MIAMI, June 21, 2016 /PRNewswire/ --
- Net earnings of $218.5 million, or $0.95 per diluted share,
compared to net earnings of $183.0 million, or $0.79 per diluted
share
- Deliveries of 6,724 homes – up 12%
- New orders of 7,962 homes – up 10%; new orders dollar value of $2.9 billion – up
11%
- Backlog of 9,014 homes – up 12%; backlog dollar value of $3.3 billion – up 15%
- Revenues of $2.7 billion – up 15%
- Lennar Homebuilding operating earnings of $342.7 million, compared to $292.8 million – up 17%
- Gross margin on home sales of 23.1%, compared to 23.8% in Q2 2015, improved sequentially 40 basis points from Q1
2016
- S,G&A expenses as a % of revenues from home sales improved to 9.3% from 10.0% in Q2 2015, improved sequentially 150
basis points from Q1 2016
- Operating margin on home sales improved to 13.9% from 13.8% in Q2 2015, improved sequentially 200 basis points from Q1
2016
- Lennar Financial Services operating earnings of $44.1 million, compared to $39.1 million
- Rialto operating loss (net of noncontrolling interests) of $13.8 million, compared to
operating earnings (net of noncontrolling interests) of $7.6 million
- Lennar Multifamily operating earnings of $14.9 million, compared to an operating loss of
$8.7 million
- Lennar Homebuilding cash and cash equivalents of $601 million
- Lennar Homebuilding debt to total capital, net of cash and cash equivalents, of 43.5%
Lennar Corporation (NYSE: LEN and LEN.B), one of the nation's largest homebuilders, today reported results
for its second quarter ended May 31, 2016. Second quarter net earnings attributable to Lennar in
2016 were $218.5 million, or $0.95 per diluted share, compared to
second quarter net earnings attributable to Lennar in 2015 of $183.0 million, or $0.79 per diluted share.
Stuart Miller, Chief Executive Officer of Lennar Corporation, said, "We are very pleased with
our second quarter results as we achieved pre-tax earnings of $327.8 million, our highest second
quarter pre-tax earnings since 2006. The homebuilding market continued its slow and steady recovery sustained by low interest
rates, modest wage growth, positive consumer confidence and low unemployment levels combined with tight inventory levels.
"As this year's spring selling season improved over last year, our second quarter new orders increased 10% to 7,962 homes
year-over-year, while our home deliveries and home sales revenue also increased to 6,724 homes and $2.4
billion, respectively. As the recovery has continued to mature, we have remained focused on our strategy of
moderating our growth rate in community count and home sales, as well as on our soft-pivot land strategy, targeting land
acquisitions with a shorter average life.
"Our core homebuilding business continued to produce strong operating results in the second quarter of 2016 as our operating
margin was 13.9%, a 10 basis point improvement from last year, notwithstanding a lower gross
margin in the quarter, as expected. Our homebuilding divisions continued to benefit from their focus on migrating from
traditional to digital marketing, which helped to reduce S,G&A as a percentage of home sales revenues to 9.3%, the lowest
second quarter percentage in our history. As we continue our strategy of infusing and reinvigorating technologies throughout
various aspects of our business, we look forward to additional opportunities that lie ahead."
Mr. Miller continued, "Alongside our homebuilding business, our Financial Services operations reported strong earnings of
$44.1 million in our second quarter, up 13% from the same period last year, primarily due to higher
profit per transaction in its mortgage and title operations.
"For the third consecutive quarter, our Multifamily business generated positive operating earnings. During the second quarter,
earnings were $14.9 million primarily due to the sale of an apartment property by one of its joint
ventures and a third-party land sale. In addition, subsequent to quarter end, the Lennar Multifamily Venture received an
additional $550 million of equity commitments, increasing its total equity commitments to
approximately $2.0 billion.
"Rialto has continued to grow despite the combination of turmoil in the CMBS markets earlier in the year and a write-off
relating to a single asset in one of our early bank portfolios. During the second quarter, our investment management
platform increased assets under management and profitability, while our mortgage finance business continues to be a market leader
in securitization margins and has seen an increase in its origination volumes, which improved sequentially from the first
quarter.
"Finally, during the second quarter of 2016, we contributed our investment in three strategic joint ventures previously
managed by FivePoint Communities in exchange for an investment in a newly formed FivePoint
entity. This transaction marked the next step in FivePoint's strategic evolution as a leader in the management and
development of large master-planned communities."
