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EXHIBIT 99.1
LENNAR CORPORATION
PRO FORMA COMBINED CONDENSED STATEMENT OF EARNINGS
THREE MONTHS ENDED FEBRUARY 29, / MARCH 31, 2000
(UNAUDITED)
HISTORICAL HISTORICAL PRO FORMA
LENNAR U.S. HOME ACQUISITION COMBINED
CORPORATION CORPORATION(1) ADJUSTMENTS(2) CORPORATION
----------- -------------- -------------- -----------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Revenues:
Homebuilding........................... $580,922 467,415 -- 1,048,337
Financial services..................... 59,445 10,083 -- 69,528
-------- ------- ------ ---------
Total revenues................. 640,367 477,498 -- 1,117,865
-------- ------- ------ ---------
Costs and expenses:
Homebuilding........................... 526,093 422,999 -- 949,092
Financial services..................... 58,837 5,797 -- 64,634
Corporate general and administrative... 9,057 5,960 672(3) 15,689
Interest............................... 9,968 11,216 8,777(3) 29,961
-------- ------- ------ ---------
Total costs and expenses....... 603,955 445,972 9,449 1,059,376
-------- ------- ------ ---------
Earnings before income taxes............. 36,412 31,526 (9,449) 58,489
Provision for income taxes............... 14,201 11,980 (3,423)(3) 22,758
-------- ------- ------ ---------
Net earnings............................. $ 22,211 19,546 (6,026) 35,731
======== ======= ====== =========
Earnings per share:
Basic.................................. $ 0.42 1.48 0.54
Diluted................................ $ 0.40 1.45 0.51
Weighted average shares outstanding:
Basic.................................. 53,160 13,219 66,138(4)
Diluted................................ 59,676 13,460 72,654(4)
- ---------------
(1) Amounts have been reclassified to conform to Lennar Corporation's historical
presentation.
(2) As of February 29, 2000, the Acquisition Adjustments in the Pro Forma
Combined Condensed Balance Sheet reflect an increase in certain of the
inventories of U.S. Home Corporation of approximately $28 million. The
effects of this estimated purchase adjustment are not included in
Acquisition Adjustments to the Statement of Earnings above. It will increase
cost of sales and decrease gross margin by approximately $28 million and
will decrease net earnings by approximately $17 million ($0.24 per share
diluted) in the first three to six months after the acquisition is
completed.
(3) Represents estimated purchase adjustments for the amortization of the
estimated excess of purchase price over the net assets acquired over a 20
year period (included in corporate general and administrative expenses), and
the effect of the additional financing to complete the acquisition (included
in interest expense) and its related tax effect (at 39%), as if the
acquisition had occurred on December 1, 1998.
(4) The pro forma weighted average shares represent the weighted average shares
for Lennar Corporation plus the shares issued (12,978,320 shares) to U.S.
Home Corporation stockholders to complete the acquisition.
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LENNAR CORPORATION
PRO FORMA COMBINED CONDENSED STATEMENT OF EARNINGS
YEAR ENDED NOVEMBER 30, / DECEMBER 31, 1999
(UNAUDITED)
HISTORICAL HISTORICAL PRO FORMA
LENNAR U.S. HOME ACQUISITION COMBINED
CORPORATION CORPORATION(1) ADJUSTMENTS(2) CORPORATION
----------- -------------- -------------- -----------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Revenues:
Homebuilding......................... $2,849,207 1,788,750 -- 4,637,957
Financial services................... 269,307 38,469 -- 307,776
---------- --------- ------- ---------
Total revenues............... 3,118,514 1,827,219 -- 4,945,733
---------- --------- ------- ---------
Costs and expenses:
Homebuilding......................... 2,508,404 1,629,398 -- 4,137,802
Financial services................... 238,211 22,297 -- 260,508
Corporate general and
administrative.................... 37,563 14,202 3,590(3) 55,355
Interest............................. 48,859 45,490 10,240(3) 104,589
---------- --------- ------- ---------
Total costs and expenses..... 2,833,037 1,711,387 13,830 4,558,254
---------- --------- ------- ---------
Earnings before income taxes........... 285,477 115,832 (13,830) 387,479
Provision for income taxes............. 112,763 43,437 (3,994)(3) 152,206
---------- --------- ------- ---------
Net earnings........................... $ 172,714 72,395 (9,836) 235,273
========== ========= ======= =========
Earnings per share:
Basic................................ $ 2.97 5.41 3.30
Diluted.............................. $ 2.74 5.30 3.09
Weighted average shares outstanding:
Basic................................ 58,246 13,379 71,224(4)(5)
Diluted.............................. 65,035 13,669 78,013(4)(5)
- ---------------
(1) Amounts have been reclassified to conform to Lennar Corporation's historical
presentation.
