconsolidated
entities, and a 4% increase in the average sales price of homes
delivered. New home deliveries, excluding unconsolidated entities,
increased to 29,322 homes in the year ended November 30, 2017 from 26,481 homes in the year
ended November 30, 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, excluding unconsolidated entities, increased to
$376,000 in the year ended
November 30, 2017 from $361,000 in the year ended November 30, 2016. Sales incentives offered to
homebuyers were $22,700 per home
delivered in the year ended November 30,
2017, or 5.7% as a percentage of home sales revenue,
compared to $22,500 per home
delivered in the year ended November 30,
2016, or 5.9% as a percentage of home sales revenue.
Gross margins on home sales were $2.4
billion, or 22.1%, in the year ended November 30, 2017, compared to $2.2 billion, or 23.0%, in the year ended
November 30, 2016. Gross margin
percentage on home sales decreased compared to the year ended
November 30, 2016 primarily due to an
increase in construction and land costs per home, partially offset
by an increase in the average sales price of homes delivered.
Selling, general and administrative expenses were $1.0 billion in the year ended November 30, 2017, compared to $898.9 million in the year ended November 30, 2016. As a percentage of revenues
from home sales, selling, general and administrative expenses
improved to 9.2% in the year ended November
30, 2017, from 9.4% in the year ended November 30, 2016, due to improved operating
leverage as a result of an increase in home deliveries.
Gross profits on land sales were $29.9
million in the year ended November 30, 2017, compared
to $44.7 million in the year ended
November 30, 2016.
Lennar Homebuilding equity in loss from unconsolidated entities
was $61.7 million in the year ended
November 30, 2017, compared to
$49.3 million in the year ended
November 30, 2016. In the year ended
November 30, 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 were primarily driven by
general and administrative expenses and valuation adjustments
related to assets of Lennar Homebuilding's unconsolidated entities,
partially offset by profits from land sales. In the year ended
November 30, 2016, Lennar Homebuilding equity in loss from
unconsolidated entities was primarily attributable to the Company's
share of costs associated with the FivePoint combination as well as
the Company's share of net operating losses associated with the new
FivePoint unconsolidated entity formed as the result of this
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, totaled $22.8 million in the year ended November 30, 2017, compared to $52.8 million in the year ended November 30, 2016. In the year ended
November 30, 2016, other income, net, included management fee
income and a profit participation related to Lennar Homebuilding's
strategic joint ventures and gains on the sale of several
clubhouses.
Lennar Homebuilding loss due to litigation of $140 million in the year ended November 30, 2017 was related to litigation
regarding a contract the Company entered into in 2005 to purchase
property in Maryland. As a result
of the litigation, the Company purchased the property for
$114 million, which approximated the
Company's estimate of fair value for the property. In addition, the
Company paid approximately $124
million in interest and other closing costs and has accrued
for the amount it expects to pay as reimbursement for attorney's
fees.
Lennar Homebuilding interest expense was $277.8 million in the year ended November 30, 2017 ($260.7
million was included in costs of homes sold, $10.0 million in costs of land sold and
$7.2 million in other interest
expense), compared to $245.1 million
in the year ended November 30, 2016
($235.1 million was included in costs
of homes sold, $5.3 million in costs
of land sold and $4.6 million in
other interest expense). 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 $155.5 million in the year ended
November 30, 2017, compared to
$163.6 million in the year ended
November 30, 2016. Operating earnings
decreased due to lower profitability in the segment's mortgage
operations as a result of a decrease in refinance transactions,
which led to both lower origination volume and profit per loan.
This was partially offset by higher profit per transaction in the
segment's title operations and earnings from the real estate
brokerage business which was acquired as part of the WCI
Communities, Inc. ("WCI") acquisition in February 2017.