Mr. Miller concluded, "With a strong balance sheet, a backlog of homes with a value of $3.3
billion and a solid strategy in our core and ancillary businesses, we are well positioned to continue our strong performance for
2016."
RESULTS OF OPERATIONS
THREE MONTHS ENDED MAY 31, 2016 COMPARED TO
THREE MONTHS ENDED MAY 31, 2015
Lennar Homebuilding
Revenues from home sales increased 17% in the second quarter of 2016 to $2.4 billion from
$2.1 billion in the second quarter of 2015. 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 6,711 homes in the second quarter of 2016 from
5,989 homes in the second quarter of 2015. There was an increase in home deliveries in all of the Company's Homebuilding
segments, except in Homebuilding Houston and Homebuilding Other. The decrease in home deliveries in Houston was primarily due to less demand driven by volatility in the energy sector. The decrease in home
deliveries in Homebuilding Other was primarily due to a higher mix of start-up communities, which are earlier in the life cycle
of delivering homes than non start-up communities. The average sales price of homes delivered increased to $362,000 in the second quarter of 2016 from $348,000 in the second quarter of
2015. Sales incentives offered to homebuyers were $21,800 per home delivered in the second quarter
of 2016, or 5.7% as a percentage of home sales revenue, compared to $21,500 per home delivered in
the second quarter of 2015, or 5.8% as a percentage of home sales revenue, and $21,600 per home
delivered in the first quarter of 2016, or 5.6% as a percentage of home sales revenue.
Gross margins on home sales were $561.5 million, or 23.1%, in the second quarter of 2016,
compared to $495.9 million, or 23.8%, in the second quarter of 2015. Gross margin percentage on
home sales decreased compared to the second quarter of 2015 primarily due to an increase in land costs, partially offset by an
increase in the average sales price of homes delivered.
Selling, general and administrative expenses were $224.8 million in the second quarter of 2016,
compared to $209.0 million in the second quarter of 2015. As a percentage of revenues from home
sales, selling, general and administrative expenses improved to 9.3% in the second quarter of 2016, from 10.0% in the second
quarter of 2015, due to improved operating leverage as a result of an increase in home deliveries and benefits from the Company's
focus on digital marketing.
Lennar Homebuilding equity in earnings (loss) from unconsolidated entities was ($9.6) million in
the second quarter of 2016, compared to $6.5 million in the second quarter of 2015. 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. In
the second quarter of 2015, Lennar Homebuilding equity in earnings from unconsolidated entities included $11.6 million of equity in earnings from one of the Company's unconsolidated entities primarily due to the sale
of a commercial property and homesites to third parties, partially offset by the Company's share of net operating losses from
various unconsolidated entities.
Lennar Homebuilding other income (expense), net, was $14.9 million in the second quarter of
2016, compared to ($0.2) million in the second quarter of 2015. 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 $63.9 million in the second quarter of 2016
($62.1 million was included in cost of homes sold, $0.6 million in
cost of land sold and $1.2 million in other interest expense), compared to $57.7 million in the second quarter of 2015 ($53.2 million was included in cost
of homes sold, $0.6 million in cost of land sold and $3.8 million in
other interest expense). Interest expense included in cost of homes sold increased primarily due to an increase in the Company's
outstanding homebuilding debt and an increase in home deliveries.
Lennar Financial Services
Operating earnings for the Lennar Financial Services segment were $44.1 million in the second
quarter of 2016, compared to $39.1 million in the second quarter of 2015. The increase in
profitability was primarily due to higher profit per transaction in the segment's mortgage and title operations.
Rialto
Operating loss for the Rialto segment was $13.8 million in the second quarter of 2016 (which
included an $18.1 million operating loss and an add back of $4.3
million of net loss attributable to noncontrolling interests). The operating loss in 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. The hospital is managed by a third-party management company. Operating earnings for second quarter of
2015 were $7.6 million (which included $6.9 million of operating
earnings and an add back of $0.7 million of net loss attributable to noncontrolling interests).
Revenues in this segment were $44.8 million in the second quarter of 2016, compared to
$67.9 million in the second quarter of 2015. Revenues decreased primarily due to a decrease in
Rialto Mortgage Finance ("RMF") securitization revenues due to lower securitization volume and margins. During the second quarter
of 2016 and 2015, Rialto received $2.5 million and $4.8 million,
respectively, of advanced distributions with regard to Rialto's carried interests in its real estate
funds (the "Funds") in order to cover income tax obligations resulting from allocations of taxable income to Rialto's
carried interests in these funds.