(2) As of November 30, 1999, the Acquisition Adjustments in the Pro Forma
Combined Condensed Balance Sheet reflect an increase in certain of the
inventories of U.S. Home Corporation of approximately $28 million. The
effects of this estimated purchase adjustment are not included in
Acquisition Adjustments to the Statement of Earnings above. It will increase
cost of sales and decrease gross margin by approximately $28 million and
will decrease net earnings by approximately $17 million ($0.22 per share
diluted) in the first three to six months after the acquisition is
completed.
(3) Represents estimated purchase adjustments for the amortization of the
estimated excess of purchase price over the net assets acquired over a 20
year period (included in corporate general and administrative expenses), and
the effect of the additional financing to complete the acquisition (included
in interest expense) and its related tax effect (at 39%), as if the
acquisition had occurred on December 1, 1998.
(4) The pro forma weighted average shares represent the weighted average shares
for Lennar Corporation plus the shares issued (12,978,320 shares) to U.S.
Home Corporation stockholders to complete the acquisition.
(5) From October 1999 through February 2000, Lennar Corporation repurchased
approximately 9,700,000 shares of its outstanding common stock for an
average price of slightly more than $16 per share. The Pro Forma Combined
Condensed Financial Statements do not reflect the repurchase of the portion
of those shares (approximately 9,300,000 shares) which occurred after
November 30, 1999.
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LENNAR CORPORATION
PRO FORMA COMBINED CONDENSED BALANCE SHEET
FEBRUARY 29, / MARCH 31, 2000
(UNAUDITED)
HISTORICAL HISTORICAL PRO FORMA
LENNAR U.S. HOME ACQUISITION COMBINED
CORPORATION CORPORATION(1) ADJUSTMENTS(2) CORPORATION
----------- -------------- -------------- -----------
(IN THOUSANDS)
ASSETS
Homebuilding:
Cash and receivables, net........................ $ 59,553 66,642 (3,713)(3) 122,482
Inventories...................................... 1,393,024 1,395,510 (120,357)(4) 2,668,177
Investments in partnerships...................... 173,169 41,529 3,783 (5) 218,481
Other assets..................................... 99,076 71,145 116,512 (6) 286,733
---------- --------- -------- ---------
1,724,822 1,574,826 (3,775) 3,295,873
Financial services assets.......................... 328,246 113,641 (779)(7) 441,108
---------- --------- -------- ---------
$2,053,068 1,688,467 (4,554) 3,736,981
========== ========= ======== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Homebuilding:
Accounts payable and other liabilities........... $ 316,761 283,345 16,295(8) 616,401
Mortgage notes and other debts payable, net...... 750,184 708,297 309,003(9) 1,767,484
---------- --------- -------- ---------
1,066,945 991,642 325,298 2,383,885
Financial services liabilities..................... 233,414 100,106 -- 333,520
---------- --------- -------- ---------
1,300,359 1,091,748 325,298 2,717,405
Stockholders' equity............................... 752,709 596,719 (329,852)(10) 1,019,576
---------- --------- -------- ---------
$2,053,068 1,688,467 (4,554) 3,736,981
========== ========= ======== =========
- ---------------
(1) Amounts have been reclassified to conform to Lennar Corporation's
historical presentation.
