================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended MAY 31, 1996
Commission File Number: 1-6643
LENNAR CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 59-1281887
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
700 NORTHWEST 107TH AVENUE, MIAMI, FLORIDA 33172
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (305) 559-4000
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES [X] NO
Common shares outstanding as of the end of the current fiscal quarter:
Common 25,919,427
Class B Common 9,984,831
================================================================================
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
LENNAR CORPORATION AND SUBSIDIARIES
Consolidated Condensed Balance Sheets
(In thousands)
(Unaudited)
May 31, November 30,
1996 1995
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
HOMEBUILDING, INVESTMENT AND FINANCIAL SERVICES:
Homebuilding and investment assets:
Cash and cash equivalents $ 10,206 21,870
Receivables, net 86,002 70,202
Inventories:
Construction in progress and model homes 273,131 199,774
Land held for development 384,312 304,630
---------------------------------
Total inventories 657,443 504,404
Land held for investment 73,045 72,976
Operating properties and equipment, net 216,650 189,341
Investments in and advances to partnerships 143,928 114,240
Other assets 54,185 40,792
Financial services assets 361,500 353,809
- ------------------------------------------------------------------------------------------------------------------------
Total assets - homebuilding, investment and financial services 1,602,959 1,367,634
- -----------------------------------------------------------------------------------------------------------------------
LIMITED-PURPOSE FINANCE SUBSIDIARIES - COLLATERAL FOR BONDS AND NOTES PAYABLE 66,443 74,728
- ------------------------------------------------------------------------------------------------------------------------
$ 1,669,402 1,442,362
========================================================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
HOMEBUILDING, INVESTMENT AND FINANCIAL SERVICES:
Homebuilding and investment liabilities:
Accounts payable and accrued liabilities $ 123,034 114,833
Customer deposits 18,978 14,441
Income taxes:
Currently payable 3,130 12,219
Deferred 37,501 42,611
Mortgage notes and other debts payable 508,716 336,633
Financial services liabilities 274,302 243,191
- ------------------------------------------------------------------------------------------------------------------------
Total liabilities - homebuilding, investment and financial services 965,661 763,928
- ------------------------------------------------------------------------------------------------------------------------
LIMITED-PURPOSE FINANCE SUBSIDIARIES - BONDS AND NOTES PAYABLE 62,680 70,640
- ------------------------------------------------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY:
Common stock 2,592 2,588
Class B common stock 999 999
Additional paid-in capital 171,306 170,586
Retained earnings 461,602 427,851
Unrealized gain on securities available-for-sale, net 4,562 5,770
- ------------------------------------------------------------------------------------------------------------------------
Total stockholders' equity 641,061 607,794
- ------------------------------------------------------------------------------------------------------------------------
$ 1,669,402 1,442,362
========================================================================================================================
</TABLE>
See accompanying notes to consolidated condensed financial statements.
1
<PAGE>
LENNAR CORPORATION AND SUBSIDIARIES
Consolidated Condensed Statements of Earnings
(Unaudited)
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
May 31, May 31,
1996 1995 1996 1995
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
REVENUES:
Homebuilding $ 202,220 147,194 377,102 285,621
Investment 33,510 48,213 65,071 76,768
Financial services 20,913 13,187 39,275 25,318
Limited-purpose finance subsidiaries 1,610 1,938 3,329 4,008
- -------------------------------------------------------------------------------------------------------------------------------
Total revenues 258,253 210,532 484,777 391,715
- -------------------------------------------------------------------------------------------------------------------------------
COSTS AND EXPENSES:
Homebuilding 186,737 136,727 347,661 263,844
Investment 15,722 23,670 31,113 36,923
Financial services 13,665 8,911 25,093 17,169
Limited-purpose finance subsidiaries 1,629 1,934 3,345 3,998
Corporate general and administrative 3,010 2,841 5,980 5,297
Interest 7,501 4,192 13,395 7,625
- -------------------------------------------------------------------------------------------------------------------------------
Total costs and expenses 228,264 178,275 426,587 334,856
- -------------------------------------------------------------------------------------------------------------------------------
EARNINGS BEFORE INCOME TAXES 29,989 32,257 58,190 56,859
INCOME TAXES 11,696 12,580 22,694 22,175
- -------------------------------------------------------------------------------------------------------------------------------
NET EARNINGS $ 18,293 19,677 35,496 34,684
- -------------------------------------------------------------------------------------------------------------------------------
AVERAGE SHARES OUTSTANDING 36,220 36,100 36,213 36,069
- -------------------------------------------------------------------------------------------------------------------------------
NET EARNINGS PER SHARE $ .51 .55 .98 .96
===============================================================================================================================
- -------------------------------------------------------------------------------------------------------------------------------
CASH DIVIDENDS PER COMMON SHARE $ .025 .025 .05 .05
- -------------------------------------------------------------------------------------------------------------------------------
CASH DIVIDENDS PER CLASS B COMMON SHARE $ .0225 .0225 .045 .045
===============================================================================================================================
</TABLE>
2
See accompanying notes to consolidated condensed financial statements.
