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Filed by U.S. Home Corporation
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12
of the Securities Exchange Act of 1934
Subject Company: U.S. Home Corporation
Commission File No: 001-05899
U.S. HOME CORPORATION AND LENNAR CORPORATION DISTRIBUTED THIS PRESENTATION TO
MEMBERS OF THE INVESTMENT COMMUNITY BEGINNING ON FEBRUARY 17, 2000.
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[LENNAR CORPORATION LOGO]
[U.S. HOME LOGO]
Investment Community Presentation
February 17, 2000
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Page 2
Transaction Overview
- - Lennar Corporation will acquire U.S. Home for $36.00 per share
- - Total equity purchase price of approximately $476 million to
consist of 50% cash / 50% Lennar stock
- - Lennar will also be assuming approximately $650 million of
U.S. Home outstanding debt
- - The acquisition is subject to approval by both companies'
shareholders at a special shareholders' meeting to be called
and is expected to be completed in mid-May
- - The transaction is structured to be tax-free to those U.S.
Home shareholders electing to receive Lennar stock
- - We have agreed on a collar arrangement on the stock portion
of the transaction
- - Post-transaction, Lennar's Board of Directors will add 4
representatives from U.S. Home
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Page 3
Financial Rationale
- - The transaction is expected to be accretive to Lennar's EPS
in 2000 without synergies
- - Lennar's balance sheet post-transaction will continue to be
one of the strongest in the homebuilding industry
- homebuilding debt/EBITDA: 2.8x
- homebuilding debt/total capitalization: 61.2%
- - Purchase price to book value of U.S. Home of 0.8x
- - Operational savings from combining administrative
systems; elimination of duplicative public company costs
- - Capture of higher financial services revenues and other
ancillary revenues
- - Increased size in terms of revenue, EBITDA and pro-forma
market capitalization enhance the Company's competitive
positions and economies of scale
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Strategic Rationale
- - Creates most profitable homebuilder in the United States
- - Further strengthens our leading market positions in the nation's fastest
growing homebuilding markets
- Florida
- California
- Texas
- Arizona
- Nevada
- - Broadens geographic diversity into a number of new markets
- Colorado - New Jersey
- Maryland/Virginia - Ohio
- Minnesota
- - Enhances overall land position
- - Expands product offering and expertise
- - Increases focus on fast-growing retirement/active adult segment
- - Very compatible operating strategies, systems and cultures
- - Strengthens management at both corporate and operational levels
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Cultural Compatibility
- - Shared values vis-a-vis associates, as well as with
operating practices and principles
- - U.S. Home's management to become active participants
in the new enterprise
- - U.S. Home expertise in housing for seniors will be
invaluable in enhancing Lennar's product line and
expertise in the area
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Page 6
Lennar - Long History of Successful Expansion
- --------------------------------------------------------------------------------
1954 - Founded as a South Florida homebuilder
1972 - Entered the Arizona market
1982 - Established mortgage banking operations
1987 - Acquired Development Corporation of America, the Company's largest
Florida competitor
1990 - Established operations in Texas
1996 - Expanded Texas operations via acquisition of Village Builders and
Friendswood Development Company from Exxon
1996 - Established operations in California
1997 - Spin-off of commercial real estate investment and management business
1997 - Merged with Pacific Greystone
1998 - Acquired North American Title, Winncrest Homes, ColRich and Polygon
Communities
2000 - Acquisition of U.S. Home
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Page 7
Largest Homebuilders in US-
Homebuilding Revenue and Total EBITDA
- --------------------------------------------------------------------------------
($ in millions)
<TABLE>
<CAPTION>
Based on LTM Based on LTM
Homebuilding Revenue(1) Total EBITDA(2)
<S> <C> <C> <C>
Pro-forma Lennar $4,635 Pro-forma Lennar $551
