Lennar Reports First Quarter Results

MIAMI, March 30 /PRNewswire-FirstCall/ --

-- Revenues of $593.1 million - down 44%
-- Loss per share of $0.98 (includes a $0.35 per share charge related to
valuation adjustments and other write-offs; and a $0.36 per share
charge
related to a non-cash deferred tax asset valuation allowance)
-- Gross margin on home sales:
-- 14.3% (excluding SFAS 144 valuation adjustments of $40.8 million)
-
down 280 basis points
-- 6.5% (including SFAS 144 valuation adjustments) - down 780 basis
points
-- S, G & A expenses as a % of revenues from home sales of 19.4% - up
100 basis points
-- Homebuilding cash of $1.1 billion as of February 28, 2009
-- No outstanding balance under the Company's credit facility as of
February 28, 2009
-- Homebuilding debt to total capital, net of homebuilding cash, of 37.4%
-- Maximum recourse indebtedness related to the Company's
unconsolidated entities of $474.0 million - reduced $45.9 million
since
Q4 2008 and $1.3 billion since the peak in 2006
-- Number of unconsolidated joint ventures reduced to 95 - down from 116
unconsolidated joint ventures at Q4 2008 and 270 unconsolidated joint
ventures at the peak in 2006
-- Simultaneous with this press release, the Company has filed a Form 8-K
providing additional unconsolidated joint venture disclosures
-- Deliveries of 2,142 homes - down 40%
-- New orders of 2,190 homes - down 28%; cancellation rate of 21%

-- Backlog of 1,647 homes - down 52%

Lennar Corporation (NYSE: LEN and LEN.B), one of the nation's largest
homebuilders, today reported results for its first quarter ended February 28,
2009. First quarter net loss in 2009 was $155.9 million, or $0.98 per diluted
share, compared to first quarter net loss of $88.2 million, or $0.56 per
diluted share, in 2008.

Stuart Miller, President and Chief Executive Officer of Lennar Corporation,
said, "The housing market continued its downward trend throughout our first
quarter. Despite historically low interest rates and some indicators pointing
toward market stabilization, low consumer confidence, increased unemployment
and growing foreclosure rates negatively impacted new home sales in most of
our markets. While we are hopeful that the recent actions taken by the
Federal government will help stimulate housing demand and restore consumer
confidence, we continue to adjust our business to adapt to market conditions."

Mr. Miller continued, "During the first quarter, we continued to focus on
returning to profitability by concentrating on the basics of our homebuilding
operations. We remained focused on repositioning our product to meet today's
consumer demand for more affordable product. We reduced our construction
costs by re-bidding and re-tooling our product and eliminated S, G & A
expenses by restructuring our operations and consolidating operating divisions
in the wake of declining volume levels."

"We remain focused on maintaining strong liquidity as we ended our first
quarter with $1.1 billion in cash, no outstanding borrowings under our credit
facility and a responsible homebuilding debt-to-total capital ratio, net of
homebuilding cash, of 37.4%. We also reduced the number of our unconsolidated
joint ventures to 95 from 116 at November 30, 2008 and reduced our maximum
unconsolidated joint venture recourse debt to $474 million from $520 million
at November 30, 2008."

Mr. Miller concluded, "As we continue to focus on homebuilding profitability
and on cash generation, we are well positioned to weather the current
challenges and to take advantage of opportunities as they present themselves."

RESULTS OF OPERATIONS

THREE MONTHS ENDED FEBRUARY 28, 2009 COMPARED TO
THREE MONTHS ENDED FEBRUARY 29, 2008

Homebuilding
Revenues from home sales decreased 45% in the first quarter of 2009 to $522.8
million from $953.1 million in 2008. Revenues were lower primarily due to a
38% decrease in the number of home deliveries and a 12% decrease in the
average sales price of homes delivered in 2009. New home deliveries,
excluding unconsolidated entities, decreased to 2,136 homes in the first
quarter of 2009 from 3,437 homes last year. In the first quarter of 2009, new
home deliveries were lower in each of the Company's homebuilding segments and
Homebuilding Other, compared to 2008. The average sales price of homes
delivered decreased to $244,000 in the first quarter of 2009 from $278,000 in
the same period last year, primarily due to reduced pricing. Sales incentives
offered to homebuyers were $50,500 per home delivered in the first quarter of
2009, compared to $48,000 per home delivered in the first quarter of 2008.

