MIAMI, Oct. 3, 2017
/PRNewswire/ --
- Net earnings of $249.2
million, or $1.06 per diluted
share, compared to net earnings of $235.8
million, or $1.01 per diluted
share
- Deliveries of 7,598 homes – up 12%
- New orders of 7,610 homes – up 8%; new orders dollar value
of $2.9 billion – up 14%
- Backlog of 10,212 homes – up 10%; backlog dollar value of
$4.1 billion – up 18%
- Revenues of $3.3 billion – up
15%
- Lennar Homebuilding operating earnings of $386.3 million, compared to $344.9 million – up 12%
- Gross margin on home sales of 22.8% – improved 20 basis
points
- S,G&A expenses as a % of revenues from home sales of
9.2% – improved 10 basis points
- Operating margin on home sales of 13.6% – improved 40 basis
points
- Lennar Financial Services operating earnings of $49.1 million, compared to $53.2 million
- Rialto operating earnings (net of noncontrolling interests)
of $3.2 million, compared to
$5.9 million
- Lennar Multifamily operating earnings of $9.1 million, compared to $2.6 million
- Lennar Homebuilding cash and cash equivalents of
$565 million
- Lennar redeemed the $250
million principal amount of 6.875% senior notes due 2021
that had been issued by WCI Communities, Inc.
- Lennar Homebuilding debt to total capital, net of cash and
cash equivalents, of 39.6%
Lennar Corporation (NYSE: LEN and LEN.B), one
of the nation's largest homebuilders, today reported results
for its third quarter ended August 31,
2017. Third quarter net earnings attributable to Lennar in
2017 were $249.2 million, or
$1.06 per diluted share, compared to
third quarter net earnings attributable to Lennar in 2016 of
$235.8 million, or $1.01 per diluted share.
Stuart Miller, Chief Executive
Officer of Lennar Corporation, said, "We are pleased to announce
our third quarter results as we achieved net earnings of
$249.2 million, or $1.06 per diluted share. These results were
supported by strong demand for homes, low unemployment, favorable
interest rates and increased consumer confidence which are all
signs of a very healthy homebuilding market."
Mr. Miller continued, "Our core homebuilding business continued
to produce strong operating results in the third quarter as our
home deliveries and new orders increased 12% and 8%, respectively,
compared to last year, while our gross and operating margins were
22.8% and 13.6%, respectively. Our sales incentives per home
delivery in the third quarter were 5.5%, our lowest percentage
since 2006. We continued to invest in new technologies
throughout various aspects of our business, which helped contribute
to a record low third quarter S,G&A % of home sales
revenues of 9.2%."
"We continue to remain focused on fortifying our financial
position. In February 2017, we
acquired WCI for $643 million in an
all-cash transaction. Our strategy at that time was to
integrate WCI operations and systems efficiently, and to
quickly return our cash position and leverage back to prior year
levels. In very short order, we have seamlessly completed the
integration of WCI, and we have improved our net homebuilding debt
to total capital to 39.6%, a decrease of 30 basis points from the
prior year. The improvement in our leverage coupled with a
strong cash position and improved financial flexibility and
capacity from our $1.6 billion
revolving credit facility positions our balance sheet extremely
well for the future."
"A few weeks ago, we provided an update on our third and fourth
quarter home deliveries and new orders from the impact of
Hurricanes Harvey and Irma. After having time to complete a
more detailed assessment, we can confirm that the overall damage to
our communities was minimal. Additionally, given the
disruption from the preparation for the storms, clean-up after the
storms, and restart and normalization of business operations, we
maintain our estimate that approximately 950 closings will be
pushed from 2017 into 2018. We expect that once we get past
the short-term impact from the storms, there will be increased
economic activity and an increased demand for new homes which will
result in a broader range of opportunities for us as we look
towards 2018."
"Complementing our homebuilding business, our Financial Services
business reported earnings of $49.1
million in our third quarter. Although these results
are down 8% from the prior year, the decrease was primarily due to
a significantly lower number of refinance transactions which was
partially offset by higher profit per transaction in our title
operations."