Pulte $3,841 Centex (3) $518
Kaufman and Broad $3,772 Kaufman and Broad $377
Centex $3,593 Lennar $373
D.R. Horton $3,264 D.R. Horton $370
Lennar $2,849 Pulte $337
</TABLE>
(1) Includes revenue from sales of land and other homebuilding
revenue
(2) Includes financial services
(3) Includes construction products
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Page 8
Largest Homebuilders in US-Deliveries
- -------------------------------------
1999 US Ranking - Domestic Deliveries
(including detached and attached homes)
Pro-forma Lennar (1) 21,658
Kaufman and Broad (1) 19,933
Pulte 19,848
D.R. Horton 19,041
Centex 17,596
Lennar 12,589
Ryland 10,193
NVR 9,316
U.S. Home (1) 9,069
Beazer Homes 7,804
Del Webb 7,737
(1) Excludes joint venture activities
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Page 9
Leading Market Positions in Fastest
Growing Markets
Pro-forma lots owned & controlled and LTM deliveries (1)
Colorado
- --------
Owned 5,759 (61%)
Controlled 3,732 (39%)
Total lots 9,491
Deliveries 1,178
Years supply 8.1
Minnesota
- ---------
Owned 1,605 (36%)
Controlled 2,842 (64%)
Total lots 4,447
Deliveries 753
Years supply 5.9
Ohio
- ----
Owned 350 (81%)
Controlled 82 (19%)
Total lots 432
Deliveries 77
Years supply 5.6
Nevada
- ------
Owned 1,212 (88%)
Controlled 169 (12%)
Total lots 1,381
Deliveries 724
Years supply 1.9
New Jersey
- ----------
Owned 820 (29%)
Controlled 2,007 (71%)
Total lots 2,827
Deliveries 304
Years supply 9.3
California
Owned 15,277 (42%)
Controlled 21,353 (58%)
Total lots 36,630
Deliveries 4,508
Years supply 8.1
Maryland/Virginia
Owned 2,504 (73%)
Controlled 915 (27%)
Total lots 3,419
Deliveries 589
Years supply 5.8
Arizona
Owned 4,397 (77%)
Controlled 1,309 (23%)
Total lots 5,706
Deliveries 2,429
Years supply 2.3
Texas
Owned 10,356 (57%)
Controlled 7,923 (43%)
Total lots 18,279
Deliveries 4,381
Years supply 4.2
Florida
Owned 16,036 (32%)
Controlled 33,716 (68%)
Total lots 49,752
Deliveries 6,715
Years supply 7.4
Total
- -----
Owned 58,316 (44%)
Controlled 74,048 (56%)
Total lots 132,364
Deliveries 21,658
Years supply 6.1
(1) Lennar lot positions and deliveries as of FYE 11/30/99; U.S. Home lot
positions and deliveries as of FYE 12/31/99.
Note: U.S. Home deliveries exclude joint venture activities. Lennar owned lots
reflect direct ownership only (lots owned by partnerships are included in
controlled lots).
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Homebuilding Operations
Highlights
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FISCAL 1999 REVENUE FROM THE
SALES OF HOMES
LENNAR
<TABLE>
<S> <C>
NV ................ 2%
TX ................ 21%
AZ ................ 6%
CA ................ 45%
FL ................ 26%
Revenue = ......... $2,671.7M
</TABLE>
U.S. HOME
<TABLE>
<S> <C>
NV ................ 3%
NJ ................ 4%
OH ................ 1%
TX ................ 11%
AZ ................ 13%
CA ................ 12%
CO ................ 15%
FL ................ 24%
MD/VA ............. 7%
MN ................ 10%
Revenue = ......... $1,752.8M
</TABLE>
PRO-FORMA COMBINED
<TABLE>
<S> <C>
NV ................ 2%
NJ ................ 2%
OH ................ 0.4%
TX ................ 17%
AZ ................ 9%
CA ................ 32%
CO ................ 6%
FL ................ 25%
MD/VA ............. 3%
MN ................ 4%
Revenue = ......... $4,424.5M
</TABLE>
Note: Totals may not add to 100% due to rounding.
Excludes joint venture activities.
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FISCAL 1999 HOMES DELIVERED
LENNAR
<TABLE>
<S> <C>
NV ................ 3%
TX ................ 25%
AZ ................ 8%
CA ................ 30%
FL ................ 34%
Homes delivered = . 12,589
</TABLE>
U.S. HOME
<TABLE>
<S> <C>
NV ................ 3%
NJ ................ 3%
OH ................ 1%
TX ................ 14%
AZ ................ 15%
CA ................ 9%
CO ................ 13%
FL ................ 27%
MD/VA ............. 7%
MN ................ 8%
Homes delivered = . 9,069
</TABLE>
PRO-FORMA COMBINED
<TABLE>
<S> <C>
NV ................ 4%
NJ ................ 1%
OH ................ 0.4%
TX ................ 20%
AZ ................ 11%
CA ................ 21%
CO ................ 5%
FL ................ 31%
MD/VA ............. 3%
MN ................ 4%
Homes delivered = . 21,658
</TABLE>
Note: Totals may not add to 100% due to rounding.