<PAGE>
LENNAR CORPORATION AND SUBSIDIARIES
Consolidated Condensed Statements of Cash Flows
(Unaudited)
(In thousands)
<TABLE>
<CAPTION>
Six Months Ended
May 31,
1996 1995
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 35,496 34,684
Adjustments to reconcile net earnings to net cash provided by (used in) operating
activities:
Depreciation and amortization 6,178 5,488
Equity in earnings of partnerships (24,471) (15,308)
Gains on sales of other real estate (2,532) (13,190)
Increase (decrease) in deferred income taxes (5,110) 3,214
Changes in assets and liabilities, net of effect of acquisition:
Decrease (increase) in receivables (4,401) 11,300
Increase in inventories (45,818) (37,936)
Decrease (increase) in financial services' loans held for sale or disposition 14,718 (525)
Increase (decrease) in accounts payable and accrued liabilities (4,985) 1,361
Other, net (2,903) (7,237)
- -----------------------------------------------------------------------------------------------------------------------------------
Net cash used in operating activities (33,828) (18,149)
- -----------------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to operating properties and equipment (13,401) (7,704)
Sales of operating properties and equipment 3,475 17,944
Sales of land held for investment 4,242 7,741
Decrease in investments in and advances to partnerships 4,610 18,677
Increase in financial services' loans held for investment (6,270) (29,546)
Purchase of investment securities (73,119) (29,541)
Receipts from investment securities 42,137 7,242
Acquisition of business (110,505) -
Other, net 1,957 (1,015)
- -----------------------------------------------------------------------------------------------------------------------------------
Net cash used in investing activities (146,874) (16,202)
- -----------------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings under revolving credit agreement 220,200 72,000
Net borrowings (repayments) under financial services' short-term debt (1,707) 28,225
Mortgage notes and other debts payable:
Proceeds from borrowings 51,467 3,044
Principal payments (96,912) (72,032)
Limited-purpose finance subsidiaries:
Principal reduction of mortgage loans and other receivables 8,487 8,943
Principal reduction of bonds and notes payable (8,188) (8,455)
Common stock:
Issuance 724 660
Dividends (1,745) (1,740)
- -----------------------------------------------------------------------------------------------------------------------------------
Net cash provided by financing activities 172,326 30,645
- -----------------------------------------------------------------------------------------------------------------------------------
Net decrease in cash and cash equivalents (8,376) (3,706)
Cash and cash equivalents at beginning of period 30,243 17,942
- -----------------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period $ 21,867 14,236
===================================================================================================================================
Summary of cash and cash equivalent balances:
Homebuilding and investment $ 10,206 8,437
Financial services 11,661 5,799
- -----------------------------------------------------------------------------------------------------------------------------------
$ 21,867 14,236
===================================================================================================================================
Supplemental disclosures of cash flow information:
Cash paid for interest, net of amounts capitalized $ 15,138 10,441
Cash paid for income taxes $ 36,369 27,307
===================================================================================================================================
</TABLE>
3
See accompanying notes to consolidated condensed financial statements
<PAGE>
LENNAR CORPORATION AND SUBSIDIARIES
Notes to Consolidated Condensed Financial Statements
(1) BASIS OF CONSOLIDATION
The accompanying consolidated condensed financial statements include the
accounts of Lennar Corporation and all wholly-owned subsidiaries (the
"Company"). All significant intercompany transactions and balances have been
eliminated. The Company's investments in partnerships are accounted for by the
equity method. The financial statements have been prepared by management without
audit by independent public accountants and should be read in conjunction with
the November 30, 1995 audited financial statements in the Company's Annual
Report on Form 10-K for the year then ended. However, in the opinion of
management, all adjustments (consisting of normal recurring adjustments)
necessary for fair presentation of the accompanying consolidated condensed
financial statements have been made.