"Additionally complementing our core homebuilding performance,
our ancillary business segments continued to perform as expected
and to mature as independent businesses."
Mr. Miller concluded, "We continue to execute our
carefully-crafted strategy across all of our businesses. While our
homebuilding and financial services businesses continue to be the
primary drivers of our quarterly earnings, we are in an excellent
position across our multiple platforms."
RESULTS OF OPERATIONS
THREE MONTHS ENDED AUGUST 31, 2017
COMPARED TO
THREE MONTHS ENDED AUGUST 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 August 31, 2016.
Lennar Homebuilding
Revenues from home sales increased 17% in the third quarter of
2017 to $2.8 billion from
$2.4 billion in the third quarter of
2016. Revenues were higher primarily due to a 12% 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 7,588
homes in the third quarter of 2017 from 6,758 homes in the third
quarter of 2016. There was an increase in home deliveries in all of
the Company's Homebuilding segments and Homebuilding Other, except
in Homebuilding Central that was slightly down from prior year due
to Hurricane Harvey which impacted approximately 120 deliveries in
the third quarter of 2017. The average sales price of homes
delivered was $375,000 in the third
quarter of 2017, compared to $362,000
in the third quarter of 2016. Sales incentives offered to
homebuyers were $21,800 per home
delivered in the third quarter of 2017, or 5.5% as a percentage of
home sales revenue, compared to $22,500 per home delivered in the third quarter
of 2016, or 5.9% as a percentage of home sales revenue, and
$22,700 per home delivered in the
second quarter of 2017, or 5.7% as a percentage of home sales
revenue.
Gross margins on home sales were $650.4
million, or 22.8%, in the third quarter of 2017, compared to
$551.7 million, or 22.6%, in the
third quarter of 2016. Gross margin percentage on home sales
increased compared to the third quarter of 2016 primarily due to
insurance recoveries of $10.3 million
that positively impacted gross margin percentage by 30 basis
points. Gross profits on land sales were $5.2 million in the three months ended
August 31, 2017, compared to
$9.4 million in the three months
ended August 31, 2016.
Selling, general and administrative expenses were $262.5 million in the third quarter of 2017,
compared to $228.1 million in the
third quarter of 2016. As a percentage of revenues from home sales,
selling, general and administrative expenses improved to 9.2% in
the third quarter of 2017, from 9.3% in the third quarter of 2016,
due to improved operating leverage as a result of an increase in
home deliveries. In addition, 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, which were offset by insurance recoveries.
Lennar Homebuilding equity in loss from unconsolidated entities
was $9.7 million in the third quarter
of 2017, compared to $18.0 million in
the third quarter of 2016. In the third quarter of 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 for which the Company recognized its share of earnings
during the third quarter of 2017. In the third 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 and the Company's share of net
operating losses associated with the new FivePoint unconsolidated
entity.
Lennar Homebuilding other income, net, was $2.8 million in the third quarter of 2017,
compared to $30.0 million in the
third quarter of 2016. Other income, net, in the third quarter of
2016 was primarily related to $17.4
million of management fee income related to one of Lennar
Homebuilding's strategic joint ventures and a gain of $8.7 million on the sale of a clubhouse.
Lennar Homebuilding interest expense was $71.8 million in the third quarter of 2017
($68.6 million was included in costs
of homes sold, $0.9 million in costs
of land sold and $2.3 million in
other income, net), compared to $62.7
million in the third quarter of 2016 ($60.3 million was included in costs of homes
sold, $1.4 million in costs of land
sold and $1.0 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 $49.1 million in the third
quarter of 2017, compared to $53.2
million in the third quarter of 2016. Operating earnings
were impacted by a significant decrease in refinance transactions,
partially offset by higher profit per transaction in the segment's
title operations.
Rialto
Operating earnings for the Rialto segment were $3.2 million in the third quarter of 2017 (which
included a $3.2 million operating
loss and an add back of $6.4 million
of net loss attributable to noncontrolling interests). Operating
earnings in the third quarter of 2016 were $5.9 million (which included a $0.1 million operating loss and an add back of
$6.0 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 real estate owned impairments, partially offset
by an increase in incentive income related to carried interest
distributions from the Rialto real estate funds and lower general
and administrative expenses.