Rialto
Operating earnings for the Rialto segment were $23.6 million in the year ended November 30, 2017 (which included $22.5 million of operating loss and an add
back of $46.1 million of net loss
attributable to noncontrolling interests). Operating earnings in
the year ended November 30, 2016 were
$2.1 million (which included
$16.7 million of operating loss and
an add back of $18.8 million of
net loss attributable to noncontrolling interests). The increase in
operating earnings was primarily related to an increase in
incentive income related to carried interest distributions from the
Rialto real estate funds, as well as an increase in management fee
income and equity in earnings from unconsolidated entities. This
was partially offset by an increase in REO and loan impairments and
general and administrative expenses. In addition, the year ended
November 30, 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
$73.4 million in the year ended
November 30, 2017, compared to
operating earnings of $71.2 million
in the year ended November 30, 2016.
The increase in profitability was primarily due to the segment's
$96.7 million share of gains as a
result of the sale of seven operating properties by Lennar
Multifamily's unconsolidated entities, compared to the segment's
$91.0 million share of gains as a
result of the sale of seven operating properties by Lennar
Multifamily's unconsolidated entities in the year ended
November 30, 2016.
Corporate General and Administrative Expenses
Corporate general and administrative expenses were $285.9 million, or 2.3% as a percentage of total
revenues, in the year ended November 30,
2017, compared to $232.6
million, or 2.1% as a percentage of total revenues, in the
year ended November 30, 2016. The
increase was primarily due to personnel and related expenses and
professional expenses related to technology investments.
Noncontrolling Interests
Net earnings (loss) attributable to noncontrolling interests
were ($38.7) million and $1.2 million in the years ended November 30,
2017 and 2016, respectively. Net loss attributable to
noncontrolling interests during the year ended November 30, 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
in 2010. Net earnings attributable to noncontrolling interests
during the year ended November 30,
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
Proposed Merger with CalAtlantic
In October 2017, the Company
entered into an agreement under which CalAtlantic Group, Inc.
("CalAtlantic") will be merged with, and will become, a wholly
owned subsidiary of the Company (the "Merger"). In the Merger,
CalAtlantic stockholders will be entitled to receive for each share
of CalAtlantic stock 0.885 shares of the Company's Class A common
stock and 0.0177 shares of the Company's Class B common stock.
However, the Company will pay $48.26
per share in cash for 24,083,091 of the shares of CalAtlantic
common stock, which will total approximately $1.16 billion. The Merger is subject to approval
by the stockholders of both CalAtlantic and the Company at
meetings scheduled to be held on February
12, 2018.
Debt Transactions
In November 2017, the Company
redeemed $400 million
aggregate principal amount of 4.750% Senior Notes due 2017.
The redemption price, which was paid in cash, was 100% of the
principal amount plus accrued but unpaid interest.
In November 2017, the Company
issued $300 million aggregate
principal amount of 2.95% Senior Notes due 2020 (the "2.95% Senior
Notes") and $900 million aggregate
principal amount of 4.750% Senior Notes due 2027 (the "4.750%
Senior Notes") at a price of 100% in a private placement. Proceeds
from the offering, after payment of underwriting fees and certain
expenses, were $1.19 billion. The
Company intends to use the net proceeds of this offering to fund
the portion of the cash consideration payable by the Company in
connection with the Merger, to pay expenses related to the Merger
and for general corporate purposes. Interest on the 2.95% Senior
Notes and 4.750% Senior Notes is due semi-annually beginning
May 2018.
In August 2017, the Company
redeemed $250 million
aggregate principal amount of its 6.875% senior notes due
2021 that had been issued by WCI. The redemption price, which was
paid in cash, was 103.438% of the principal amount plus accrued but
unpaid interest up to, but not including, the redemption date.
In April 2017, the Company issued
$650 million aggregate principal
amount of 4.50% senior notes due 2024. The Company used 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, and the redemption of its 6.875% senior notes due
2021, noted above.