(2) BUSINESS SEGMENTS
The Company has three business segments: Homebuilding, Investment and Financial
Services. The limited-purpose finance subsidiaries are not considered a business
segment.
Homebuilding operations include the construction and sale of single-family and
multi-family homes. These activities also include the purchase, development and
sale of residential land.
The Investment Division is involved in the development, management and leasing,
as well as the acquisition and sale, of commercial and residential properties
and land. This division also participates in and manages partnerships with
financial institutions. Since 1994, this division has been acquiring, at a
discount, issues of the unrated portion of debt securities which are
collateralized by real estate loans. The division has only invested in
securities in which it is the special servicer on behalf of all the certificate
holders of the security. The division earns interest on these investments as
well as fees for the special servicing activities.
Financial services activities are conducted primarily through Lennar Financial
Services, Inc. ("LFS") and five subsidiaries: Universal American Mortgage
Company, AmeriStar Financial Services, Inc., Universal Title Insurors, Inc.,
Lennar Capital Corporation and TitleAmerica Insurance Corporation. These
companies arrange mortgage financing, title insurance and closing services for
Lennar homebuyers and others; acquire, package and resell home mortgage loans;
and perform mortgage loan servicing activities. This division also invests in
issues of rated portions of commercial real estate mortgage-backed securities
for which Lennar's Investment Division is the special servicer and an investor
in the unrated portion of those securities.
The limited-purpose finance subsidiaries of LFS have placed mortgages and other
receivables as collateral for various long-term financings. These
limited-purpose finance subsidiaries are not considered a part of the financial
services operations and are reported separately.
(3) ACQUISITION
On December 29, 1995, the Company purchased the assets and operations of the
residential business of Friendswood Development Company, the real estate
subsidiary of Exxon Corporation, for $110.5 million in cash. The Company
financed this transaction through borrowings under its existing revolving credit
agreement. The acquisition of these assets and operations has been accounted for
using the purchase method of accounting.
4
<PAGE>
(4) NET EARNINGS PER SHARE
Net earnings per share is calculated by dividing net earnings by the weighted
average number of the total of common shares, Class B common shares and common
share equivalents outstanding during the period.
(5) RESTRICTED CASH
Cash includes restricted deposits of $2.5 million and $3.1 million as of May 31,
1996 and November 30, 1995, respectively. These balances are comprised primarily
of escrow deposits related to new home sales and security deposits from tenants
of commercial and apartment properties.
(6) FINANCIAL SERVICES
The assets and liabilities related to the Company's financial services
operations (as described in Note 2) are summarized as follows:
<TABLE>
<CAPTION>
(Unaudited)
May 31, November 30,
(IN THOUSANDS) 1996 1995
-----------------------------------------------------------------------------------------
<S> <C> <C>
Assets:
Investment securities available-for-sale $ 164,864 141,832
Loans held for sale or disposition, net 133,321 123,842
Loans and mortgage-backed securities
held for investment, net 23,017 43,506
Investments in and advances to partnerships 17,474 27,301
Cash and receivables, net 18,544 14,416
Other 4,280 2,912
-----------------------------------------------------------------------------------------
$ 361,500 353,809
=========================================================================================
Liabilities:
Notes and other debts payable $ 257,928 228,488
Other 16,374 14,703
-----------------------------------------------------------------------------------------
$ 274,302 243,191
=========================================================================================
</TABLE>
(7) SUMMARY OF NON-CASH INVESTING AND FINANCING ACTIVITIES
During the six months ended May 31, 1996, the Company acquired commercial
mortgage-backed securities for $84.2 million. Of this amount, $73.1 million was
paid in cash and the balance of $11.1 million was financed by the sellers.
During the same period of 1995, the Company acquired commercial mortgage-backed
securities for $33.7 million. Of this amount, $22.3 million was paid in cash and
the balance of $11.4 million was financed by the sellers. Also in 1996, the
Company acquired a commercial property for $26.1 million, of which $8.7 million
was paid in cash and the Company assumed a $17.4 million mortgage.
(8) RECLASSIFICATIONS
Certain prior year amounts in the consolidated condensed financial statements
have been reclassified to conform with the current period presentation.