Lennar Multifamily
Operating earnings for the Lennar Multifamily segment were
$9.1 million in the third quarter of
2017, primarily due to the segment's $15.4
million share of gains as a result of the sale of two
operating properties by Lennar Multifamily's unconsolidated
entities and management fee income, partially offset by general and
administrative expenses. In the third quarter of 2016, the Lennar
Multifamily segment had operating earnings of $2.6 million primarily due to the segment's
$8.0 million share of a gain as a
result of the sale of an operating property by one of its
unconsolidated entities and management fee income, partially offset
by general and administrative expenses.
Corporate General and Administrative Expenses
Corporate general and administrative expenses were $72.9 million, or 2.2% as a percentage of total
revenues, in the third quarter of 2017, compared to $61.2 million, or 2.2% as a percentage of total
revenues, in the third quarter of 2016.
Noncontrolling Interests
Net loss attributable to noncontrolling interests was
$5.6 million and $2.7 million in the third quarter of 2017 and
2016, respectively. Net loss attributable to noncontrolling
interests during the third quarter of 2017 was primarily
attributable to a net loss related to the FDIC's interest in a
portfolio of real estate loans that the Company acquired in
partnership with the FDIC. Net loss attributable to noncontrolling
interests in the third quarter of 2016 was primarily attributable
to a net loss related to the FDIC's interest in the portfolio of
real estate loans, partially offset by net earnings related to the
Lennar Homebuilding consolidated joint ventures.
RESULTS OF OPERATIONS
NINE MONTHS ENDED AUGUST 31, 2017
COMPARED TO
NINE MONTHS ENDED AUGUST 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 August 31, 2017. Prior year information includes
only stand-alone data for Lennar Corporation for the nine months
ended August 31, 2016.
Lennar Homebuilding
Revenues from home sales increased 16% in the nine months ended
August 31, 2017 to $7.7 billion from $6.6
billion in the nine months ended August 31, 2016. Revenues were higher primarily
due to a 13% 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 20,708 homes in the nine
months ended August 31, 2017 from
18,275 homes in the nine months ended August
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 $372,000 in the nine months ended August 31, 2017, compared to $363,000 in the nine months ended August 31, 2016. Sales incentives offered to
homebuyers were $22,400 per home
delivered in the nine months ended August
31, 2017, or 5.7% as a percentage of home sales revenue,
compared to $22,000 per home
delivered in the nine months ended August
31, 2016, or 5.7% as a percentage of home sales revenue.
Gross margins on home sales were $1.7
billion, or 21.9%, in the nine months ended August 31, 2017, compared to $1.5 billion, or 22.8%, in the nine months ended
August 31, 2016. Gross margin
percentage on home sales decreased compared to the nine months
ended August 31, 2016 primarily due
to an increase in construction costs per home. Gross profits on
land sales were $8.9 million in the
nine months ended August 31, 2017,
compared to $20.4 million in the nine
months ended August 31, 2016.
Selling, general and administrative expenses were $734.8 million in the nine months ended
August 31, 2017, compared to
$642.8 million in the nine months
ended August 31, 2016. As a
percentage of revenues from home sales, selling, general and
administrative expenses improved to 9.5% in the nine months ended
August 31, 2017, from 9.7% in the
nine months ended August 31, 2016,
due to improved operating leverage as a result of an increase in
home deliveries, despite the fact that 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 nine months ended August 31,
2017.
Lennar Homebuilding equity in loss from unconsolidated entities
was $42.7 million in the nine months
ended August 31, 2017, compared to
$24.7 million in the nine months
ended August 31, 2016. In the nine
months ended August 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 for which the Company recognized its share of earnings
during the nine months ended August 31,
2017. In the nine months ended August
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 and the
Company's share of net operating losses associated with the new
FivePoint unconsolidated entity. 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 $12.4 million in the nine months ended
August 31, 2017, compared to
$43.1 million in the nine months
ended August 31, 2016. In the nine
months ended August 31, 2016, other
income, net, included management fee income and a profit
participation related to Lennar Homebuilding's strategic joint
ventures and a gain on the sale of a clubhouse.