In January 2017, the Company
issued $600 million aggregate
principal amount of 4.125% senior notes due 2022 (the "4.125%
Senior Notes"). The Company used the net proceeds from the sale of
the 4.125% Senior Notes to fund a portion of the cash consideration
for the Company's acquisition of WCI, to pay costs and expenses
related to the acquisition of WCI and for general corporate
purposes.
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. As of November 30, 2017,
there were no outstanding borrowings under the Credit Facility.
SUBSEQUENT EVENT
Tax Reform
In December 2017, the Tax Cuts and
Jobs Act was enacted which will have a positive impact on our
effective tax rate in 2018 and subsequent years. The tax reform
bill will reduce our effective tax rate in 2018 from 34% to
approximately 25%. Excluded from our 2018 effective tax rate is a
one-time non-cash write-down of our deferred tax assets of
approximately $70 million which will
be recorded in the first quarter of 2018 as a result of our lower
effective tax rate.
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 a strategic transaction
closing in the first quarter of 2018, our combination with
CalAtlantic closing in February 2018,
the effect of the Tax Cuts and Jobs Act on our effective tax
rate, 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 ability to manage our cost structure, both in our Lennar
Homebuilding and Lennar Multifamily businesses; 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; 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 ability 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; that the Tax Cuts and Jobs Act will not have the
positive impact on our effective tax rate that we anticipate; that
the write-down of our deferred tax assets be higher than we
expect; with respect to the strategic transaction and the
CalAtlantic transaction, that either or both of the transactions do
not close, or closing is delayed; 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 fourth quarter
earnings will be held at 11:00 a.m. Eastern
Time on Wednesday, January 10, 2018. 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 203-369-1758 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
|
|
Years
Ended
|
|
November
30,
|
|
November
30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Revenues:
|
|
|
|
|
|
|
|
Lennar
Homebuilding
|
$
|
3,410,612
|
|
3,007,002
|
|
11,200,242
|
|
9,741,337
|
Lennar Financial
Services
|
198,647
|
|
195,915
|
|
770,109
|
|
687,255
|
Rialto
|
73,439
|
|
81,532
|
|
281,243
|
|
233,966
|
Lennar
Multifamily
|
102,871
|
|
92,177
|
|
394,771
|
|
287,441
|
Total
revenues
|
$
|
3,785,569
|
|
3,376,626
|
|
12,646,365
|
|
10,949,999
|
|
|
|
|
|
|
|
|
Lennar Homebuilding
operating earnings
|
$
|
478,845
|
|
436,716
|
|
1,269,039
|
|
1,344,932
|
Lennar Financial
Services operating earnings
|
42,076
|
|
51,350
|
|
155,524
|
|
163,617
|
Rialto operating
loss
|
(11,998)
|
|
(159)
|
|
(22,495)
|
|
(16,692)
|
Lennar Multifamily
operating earnings
|
38,616
|
|
41,400
|
|
73,432
|
|
71,174
|
Corporate general and
