EX-99.1 2 ex991-2021228x8kq1.htm EX-99.1 Document
Exhibit 99.1




Contact:
Allison Bober
Investor Relations
Lennar Corporation
(305) 485-2038
FOR IMMEDIATE RELEASE
Lennar Reports First Quarter EPS of $3.20
Net earnings of $1.0 billion, or $3.20 per diluted share, compared to net earnings of $398.5 million, or $1.27 per diluted share – both up over 150%
Excluding the pretax gain of $469.7 million ($358.7 million after tax) related to the mark to market of a strategic investment that went public, EPS would have been $2.04 per diluted share
Deliveries of 12,314 homes – up 19%
New orders of 15,570 homes – up 26%; new orders dollar value of $6.5 billion – up 31%
Backlog of 22,077 homes – up 25%; backlog dollar value of $9.5 billion – up 32%
Revenues of $5.3 billion – up 18%
Homebuilding net margins of $824.8 million, compared to $474.3 million
Gross margin on home sales of 25.0%, compared to 20.5%
S,G&A expenses as a % of revenues from home sales of 8.4%, compared to 9.2%
Net margin on home sales of 16.6%, compared to 11.4%
Financial Services operating earnings of $146.2 million, compared to $58.2 million
Multifamily operating loss of $0.9 million, compared to operating earnings of $1.8 million
Lennar Other operating earnings of $471.3 million (including $469.7 million gain related to a strategic investment that went public), compared to $0.9 million
Homebuilding cash and cash equivalents of $2.4 billion
No borrowings under the Company's $2.5 billion revolving credit facility
Homebuilding debt to total capital of 24.0%, compared to 33.6%
Controlled homesites as a percentage of total owned and controlled homesites increased to 45%, compared to 31%
(more)


2-2-2
Miami, March 16, 2021 -- Lennar Corporation (NYSE: LEN and LEN.B), one of the nation’s leading homebuilders, today reported results for its first quarter ended February 28, 2021. First quarter net earnings attributable to Lennar in 2021 were $1.0 billion, or $3.20 per diluted share, compared to first quarter net earnings attributable to Lennar in 2020 of $398.5 million, or $1.27 per diluted share.
Stuart Miller, Executive Chairman of Lennar, said, “We are pleased to announce our results for the first quarter of 2021 which were driven by both operational excellence as well as an extraordinary contribution from one of our technology investments.”
“We achieved net earnings of just over $1.0 billion, or $3.20 per diluted share, compared to $398.5 million, or $1.27 per diluted share in the prior year. Overall, we continue to see improvement in our bottom line and returns, driven by consistent strategies that have continued to work for our company.”
“In spite of a recent uptick in interest rates, the housing market remains very strong across the country. A combination of still low interest rates, strong personal savings rates during the pandemic, strong stimulus from the government, and solid household formation continue to drive demand, while the housing shortage driven by 10 years of production shortfall, defines a constrained supply. This combination indicates a sustained strong housing market with pricing power keeping pace with cost increases.”
“Our first quarter results benefited from continued robust market conditions, combined with the exceptional performance of our core homebuilding and financial services businesses. Our first quarter homebuilding gross margin of 25.0%, a 450 basis point improvement over the prior year, was partly driven by our strategy of matching sales pace with production pace and keeping price increases in step with cost increases. Both homebuilding and financial services operations have continued to benefit from our strategic technology investments which have materially driven improvements in both segments. Our homebuilding SG&A was a historic first quarter low of 8.4% vs 9.2% last year and reflects continued improvement as we incorporate technology driven innovation across our platform. In financial services we have continued to drive performance through technology advancements to improve our bottom line.”
Mr. Miller continued, “In our first quarter we also saw the upside embedded in some of our technology investments. We are not only improving our core business by incorporating these technologies, but we also benefit from the economic upside of our investments in exceptional innovators. Our well-documented Opendoor investment (NYSE: OPEN) went public in the first quarter and drove $470 million of profit as the public markets joined us in understanding the innovative potential that Opendoor pioneered in the iBuyer space. Although the now public stock price may go up and down over time, we remain long-term investors in order to help evolve our business strategy and drive associated benefits to the Lennar operating platform. In addition, two other technology-driven companies in which we have investments have announced agreements to merge with publicly traded special purpose acquisition companies.”
“We ended the quarter with $2.4 billion in cash and no borrowings on our revolver. During the quarter, we began to repurchase a small amount of stock, and ended the quarter with a homebuilding debt to capital of 24.0%, an all-time low.”
Rick Beckwitt, Co-Chief Executive Officer and Co-President of Lennar, said, “During the quarter, our homebuilding machine continued to accelerate production, with starts in the quarter up 26% over the prior year, thereby positioning our company for growth through the year. New home sales were strong in all of our major