Lennar Homebuilding loss due to litigation of $140 million in the nine months ended
August 31, 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 approximates 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 $196.1 million in the nine months ended
August 31, 2017 ($187.2 million was included in costs of homes
sold, $4.1 million in costs of land
sold and $4.8 million in other
income, net), compared to $171.8
million in the nine months ended August 31, 2016 ($165.8
million was included in costs of homes sold, $2.7 million in costs of land sold and
$3.3 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 $113.4 million in the nine
months ended August 31, 2017,
compared to $112.3 million in the
nine months ended August 31, 2016.
The increase in operating earnings was primarily due to increased
profitability in the segment's title operations and earnings from
Berkshire Hathaway Home Services ("BHHS") which was acquired as
part of the WCI acquisition in February, partially offset by
decreased profitability in the segment's mortgage operations as a
result of a decrease in refinance transactions.
Rialto
Operating earnings for the Rialto segment were $21.4 million in the nine months ended
August 31, 2017 (which included a
$10.5 million operating loss and an
add back of $31.9 million of net loss
attributable to noncontrolling interests). Operating loss for the
nine months ended August 31, 2016 was
$5.9 million (which included a
$16.5 million operating loss and an
add back of $10.6 million of net loss
attributable to noncontrolling interests). The increase in
operating earnings was primarily related to an increase in RMF
earnings as a result of higher securitization margins, 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. This was partially offset by an increase in loan
impairments, real estate owned impairments and general and
administrative expenses. In addition, the nine months ended
August 31, 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
$34.8 million in the nine months
ended August 31, 2017, primarily due
to the segment's $52.9 million share
of gains as a result of the sale of five operating properties by
Lennar Multifamily's unconsolidated entities and management fee
income, partially offset by general and administrative expenses. In
the nine months ended August 31,
2016, the Lennar Multifamily segment had operating earnings
of $29.8 million primarily due to the
segment's $43.8 million share of
gains as a result of the sale of three operating properties by its
unconsolidated entities and a gross profit of $5.2 million on a third-party land sale and
management fee income, partially offset by general and
administrative expenses.
Corporate General and Administrative Expenses
Corporate general and administrative expenses were $200.3 million, or 2.3% as a percentage of total
revenues, in the nine months ended August
31, 2017, compared to $164.6
million, or 2.2% as a percentage of total revenues, in the
nine months ended August 31,
2016.
Noncontrolling Interests
Net earnings (loss) attributable to noncontrolling interests
were ($26.9) million and $4.2 million in the nine months ended
August 31, 2017 and 2016,
respectively. Net loss attributable to noncontrolling interests
during the nine months ended August 31,
2017 was primarily attributable to a net loss related to the
FDIC's interest in a 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 nine months ended August 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.
OTHER TRANSACTIONS
Debt Transactions
During the three months ended August 31,
2017, the Company redeemed the $250
million principal amount of the 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.