Gross margins on home sales excluding SFAS 144 valuation adjustments were
$75.0 million, or 14.3%, in the first quarter of 2009, compared to $162.9
million, or 17.1%, in 2008. Gross margin percentage on home sales, excluding
SFAS 144 valuation adjustments, decreased compared to last year, primarily due
to higher sales incentives offered to homebuyers as a percentage of revenues
from home sales. Gross margins on home sales were $34.2 million, or 6.5%, in
the first quarter of 2009, which included $40.8 million of SFAS 144 valuation
adjustments, compared to gross margins on home sales of $136.7 million, or
14.3%, in the first quarter of 2008, which included $26.2 million of SFAS 144
valuation adjustments. Gross margins on home sales excluding SFAS 144
valuation adjustments is a non-GAAP financial measure. This financial measure
is disclosed by certain of the Company's competitors. The Company finds it
useful and important in evaluating its performance because it discloses the
Company's gross margins with regard to new homes the Company actually delivers
in the periods presented. The Company believes that disclosing this
information is helpful to readers of its financial statements by enabling them
to compare the gross margins of new homes the Company actually delivers during
the periods presented with those of its competitors.

Selling, general and administrative expenses were reduced by $73.8 million, or
42%, in the first quarter of 2009, compared to the same period last year,
primarily due to reduction in associate headcount, variable selling expenses
and fixed costs. As a percentage of revenues from home sales, selling,
general and administrative expenses increased to 19.4% in the first quarter of
2009, from 18.4% in the first quarter of 2008, due to lower revenues.

Losses on land sales totaled $10.5 million in the first quarter of 2009, which
included $0.2 million of SFAS 144 valuation adjustments and $10.2 million of
write-offs of deposits and pre-acquisition costs related to approximately
1,100 homesites under option that the Company does not intend to purchase. In
the first quarter of 2008, losses on land sales totaled $26.5 million, which
included $15.5 million of SFAS 144 valuation adjustments and $16.9 million of
write-offs of deposits and pre-acquisition costs related to approximately
2,600 homesites that were under option.

Equity in loss from unconsolidated entities was $2.9 million in the first
quarter of 2009, compared to equity in loss from unconsolidated entities of
$23.0 million in the first quarter of 2008, which included $18.9 million of
SFAS 144 valuation adjustments related to assets of unconsolidated entities in
which the Company has investments.
Other income (expense), net, totaled ($47.8) million in the first quarter of
2009, which included $37.2 million of APB 18 valuation adjustments to the
Company's investments in unconsolidated entities, compared to other income
(expense), net, of ($21.8) million in the first quarter of 2008, which
included $29.6 million of APB 18 valuation adjustments to the Company's
investments in unconsolidated entities.

Minority interest income (expense), net was $1.7 million and ($0.2) million,
respectively, in the first quarter of 2009 and 2008.

Sales of land, equity in loss from unconsolidated entities, other income
(expense), net and minority interest income (expense), net may vary
significantly from period to period depending on the timing of land sales and
other transactions entered into by the Company and unconsolidated entities in
which it has investments.

Financial Services
Operating earnings for the Financial Services segment was $0.5 million in the
first quarter of 2009, compared to an operating loss of $9.7 million in the
first quarter of 2008. The improvement in the Financial Services segment was
primarily due to lower fixed costs as a result of the Company's focus on cost
reductions in the segment's mortgage and title operations.

Corporate General and Administrative Expenses
Corporate general and administrative expenses were reduced by $6.8 million, or
20%, in the first quarter of 2009, compared to the first quarter of 2008. As
a percentage of total revenues, corporate general and administrative expenses
increased to 4.7% in the first quarter of 2009, from 3.3% in the first quarter
of 2008, due to lower revenues.

Deferred Tax Asset Valuation Allowance
SFAS 109 requires a reduction of the carrying amounts of deferred tax assets
by a valuation allowance, if based on available evidence, it is more likely
than not that such assets will not be realized. As a result of its net loss
during the three months ended February 28, 2009, the Company generated
deferred tax assets of $57.7 million and recorded a non-cash valuation
allowance in accordance with SFAS 109 against the entire amount of deferred
tax assets generated.

Lennar Corporation, founded in 1954, is one of the nation's leading 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 primarily mortgage financing, title
insurance and closing services for both buyers of the Company's homes and
others. 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.