administrative expenses
|
(85,556)
|
|
(67,928)
|
|
(285,889)
|
|
(232,562)
|
Earnings before
income taxes
|
461,983
|
|
461,379
|
|
1,189,611
|
|
1,330,469
|
Provision for income
taxes
|
(164,201)
|
|
(150,909)
|
|
(417,857)
|
|
(417,378)
|
Net earnings
(including net earnings (loss) attributable to
noncontrolling interests)
|
297,782
|
|
310,470
|
|
771,754
|
|
913,091
|
Less: Net earnings
(loss) attributable to noncontrolling interests
|
(11,808)
|
|
(2,983)
|
|
(38,726)
|
|
1,247
|
Net earnings
attributable to Lennar
|
$
|
309,590
|
|
313,453
|
|
810,480
|
|
911,844
|
|
|
|
|
|
|
|
|
Average shares
outstanding:
|
|
|
|
|
|
|
|
Basic
(1)
|
237,562
|
|
230,898
|
|
237,155
|
|
223,078
|
Diluted
(1)
|
237,564
|
|
236,856
|
|
237,156
|
|
235,370
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
Basic
(1)
|
$
|
1.29
|
|
1.34
|
|
3.38
|
|
4.05
|
Diluted (1)
(2)
|
$
|
1.29
|
|
1.31
|
|
3.38
|
|
3.86
|
|
|
|
|
|
|
|
|
Supplemental
information:
|
|
|
|
|
|
|
|
Interest incurred
(3)
|
$
|
70,376
|
|
67,909
|
|
290,325
|
|
281,394
|
|
|
|
|
|
|
|
|
EBIT
(4):
|
|
|
|
|
|
|
|
Net earnings
attributable to Lennar
|
$
|
309,590
|
|
313,453
|
|
810,480
|
|
911,844
|
Provision for income
taxes
|
164,201
|
|
150,909
|
|
417,857
|
|
417,378
|
Interest
expense
|
81,728
|
|
73,277
|
|
277,809
|
|
245,061
|
EBIT
|
$
|
555,519
|
|
537,639
|
|
1,506,146
|
|
1,574,283
|
|
|
(1)
|
Basic and diluted
average shares outstanding and earnings per share calculations have
been retroactively adjusted in the periods presented to
reflect 4.7 million Class B shares distributed as a part of the
stock dividend on November 27, 2017.
|
(2)
|
For the three months
and year ended November 30, 2016, diluted earnings per share
includes an add back of interest of $0.7 million and $5.5 million,
respectively, related to the Company's 3.25% convertible senior
notes.
|
(3)
|
Amount represents
interest incurred related to Lennar Homebuilding debt.
|
(4)
|
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,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Lennar
Homebuilding revenues:
|
|
|
|
|
|
|
|
Sales of
homes
|
$
|
3,333,428
|
|
2,930,921
|
|
11,035,299
|
|
9,558,517
|
Sales of
land
|
77,184
|
|
76,081
|
|
164,943
|
|
182,820
|
Total
revenues
|
3,410,612
|
|
3,007,002
|
|
11,200,242
|
|
9,741,337
|
|
|
|
|
|
|
|
|
Lennar
Homebuilding costs and expenses:
|
|
|
|
|
|
|
|
Costs of homes
sold
|
2,585,926
|
|
2,247,402
|
|
8,601,346
|
|
7,362,853
|
Costs of land
sold
|
56,222
|
|
51,792
|
|
135,075
|
|
138,111
|
Selling, general and
administrative
|
281,012
|
|
256,167
|
|
1,015,848
|
|
898,917
|
Total costs and
expenses
|
2,923,160
|
|
2,555,361
|
|
9,752,269
|
|
8,399,881
|
Lennar
Homebuilding operating margins
|
487,452
|
|
451,641
|
|
1,447,973
|
|
1,341,456
|
Lennar Homebuilding
equity in loss from unconsolidated entities
|
(19,017)
|
|
(24,608)
|
|
(61,708)
|
|
(49,275)
|
Lennar Homebuilding
other income, net
|
10,410
|
|
9,683
|
|
22,774
|
|
52,751
|
Lennar Homebuilding
loss due to litigation
|
—
|
|
—
|
|
(140,000)
|
|
—
|
Lennar
Homebuilding operating earnings
