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EXHIBIT 99.1
Contact:
Marshall Ames
Investor Relations
Lennar Corporation
(305) 485-2092
FOR IMMEDIATE RELEASE
LENNAR EPS INCREASES 70% IN THIRD QUARTER 2001
MIAMI, SEPTEMBER 20, 2001 -- LENNAR CORPORATION (NYSE: LEN)
Like all Americans, we are deeply saddened by the events of last week.
We pray for the families of the victims of this tragedy. We pray, and
believe, that our country will grow stronger as we work together
through this very difficult time.
Any discussion of our financial results is, of course, secondary to the
sympathies that we feel for the victims of last week's attack.
Nevertheless, we continue to build a strong company for a brighter day
when our country returns to normalcy.
FINANCIAL RESULTS
Third quarter net earnings increased 75% to $106.7 million from $61.0
million in 2000. Earnings per share increased 70% in the third quarter
of 2001 to $1.53 per share diluted from $0.90 per share diluted in
2000, and exceeded the First Call consensus estimate of $1.33 per
share. Revenues in the third quarter increased 15% to $1.6 billion from
$1.4 billion in the same period last year. Operating margin as a
percentage of home sales increased to 13.5% from 9.3% in 2000, an
increase of 420 basis points.
The Company remains comfortable with the First Call consensus estimate
of $1.81 per share for Q4 2001, which would result in a 2001 earnings
target of $5.49 per share.
THREE MONTHS ENDED AUGUST 31, 2001 COMPARED TO
THREE MONTHS ENDED AUGUST 31, 2000
HOMEBUILDING
Revenues from sales of homes increased 14% in the third quarter of 2001
to $1.4 billion from $1.2 billion in 2000. Revenues were higher as a
result of an 11% increase in the number of home deliveries and a 3%
increase in the average sales price. New home deliveries increased
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to 6,134 homes in the third quarter from 5,544 homes last year. New
home deliveries were higher primarily due to increases in home
deliveries in Florida and Texas, compared to the same period in 2000.
The average sales price on homes delivered increased to $232,000 from
$224,000 primarily due to an increase in the average sales price in
most of the Company's existing markets, combined with changes in
product mix.
Gross margin percentages on home sales were 23.9% in the third quarter
of 2001, compared to 19.7% in the same period last year. The gross
margin percentage in 2000 was 20.7% excluding the effect of purchase
accounting associated with the acquisition of U.S. Home. The increase
in 2001 was due to improved operational efficiencies and strength in
the homebuilding markets in which the Company operates.
Selling, general and administrative expenses as a percentage of
revenues from home sales were 10.3% in the third quarter of 2001,
compared to 10.4% in 2000.
As a result of the increase in gross margin percentage in the third
quarter of 2001, operating margin as a percentage of home sales
increased to 13.5% from 9.3% in 2000, an increase of 420 basis points.
Revenues from land sales totaled $39.9 million in the third quarter of
2001, compared to $38.3 million in the same period in 2000. Gross
profits from land sales totaled $2.1 million, or a 5.2% margin, in the
third quarter of 2001, compared to $3.8 million, or a 9.9% margin, in
the same period last year. Equity in earnings from partnerships was
$2.3 million in the third quarter of 2001, compared to $3.2 million in
the same period last year. Profits achieved on land sales and equity in
earnings from partnerships may vary significantly from period to period
depending on the timing of land sales by the Company and its
partnerships.
FINANCIAL SERVICES
Operating earnings for the Financial Services Division
increased to $24.7 million in the third quarter of 2001 from $17.0
million in the third quarter of 2000. The increase reflects the
successful operational efficiencies which resulted from the combination
of Lennar's and U.S. Home's mortgage operations and the consolidation
of the Company's title operations under the North American Title
banner. Additionally, the increase was a result of a greater level of
refinance activity.
CORPORATE GENERAL AND ADMINISTRATIVE EXPENSES
Corporate general and administrative expenses as a percentage
of total revenues were 1.2% in the third quarter of 2001, compared to
1.0% in the same period last year.
INTEREST EXPENSE
In the third quarter of 2001, interest expense was $30.7 million, or
1.9% of total revenues, compared to interest expense of $27.8 million,
or 2.0% of total revenues, in 2000. The
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decrease in interest as a percentage of total revenues was due to lower
average debt outstanding combined with lower interest rates, compared
to the same period last year.