Excludes joint venture activities.
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BACKLOG AT FISCAL YEAR END 1999
LENNAR
<TABLE>
<S> <C>
TX .................. 22%
AZ/NV ............... 13%
CA .................. 27%
FL .................. 38%
Backlog = ........... 2,891
</TABLE>
U.S. HOME
<TABLE>
<S> <C>
NJ ................ 7%
OH ................ 1%
TX ................ 14%
AZ/NV ............. 12%
CA ................ 6%
CO ................ 19%
FL ................ 29%
MD/VA ............. 6%
MN ................ 6%
Backlog = ......... 4,343
</TABLE>
PRO-FORMA COMBINED
<TABLE>
<S> <C>
NJ ................ 4%
OH ................ 0.4%
TX ................ 17%
AZ/NV ............. 12%
CA ................ 15%
CO ................ 11%
FL ................ 33%
MD/VA ............. 4%
MN ................ 4%
Backlog = ......... 7,234
</TABLE>
Note: Totals may not add to 100% due to rounding.
Excludes joint venture activities.
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PRODUCT MIX - LTM DELIVERIES
LENNAR
<TABLE>
<S> <C>
ENTRY LEVEL/AFFORDABLE .......... 30%
RETIREMENT/ACTIVE ADULT ......... 5%
MOVE-UP ......................... 65%
</TABLE>
U.S. HOME
<TABLE>
<S> <C>
ENTRY LEVEL/AFFORDABLE .......... 35%
RETIREMENT/ACTIVE ADULT ......... 25%
MOVE-UP ......................... 40%
</TABLE>
PRO-FORMA COMBINED
<TABLE>
<S> <C>
ENTRY LEVEL/AFFORDABLE .......... 32%
RETIREMENT/ACTIVE ADULT ......... 13%
MOVE-UP ......................... 55%
</TABLE>
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FINANCIAL HIGHLIGHTS
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1999 INCOME STATEMENT DATA
($ in millions, except for home sales price)
<TABLE>
<CAPTION>
U.S. Pro-forma
Lennar Home Combined
------------ ------------ ------------
<S> <C> <C> <C>
Homebuilding revenue $ 2,849.2 $ 1,786.0 $ 4,635.2
Financial services revenue 269.3 38.5 307.8
------------ ------------ ------------
LTM total revenue $ 3,118.5 $ 1,824.5 $ 4,943.0
LTM EBITDA $ 373.3 $ 177.3 $ 550.6
% margin 12.0% 9.7% 11.1%
Homebuilding operating income $ 340.8 $ 113.9 $ 454.7
Financial services operating income 31.1 16.2 47.3
Average home sales price $ 212,200 $ 193,300 $ 204,300
Homebuilding gross margin 21.2% 18.5% 20.1%
Homebuilding SG&A % of total homebuilding revenue 9.6% 9.8% 9.6%
</TABLE>
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PRO-FORMA BALANCE SHEET AND
CREDIT STATISTICS - FYE 1999
- - Post-combination, Lennar will continue to have one of the strongest balance
sheets in the industry
($ in millions)
<TABLE>
<CAPTION>
Transaction Pro-forma
Lennar U.S. Home Adjustments Combined
---------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Homebuilding debt $ 590.2 $ 650.1 $ 291.1 $ 1,531.4
Shareholders' equity 731.7 578.6 (340.4) 969.9
---------- ---------- -------- ----------
Total capitalization $ 1,321.9 $ 1,228.7 $ (49.3) $ 2,501.3
---------- ---------- -------- ----------
Credit statistics
Homebuilding debt / EBITDA 1.6x 3.7x 2.8x
EBITDA / interest incurred 6.8x 2.9x 4.2x
EBITDA / cash interest incurred 8.1x 2.9x 5.1x
Homebuilding debt / total capitalization 44.6% 52.9% 61.2%
</TABLE>
Note: Lennar debt and shareholders' equity adjusted for stock repurchases since
11/30/99
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PRO-FORMA DEBT COMPOSITION
($ in millions)
<TABLE>
<CAPTION>
$ % Debt/EBITDA
---------- ---------- -----------
<S> <C> <C> <C>
Bank debt $ 1,007.8 65.8% 1.9x
7 5/8% senior notes due 2009 269.5 17.6% 0.5x
3 7/8% zero coupon senior
convertible debentures due 2018 237.9 15.5% 0.4x
Mortgage notes 16.2 1.1% NM
---------- ---------- -----------
Total $ 1,531.4 100.0% 2.8x
</TABLE>
- - Bank debt to be opportunistically refinanced with fixed-rate / long-term
bond offerings
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HOMEBUILDING DEBT TO TOTAL
CAPITALIZATION
Homebuilding Debt to Total Capitalization
Note: Represents historical Lennar homebuilding debt to total capitalization
Debt to Total
Capitalization
Year Percentage
---- ---------------
1984 53.2%
1985 40.5%
1986 32.7%
1987 45.9%
1988 36.4%
1989 37.5%
1990 33.2%
1991 30.8%
1992 35.7%
1993 34.1%
1994 38.1%
1995 35.6%
1996 34.2%
1997 54.6%
1998 42.6%
1999 37.3%
* Reflects spin-off of LNR Property Corporation.