Expenses in this segment were $50.2 million in the second quarter of 2016, compared to
$67.5 million in the second quarter of 2015. Expenses decreased primarily due to a decrease in
general and administrative expenses and a decrease in securitization expenses related to RMF.
Rialto equity in earnings from unconsolidated entities was $6.9 million and $7.3 million in the second quarter of 2016 and 2015, respectively, related to Rialto's share of earnings from
the Funds.
Rialto other expense, net, was $19.6 million in the second quarter of 2016, compared to
$0.9 million in the second quarter of 2015. In the second quarter of 2016, Rialto other expense,
net, included a $16.0 million write-off of uncollectible receivables related to the hospital.
Lennar Multifamily
Operating earnings for the Lennar Multifamily segment were $14.9 million in the second quarter
of 2016, compared to an operating loss of $8.7 million in the second quarter of 2015. The increase
in profitability was 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 Lennar Multifamily's 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 $55.8 million, or 2.0% as a percentage of
total revenues, in the second quarter of 2016, compared to $50.2 million, or 2.1% as a percentage
of total revenues, in the second quarter of 2015. As a percentage of total revenues, corporate general and administrative
expenses improved due to increased operating leverage.
Noncontrolling Interests
Net earnings attributable to noncontrolling interests were $5.6 million and $1.6 million in the second quarter of 2016 and 2015, respectively. Net earnings attributable to noncontrolling
interests during 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. Net earnings attributable to noncontrolling interests during the second quarter of
2015 were primarily attributable to a strategic transaction by one of Lennar Homebuilding's consolidated joint ventures that
impacted noncontrolling interests by $2.3 million, 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.
SIX MONTHS ENDED MAY 31, 2016 COMPARED TO
SIX MONTHS ENDED MAY 31, 2015
Lennar Homebuilding
Revenues from home sales increased 20% in the six months ended May 31, 2016 to $4.2 billion from $3.5 billion in the six months ended May
31, 2015. Revenues were higher primarily due to a 12% increase in the number of home deliveries, excluding unconsolidated
entities, and a 7% increase in the average sales price of homes delivered. New home deliveries, excluding unconsolidated
entities, increased to 11,517 homes in the six months ended May 31, 2016 from 10,290 homes in the
six months ended May 31, 2015. There was an increase in home deliveries in all of the Company's
Homebuilding segments, except in Homebuilding Houston. The decrease in home deliveries in Houston was primarily due to less demand driven by volatility in the energy sector. The average sales price
of homes delivered increased to $363,000 in the six months ended May 31,
2016 from $339,000 in the six months ended May 31, 2015. Sales
incentives offered to homebuyers were $21,700 per home delivered in the six months ended
May 31, 2016, or 5.6% as a percentage of home sales revenue, compared to $21,600 per home delivered in the six months ended May 31, 2015, or 6.0% as a
percentage of home sales revenue.
Gross margins on home sales were $960.5 million, or 23.0%, in the six months ended May 31, 2016, compared to $820.6 million, or 23.5%, in the six months ended
May 31, 2015. Gross margin percentage on home sales decreased compared to the six months ended
May 31, 2015 primarily due to an increase in land costs, partially offset by an increase in the
average sales price of homes delivered.
Selling, general and administrative expenses were $414.6 million in the six months ended
May 31, 2016, compared to $369.4 million in the six months ended
May 31, 2015. As a percentage of revenues from home sales, selling, general and administrative
expenses improved to 9.9% in the six months ended May 31, 2016, from 10.6% in the six months ended
May 31, 2015, due to improved operating leverage as a result of an increase in home deliveries and
benefits from the Company's focus on digital marketing.
Lennar Homebuilding equity in earnings (loss) from unconsolidated entities was ($6.6) million in
the six months ended May 31, 2016, compared to $35.4 million in the
six months ended May 31, 2015. In the six months ended May 31, 2016,
Lennar Homebuilding equity in earnings 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. In the six
months ended May 31, 2015, Lennar Homebuilding equity in earnings from unconsolidated entities
included $43.0 million of equity in earnings from one of the Company's unconsolidated entities
primarily due to sales of homesites and a commercial property to third parties, partially offset by the Company's share of net
operating losses from various unconsolidated entities.