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. These forward-looking statements include statements regarding our
business, financial condition, results of operations, strategies and
prospects. 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. Because forward-looking statements relate to
matters that have not yet occurred, these statements are inherently subject to
risks and uncertainties. Many factors could cause our actual activities or
results to differ materially from the activities and results anticipated in
forward-looking statements. These factors include those described under the
caption "Risk Factors" in Item 1A of our Annual Report on Form 10-K for our
fiscal year ended November 30, 2008. We do not undertake any obligation to
update forward-looking statements, except as required by Federal securities
laws.

A conference call to discuss the Company's first quarter earnings will be held
at 11:00 a.m. Eastern Time on Tuesday, March 31, 2009. 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
203-369-0957 and entering 5932669 as the confirmation number.

LENNAR CORPORATION AND SUBSIDIARIES

Selected Revenues and Operational Information
(In thousands, except per share amounts)
(unaudited)

Three Months Ended
February 28, February 29,
2009 2008
---- ----

Revenues:
Homebuilding $ 529,034 993,776
Financial services 64,029 69,137
-------- ---------
Total revenues $ 593,063 1,062,913
-------- ---------

Homebuilding operating loss $(126,542) (109,780)
Financial services operating earnings (loss) 492 (9,692)
Corporate general and
administrative expenses (28,031) (34,822)
------- -------
Loss before (provision)
benefit for income taxes (154,081) (154,294)
(Provision) benefit for income taxes (1,848) 66,078
------- -------

Net loss $(155,929) (88,216)
========= =======

Basic and diluted average shares outstanding 158,621 158,204
------- -------
Basic and diluted loss per share $(0.98) (0.56)
======= =======

Supplemental information:
Interest incurred (1) $ 38,504 38,095
======= ======
EBIT before valuation adjustments and
write-offs of option deposits and
pre-acquisition costs (2):
Loss before (provision) benefit for
income taxes $(154,081) (154,294)
Interest expense 16,984 32,443
Valuation adjustments and write-offs of
option deposits and pre-acquisition costs 88,453 107,111
EBIT before valuation adjustments
and write-offs of option deposits and -------- -------
pre-acquisition costs $ (48,644) (14,740)
======== =======

(1) Amount represents interest incurred related to homebuilding debt,
which is primarily capitalized to inventories and relieved as cost of
sales when homes are delivered or land is sold.

(2) EBIT before valuation adjustments and write-offs of option deposits
and pre-acquisition costs is a non-GAAP financial measure derived by
adding back interest expense, valuation adjustments and write-offs of
option deposits and pre-acquisition costs reflected in loss before
(provision) benefit for income taxes. This financial measure has been
presented because the Company finds it useful and important in
evaluating its performance and believes that it helps readers of the
Company's financial statements compare its operations with those of
its competitors.

LENNAR CORPORATION AND SUBSIDIARIES

Homebuilding Information
(In thousands)
(unaudited)

Three Months Ended
February 28, February 29,
2009 2008
---- ----

Revenues:
Sales of homes $ 522,758 953,066
Sales of land 6,276 40,710
------- -------
Total revenues 529,034 993,776
------- -------

Costs and expenses:
Cost of homes sold 488,576 816,371
Cost of land sold 16,806 67,160
Selling, general and administrative 101,177 175,018
------- ---------
Total costs and expenses 606,559 1,058,549
------- ---------

Equity in loss from unconsolidated
entities (2,917) (22,980)
Other income (expense), net (47,834) (21,793)
Minority interest income (expense), net 1,734 (234)
--------- --------
Operating loss $(126,542) (109,780)
========= ========

LENNAR CORPORATION AND SUBSIDIARIES

Valuation Adjustments and Write-offs
(In thousands)
(unaudited)