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SUMMARY
- - Creates most profitable homebuilder in the United States
- - Strengthens leading market positions in fastest growing markets
- - Broadens geographic diversity into a number of attractive new markets
- - Enhances overall land position
- - Expands product offering
- - Increases focus on fast-growing retirement/active adult segment
- - Very compatible culture, operating strategies/systems
- - Strengthens depth of management/board
- - Significant synergies to be realized
- - Accretive to earnings
- - Strong post-transaction balance sheet
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These communications include certain "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995. These
statements are based on management's current expectation and are naturally
subject to uncertainty and changes in circumstances. Actual results may vary
materially from the expectations contained herein. The forward-looking
statements in this document include statements about future financial and
operating results and the proposed U.S. Home Corporation/Lennar Corporation
transaction. The following factors, among others, could cause actual results to
differ materially from those described herein: inability to obtain, or meet
conditions imposed for, governmental approvals for the merger with Lennar
Corporation; failure of the U.S. Home or Lennar stockholders to approve the
merger; the risk that the U.S. Home and Lennar businesses will not be
integrated successfully; the costs related to the merger; and other economic,
business, competitive and/or regulatory factors affecting U.S. Home's and
Lennar's businesses generally. More detailed information about those factors is
set forth in U.S. Home's filings with the Securities and Exchange Commission,
including its Annual Report filed on Form 10-K for the fiscal year ended
December 31, 1998, especially in the Management's Discussion and Analysis
section, its most recent quarterly reports on Form 10-Q, and its Current Reports
on Form 8-K. U.S. Home is under no obligation to (and expressly disclaims any
such obligation to) update or alter its forward-looking statements whether as a
result of new information, future events or otherwise.
****
U.S. Home and Lennar will be jointly preparing a joint proxy
statement/prospectus and will be filing such joint proxy statement/prospectus
with the Securities and Exchange Commission as soon as practicable. WE URGE
INVESTORS TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT
DOCUMENTS TO BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, BECAUSE THEY
CONTAIN IMPORTANT INFORMATION. Investors and security holders may obtain a free
copy of the joint proxy statement/prospectus and other documents filed by U.S.
Home Corporation and Lennar Corporation with the Securities and Exchange
Commission at the Securities and Exchange Commission's web site at www.sec.gov.
In addition, the joint proxy statement/prospectus and other documents filed with
the Securities and Exchange Commission by U.S. Home Corporation may be obtained
for free from U.S. Home Corporation by directing a request to U.S. Home
Corporation, 10707 Clay Road, Houston, Texas 77041, Attention: Investor
Relations, telephone (713) 877-2311. The joint proxy statement/prospectus and
other documents filed with the Securities and Exchange Commission by Lennar
Corporation may be obtained for free from Lennar Corporation by directing a
request to Lennar Corporation, 700 Northwest 107th Avenue, 4th Floor; Miami,
Florida 33172, Attention: Investor Relations, telephone (305) 559-4000.
READ THE DEFINITIVE JOINT PROXY STATEMENT/PROSPECTUS CAREFULLY BEFORE MAKING A
DECISION CONCERNING THE MERGER.
U.S. HOME Corporation, its directors, executive officers and certain other
members of U.S. Home Corporation management and employees may be soliciting
proxies from U.S. Home Corporation stockholders in favor of the merger.
Information concerning the participants will be set forth on a Schedule 14A
filed as soon as practicable.
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