3-3-3
markets and increased 26% year over year. We continued our previously stated strategy of improving our controlled homesite percentage which increased by 1,400 basis points year over year and 600 basis points sequentially to end the first quarter at 45%, while reducing our years owned supply of homesites to 3.4 years from 4.0 years year over year and from 3.5 years sequentially.”
Jon Jaffe, Co-Chief Executive Officer and Co-President of Lennar, said, “We have been and continue to be very focused on production costs and cycle times as the homebuilding industry ramps up to meet growing demand. Our focus on our trade partner relationships together with our size and scale have enabled us to maintain consistent production while we match cost increases with pricing power to maintain margin in the first quarter. Lennar is also uniquely positioned with our production-oriented Everything’s Included® business model to navigate the industry supply challenges.”
Mr. Miller concluded, “The housing market has proven to be resilient in the current environment and we expect it to continue to be a significant driver in the recovery of the overall economy. As we look ahead to our second quarter, we expect to deliver approximately 14,200 - 14,400 homes while we expect homebuilding margins to remain at 25.0% despite rising material and labor costs. With an excellent balance sheet and continued execution of our core operating strategies, we are extremely well positioned for an even stronger 2021 as the year progresses.”



4-4-4
RESULTS OF OPERATIONS
THREE MONTHS ENDED FEBRUARY 28, 2021 COMPARED TO
THREE MONTHS ENDED FEBRUARY 29, 2020
Homebuilding
Revenues from home sales increased 18% in the first quarter of 2021 to $4.9 billion from $4.1 billion in the first quarter of 2020. Revenues were higher primarily due to a 19% increase in the number of home deliveries, excluding unconsolidated entities. New home deliveries, excluding unconsolidated entities, increased to 12,302 homes in the first quarter of 2021 from 10,313 homes in the first quarter of 2020. The average sales price of homes delivered was $398,000 in the first quarter of 2021, compared to $402,000 in the first quarter of 2020.
Gross margin on home sales were $1.2 billion, or 25.0%, in the first quarter of 2021, compared to $849.0 million, or 20.5%, in the first quarter of 2020. The gross margin percentage on home sales increased primarily driven by pricing power as we have been able to increase revenue per square foot, as well as lower interest expense per home delivered as result of paydowns of senior notes in the past two years and lower field expense as a percentage of home sales revenue due to increased volume.
Selling, general and administrative expenses were $410.2 million in the first quarter of 2021, compared to $378.9 million in the first quarter of 2020. As a percentage of revenues from home sales, selling, general and administrative expenses improved to 8.4% in the first quarter of 2021, from 9.2% in the first quarter of 2020. This was the lowest percentage for a first quarter in the Company's history primarily due to the Company focus on improving its operating leverage combined with the benefits of the Company's technology efforts.
Financial Services
Operating earnings for the Financial Services segment were $146.2 million in the first quarter of 2021, compared to $58.2 million in the first quarter of 2020 (which included $47.3 million of operating earnings and an add back of $10.9 million of net loss attributable to noncontrolling interests). Operating earnings increased primarily due to the improvement in the mortgage business as a result of an increase in volume and margin and improvement in the title business as a result of an increase in volume.
Other Ancillary Businesses
Operating loss for the Multifamily segment was $0.9 million in the first quarter of 2021, compared to operating earnings of $1.8 million in the first quarter of 2020.
Operating earnings for the Lennar Other segment were $471.3 million in the first quarter of 2021, compared to $0.9 million in the first quarter of 2020. In the first quarter of 2021, the Company recognized a gain of $469.7 million related to a strategic investment, Opendoor, which began trading on the Nasdaq stock market in December 2020. The gain relates to the mark to market of our share holdings in the public entity. Two other technology driven