|
$
|
478,845
|
|
436,716
|
|
1,269,039
|
|
1,344,932
|
|
|
|
|
|
|
|
|
Lennar Financial
Services revenues
|
$
|
198,647
|
|
195,915
|
|
770,109
|
|
687,255
|
Lennar Financial
Services costs and expenses
|
156,571
|
|
144,565
|
|
614,585
|
|
523,638
|
Lennar Financial
Services operating earnings
|
$
|
42,076
|
|
51,350
|
|
155,524
|
|
163,617
|
|
|
|
|
|
|
|
|
Rialto
revenues
|
$
|
73,439
|
|
81,532
|
|
281,243
|
|
233,966
|
Rialto costs and
expenses
|
72,057
|
|
74,353
|
|
247,549
|
|
229,769
|
Rialto equity in
earnings from unconsolidated entities
|
14,137
|
|
4,624
|
|
25,447
|
|
18,961
|
Rialto other expense,
net
|
(27,517)
|
|
(11,962)
|
|
(81,636)
|
|
(39,850)
|
Rialto operating
loss
|
$
|
(11,998)
|
|
(159)
|
|
(22,495)
|
|
(16,692)
|
|
|
|
|
|
|
|
|
Lennar Multifamily
revenues
|
$
|
102,871
|
|
92,177
|
|
394,771
|
|
287,441
|
Lennar Multifamily
costs and expenses
|
105,775
|
|
97,542
|
|
407,078
|
|
301,786
|
Lennar Multifamily
equity in earnings from unconsolidated entities
|
41,520
|
|
46,765
|
|
85,739
|
|
85,519
|
Lennar Multifamily
operating earnings
|
$
|
38,616
|
|
41,400
|
|
73,432
|
|
71,174
|
LENNAR CORPORATION
AND SUBSIDIARIES
|
Summary of Deliveries
and New Orders
|
(Dollars in
thousands, except average sales price)
|
(unaudited)
|
|
|
|
For the Three
Months Ended November 30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Deliveries:
|
Homes
|
|
Dollar
Value
|
|
Average Sales
Price
|
East
|
4,207
|
|
4,260
|
|
$
|
1,378,540
|
|
1,317,343
|
|
$
|
328,000
|
|
309,000
|
Central
|
2,085
|
|
1,865
|
|
694,429
|
|
616,262
|
|
333,000
|
|
330,000
|
West
|
1,858
|
|
1,640
|
|
1,029,791
|
|
791,905
|
|
554,000
|
|
483,000
|
Other
|
483
|
|
463
|
|
245,009
|
|
221,297
|
|
507,000
|
|
478,000
|
Total
|
8,633
|
|
8,228
|
|
$
|
3,347,769
|
|
2,946,807
|
|
$
|
388,000
|
|
358,000
|
|
Of the total homes
delivered listed above, 19 homes with a dollar value of $14.3
million and an average sales price of $755,000 represent home
deliveries from unconsolidated entities for the three months ended
November 30, 2017, compared to 22 home deliveries with a dollar
value of $15.9 million and an average sales price of $722,000 for
the three months ended November 30, 2016.
|
New
Orders:
|
Homes
|
|
Dollar
Value
|
|
Average Sales
Price
|
East
|
3,719
|
|
3,292
|
|
$
|
1,222,341
|
|
1,014,620
|
|
$
|
329,000
|
|
308,000
|
Central
|
1,800
|
|
1,557
|
|
602,611
|
|
530,367
|
|
335,000
|
|
341,000
|
West
|
1,441
|
|
1,342
|
|
806,666
|
|
651,687
|
|
560,000
|
|
486,000
|
Other
|
397
|
|
407
|
|
198,224
|
|
199,759
|
|
499,000
|
|
491,000
|
Total
|
7,357
|
|
6,598
|
|
$
|
2,829,842
|
|
2,396,433
|
|
$
|
385,000
|
|
363,000
|
|
Of the total new
orders listed above, 28 homes with a dollar value of $19.8 million
and average sales price of $708,000 represent new orders from
unconsolidated entities for the three months ended November 30,
2017, compared to net 5 cancellations from unconsolidated entities
with a dollar value of $6.5 million and an average sales price of
$1,294,000 for the three months ended November 30, 2016.