Lennar Homebuilding other income, net, totaled $15.4 million in the six months ended
May 31, 2016, compared to $6.1 million in the six months ended
May 31, 2015. 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. In the six months ended
May 31, 2015, other income, net included a $6.5 million gain on the
sale of an operating property.
Lennar Homebuilding interest expense was $109.1 million in the six months ended May 31, 2016 ($105.4 million was included in cost of homes sold, $1.3 million in cost of land sold and $2.4 million in other interest expense),
compared to $95.7 million in the six months ended May 31, 2015
($86.8 million was included in cost of homes sold, $1.0 million in
cost of land sold and $7.9 million in other interest expense). Interest expense included in cost of
homes sold increased primarily due to an increase in the Company's outstanding homebuilding debt and an increase in home
deliveries.
Lennar Financial Services
Operating earnings for the Lennar Financial Services segment were $59.0 million in the six
months ended May 31, 2016, compared to $54.6 million in the six
months ended May 31, 2015. The increase in profitability was primarily due to higher profit per
transaction in the segment's mortgage and title operations.
Rialto
Operating loss for the Rialto segment was $11.8 million in the six months ended May 31, 2016 (which included a $16.5 million operating loss and an add back of
$4.6 million of net loss attributable to noncontrolling interests). The operating loss in the six
months ended May 31, 2016 included a $16.0 million write-off of
uncollectible receivables related to the hospital. Operating earnings in the six months ended
May 31, 2015 were $12.2 million (which included $9.7 million of operating earnings and an add back of $2.5 million of net loss
attributable to noncontrolling interests).
Revenues in this segment were $88.5 million in the six months ended May
31, 2016, compared to $109.1 million in the six months ended May 31,
2015. Revenues decreased primarily due to a decrease in RMF securitization revenues due to lower securitization volume and
margins. During the six months ended May 31, 2016 and 2015, Rialto received $7.4 million and $11.3 million, respectively, of advanced distributions with
regard to Rialto's carried interests in the Funds in order to cover income tax obligations resulting from allocations of taxable
income to Rialto's carried interests in these funds.
Expenses in this segment were $93.1 million in the six months ended May
31, 2016, compared to $108.3 million in the six months ended May 31,
2015. Expenses decreased primarily due to a decrease in general and administrative expenses and a decrease in
securitization expenses related to RMF.
Rialto equity in earnings from unconsolidated entities was $8.4 million and $10.0 million in the six months ended May 31, 2016 and 2015, respectively,
related to Rialto's share of earnings from the Funds. The decrease in equity in earnings was primarily related to mark downs of
certain assets in the Funds and smaller net increases in the fair value of certain assets in the Funds in the six months ended
May 31, 2016 than in the same period last year.
Rialto other expense, net, was $20.3 million in the six months ended May
31, 2016, compared to $1.1 million in the six months ended May 31,
2015. In the six months ended May 31, 2016, Rialto other expense, net, included a $16.0 million write-off of uncollectible receivables related to the hospital.
Lennar Multifamily
Operating earnings for the Lennar Multifamily segment were $27.1 million in the six months ended
May 31, 2016, compared to an operating loss of $14.4 million in the
six months ended May 31, 2015. The increase in profitability was primarily due to the segment's
$35.8 million share of gains as a result of the sale of two operating properties by Lennar
Multifamily's 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 $103.5 million, or 2.2% as a percentage of
total revenues, in the six months ended May 31, 2016, compared to $93.9
million, or 2.3% as a percentage of total revenues, in the six months ended May 31, 2015. As
a percentage of total revenues, corporate general and administrative expenses improved due to increased operating leverage.
Noncontrolling Interests
Net earnings attributable to noncontrolling interests were $6.9 million and $3.5 million in the six months ended May 31, 2016 and 2015, respectively. Net
earnings attributable to noncontrolling interests during 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. Net
earnings attributable to noncontrolling interests during the six months ended May 31, 2015 were
primarily attributable to a strategic transaction by one of Lennar Homebuilding's consolidated joint ventures that impacted
noncontrolling interests by $2.3 million and earnings related to consolidated joint ventures.
OTHER TRANSACTIONS
Debt Transactions
In the second quarter of 2016, the Company issued $500 million of 4.750% senior notes due 2021.