5
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(1) MATERIAL CHANGES IN RESULTS OF OPERATIONS.
OVERVIEW
Net earnings were $18.3 million and $35.5 million, respectively, for the
three-month and six-month periods ended May 31, 1996, compared to $19.7 million
and $34.7 million, respectively, for the same periods in 1995. The quarterly and
year-to-date 1996 operating earnings for the Homebuilding and Financial Services
Divisions increased from the same periods in 1995. Operating earnings for the
Investment Division were lower than last year as a result of a significant sale
of real estate which occurred in the second quarter of 1995. There were no sales
of comparable size in 1996. Additionally, interest expense was higher for both
the three-month and six-month periods of 1996 primarily as a result of higher
debt levels.
HOMEBUILDING
The following tables set forth selected financial and operational information
related to the Homebuilding Division for the periods indicated (unaudited):
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
(DOLLARS IN THOUSANDS, EXCEPT May 31, May 31,
AVERAGE SALES PRICES) 1996 1995 1996 1995
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
REVENUES:
Sales of homes $ 191,745 143,520 361,141 276,493
Other 10,475 3,674 15,961 9,128
- --------------------------------------------------------------------------------------------------
Total revenues 202,220 147,194 377,102 285,621
COSTS AND EXPENSES:
Cost of homes sold 156,739 116,320 294,874 223,190
Cost of other revenues 6,208 2,823 8,964 7,284
Selling, general and administrative 23,790 17,584 43,823 33,370
- --------------------------------------------------------------------------------------------------
Total costs and expenses 186,737 136,727 347,661 263,844
- --------------------------------------------------------------------------------------------------
OPERATING EARNINGS $ 15,483 10,467 29,441 21,777
==================================================================================================
Gross profit - home sales $ 35,006 27,200 66,267 53,303
Gross profit percentage 18.3% 19.0% 18.3% 19.3%
S,G&A as a percentage of homebuilding
revenues 11.8% 11.9% 11.6% 11.7%
Average sales price $ 141,500 $ 140,200 142,700 139,600
==================================================================================================
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
SUMMARY OF HOME AND BACKLOG DATA
Three Months Ended Six Months Ended
May 31, May 31,
DELIVERIES 1996 1995 1996 1995
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Florida 727 741 1,487 1,440
Arizona 190 122 316 232
Texas 438 161 728 308
--------------------------------------------------------------------------------------------------
1,355 1,024 2,531 1,980
==================================================================================================
NEW ORDERS
--------------------------------------------------------------------------------------------------
Florida 989 1,055 1,821 1,764
Arizona 219 152 404 244
Texas 593 227 1,021 383
--------------------------------------------------------------------------------------------------
1,801 1,434 3,246 2,391
==================================================================================================
BACKLOG - HOMES
--------------------------------------------------------------------------------------------------
Florida 1,651 1,646
Arizona 390 250
Texas 679 218
--------------------------------------------------------------------------------------------------
2,720 2,114
--------------------------------------------------------------------------------------------------
BACKLOG - DOLLAR VALUE (IN THOUSANDS) $428,144 296,507
==================================================================================================
</TABLE>
Homebuilding revenues in the three-month and six-month periods ended May 31,
1996 were $202.2 million and $377.1 million, respectively, compared to $147.2
million and $285.6 million, respectively, for the same periods in 1995.
Homebuilding revenues were higher in both of the 1996 periods due to a higher
number of home deliveries and an increase in the average sales price. New home
deliveries for the 1996 three-month and six-month periods were 1,355 and 2,531,
respectively, compared to 1,024 and 1,980, respectively, for the same periods of
1995. The average sales prices of homes delivered during the three-month and
six-month periods ended May 31, 1996 were $141,500 and $142,700, respectively,
compared to $140,200 and $139,600, respectively, in the corresponding periods of
the prior year. The higher average sales price was due to a proportionately
greater number of sales of higher priced homes.
Gross profit percentages from the sales of homes were 18.3% in both the
three-month and six-month periods ending May 31, 1996, compared to 19.0% and
19.3%, respectively, in the corresponding periods of the prior year. These
decreases were primarily attributable to an increase in costs related to the mix
of homes delivered.