5-5-5
companies in which we have investments have announced agreements to merge with publicly traded special purpose acquisition companies.
Share Repurchases
During the first quarter of 2021, the Company repurchased a total of 510,000 shares of its Class A common stock for $43.1 million at an average per share price of $84.51.
Liquidity
At February 28, 2021, the Company had $2.4 billion of Homebuilding cash and cash equivalents and no borrowings under its $2.5 billion revolving credit facility, thereby providing $4.9 billion of available capacity.
2021 Guidance
The following are the Company's expected results of its homebuilding and financial services activities for the second quarter of 2021:
New Orders16,500 - 16,700
Deliveries14,200 - 14,400
Average Sales Price$405,000
Gross Margin % on Home Sales25.0%
S,G&A as a % of Home Sales7.9% - 8.0%
Financial Services Operating Earnings$100 million - $105 million
The following are the Company's expected results of its homebuilding and financial services activities for fiscal year 2021:
Deliveries62,000 - 64,000
Average Sales Price$400,000
Gross Margin % on Home Sales25.0%
S,G&A as a % of Home Sales7.6% - 7.8%
Financial Services Operating Earnings$445 million - $460 million



6-6-6
About Lennar
Lennar Corporation, founded in 1954, is one of the nation’s leading builders of quality homes for all generations. Lennar builds affordable, move-up and active adult homes primarily under the Lennar brand name. Lennar’s Financial Services segment provides mortgage financing, title and closing services primarily for buyers of Lennar’s homes and, through LMF Commercial, originates mortgage loans secured primarily by commercial real estate properties throughout the United States. Lennar's Multifamily segment is a nationwide developer of high-quality multifamily rental properties. LENX drives Lennar's technology, innovation and strategic investments. For more information about Lennar, please visit 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 relating to the homebuilding market and other markets in which we participate. 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 the potential negative impact to our business of the ongoing coronavirus (COVID-19) pandemic; slowdowns in real estate markets in regions where we have significant Homebuilding or Multifamily development activities; increases in operating costs, including costs related to construction materials, labor, real estate taxes and insurance, which exceed our ability to increase prices, both in our Homebuilding and Multifamily businesses; reduced availability of mortgage financing or increased interest rates; decreased demand for our homes or Multifamily rental apartments; natural disasters or catastrophic events for which our insurance may not provide adequate coverage; our inability to successfully execute our strategies, including our land lighter strategy; a decline in the value of the land and home inventories we maintain and resulting possible future writedowns of the carrying value of our real estate assets; unfavorable losses in legal proceedings; 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, 2020. 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 first quarter earnings will be held at 11:00 a.m. Eastern Time on Wednesday, March 17, 2021. 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 203-369-3026 and entering 5723593 as the confirmation number.
###




7-7-7
LENNAR CORPORATION AND SUBSIDIARIES
Selected Revenues and Operating Information
(In thousands, except per share amounts)
(unaudited)
Three Months Ended
February 28,February 29,
20212020
Revenues:
Homebuilding$4,943,056 4,172,116 
Financial Services244,069 198,661 
Multifamily131,443 132,617 
Lennar Other6,900 1,943 
Total revenues$5,325,468 4,505,337 
Homebuilding operating earnings
$833,180 460,398 
Financial Services operating earnings146,207 47,317 
Multifamily operating earnings (loss)
(874)1,785 
Lennar Other operating earnings
471,346 899 
Corporate general and administrative expenses(110,531)(82,634)
Charitable foundation contribution(12,314)(4,213)
Earnings before income taxes1,327,014 423,552 
Provision for income taxes(310,105)(32,329)
Net earnings (including net earnings (loss) attributable to noncontrolling interests)
1,016,909 391,223 
Less: Net earnings (loss) attributable to noncontrolling interests15,540 (7,229)
Net earnings attributable to Lennar$1,001,369 398,452 
Average shares outstanding:
Basic309,020 311,213 
Diluted309,020 311,215 
Earnings per share:
Basic$3.20 1.27 
Diluted$3.20 1.27 
Supplemental information:
Interest incurred (1)$71,064 93,291 
EBIT (2):
Net earnings attributable to Lennar$1,001,369 398,452 
Provision for income taxes310,105 32,329 
Interest expense included in:
Costs of homes sold74,947 72,823 
Costs of land sold559 197 
Homebuilding other expense, net4,931 5,934 
Total interest expense80,437 78,954 
EBIT$1,391,911 509,735 
(1)Amount represents interest incurred related to homebuilding debt.
(2)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.