|
|
For the Years
Ended November 30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Deliveries:
|
Homes
|
|
Dollar
Value
|
|
Average Sales
Price
|
East
|
14,076
|
|
12,483
|
|
$
|
4,577,296
|
|
3,890,405
|
|
$
|
325,000
|
|
312,000
|
Central
|
7,262
|
|
6,788
|
|
2,444,924
|
|
2,218,590
|
|
337,000
|
|
327,000
|
West
|
6,238
|
|
5,734
|
|
3,199,252
|
|
2,757,112
|
|
513,000
|
|
481,000
|
Other
|
1,818
|
|
1,558
|
|
862,657
|
|
748,040
|
|
475,000
|
|
480,000
|
Total
|
29,394
|
|
26,563
|
|
$
|
11,084,129
|
|
9,614,147
|
|
$
|
377,000
|
|
362,000
|
|
Of the total homes
delivered listed above, 72 homes with a dollar value of $48.8
million and an average sales price of $678,000 represent home
deliveries from unconsolidated entities for the year ended November
30, 2017, compared to 82 home deliveries with a dollar value of
$55.6 million and an average sales price of $678,000 for the year
ended November 30, 2016.
|
New
Orders:
|
Homes
|
|
Dollar
Value
|
|
Average Sales
Price
|
East
|
14,775
|
|
12,764
|
|
$
|
4,795,740
|
|
3,977,605
|
|
$
|
325,000
|
|
312,000
|
Central
|
7,154
|
|
7,041
|
|
2,409,559
|
|
2,354,618
|
|
337,000
|
|
334,000
|
West
|
6,715
|
|
5,910
|
|
3,529,945
|
|
2,832,993
|
|
526,000
|
|
479,000
|
Other
|
1,704
|
|
1,657
|
|
823,993
|
|
788,721
|
|
484,000
|
|
476,000
|
Total
|
30,348
|
|
27,372
|
|
$
|
11,559,237
|
|
9,953,937
|
|
$
|
381,000
|
|
364,000
|
|
Of the total new
orders listed above, 65 homes with a dollar value of $48.0 million
and an average sales price of $738,000 represent new orders from
unconsolidated entities for the year ended November 30, 2017,
compared to 23 new orders with a dollar value of $9.2 million and
an average sales price of $401,000 for the year ended November 30,
2016.
|
LENNAR CORPORATION
AND SUBSIDIARIES
|
Summary of
Backlog
|
(Dollars in
thousands, except average sales price)
|
(unaudited)
|
|
|
|
November
30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Backlog:
|
Homes
|
|
Dollar
Value
|
|
Average Sales
Price
|
East (1)
|
4,300
|
|
3,243
|
|
$
|
1,468,830
|
|
1,065,425
|
|
$
|
342,000
|
|
329,000
|
Central
|
2,213
|
|
2,321
|
|
785,469
|
|
821,608
|
|
355,000
|
|
354,000
|
West
|
2,007
|
|
1,530
|
|
1,078,760
|
|
748,488
|
|
537,000
|
|
489,000
|
Other (2)
|
415
|
|
529
|
|
217,307
|
|
256,017
|
|
524,000
|
|
484,000
|
Total
|
8,935
|
|
7,623
|
|
$
|
3,550,366
|
|
2,891,538
|
|
$
|
397,000
|
|
379,000
|
|
Of the total homes in
backlog listed above, 23 homes with a backlog dollar value of $15.2
million and an average sales price of $659,000 represent the
backlog from unconsolidated entities at November 30, 2017,
compared to 30 homes with a backlog dollar value of $16.0 million
and an average sales price of $533,000 at November 30,
2016.
|
|
|
(1)
|
During the year ended
November 30, 2017, the Company acquired 359 homes in backlog
related to the WCI acquisition. During the year ended November 30,
2016, the Company acquired 110 homes in backlog from other
homebuilders.