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 impact of the hurricanes on home closings, our belief regarding
the long-term opportunity of housing demands resulting from the
rebuilding efforts, our belief that we are in an excellent position
to perform across our multiple platforms, 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 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 difficulties we might have in managing 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 meet the demand
resulting from the rebuilding effort; decreased demand for our
homes or Lennar Multifamily rental properties, and difficulties we
might have in selling our apartment developments; natural disasters
or catastrophic events for which our insurance may not provide
adequate coverage; difficulties we might have in successfully
executing 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 third quarter
earnings will be held at 11:00 a.m. Eastern
Time on Tuesday, October 3, 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 203-369-0617 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
|
|
Nine Months
Ended
|
|
August
31,
|
|
August
31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Revenues:
|
|
|
|
|
|
|
|
Lennar
Homebuilding
|
$
|
2,885,195
|
|
|
2,496,969
|
|
|
7,789,630
|
|
|
6,734,335
|
|
Lennar Financial
Services
|
215,056
|
|
|
191,444
|
|
|
571,462
|
|
|
491,340
|
|
Rialto
|
57,810
|
|
|
63,885
|
|
|
207,804
|
|
|
152,434
|
|
Lennar
Multifamily
|
103,415
|
|
|
81,596
|
|
|
291,900
|
|
|
195,264
|
|
Total
revenues
|
$
|
3,261,476
|
|
|
2,833,894
|
|
|
8,860,796
|
|
|
7,573,373
|
|
|
|
|
|
|
|
|
|
Lennar Homebuilding
operating earnings
|
$
|
386,276
|
|
|
344,882
|
|
|
790,194
|
|
|
908,216
|
|
Lennar Financial
Services operating earnings
|
49,057
|
|
|
53,248
|
|
|
113,448
|
|
|
112,267
|
|
Rialto operating
loss
|
(3,192)
|
|
|
(57)
|
|
|
(10,497)
|
|
|
(16,533)
|
|
Lennar Multifamily
operating earnings
|
9,104
|
|
|
2,649
|
|
|
34,816
|
|
|
29,774
|
|
Corporate general and
administrative expenses
|
(72,860)
|
|
|
(61,164)
|
|
|
(200,333)
|
|
|
(164,634)
|
|
Earnings before
income taxes
|
368,385
|
|
|
339,558
|
|
|
727,628
|
|
|
869,090
|
|
Provision for income
taxes
|
(124,795)
|
|
|
(106,427)
|
|
|
(253,656)
|
|
|
(266,469)
|
|
Net earnings
(including net earnings (loss) attributable to
noncontrolling interests)
|
243,590
|
|
|
233,131
|
|
|
473,972
|
|
|
602,621
|
|
Less: Net earnings
(loss) attributable to noncontrolling interests
|
(5,575)
|
|
|
(2,711)
|
|
|
(26,918)
|
|
|
4,230
|
|
Net earnings
attributable to Lennar
|
$
|
249,165
|
|
|
235,842
|
|
|
500,890
|
|
|
598,391
|
|
|
|
|
|
|
|
|
|
Average shares
outstanding:
|
|
|
|
|
|
|
|
Basic
|
232,673
|
|
|
223,549
|
|
|
232,361
|
|
|
215,814
|
|
Diluted
|
232,674
|
|
|
231,818
|
|
|
232,363
|
|
|
230,218
|
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
Basic
|
$
|
1.06
|
|
|
1.04
|
|
|
2.13
|
|
|
2.74
|
|
Diluted
(1)
|
$
|
1.06
|
|
|
1.01
|
|
|
2.13
|
|
|
2.59
|
|
|
|
|
|
|
|
|
|
Supplemental
information:
|
|
|
|
|
|
|
|
Interest incurred
(2)
|
$
|
71,036
|
|
|
70,038
|
|
|
219,949
|
|
|
213,485
|
|
|
|
|
|
|
|
|
|
EBIT
(3):
|
|
|
|
|
|
|
|
Net earnings
attributable to Lennar
|
$
|
249,165
|
|
|
235,842
|
|
|
500,890
|
|
|
598,391
|
|
Provision for income
taxes
|
124,795
|
|
|
106,427
|
|
|
253,656
|
|
|
266,469
|
|
Interest
expense
|
71,804
|
|
|
62,694
|
|
|
196,081
|
|
|
171,784
|
|
EBIT
|
$
|
445,764
|
|
|
404,963
|
|
|
950,627
|
|
|
1,036,644
|
|
|
(1)
|
For the three and
nine months ended August 31, 2016, diluted earnings per share
includes an add back of interest of $1.0 million