8-8-8
LENNAR CORPORATION AND SUBSIDIARIES
Segment Information
(In thousands)
(unaudited)
Three Months Ended
February 28,February 29,
20212020
Homebuilding revenues:
Sales of homes$4,890,914 4,140,767 
Sales of land47,643 26,867 
Other homebuilding4,499 4,482 
Total homebuilding revenues4,943,056 4,172,116 
Homebuilding costs and expenses:
Costs of homes sold3,666,862 3,291,779 
Costs of land sold41,188 27,135 
Selling, general and administrative410,236 378,892 
Total homebuilding costs and expenses4,118,286 3,697,806 
Homebuilding net margins824,770 474,310 
Homebuilding equity in loss from unconsolidated entities(4,565)(4,546)
Homebuilding other income (expense), net12,975 (9,366)
Homebuilding operating earnings$833,180 460,398 
Financial Services revenues$244,069 198,661 
Financial Services costs and expenses97,862 151,344 
Financial Services operating earnings$146,207 47,317 
Multifamily revenues$131,443 132,617 
Multifamily costs and expenses131,049 137,348 
Multifamily equity in earnings (loss) from unconsolidated entities and other gain(1,268)6,516 
Multifamily operating earnings (loss)$(874)1,785 
Lennar Other revenues$6,900 1,943 
Lennar Other costs and expenses4,252 2,574 
Lennar Other equity in earnings (loss) from unconsolidated entities and other income (expense), net(1,047)1,530 
Lennar Other unrealized gain469,745 — 
Lennar Other operating earnings$471,346 899 






9-9-9
LENNAR CORPORATION AND SUBSIDIARIES
Summary of Deliveries, New Orders and Backlog
(Dollars in thousands, except average sales price)
(unaudited)
Lennar's reportable homebuilding segments and all other homebuilding operations not required to be reported separately have divisions located in:
East: Florida, New Jersey, Pennsylvania and South Carolina
Central: Georgia, Illinois, Indiana, Maryland, Minnesota, North Carolina, Tennessee and Virginia
Texas: Texas
West: Arizona, California, Colorado, Idaho, Nevada, Oregon, Utah and Washington
Other: Urban divisions
For the Three Months Ended
February 28, 2021February 29, 2020February 28, 2021February 29, 2020February 28, 2021February 29, 2020
Deliveries:HomesDollar ValueAverage Sales Price
East3,920 3,388 $1,351,301 1,153,715 $345,000 341,000 
Central2,419 2,043 926,438 786,698 383,000 385,000 
Texas2,349 1,577 636,411 463,796 271,000 294,000 
West3,622 3,304 1,976,808 1,731,514 546,000 524,000 
Other4 3,647 8,039 912,000 893,000 
Total12,314 10,321 $4,894,605 4,143,762 $397,000 401,000 
Of the total homes delivered listed above, 12 homes with a dollar value of $3.7 million and an average sales price of $308,000 represent home deliveries from unconsolidated entities for the three months ended February 28, 2021, compared to eight home deliveries with a dollar value of $3.0 million and an average sales price of $374,000 for the three months ended February 29, 2020.
AtFor the Three Months Ended
February 28, 2021February 29, 2020February 28, 2021February 29, 2020February 28, 2021February 29, 2020February 28, 2021February 29, 2020
New Orders:Active CommunitiesHomesDollar ValueAverage Sales Price
East340 344 4,814 3,731 $1,700,112 1,274,353 $353,000 342,000 
Central274 323 3,326 2,667 1,333,626 1,018,443 401,000 382,000 
Texas218 236 2,775 1,999 812,169 573,079 293,000 287,000 
West327 352 4,652 3,965 2,692,395 2,125,632 579,000 536,000 
Other3 3 14 2,974 13,581 991,000 970,000 
Total1,162 1,258 15,570 12,376 $6,541,276 5,005,088 $420,000 404,000 
Of the total new orders listed above, 35 homes with a dollar value of $11.6 million and an average sales price of $332,000 represent new orders in four active communities from unconsolidated entities for the three months ended February 28, 2021, compared to 26 new orders with a dollar value of $8.1 million and an average sales price of $310,000 in five active communities for the three months ended February 29, 2020.