The Company used the net proceeds from the sales of the 4.750% senior notes due 2021 to retire its 6.50% senior notes due
April 2016 for 100% of the outstanding principal amount, plus accrued and unpaid interest.
During the six months ended May 31, 2016, holders converted the remaining aggregate principal
amount of $234 million of the Company's 2.75% convertible senior notes due 2020 for approximately
$234 million in cash and 5.2 million shares of Class A common stock.
During the six months ended May 31, 2016, holders converted approximately $68 million aggregate principal amount of the Company's 3.25% convertible senior notes due 2021 for
approximately 2.9 million shares of Class A common stock. Subsequent to May 31, 2016, holders have converted approximately
$136.5 million aggregate principal amount of the Company's 3.25% convertible senior notes due 2021
for approximately 5.8 million shares of Class A common stock and small cash premiums.
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 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; 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, 2015. 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 21, 2016. 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 203-369-0320 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,
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
Lennar Homebuilding
|
$
|
2,450,885
|
|
|
2,115,812
|
|
|
4,237,366
|
|
|
3,557,470
|
|
|
Lennar Financial Services
|
175,940
|
|
|
169,885
|
|
|
299,896
|
|
|
294,712
|
|
|
Rialto
|
44,838
|
|
|
67,931
|
|
|
88,549
|
|
|
109,128
|
|
|
Lennar Multifamily
|
74,152
|
|
|
38,976
|
|
|
113,668
|
|
|
75,433
|
|
|
Total revenues
|
$
|
2,745,815
|
|
|
2,392,604
|
|
|
4,739,479
|
|
|
4,036,743
|
|
|
|
|
|
|
|
|
|
|
Lennar Homebuilding operating earnings
|
$
|
342,696
|
|
|
292,789
|
|
|
563,334
|
|
|
500,433
|
|
|
Lennar Financial Services operating earnings
|
44,088
|
|
|
39,053
|
|
|
59,019
|
|
|
54,580
|
|
|
Rialto operating earnings (loss)
|
(18,086)
|
|
|
6,881
|
|
|
(16,476)
|
|
|
9,689
|
|
|
Lennar Multifamily operating earnings (loss)
|
14,943
|
|
|
(8,706)
|
|
|
27,125
|
|
|
(14,388)
|
|
|
Corporate general and administrative expenses
|
(55,802)
|
|
|
(50,207)
|
|
|
(103,470)
|
|
|
(93,861)
|
|
|
Earnings before income taxes
|
327,839
|
|
|
279,810
|
|
|
529,532
|
|
|
456,453
|
|
|
Provision for income taxes
|
(103,801)
|
|
|
(95,226)
|
|
|
(160,042)
|
|
|
(154,952)
|
|
|
Net earnings (including net earnings attributable to noncontrolling
interests)
|
224,038
|
|
|
184,584
|
|
|
369,490
|
|
|
301,501
|
|
|
Less: Net earnings attributable to noncontrolling interests
|
5,569
|
|
|
1,568
|
|
|
6,941
|
|
|
3,522
|
|
|
Net earnings attributable to Lennar
|
$
|
218,469
|
|
|
183,016
|
|
|
362,549
|
|
|
297,979
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
213,601
|
|
|
202,991
|
|
|
211,947
|
|
|
202,961
|
|
|
Diluted
|
229,917
|
|
|
231,041
|
|
|
229,417
|
|
|
230,679
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
1.01
|
|
|
0.89
|
|
|
1.69
|
|
|
1.45
|
|
|
Diluted (1)
|
$
|
0.95
|
|
|
0.79
|
|
|
1.58
|
|
|
1.30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental information:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest incurred (2)
|
$
|
71,857
|
|
|
76,232
|
|
|
143,447
|
|
|
146,491
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT (3):
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings attributable to Lennar
|
$
|
218,469
|
|
|
183,016
|
|
|
362,549
|
|
|
297,979
|
|
|
Provision for income taxes
|
103,801
|
|
|
95,226
|
|
|
160,042
|
|
|
154,952
|
|
|
Interest expense
|
63,866
|
|
|
57,678
|
|
|
109,090
|
|
|
95,709
|
|
|
EBIT
|
$
|
386,136
|
|
|
335,920
|
|
|
631,681
|
|
|
548,640
|
|
|
(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. For the three and six months ended May 31, 2015, diluted earnings per share includes an add