and $4.8 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
|
|
Nine Months
Ended
|
|
August
31,
|
|
August
31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Lennar
Homebuilding revenues:
|
|
|
|
|
|
|
|
Sales of
homes
|
$
|
2,847,731
|
|
|
2,443,337
|
|
|
7,701,871
|
|
|
6,627,596
|
|
Sales of
land
|
37,464
|
|
|
53,632
|
|
|
87,759
|
|
|
106,739
|
|
Total
revenues
|
2,885,195
|
|
|
2,496,969
|
|
|
7,789,630
|
|
|
6,734,335
|
|
|
|
|
|
|
|
|
|
Lennar
Homebuilding costs and expenses:
|
|
|
|
|
|
|
|
Costs of homes
sold
|
2,197,320
|
|
|
1,891,661
|
|
|
6,015,420
|
|
|
5,115,451
|
|
Costs of land
sold
|
32,278
|
|
|
44,239
|
|
|
78,853
|
|
|
86,319
|
|
Selling, general and
administrative
|
262,467
|
|
|
228,127
|
|
|
734,836
|
|
|
642,750
|
|
Total costs and
expenses
|
2,492,065
|
|
|
2,164,027
|
|
|
6,829,109
|
|
|
5,844,520
|
|
Lennar
Homebuilding operating margins
|
393,130
|
|
|
332,942
|
|
|
960,521
|
|
|
889,815
|
|
Lennar Homebuilding
equity in loss from unconsolidated entities
|
(9,651)
|
|
|
(18,034)
|
|
|
(42,691)
|
|
|
(24,667)
|
|
Lennar Homebuilding
other income, net
|
2,797
|
|
|
29,974
|
|
|
12,364
|
|
|
43,068
|
|
Lennar Homebuilding
loss due to litigation
|
—
|
|
|
—
|
|
|
(140,000)
|
|
|
—
|
|
Lennar
Homebuilding operating earnings
|
$
|
386,276
|
|
|
344,882
|
|
|
790,194
|
|
|
908,216
|
|
|
|
|
|
|
|
|
|
Lennar Financial
Services revenues
|
$
|
215,056
|
|
|
191,444
|
|
|
571,462
|
|
|
491,340
|
|
Lennar Financial
Services costs and expenses
|
165,999
|
|
|
138,196
|
|
|
458,014
|
|
|
379,073
|
|
Lennar Financial
Services operating earnings
|
$
|
49,057
|
|
|
53,248
|
|
|
113,448
|
|
|
112,267
|
|
|
|
|
|
|
|
|
|
Rialto
revenues
|
$
|
57,810
|
|
|
63,885
|
|
|
207,804
|
|
|
152,434
|
|
Rialto costs and
expenses
|
49,503
|
|
|
62,306
|
|
|
175,492
|
|
|
155,416
|
|
Rialto equity in
earnings from unconsolidated entities
|
4,858
|
|
|
5,976
|
|
|
11,310
|
|
|
14,337
|
|
Rialto other expense,
net
|
(16,357)
|
|
|
(7,612)
|
|
|
(54,119)
|
|
|
(27,888)
|
|
Rialto operating
loss
|
$
|
(3,192)
|
|
|
(57)
|
|
|
(10,497)
|
|
|
(16,533)
|
|
|
|
|
|
|
|
|
|
Lennar Multifamily
revenues
|
$
|
103,415
|
|
|
81,596
|
|
|
291,900
|
|
|
195,264
|
|
Lennar Multifamily
costs and expenses
|
105,956
|
|
|
84,007
|
|
|
301,303
|
|
|
204,244
|
|
Lennar Multifamily
equity in earnings from unconsolidated entities
|
11,645
|
|
|
5,060
|
|
|
44,219
|
|
|
38,754
|
|
Lennar Multifamily
operating earnings
|
$
|
9,104
|
|
|
2,649
|
|
|
34,816
|
|
|
29,774
|
|
LENNAR CORPORATION
AND SUBSIDIARIES
Summary of Deliveries
and New Orders
(Dollars in
thousands, except average sales price)
(unaudited)
|
|
|
For the Three
Months Ended August 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Deliveries:
|
Homes
|
|
Dollar
Value
|
|
Average Sales
Price
|
East
|
3,778
|
|
|
3,127
|
|
|
$
|
1,236,619
|
|
|
971,636
|
|
|
$
|
327,000
|
|
|
311,000
|
|
Central
|
1,730
|
|
|
1,812
|
|
|
589,572
|
|
|
610,535
|
|
|
341,000
|
|
|
337,000
|
|
West
|
1,656
|
|
|
1,423
|
|
|
827,713
|
|
|
678,289
|
|
|
500,000
|
|
|
477,000
|
|
Other
|
434
|
|
|
417
|
|
|
201,511
|
|
|
198,873
|
|
|
464,000
|
|
|
477,000
|
|
Total
|
7,598
|
|
|
6,779
|
|
|
$
|
2,855,415
|
|
|
2,459,333
|
|
|
$
|
376,000
|
|
|
363,000
|
|
Of the total homes delivered listed above, 10 homes with a
dollar value of $7.7 million and an
average sales price of $768,000
represent home deliveries from unconsolidated entities for the
three months ended August 31, 2017,
compared to 21 home deliveries with a dollar value of $16.0 million and an average sales price of
$762,000 for the three months ended
August 31, 2016.