|
(2)
|
During the year ended
November 30, 2016, the Company acquired 58 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)
|
|
|
|
November
30,
|
|
2017
|
|
2016
|
Lennar Homebuilding
debt
|
$
|
6,410,003
|
|
4,575,977
|
Stockholders'
equity
|
7,872,317
|
|
7,026,042
|
Total
capital
|
$
|
14,282,320
|
|
11,602,019
|
Lennar
Homebuilding debt to total capital
|
44.9%
|
|
39.4%
|
|
|
|
|
Lennar Homebuilding
debt
|
$
|
6,410,003
|
|
4,575,977
|
Less: Lennar
Homebuilding cash and cash equivalents
|
2,282,925
|
|
1,050,138
|
Net Lennar
Homebuilding debt
|
$
|
4,127,078
|
|
3,525,839
|
Net Lennar
Homebuilding debt to total capital
(1)
|
34.4%
|
|
33.4%
|
|
|
(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.
|
As previously disclosed, the Merger is expected to close in
February 2018. As such, below are
CalAtlantic's fourth quarter and year ended December 31, 2017 selected operating data
released by CalAtlantic today. For additional information, refer to
CalAtlantic's website: www.calatlantichomes.com.
CALATLANTIC GROUP,
INC.
|
Supplemental
Data
|
(Dollars in
thousands, except average sales price)
|
(unaudited)
|
|
|
|
Three Months Ended
December 31
|
|
2017
|
|
2016
|
|
%
Change
|
|
Homes
|
|
Average
Sales Price
|
|
Homes
|
|
Average
Sales Price
|
|
Homes
|
|
Average
Sales Price
|
New homes delivered
(1)
|
4,557
|
|
$
|
461,000
|
|
4,338
|
|
$
|
450,000
|
|
5%
|
|
2%
|
Net new orders
(2)
|
3,407
|
|
463,000
|
|
2,848
|
|
447,000
|
|
20%
|
|
4%
|
|
Years Ended
December 31
|
|
2017
|
|
2016
|
|
%
Change
|
|
Homes
|
|
Average
Sales Price
|
|
Homes
|
|
Average
Sales Price
|
|
Homes
|
|
Average
Sales Price
|
New homes delivered
(1)
|
14,602
|
|
$
|
450,000
|
|
14,229
|
|
$
|
447,000
|
|
3%
|
|
1%
|
Net new orders
(2)
|
15,205
|
|
466,000
|
|
14,435
|
|
439,000
|
|
5%
|
|
6%
|
|
|
|
Three Months Ended
December 31
|
|
Years Ended
December 31
|
|
2017
|
|
2016
|
|
%
Change
|
|
2017
|
|
2016
|
|
%
Change
|
Average number of
selling communities
during the period
|
565
|
|
580
|
|
(3)%
|
|
565
|
|
570
|
|
(1)%
|
|
At December
31
|
|
2017
|
|
2016
|
|
%
Change
|
|
Homes
|
|
Dollar
Value
|
|
Homes
|
|
Dollar
Value
|
|
Homes
|
|
Dollar
Value
|
Backlog
(3)
|
6,420
|
|
$
|
3,217,810
|
|
5,817
|
|
$
|
2,663,851
|
|
10%
|
|
21%
|
(1)
|
As a result of
Hurricanes Harvey and Irma, the Weyerhauser I-joist issue discussed
in CalAtlantic's most recent Form 10-Q, and the California
wildfires, approximately 455 closings that were scheduled to close
during the 2017 fourth quarter have been rescheduled to close in
the 2018 first quarter.
|
(2)
|
Net new orders for
the 2017 fourth quarter include 105 homes in backlog acquired in
connection with CalAtlantic's December 2017 acquisition of Home
South Communities, one of the largest privately-held builders in
the Atlanta metro market.
|
(3)
|
As of December 31,
2017, the average gross margin of the 6,420 homes in backlog was
approximately 21.1%, up 70 basis points
compared to the total homes in backlog as December 31,
2016.
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content:http://www.prnewswire.com/news-releases/lennar-reports-fourth-quarter-eps-of-129-300580505.html
SOURCE Lennar Corporation