Selling, general and administrative expenses increased to $23.8 million and
$43.8 million for the three-month and six-month periods ended May 31, 1996,
respectively, from $17.6 million and $33.4 million, respectively, for the
comparable periods in 1995. These increases in expenses were primarily the
result of the acquisition of Friendswood Development Company and additional
expenses associated with the increased sales revenues. Also, contributing to the
increases were additional expenses relating to the Company's homebuilding
expansion into California and start-up expenses for a new adult community in the
Orlando area. As a percentage of homebuilding revenues, selling, general and
administrative expenses remained relatively constant at 11.8% and 11.6%,
respectively, for the three-month and six-month periods ended May 31, 1996
compared to 11.9% and 11.7%, respectively, for the same periods in 1995.
7
<PAGE>
At May 31, 1996, the Company had approximately $428.1 million (2,720 homes) of
sales contracts in backlog, as compared to $296.5 million (2,114 homes) at the
end of the same period a year ago. The increase in the backlog was attributable
to an increase in new orders, including Village Builders (the homebuilding
operation of Friendswood Development Company).
INVESTMENT
The following table presents the selected financial data related to the
Investment Division for the periods indicated (unaudited):
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
May 31, May 31,
(DOLLARS IN THOUSANDS) 1996 1995 1996 1995
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
REVENUES:
Rental income $ 15,216 12,740 28,628 25,678
Equity in earnings of partnerships 6,394 6,179 15,568 15,437
Management fees 5,828 2,575 10,158 5,198
Sales of other real estate 3,205 24,279 5,314 25,679
Other 2,867 2,440 5,403 4,776
---------------------------------------------------------------------------------------------------------
Total revenues 33,510 48,213 65,071 76,768
COST OF SALES AND EXPENSES 15,722 23,670 31,113 36,923
---------------------------------------------------------------------------------------------------------
OPERATING EARNINGS $ 17,788 24,543 33,958 39,845
=========================================================================================================
</TABLE>
For the three-month and six-month periods ended May 31, 1996, Investment
Division revenues were $33.5 million and $65.1 million, respectively, compared
to $48.2 million and $76.8 million, respectively, in the same periods of 1995.
Operating earnings were $17.8 million and $34.0 million, respectively, in the
second quarter and first six months of 1996, compared to $24.5 million and $39.8
million, respectively, in the corresponding periods of 1995. The decreases in
revenues and operating earnings for the 1996 three-month and six-month periods
were primarily due to the decline in sales of other real estate. In the second
quarter of 1995, a recreational facility was sold for $16.5 million. There were
no sales of comparable size in 1996. The decreases in revenues and operating
earnings from sales of other real estate were partially offset by increases in
rental income and management fees. Rental income on operating properties
increased primarily as a result of the acquisition of an additional commercial
property during the first quarter of 1996. Management fees increased primarily
as a result of incentive fees received from the partnerships managed by the
division. A significant portion of partnership earnings and management fees are
derived from loan payoffs and asset sales which can vary substantially from
period to period.
8
<PAGE>
FINANCIAL SERVICES
The following table presents the selected financial data related to the
Financial Services Division for the periods indicated (unaudited):
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
May 31, May 31,
(DOLLARS IN THOUSANDS) 1996 1995 1996 1995
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
REVENUES $ 20,913 13,187 39,275 25,318
COSTS AND EXPENSES 13,665 8,911 25,093 17,169
INTERCOMPANY INTEREST EXPENSE 46 630 186 1,200
---------------------------------------------------------------------------------------------------------
OPERATING EARNINGS $ 7,202 3,646 13,996 6,949
=========================================================================================================
Dollar volume of mortgages originated $ 141,909 137,878 295,777 264,978
---------------------------------------------------------------------------------------------------------
Number of mortgages originated 1,300 1,300 2,600 2,500
---------------------------------------------------------------------------------------------------------
Principal balance of servicing portfolio $ 3,332,331 3,351,402
---------------------------------------------------------------------------------------------------------
Number of loans serviced 43,000 44,600
=========================================================================================================
</TABLE>
Operating earnings of the Financial Services Division were $7.2 million and
$14.0 million, respectively, for the three-month and six-month periods ended May
31, 1996, compared to $3.6 million and $6.9 million, respectively, for the same
periods of 1995. These increases were attributable to additional operating
earnings from the division's traditional mortgage banking and title operations,
as well as an increase in operating earnings from the division's investment in
commercial mortgage-backed securities, commercial loans and partnerships.