(2) Represents estimated purchase adjustments to reflect the assets and
liabilities of U.S. Home Corporation as if the acquisition had occurred on
February 29, 2000.
(3) To adjust certain receivables of U.S. Home Corporation in accordance with
Accounting Principles Board Opinion No. 16 ("APB 16").
(4) To adjust certain inventories of U.S. Home Corporation in accordance with
APB 16. This estimated purchase adjustment primarily results from certain
long-term land holdings of U.S. Home Corporation that have estimated rates
of return that are below market, based upon Lennar Corporation's historical
practices for determining market returns. However, the land holdings are
estimated to be profitable even at their historical carrying values over
the lives of the projects. Therefore, no adjustment to their carrying
values are required under generally accepted accounting principles in the
historical financial statements of U.S. Home Corporation.
(5) To adjust certain investments in partnerships of U.S. Home Corporation in
accordance with APB 16.
(6) To write-off certain assets of U.S. Home Corporation in the amount of
$25,771,000 that will have no continuing economic benefit (primarily
goodwill and deferred loan costs); to record the estimated purchase price
in excess of net assets acquired of $53,720,000; to record the deferred tax
effect of $63,788,000 related to the estimated purchase adjustments; and to
record Lennar Corporation's debt issuance costs of $24,775,000 related to
the financing to complete the acquisition of U.S. Home Corporation.
The estimated purchase price in excess of net assets acquired was
calculated as follows:
Estimated purchase price:
Lennar Corporation shares issued...................................... $ 266,867,000
Cash paid............................................................. 243,382,000
--------------
Total estimated purchase price........................................ $510,249,000
Estimated assets acquired (in accordance with APB 16)................. $1,605,418,000
Estimated liabilities acquired (in accordance with APB 16)............ 1,148,889,000
--------------
Estimated net assets acquired......................................... 456,529,000
------------
Estimated excess of purchase price over net assets acquired........... $ 53,720,000
============
Certain merger related costs may be payable in the future if certain events
occur. Such amounts are not significant and are not included in the
estimated amounts above.
(7) To adjust certain financial services assets of U.S. Home Corporation in
accordance with APB 16.
(8) To record an estimate of costs to conform management information systems of
$4,750,000; to conform accounting policies with respect to warranty costs
of $9,000,000; and to record other transaction related liabilities of
$2,545,000.
(9) To record $296,767,000 of additional financing, at an interest rate of
approximately 9%, to complete the acquisition (including certain
acquisition related costs) and to adjust U.S. Home Corporation's senior
notes, senior subordinated notes and notes payable by $12,236,000 in
accordance with APB 16.
(10) To record the estimated value of the Lennar Corporation common stock
consideration given to purchase U.S. Home Corporation (12,978,320 shares
issued at an estimated market price of $20.5625 per share), minus the
historical equity of U.S. Home Corporation of $596,719,000.