back of interest of $2.0 million and $4.0 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,
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
Lennar Homebuilding revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales of homes
|
$
|
2,429,568
|
|
|
2,081,113
|
|
|
4,184,259
|
|
|
3,484,681
|
|
|
Sales of land
|
21,317
|
|
|
34,699
|
|
|
53,107
|
|
|
72,789
|
|
|
Total revenues
|
2,450,885
|
|
|
2,115,812
|
|
|
4,237,366
|
|
|
3,557,470
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lennar Homebuilding costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of homes sold
|
1,868,045
|
|
|
1,585,259
|
|
|
3,223,790
|
|
|
2,664,055
|
|
|
Cost of land sold
|
19,468
|
|
|
31,204
|
|
|
42,080
|
|
|
57,229
|
|
|
Selling, general and administrative
|
224,775
|
|
|
209,019
|
|
|
414,623
|
|
|
369,373
|
|
|
Total costs and expenses
|
2,112,288
|
|
|
1,825,482
|
|
|
3,680,493
|
|
|
3,090,657
|
|
|
Lennar Homebuilding operating margins
|
338,597
|
|
|
290,330
|
|
|
556,873
|
|
|
466,813
|
|
|
Lennar Homebuilding equity in earnings (loss) from unconsolidated
entities
|
(9,633)
|
|
|
6,494
|
|
|
(6,633)
|
|
|
35,393
|
|
|
Lennar Homebuilding other income (expense), net
|
14,925
|
|
|
(217)
|
|
|
15,444
|
|
|
6,116
|
|
|
Other interest expense
|
(1,193)
|
|
|
(3,818)
|
|
|
(2,350)
|
|
|
(7,889)
|
|
|
Lennar Homebuilding operating earnings
|
$
|
342,696
|
|
|
292,789
|
|
|
563,334
|
|
|
500,433
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lennar Financial Services revenues
|
$
|
175,940
|
|
|
169,885
|
|
|
299,896
|
|
|
294,712
|
|
|
Lennar Financial Services costs and expenses
|
131,852
|
|
|
130,832
|
|
|
240,877
|
|
|
240,132
|
|
|
Lennar Financial Services operating earnings
|
$
|
44,088
|
|
|
39,053
|
|
|
59,019
|
|
|
54,580
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rialto revenues
|
$
|
44,838
|
|
|
67,931
|
|
|
88,549
|
|
|
109,128
|
|
|
Rialto costs and expenses
|
50,203
|
|
|
67,506
|
|
|
93,110
|
|
|
108,287
|
|
|
Rialto equity in earnings from unconsolidated entities
|
6,864
|
|
|
7,328
|
|
|
8,361
|
|
|
9,992
|
|
|
Rialto other expense, net
|
(19,585)
|
|
|
(872)
|
|
|
(20,276)
|
|
|
(1,144)
|
|
|
Rialto operating earnings (loss)
|
$
|
(18,086)
|
|
|
6,881
|
|
|
(16,476)
|
|
|
9,689
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lennar Multifamily revenues
|
$
|
74,152
|
|
|
38,976
|
|
|
113,668
|
|
|
75,433
|
|
|
Lennar Multifamily costs and expenses
|
73,217
|
|
|
47,260
|
|
|
120,237
|
|
|
89,221
|
|
|
Lennar Multifamily equity in earnings (loss) from unconsolidated
entities
|
14,008
|
|
|
(422)
|
|
|
33,694
|
|
|
(600)
|
|
|
Lennar Multifamily operating earnings (loss)
|
$
|
14,943
|
|
|
(8,706)
|
|
|
27,125
|
|
|
(14,388)
|
|
|
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,
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
Deliveries:
|
Homes
|
|
|
Dollar Value
|
|
|
Average Sales Price
|
|
|
East
|
3,032
|
|
|
2,708
|
|
|
$
|
953,671
|
|
|
833,146
|
|
|
$
|
315,000
|
|
|
308,000
|
|
|
Central
|
1,217
|
|
|
951
|
|
|
409,027
|
|
|
301,339
|
|
|
336,000
|
|
|
317,000
|
|
|
West
|
1,503
|
|
|
1,353
|
|
|
727,384
|
|
|
624,042
|
|
|
484,000
|
|
|
461,000
|
|
|
Houston
|
613
|
|
|
636
|
|
|
182,328
|
|
|
182,633
|
|
|
297,000
|
|
|
287,000
|
|
|
Other
|
359
|
|
|
367
|
|
|
166,833
|
|
|
157,391
|
|
|
465,000
|
|
|
429,000
|
|
|
Total
|
6,724
|
|
|
6,015
|
|
|
$
|
2,439,243
|
|
|
2,098,551
|
|
|
$
|
363,000
|
|
|
349,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Of the total homes delivered listed above, 13 homes with a dollar value of
$9.7 million and an average sales price of $744,000 represent home deliveries from unconsolidated entities for the three
months ended May 31, 2016, compared to 26 home deliveries with a dollar value of $17.4 million and an average sales price
of $671,000 for the three months ended May 31, 2015.