New
Orders:
|
Homes
|
|
Dollar
Value
|
|
Average Sales
Price
|
East
|
3,841
|
|
|
3,376
|
|
|
$
|
1,250,446
|
|
|
1,055,043
|
|
|
$
|
326,000
|
|
|
313,000
|
|
Central
|
1,657
|
|
|
1,714
|
|
|
558,782
|
|
|
578,053
|
|
|
337,000
|
|
|
337,000
|
|
West
|
1,689
|
|
|
1,497
|
|
|
909,209
|
|
|
722,888
|
|
|
538,000
|
|
|
483,000
|
|
Other
|
423
|
|
|
431
|
|
|
204,784
|
|
|
211,767
|
|
|
484,000
|
|
|
491,000
|
|
Total
|
7,610
|
|
|
7,018
|
|
|
$
|
2,923,221
|
|
|
2,567,751
|
|
|
$
|
384,000
|
|
|
366,000
|
|
Of the total new orders listed above, 16 homes with a dollar
value of $12.8 million and an average
sales price of $798,000 represent new
orders from unconsolidated entities for the three months ended
August 31, 2017, compared to four new
orders with a dollar value of $1.6
million and an average sales price of $396,000 for the three months ended August 31, 2016.
|
For the Nine
Months Ended August 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Deliveries:
|
Homes
|
|
Dollar
Value
|
|
Average Sales
Price
|
East
|
9,869
|
|
|
8,223
|
|
|
$
|
3,198,756
|
|
|
2,573,062
|
|
|
$
|
324,000
|
|
|
313,000
|
|
Central
|
5,177
|
|
|
4,923
|
|
|
1,750,495
|
|
|
1,602,328
|
|
|
338,000
|
|
|
325,000
|
|
West
|
4,380
|
|
|
4,094
|
|
|
2,169,461
|
|
|
1,965,207
|
|
|
495,000
|
|
|
480,000
|
|
Other
|
1,335
|
|
|
1,095
|
|
|
617,648
|
|
|
526,743
|
|
|
463,000
|
|
|
481,000
|
|
Total
|
20,761
|
|
|
18,335
|
|
|
$
|
7,736,360
|
|
|
6,667,340
|
|
|
$
|
373,000
|
|
|
364,000
|
|
Of the total homes delivered listed above, 53 homes with a
dollar value of $34.5 million and an
average sales price of $651,000
represent home deliveries from unconsolidated entities for the nine
months ended August 31, 2017,
compared to 60 home deliveries with a dollar value of $39.7 million and an average sales price of
$662,000 for the nine months ended
August 31, 2016.