Three Months Ended
February 28, February 29,
2009 2008
---- ----
SFAS 144 valuation adjustments to finished
homes, CIP and land on which the Company
intends to build homes:
East $13,478 8,106
Central 8,081 1,667
West 18,398 9,920
Houston 146 112
Other 677 6,424
------ ------
Total 40,780 26,229
------ ------
SFAS 144 valuation adjustments to land the
Company intends to sell or has sold to
third parties:
East 139 1,372
Central 78 9,233
West - 4,192
Houston - 64
Other - 594
--- ------
Total 217 15,455
--- ------
Write-offs of option deposits and pre-acquisition
costs:
East 5,780 7,054
Central 82 4,079
West 515 3,364
Houston 721 265
Other 3,133 2,090
------ ------
Total 10,231 16,852
------ ------
Company's share of SFAS 144 valuation adjustments
related to assets of unconsolidated entities:
East - 4,157
Central - 158
West - 14,025
Houston - -
Other - 597
--- ------
Total - 18,937
--- ------
APB 18 valuation adjustments to investments in
unconsolidated entities:
East 2,566 937
Central 7,618 228
West 25,550 28,439
Houston - -
Other 1,491 34
------ ------
Total 37,225 29,638
------ ------
Total valuation adjustments and
write-offs of option deposits and ------- -------
pre-acquisitions costs $88,453 107,111
======= =======

LENNAR CORPORATION AND SUBSIDIARIES

Summary of Deliveries, New Orders and Backlog
(Dollars in thousands)
(unaudited)

At or for the
Three Months Ended
February 28, 2009 February 29, 2008
----------------- -----------------
Homes Dollar Value Homes Dollar Value
----- ------------ ----- ------------

Deliveries:
East 794 $178,372 1,165 $ 313,757
Central 315 61,902 604 132,809
West 409 148,116 924 366,523
Houston 405 78,620 575 109,657
Other 219 63,373 328 107,799
----- -------- ----- ----------
Total 2,142 $530,383 3,596 $1,030,545
===== ======== ===== ==========

Of the total home deliveries listed above, 6 homes with a dollar value of
$7,625 represent deliveries from unconsolidated entities for the three
months ended February 28, 2009, compared to 159 home deliveries with a
dollar value of $77,479 for the three months ended February 29, 2008.

New Orders:
East 716 $155,281 942 $ 231,002
Central 366 72,846 569 122,009
West 491 161,676 747 293,082
Houston 395 74,069 492 99,277
Other 222 59,464 295 83,387
----- -------- ----- --------
Total 2,190 $523,336 3,045 $ 828,757
===== ======== ===== ========

Of the total new orders listed above, 8 homes with a dollar value of
$4,898 represent new orders from unconsolidated entities for the three
months ended February 28, 2009, compared to 62 new orders with a dollar
value of $39,298 for the three months ended February 29, 2008.

Backlog:
East 711 $180,785 1,568 $ 492,862
Central 174 35,395 250 56,401
West 329 122,260 711 307,071
Houston 259 53,168 506 117,960
Other 174 58,513 363 178,045
----- -------- ----- ----------
Total 1,647 $450,121 3,398 $1,152,339
===== ======== ===== ==========

Of the total homes in backlog listed above, 9 homes with a backlog dollar
value of $9,339 represents the backlog from unconsolidated entities at
February 28, 2009, compared to 204 homes in backlog with a dollar value of
$113,865 at February 29, 2008.

Lennar's reportable homebuilding segments and homebuilding other
consist of homebuilding divisions located in:
East: Florida, Maryland, New Jersey and Virginia
Central: Arizona, Colorado and Texas (1)
West: California and Nevada
Houston: Houston, Texas
Other: Illinois, Minnesota, New York, North Carolina and South
Carolina

(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)

February 28, November 30, February 29,
2009 2008 2008
---- ---- ----

Homebuilding debt $2,574,115 2,544,935 2,279,497
Stockholders' equity 2,467,375 2,623,007 3,680,898
---------- --------- ---------
Total capital $5,041,490 5,167,942 5,960,395
---------- --------- ---------
Homebuilding debt to
total capital 51.1% 49.2% 38.2%
==== ==== ====

Homebuilding debt $2,574,115 2,544,935 2,279,497
Less: Homebuilding cash
and cash equivalents 1,099,864 1,091,468 1,088,141
---------- --------- ---------
Net homebuilding debt $1,474,251 1,453,467 1,191,356
---------- --------- ---------
Net homebuilding debt
to total capital (1) 37.4% 35.7% 24.5%
===== ===== =====

(1) Net homebuilding debt to total capital consists of net homebuilding
debt (homebuilding debt less homebuilding cash and cash equivalents)
divided by total capital (net homebuilding debt plus stockholders'
equity).

SOURCE Lennar Corporation

Scott Shipley, Investor Relations, Lennar Corporation, +1-305-485-2054