|
|
|
New Orders:
|
Homes
|
|
|
Dollar Value
|
|
|
Average Sales Price
|
|
|
East
|
3,568
|
|
|
3,179
|
|
|
$
|
1,109,894
|
|
|
982,831
|
|
|
$
|
311,000
|
|
|
309,000
|
|
|
Central
|
1,489
|
|
|
1,217
|
|
|
516,765
|
|
|
398,694
|
|
|
347,000
|
|
|
328,000
|
|
|
West
|
1,781
|
|
|
1,756
|
|
|
834,570
|
|
|
818,981
|
|
|
469,000
|
|
|
466,000
|
|
|
Houston
|
651
|
|
|
684
|
|
|
199,262
|
|
|
203,386
|
|
|
306,000
|
|
|
297,000
|
|
|
Other
|
473
|
|
|
435
|
|
|
221,393
|
|
|
185,542
|
|
|
468,000
|
|
|
427,000
|
|
|
Total
|
7,962
|
|
|
7,271
|
|
|
$
|
2,881,884
|
|
|
2,589,434
|
|
|
$
|
362,000
|
|
|
356,000
|
|
|
|
|
Of the total new orders listed above, 9 homes with a dollar value of $5.4
million and an average sales price of $597,000 represent new orders from unconsolidated entities for the three months
ended May 31, 2016, compared to 24 new orders with a dollar value of $17.7 million and an average sales price of $737,000
for the three months ended May 31, 2015.
|
|
|
For the Six Months Ended May 31,
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
Deliveries:
|
Homes
|
|
|
Dollar Value
|
|
|
Average Sales Price
|
|
|
East
|
5,096
|
|
|
4,694
|
|
|
$
|
1,601,426
|
|
|
1,420,464
|
|
|
$
|
314,000
|
|
|
303,000
|
|
|
Central
|
2,041
|
|
|
1,632
|
|
|
679,072
|
|
|
506,079
|
|
|
333,000
|
|
|
310,000
|
|
|
West
|
2,671
|
|
|
2,279
|
|
|
1,286,918
|
|
|
1,006,702
|
|
|
482,000
|
|
|
442,000
|
|
|
Houston
|
1,070
|
|
|
1,097
|
|
|
312,721
|
|
|
307,563
|
|
|
292,000
|
|
|
280,000
|
|
|
Other
|
678
|
|
|
615
|
|
|
327,870
|
|
|
261,581
|
|
|
484,000
|
|
|
425,000
|
|
|
Total
|
11,556
|
|
|
10,317
|
|
|
$
|
4,208,007
|
|
|
3,502,389
|
|
|
$
|
364,000
|
|
|
339,000
|
|
|
|
|
Of the total homes delivered listed above, 39 homes with a dollar value of
$23.7 million and an average sales price of $609,000 represent home deliveries from unconsolidated entities for the six
months ended May 31, 2016, compared to 27 home deliveries with a dollar value of $17.7 million and an average sales price
of $656,000 for the six months ended May 31, 2015.