New
Orders:
|
Homes
|
|
Dollar
Value
|
|
Average Sales
Price
|
East
|
11,056
|
|
|
9,472
|
|
|
$
|
3,573,399
|
|
|
2,962,985
|
|
|
$
|
323,000
|
|
|
313,000
|
|
Central
|
5,354
|
|
|
5,484
|
|
|
1,806,948
|
|
|
1,824,251
|
|
|
337,000
|
|
|
333,000
|
|
West
|
5,274
|
|
|
4,568
|
|
|
2,723,279
|
|
|
2,181,306
|
|
|
516,000
|
|
|
478,000
|
|
Other
|
1,307
|
|
|
1,250
|
|
|
625,769
|
|
|
588,962
|
|
|
479,000
|
|
|
471,000
|
|
Total
|
22,991
|
|
|
20,774
|
|
|
$
|
8,729,395
|
|
|
7,557,504
|
|
|
$
|
380,000
|
|
|
364,000
|
|
Of the total new orders listed above, 37 homes with a dollar
value of $28.2 million and an average
sales price of $762,000 represent new
orders from unconsolidated entities for the nine months ended
August 31, 2017, compared to 28 new
orders with a dollar value of $15.7
million and an average sales price of $561,000 for the nine months ended August 31, 2016.
LENNAR CORPORATION
AND SUBSIDIARIES
Summary of
Backlog
(Dollars in
thousands, except average sales price)
(unaudited)
|
|
|
August
31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Backlog:
|
Homes
|
|
Dollar
Value
|
|
Average Sales
Price
|
East (1)
|
4,789
|
|
|
4,211
|
|
|
$
|
1,625,820
|
|
|
1,370,470
|
|
|
$
|
339,000
|
|
|
325,000
|
|
Central
|
2,498
|
|
|
2,629
|
|
|
877,607
|
|
|
907,860
|
|
|
351,000
|
|
|
345,000
|
|
West
|
2,424
|
|
|
1,828
|
|
|
1,302,318
|
|
|
888,590
|
|
|
537,000
|
|
|
486,000
|
|
Other (2)
|
501
|
|
|
585
|
|
|
264,161
|
|
|
277,323
|
|
|
527,000
|
|
|
474,000
|
|
Total
|
10,212
|
|
|
9,253
|
|
|
$
|
4,069,906
|
|
|
3,444,243
|
|
|
$
|
399,000
|
|
|
372,000
|
|
Of the total homes in backlog listed above, 14 homes with a
backlog dollar value of $9.7 million
and an average sales price of $692,000 represent the backlog from
unconsolidated entities at August 31, 2017, compared to 57
homes with a backlog dollar value of $38.3
million and an average sales price of $673,000 at August 31, 2016.
(1)
|
During the nine
months ended August 31, 2017, the Company acquired 359 homes in
backlog related to the WCI
acquisition. During the nine months ended August 31, 2016, the
Company acquired 110 homes in backlog from other
homebuilders.
|
(2)
|
During the nine
months ended August 31, 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)
|
|
|
August
31,
|
|
November
30,
|
|
August
31,
|
|
2017
|
|
2016
|
|
2016
|
Lennar Homebuilding
debt
|
$
|
5,523,765
|
|
|
4,575,977
|
|
|
4,920,848
|
|
Stockholders'
equity
|
7,554,260
|
|
|
7,026,042
|
|
|
6,545,535
|
|
Total
capital
|
$
|
13,078,025
|
|
|
11,602,019
|
|
|
11,466,383
|
|
Lennar
Homebuilding debt to total capital
|
42.2
|
%
|
|
39.4
|
%
|
|
42.9
|
%
|
|
|
|
|
|
|
Lennar Homebuilding
debt
|
$
|
5,523,765
|
|
|
4,575,977
|
|
|
4,920,848
|
|
Less: Lennar
Homebuilding cash and cash equivalents
|
564,591
|
|
|
1,050,138
|
|
|
567,708
|
|
Net Lennar
Homebuilding debt
|
$
|
4,959,174
|
|
|
3,525,839
|
|
|
4,353,140
|
|
Net Lennar
Homebuilding debt to total capital (1)
|
39.6
|
%
|
|
33.4
|
%
|
|
39.9
|
%
|
|
|
(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.
|
View original
content:http://www.prnewswire.com/news-releases/lennar-reports-third-quarter-eps-of-106-300529478.html
SOURCE Lennar Corporation