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LENNAR CORPORATION
PRO FORMA COMBINED CONDENSED BALANCE SHEET
NOVEMBER 30, / DECEMBER 31, 1999
(UNAUDITED)
HISTORICAL HISTORICAL PRO FORMA
LENNAR U.S. HOME ACQUISITION COMBINED
CORPORATION CORPORATION(1) ADJUSTMENTS(2) CORPORATION
----------- -------------- -------------- -----------
(IN THOUSANDS)
ASSETS
Homebuilding:
Cash and receivables, net........................ $ 94,418 33,173 (3,713)(3) 123,878
Inventories...................................... 1,274,551 1,306,103 (120,357)(4) 2,460,297
Investments in partnerships...................... 173,310 41,516 3,783 (5) 218,609
Other assets..................................... 97,826 113,845 134,582 (6) 346,253
---------- --------- -------- ---------
1,640,105 1,494,637 14,295 3,149,037
Financial services assets.......................... 417,542 108,003 (779)(7) 524,766
---------- --------- -------- ---------
$2,057,647 1,602,640 13,516 3,673,803
========== ========= ======== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Homebuilding:
Accounts payable and other liabilities........... $ 333,532 277,740 16,295(8) 627,567
Mortgage notes and other debts payable, net...... 523,661 650,089 309,003(9) 1,482,753
---------- --------- -------- ---------
857,193 927,829 325,298 2,110,320
Financial services liabilities..................... 318,955 96,162 -- 415,117
---------- --------- -------- ---------
1,176,148 1,023,991 325,298 2,525,437
Stockholders' equity............................... 881,499 578,649 (311,782)(10) 1,148,366
---------- --------- -------- ---------
$2,057,647 1,602,640 13,516 3,673,803
========== ========= ======== =========
- ---------------
(1) Amounts have been reclassified to conform to Lennar Corporation's
historical presentation.
(2) Represents estimated purchase adjustments to reflect the assets and
liabilities of U.S. Home Corporation as if the acquisition had occurred on
November 30, 1999.
(3) To adjust certain receivables of U.S. Home Corporation in accordance with
APB 16.
(4) To adjust certain inventories of U.S. Home Corporation in accordance with
APB 16. This estimated purchase adjustment primarily results from certain
long-term land holdings of U.S. Home Corporation that have estimated rates
of return that are below market, based upon Lennar Corporation's historical
practices for determining market returns. However, the land holdings are
estimated to be profitable even at their historical carrying values over
the lives of the projects. Therefore, no adjustment to their carrying
values are required under generally accepted accounting principles in the
historical financial statements of U.S. Home Corporation.
(5) To adjust certain investments in partnerships of U.S. Home Corporation in
accordance with APB 16.
(6) To write-off certain assets of U.S. Home Corporation in the amount of
$25,771,000 that will have no continuing economic benefit (primarily
goodwill and deferred loan costs); to record the estimated purchase price
in excess of net assets acquired of $71,790,000; to record the deferred tax
effect of $63,788,000 related to the estimated purchase adjustments; and to
record Lennar Corporation's debt issuance costs of $24,775,000 related to
the financing to complete the acquisition of U.S. Home Corporation.
The estimated purchase price in excess of net assets acquired was
calculated as follows:
Estimated purchase price:
Lennar Corporation shares issued...................................... $ 266,867,000
Cash paid............................................................. 243,382,000
--------------
Total estimated purchase price........................................ $510,249,000
Estimated assets acquired (in accordance with APB 16)................. $1,519,591,000
Estimated liabilities acquired (in accordance with APB 16)............ 1,081,132,000
--------------
Estimated net assets acquired......................................... 438,459,000
------------
Estimated excess of purchase price over net assets acquired........... $ 71,790,000
============
Certain merger related costs may be payable in the future if certain events
occur. Such amounts are not significant and are not included in the
estimated amounts above.
(7) To adjust certain financial services assets of U.S. Home Corporation in
accordance with APB 16.
(8) To record an estimate of costs to conform management information systems of
$4,750,000; to conform accounting policies with respect to warranty costs
of $9,000,000; and to record other transaction related liabilities of
$2,545,000.
(9) To record $296,767,000 of additional financing, at an interest rate of
approximately 9%, to complete the acquisition (including certain
acquisition related costs) and to adjust U.S. Home Corporation's senior
notes, senior subordinated notes and notes payable by $12,236,000 in
accordance with APB 16.
(10) To record the estimated value of the Lennar Corporation common stock
consideration given to purchase U.S. Home Corporation (12,978,320 shares
issued at an estimated market price of $20.5625 per share), minus the
historical equity of U.S. Home Corporation of $578,649,000.
F-4