NINE MONTHS ENDED AUGUST 31, 2001 COMPARED TO
NINE MONTHS ENDED AUGUST 31, 2000
HOMEBUILDING
Revenues from sales of homes increased 41% in the nine months ended
August 31, 2001 to $3.7 billion from $2.6 billion in 2000. Revenues
were higher as a result of a 33% increase in the number of home
deliveries and a 6% increase in the average sales price. New home
deliveries increased to 15,744 homes in the nine months ended August
31, 2001 from 11,814 homes last year. New home deliveries were higher
primarily due to the inclusion of a full nine months of U.S. Home's
homebuilding activity in the nine months ended August 31, 2001,
compared to four months inclusion in 2000. The average sales price on
homes delivered increased to $233,000 from $221,000 primarily due to an
increase in the average sales price in most of the Company's existing
markets, combined with changes in product mix.
Gross margin percentages on home sales were 23.4% in the nine months
ended August 31, 2001, compared to 19.2% in the same period last year.
The gross margin percentage in 2000 was 20.5% excluding the effect of
purchase accounting associated with the acquisition of U.S. Home. The
increase in 2001 was due to improved operational efficiencies and
strength in the homebuilding markets in which the Company operates.
Selling, general and administrative expenses as a percentage of
revenues from home sales were 10.7% in both the nine months ended
August 31, 2001 and 2000.
As a result of the increase in gross margin percentage in the nine
months ended August 31, 2001, operating margin as a percentage of home
sales increased to 12.7% from 8.5% in 2000, an increase of 420 basis
points.
Revenues from land sales totaled $67.8 million in the nine months ended
August 31, 2001, compared to $128.5 million in the same period in 2000.
Gross profits from land sales totaled $4.2 million, or a 6.2% margin,
in the nine months ended August 31, 2001, compared to $16.9 million, or
a 13.2% margin, in the same period last year. Equity in earnings from
partnerships was $8.8 million in the nine months ended August 31, 2001,
compared to $9.7 million in the same period in 2000. Profits achieved
on land sales and equity in earnings from partnerships may vary
significantly from period to period depending on the timing of land
sales by the Company and its partnerships.
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FINANCIAL SERVICES
Operating earnings for the Financial Services Division
increased to $65.6 million in the nine months ended August 31, 2001
from $32.5 million in 2000. The increase was attributable to the sale
of the Company's mortgage servicing operations which generated a
pre-tax profit of approximately $13 million. Additionally, the increase
reflects the successful operational efficiencies which resulted from
the combination of Lennar's and U.S. Home's mortgage operations and the
consolidation of the Company's title operations under the North
American Title banner. The increase also reflects a greater level of
refinance activity, as well as nine months of earnings contribution
from U.S. Home in 2001, compared to four months inclusion in the prior
year.
CORPORATE GENERAL AND ADMINISTRATIVE EXPENSES
Corporate general and administrative expenses as a percentage
of total revenues were 1.3% in the nine months ended August 31, 2001,
compared to 1.1% in the same period last year.
INTEREST EXPENSE
In the nine months ended August 31, 2001, interest expense was $83.8
million, or 2.1% of total revenues, compared to interest expense of
$57.6 million, or 1.9% of total revenues, in 2000. The increase in
interest as a percentage of total revenues was primarily due to higher
average debt outstanding, compared to the same period last year.
Lennar Corporation, founded in 1954, is headquartered in Miami,
Florida. The Company has homebuilding operations in 14 states and is
one of the nation's leading builders of quality homes for all
generations, building affordable, move-up and retirement homes. Under
the Lennar Family of Builders banner, the Company includes the
following brand names: Lennar Homes, U.S. Home, Greystone, Village
Builders, Renaissance, Orrin Thompson, Lundgren Bros., Winncrest and
Rutenberg Homes. The Company's active adult and retiree communities are
primarily marketed under the Heritage and Greenbriar brand names.
Lennar's Financial Services Division provides residential mortgage
services, title and closing services, and its Strategic Technologies
Division provides high-speed Internet access, cable television and home
monitoring services for both Lennar homebuyers and other customers.
Certain statements contained in this press release may be
"forward-looking statements" as defined in the Private Securities
Litigation Reform Act of 1995. By their nature, forward-looking
statements involve risks, uncertainties and other factors that may
cause actual results to differ materially from those which are
anticipated. With regard to the Company, these factors include, but are
not limited to, changes in general economic conditions, the market for
homes generally and in areas where the Company has developments, the
availability and cost of land suitable for residential development,
materials prices, labor costs, interest rates, consumer confidence,
competition, environmental factors and government regulations affecting
the Company's operations. See the Company's Annual Report on Form 10-K
for the year ended November 30, 2000 for a further discussion of these
and other risks and uncertainties applicable to the Company's business.
Previous press releases may be obtained at www.lennar.com. A conference
call to discuss the Company's third quarter earnings will be held at
10:00 AM Eastern time on Thursday, September 20, 2001. The call will be
broadcast live over the Internet and can be accessed through the
Company's web site at www.lennar.com. A replay of the conference call
will be available later that day by calling 719-457-0820 and entering
749256 as the confirmation number.