INTEREST EXPENSE
Interest expense during the three-month and six-month periods ended May 31, 1996
was $7.5 million and $13.4 million, respectively, compared to $4.2 million and
$7.6 million, respectively, in the corresponding periods of the prior year. The
increase in interest expense was primarily the result of higher debt levels due
to the Homebuilding Division's expansion in Texas and into California, as well
as an increase in the number of homes delivered which increased the amount of
previously capitalized interest charged to expense. Previously capitalized
interest charged to interest expense during the second quarter and first six
months of 1996 was $4.5 million and $8.6 million, respectively, compared to $3.8
million and $7.3 million, respectively, for the comparable periods last year.
9
<PAGE>
(2) MATERIAL CHANGES IN FINANCIAL CONDITION.
During the six months ended May 31, 1996, $33.8 million was used in the
Company's operations, compared to $18.1 million used during the corresponding
period of the prior year. The primary use of cash in the first half of 1996 was
$45.8 million to increase inventories through land purchases, land development
and seasonal increases in construction in progress. The use of cash was
partially offset by a $14.7 million decrease in loans held for sale or
disposition by the Company's Financial Services Division.
In the fiscal 1995 period, the use of cash from operating activities consisted
primarily of $37.9 million to increase inventories. The use of cash was
partially offset by $11.3 million of cash provided by a decrease in receivables.
Cash used in investing activities was $146.9 million in the first six months of
1996, compared to $16.2 million used in the first six months of 1995. During
1996, the use of cash was primarily due to the $110.5 million acquisition of the
assets and operations of Friendswood Development Company and $73.1 million used
to purchase investment securities (commercial mortgage-backed securities) by
both the Investment and Financial Services Divisions. These uses of cash were
partially offset by $42.1 million of sales and principal payments provided by
the Company's portfolio of investment securities. In addition, $4.6 million of
cash was provided by the Company's partnerships. This was comprised of $40.6
million of distributions from partnerships, partially offset by investment in
two new Southern California residential land development partnerships totaling
$36.0 million. During 1995, the use of cash was primarily due to $29.5 million
to increase loans held for investment by the Company's financial services
operations and $29.5 million to acquire additional investment securities. These
uses of cash were partially offset by $18.7 million provided by the Company's
investments in partnerships and $17.9 million from sales of operating
properties.
At May 31, 1996, the Company had an unsecured revolving credit agreement with a
five-year commitment of $450 million. Certain Financial Services Division
subsidiaries are co-borrowers under this facility and at May 31, 1996 their
borrowings under this agreement amounted to $74.0 million. The total amount
outstanding under the Company's revolving credit agreement at May 31, 1996 was
$391.4 million.
10
<PAGE>
PART II OTHER INFORMATION
ITEMS 1-5. NOT APPLICABLE.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits:
(27) Financial Data Schedule.
(b) Reports on Form 8-K: Registrant was not required to file,
and has not filed, a Form 8-K during the quarter for which
this report is being filed.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
LENNAR CORPORATION
(Registrant)
Date: JULY 9, 1996 ALLAN J. PEKOR
-------------- -------------------------------
Allan J. Pekor
Financial Vice President
Chief Financial Officer
Date: JULY 9, 1996 JAMES T. TIMMONS
-------------- --------------------------------
James T. Timmons
Controller
Chief Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> NOV-30-1996
<PERIOD-END> MAY-31-1996
<CASH> 10,206
<SECURITIES> 0
<RECEIVABLES> 86,002
<ALLOWANCES> 0
<INVENTORY> 657,443
<CURRENT-ASSETS> 753,651
<PP&E> 256,479
<DEPRECIATION> (39,829)
<TOTAL-ASSETS> 1,669,402
<CURRENT-LIABILITIES> 145,142
<BONDS> 829,324
0
0
<COMMON> 3,591
<OTHER-SE> 637,470
<TOTAL-LIABILITY-AND-EQUITY> 1,669,402
<SALES> 361,141
<TOTAL-REVENUES> 484,777
<CGS> 294,874
<TOTAL-COSTS> 334,951
<OTHER-EXPENSES> 78,241
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 13,395
<INCOME-PRETAX> 58,190
<INCOME-TAX> 22,694
<INCOME-CONTINUING> 35,496
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 35,496
<EPS-PRIMARY> 0.98
<EPS-DILUTED> 0.98
</TABLE>