At
February 28, 2021February 29, 2020February 28, 2021February 29, 2020February 28, 2021February 29, 2020
Backlog:HomesDollar ValueAverage Sales Price
East6,907 6,033 $2,659,746 2,147,007 $385,000 356,000 
Central5,278 3,774 2,169,360 1,475,711 411,000 391,000 
Texas3,249 2,592 1,000,342 822,620 308,000 317,000 
West6,642 5,219 3,629,018 2,702,535 546,000 518,000 
Other1 14 1,175 13,995 1,175,000 1,000,000 
Total22,077 17,632 $9,459,641 7,161,868 $428,000 406,000 
Of the total homes in backlog listed above, 61 homes with a backlog dollar value of $19.4 million and an average sales price of $318,000 represent the backlog from unconsolidated entities at February 28, 2021, compared to 49 homes with a backlog dollar value of $15.2 million and an average sales price of $311,000 at February 29, 2020.




10-10-10
LENNAR CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands, except per share amounts)
(unaudited)
February 28,November 30,
20212020
ASSETS
Homebuilding:
Cash and cash equivalents$2,421,411 2,703,986 
Restricted cash17,878 15,211 
Receivables, net300,134 298,671 
Inventories:
Finished homes and construction in progress9,320,283 8,593,399 
Land and land under development7,564,900 7,495,262 
Consolidated inventory not owned807,759 836,567 
Total inventories17,692,942 16,925,228 
Investments in unconsolidated entities1,077,353 953,177 
Goodwill3,442,359 3,442,359 
Other assets1,162,564 1,190,793 
26,114,641 25,529,425 
Financial Services2,217,551 2,708,118 
Multifamily1,183,720 1,175,908 
Lennar Other1,036,068 521,726 
Total assets$30,551,980 29,935,177 
LIABILITIES AND EQUITY
Homebuilding:
Accounts payable$1,037,266 1,037,338 
Liabilities related to consolidated inventory not owned671,235 706,691 
Senior notes and other debts payable, net5,976,168 5,955,758 
Other liabilities2,459,332 2,225,864 
10,144,001 9,925,651 
Financial Services1,113,083 1,644,248 
Multifamily235,651 252,911 
Lennar Other41,794 12,966 
Total liabilities11,534,529 11,835,776 
Stockholders’ equity:
Preferred stock — 
Class A common stock of $0.10 par value30,047 29,894 
Class B common stock of $0.10 par value3,944 3,944 
Additional paid-in capital8,724,192 8,676,056 
Retained earnings11,488,520 10,564,994 
Treasury stock(1,348,710)(1,279,227)
Accumulated other comprehensive loss(1,747)(805)
Total stockholders’ equity18,896,246 17,994,856 
Noncontrolling interests121,205 104,545 
Total equity19,017,451 18,099,401 
Total liabilities and equity$30,551,980 29,935,177 




11-11-11

LENNAR CORPORATION AND SUBSIDIARIES
Supplemental Data
(Dollars in thousands)
(unaudited)
February 28,November 30,February 29,
202120202020
Homebuilding debt$5,976,168 5,955,758 8,115,498 
Stockholders' equity18,896,246 17,994,856 16,044,599 
Total capital$24,872,414 23,950,614 24,160,097 
Homebuilding debt to total capital24.0 %24.9 %33.6 %
Homebuilding debt$5,976,168 5,955,758 8,115,498 
Less: Homebuilding cash and cash equivalents2,421,411 2,703,986 784,950 
Net homebuilding debt$3,554,757 3,251,772 7,330,548 
Net homebuilding debt to total capital (1)15.8 %15.3 %31.4 %

(1)Net homebuilding debt to total capital is a non-GAAP financial measure defined as net homebuilding debt (homebuilding debt less homebuilding cash and cash equivalents) divided by total capital (net homebuilding debt plus stockholders' equity). The Company believes the ratio of net homebuilding debt to total capital is a relevant and a useful financial measure to investors in understanding the leverage employed in homebuilding operations. However, because net 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.