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LENNAR CORPORATION
Selected Revenues and Earnings Information
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
August 31, August 31,
2001 2000 2001 2000
Includes Includes Includes Includes
three three nine four
months of months of months of months of
U.S. Home U.S. Home U.S. Home U.S. Home
Revenues:
Homebuilding $1,466,792 1,288,700 3,761,959 2,756,753
Financial
services 110,836 87,515 311,244 228,009
Total
revenues $1,577,628 1,376,215 4,073,203 2,984,762
Operating earnings:
Homebuilding $ 199,047 124,395 486,516 255,052
Financial
services 24,667 16,999 65,580 32,547
Total
operating
earnings 223,714 141,394 552,096 287,599
Corporate general
and administrative
expenses 19,545 13,554 53,720 33,880
Interest expense 30,681 27,829 83,795 57,557
Earnings before
income taxes 173,488 100,011 414,581 196,162
Income taxes 66,793 39,004 159,614 76,503
Net earnings $ 106,695 61,007 254,967 119,659
Average shares
outstanding:
Basic 63,025 61,650 62,607 55,863
Diluted 70,825 69,145 70,515 62,749
Earnings per share:
Basic $ 1.69 0.99 4.07 2.14
Diluted $ 1.53 0.90 3.68 1.98
Supplemental
information:
EBITDA $ 216,051 140,587 534,243 284,593
Interest
incurred $ 31,996 40,970 96,330 78,907
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LENNAR CORPORATION
Homebuilding Segment Information
(In thousands)
(Unaudited)
Three Months Ended Nine Months Ended
August 31, August 31,
2001 2000 2001 2000
Includes Includes Includes Includes
three three nine four
months of months of months of months of
U.S. Home U.S. Home U.S. Home U.S. Home
Revenues:
Sales of homes $1,422,056 1,243,408 3,674,906 2,610,782
Sales of land
and other
revenues 42,408 42,119 78,210 136,304
Equity in earnings
from partnerships 2,328 3,173 8,843 9,667
Total revenues 1,466,792 1,288,700 3,761,959 2,756,753
Costs and expenses:
Cost of
homes sold 1,082,643 998,390 2,813,991 2,109,490
Cost of land and
other expenses 38,196 36,113 66,474 114,098
Selling, general
and administrative 146,906 129,802 394,978 278,113
Total costs and
expenses 1,267,745 1,164,305 3,275,443 2,501,701
Operating
earnings $ 199,047 124,395 486,516 255,052
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LENNAR CORPORATION
Summary of Deliveries, New Orders and Backlog By Region
(Dollars in thousands)
Three Months Ended Nine Months Ended
August 31, August 31,
2001 2000 2001 2000
Includes Includes Includes Includes
three three nine four
months of months of months of months of
U.S. Home U.S. Home U.S. Home U.S. Home
Deliveries:
East 2,046 1,794 5,244 3,897
Central 1,969 1,694 4,714 3,613
West 2,119 2,056 5,786 4,304
Subtotal 6,134 5,544 15,744 11,814
Joint ventures 154 135 675 193
Total 6,288 5,679 16,419 12,007
New Orders:
East 2,128 1,820 6,513 4,030
Central 1,562 1,511 5,322 3,520
West 2,059 1,935 6,598 4,683
Subtotal 5,749 5,266 18,433 12,233
Joint ventures 113 94 742 167
Total 5,862 5,360 19,175 12,400
Backlog - Homes:
East 4,037 3,624
Central 2,535 1,653
West 4,263 3,938
Subtotal 10,835 9,215
Joint ventures 284 272
Total 11,119 9,487
Backlog Dollar Value (including JVs) $ 2,701,382 2,288,779
The Company's market regions consist of the following states:
East: Florida, Maryland/Virginia and New Jersey
Central: Texas, Minnesota and Ohio
West: California, Colorado, Arizona and Nevada
In addition, the Company has various joint ventures in North Carolina,
Michigan and Missouri.
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LENNAR CORPORATION
Consolidated Condensed Balance Sheets
(Dollars in thousands)
(Unaudited)
August 31,
2001 2000
Assets:
Cash and cash equivalents $ 208,570 58,134
Inventories 2,703,412 2,662,750
Investments in partnerships 349,772 254,839
Other assets 285,893 296,030
Financial services 624,758 497,634
$4,172,405 3,769,387
Liabilities and stockholders' equity:
Accounts payable
and other liabilities $ 681,738 616,181
Mortgage notes
and other debts payable 1,490,385 1,656,066
Financial services 505,453 381,038
Total liabilities 2,677,576 2,653,285
Stockholders' equity 1,494,829 1,116,102
$4,172,405 3,769,387
Net debt to total capital 46.2% 58.9%
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