|
|
|
New Orders:
|
Homes
|
|
|
Dollar Value
|
|
|
Average Sales Price
|
|
|
East
|
6,096
|
|
|
5,509
|
|
|
$
|
1,907,942
|
|
|
1,708,851
|
|
|
$
|
313,000
|
|
|
310,000
|
|
|
Central
|
2,617
|
|
|
2,129
|
|
|
901,450
|
|
|
685,369
|
|
|
344,000
|
|
|
322,000
|
|
|
West
|
3,071
|
|
|
2,946
|
|
|
1,458,418
|
|
|
1,346,565
|
|
|
475,000
|
|
|
457,000
|
|
|
Houston
|
1,153
|
|
|
1,204
|
|
|
344,748
|
|
|
349,109
|
|
|
299,000
|
|
|
290,000
|
|
|
Other
|
819
|
|
|
770
|
|
|
377,195
|
|
|
328,321
|
|
|
461,000
|
|
|
426,000
|
|
|
Total
|
13,756
|
|
|
12,558
|
|
|
$
|
4,989,753
|
|
|
4,418,215
|
|
|
$
|
363,000
|
|
|
352,000
|
|
|
|
|
Of the total new orders listed above, 24 homes with a dollar value of $14.1
million and an average sales price of $588,000 represent new orders from unconsolidated entities for the six months ended
May 31, 2016, compared to 50 new orders with a dollar value of $30.0 million and an average sales price of $600,000 for
the six months ended May 31, 2015.
|
|
|
LENNAR CORPORATION AND SUBSIDIARIES
Summary of Backlog
(Dollars in thousands, except average sales price)
(unaudited)
|
|
|
May 31,
|
|
|
Backlog:
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
Homes
|
|
|
Dollar Value
|
|
|
Average Sales Price
|
|
|
East (1)
|
3,963
|
|
|
3,603
|
|
|
$
|
1,287,728
|
|
|
1,173,900
|
|
|
$
|
325,000
|
|
|
326,000
|
|
|
Central
|
1,946
|
|
|
1,458
|
|
|
699,991
|
|
|
490,007
|
|
|
360,000
|
|
|
336,000
|
|
|
West
|
1,754
|
|
|
1,658
|
|
|
843,871
|
|
|
777,451
|
|
|
481,000
|
|
|
469,000
|
|
|
Houston
|
781
|
|
|
937
|
|
|
240,079
|
|
|
267,415
|
|
|
307,000
|
|
|
285,000
|
|
|
Other (2)
|
570
|
|
|
417
|
|
|
264,101
|
|
|
180,390
|
|
|
463,000
|
|
|
433,000
|
|
|
Total
|
9,014
|
|
|
8,073
|
|
|
$
|
3,335,770
|
|
|
2,889,163
|
|
|
$
|
370,000
|
|
|
358,000
|
|
|
|
|
Of the total homes in backlog listed above, 74 homes with a backlog dollar
value of $52.8 million and an average sales price of $713,000 represent the backlog from unconsolidated entities at
May 31, 2016, compared to 90 homes with a backlog dollar value of $52.1 million and an average sales price of
$579,000 at May 31, 2015.
|
|
|
|
(1)
|
During the six months ended May 31, 2016, the Company acquired 111 homes in
backlog.
|
|
(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(1)
|
|
West: California and Nevada
|
|
Houston: Houston, Texas
|
|
Other: Illinois, Minnesota, Oregon, Tennessee and
Washington
|
|
|
|
(1)
|
Texas in the Central reportable segment excludes Houston, Texas, which is
its own reportable segment.
|
|
LENNAR CORPORATION AND SUBSIDIARIES
Supplemental Data
(Dollars in thousands)
(unaudited)
|
|
May 31,
|
|
November 30,
|
|
May 31,
|
|
2016
|
|
2015
|
|
2015
|
|
Lennar Homebuilding debt
|
$
|
5,316,235
|
|
|
5,025,130
|
|
|
5,263,221
|
|
|
Stockholders' equity
|
6,118,366
|
|
|
5,648,944
|
|
|
5,138,738
|
|
|
Total capital
|
$
|
11,434,601
|
|
|
10,674,074
|
|
|
10,401,959
|
|
|
Lennar Homebuilding debt to total capital
|
46.5
|
%
|
|
47.1
|
%
|
|
50.6
|
%
|
|
|
|
|
|
|
|
Lennar Homebuilding debt
|
$
|
5,316,235
|
|
|
5,025,130
|
|
|
5,263,221
|
|
|
Less: Lennar Homebuilding cash and cash equivalents
|
601,192
|
|
|
893,408
|
|
|
638,992
|
|
|
Net Lennar Homebuilding debt
|
$
|
4,715,043
|
|
|
4,131,722
|
|
|
4,624,229
|
|
|
Net Lennar Homebuilding debt to total capital (1)
|
43.5
|
%
|
|
42.2
|
%
|
|
47.4
|
%
|
|
(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.
|
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/lennar-reports-second-quarter-eps-of-095-300287581.html
SOURCE Lennar Corporation