================================================================================
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, 1998
Commission File Number: 1-11749
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 June 30, 1998:
Common 48,203,211
Class B Common 9,909,631
================================================================================
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
LENNAR CORPORATION AND SUBSIDIARIES
Consolidated Condensed Balance Sheets
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
(Unaudited)
MAY 31, NOVEMBER 30,
1998 1997
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
HOMEBUILDING:
Cash and cash equivalents $ 39,075 52,926
Receivables, net 11,802 34,646
Inventories 1,010,819 806,975
Operating properties and equipment, net 9,824 8,598
Investments in partnerships 141,969 108,064
Other assets 127,027 127,631
-----------------------------------
1,340,516 1,138,840
FINANCIAL SERVICES 235,429 156,988
LIMITED-PURPOSE FINANCE SUBSIDIARIES - COLLATERAL FOR BONDS AND NOTES PAYABLE 41,300 47,456
- ------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $ 1,617,245 1,343,284
- ------------------------------------------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
HOMEBUILDING:
Accounts payable and other liabilities $ 195,078 198,386
Income taxes currently payable 4,645 22,634
Mortgage notes and other debts payable 686,704 527,303
-----------------------------------
886,427 748,323
FINANCIAL SERVICES 180,565 108,506
LIMITED-PURPOSE FINANCE SUBSIDIARIES - BONDS AND NOTES PAYABLE 41,300 47,456
- ------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 1,108,292 904,285
STOCKHOLDERS' EQUITY:
Common stock of $0.10 par value per share,
44,437 shares outstanding at May 31, 1998 4,444 4,322
Class B common stock of $0.10 par value per share,
9,910 shares outstanding at May 31, 1998 991 994
Additional paid-in capital 418,137 388,797
Retained earnings 85,381 44,886
- ------------------------------------------------------------------------------------------------------------------------
TOTAL STOCKHOLDERS' EQUITY 508,953 438,999
- ------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,617,245 1,343,284
- ------------------------------------------------------------------------------------------------------------------------
</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,
---------------------------- -----------------------------
1998 1997 1998 1997
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
REVENUES:
Homebuilding $ 476,097 247,424 884,635 455,271
Financial services 54,977 23,116 86,074 46,404
Limited-purpose finance subsidiaries 1,032 1,384 2,109 2,704
- -------------------------------------------------------------------------------------------------------------------------------
Total revenues 532,106 271,924 972,818 504,379
- -------------------------------------------------------------------------------------------------------------------------------
COSTS AND EXPENSES:
Homebuilding 422,493 229,066 791,477 422,691
Financial services 47,012 11,770 73,752 25,995
Limited-purpose finance subsidiaries 1,032 1,390 2,109 2,704
Corporate general and administrative 6,503 3,255 12,792 6,610
Interest 12,389 5,577 23,006 9,431
- -------------------------------------------------------------------------------------------------------------------------------
Total costs and expenses 489,429 251,058 903,136 467,431
- -------------------------------------------------------------------------------------------------------------------------------
EARNINGS FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES 42,677 20,866 69,682 36,948
Income taxes 17,071 8,138 27,873 14,410
- -------------------------------------------------------------------------------------------------------------------------------
EARNINGS FROM CONTINUING OPERATIONS 25,606 12,728 41,809 22,538
EARNINGS FROM DISCONTINUED OPERATIONS
(net of income taxes: three months - $5,930;
six months - $12,079) - 9,276 - 18,893
- -------------------------------------------------------------------------------------------------------------------------------
NET EARNINGS $ 25,606 22,004 41,809 41,431
- -------------------------------------------------------------------------------------------------------------------------------
BASIC EARNINGS PER SHARE:
Continuing operations $ 0.48 0.35 0.78 0.63
Discontinued operations - 0.26 - 0.52
- -------------------------------------------------------------------------------------------------------------------------------
$ 0.48 0.61 0.78 1.15
- -------------------------------------------------------------------------------------------------------------------------------
DILUTED EARNINGS PER SHARE:
Continuing operations $ 0.47 0.35 0.77 0.62
Discontinued operations - 0.26 - 0.52
- -------------------------------------------------------------------------------------------------------------------------------
$ 0.47 0.61 0.77 1.14
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
CASH DIVIDENDS PER COMMON SHARE $ 0.0125 0.025 0.025 0.05
- -------------------------------------------------------------------------------------------------------------------------------
CASH DIVIDENDS PER CLASS B COMMON SHARE $ 0.01125 0.0225 0.0225 0.045
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to consolidated condensed financial statements.
2
<PAGE>
LENNAR CORPORATION AND SUBSIDIARIES
Consolidated Condensed Statements of Cash Flows
(Unaudited)
(In thousands)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
MAY 31,
-------------------------------
1998 1997
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Earnings from continuing operations $ 41,809 22,538
Earnings from discontinued operations - 18,893
Adjustments to reconcile net earnings to net cash used in operating activities:
Depreciation and amortization 7,935 4,124
Equity in earnings of partnerships (7,127) (21,238)
Gain on sales of other real estate (2,133) (9,379)
Deferred income taxes 9,615 (8,108)
Changes in assets and liabilities, net of effect of acquisitions:
Decrease in receivables 23,373 8,612
Increase in inventories (118,028) (114,176)
Decrease (increase) in other assets (15,643) 5,001
Increase in financial services loans held for sale or disposition (29,571) (145)
Decrease in accounts payable and accrued liabilities (8,421) (67)
Decrease in income taxes currently payable (17,989) (9,084)
- ------------------------------------------------------------------------------------------------------------------------------
Net cash used in operating activities (116,180) (103,029)
- ------------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Operating properties and equipment:
Additions (4,166) (30,389)
Sales 6 12,496
Decrease (increase) in investments in and advances to partnerships (19,218) 40,568
Decrease (increase) in financial services loans held for investment 489 (910)
Purchases of investment securities (2,321) (102,034)
Receipts from investment securities 1,933 121,165
Acquisitions of businesses, net of cash acquired (63,818) -
Other, net 107 (1,143)
- ------------------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) investing activities (86,988) 39,753
- ------------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings under revolving credit agreement 162,250 58,800
Net borrowings (repayments) under financial services short-term debt 35,201 (10,040)
Mortgage notes and other debts payable:
Proceeds from borrowings 9,444 124,513
Principal payments (26,165) (99,534)
Limited-purpose finance subsidiaries:
Principal reduction of mortgage loans and other receivables 6,111 5,080
Principal reduction of bonds and notes payable (5,804) (4,991)
Common stock:
Issuance 20,483 1,518
Dividends (1,314) (1,749)
- ------------------------------------------------------------------------------------------------------------------------------
Net cash provided by financing activities 200,206 73,597
- ------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents (2,962) 10,321
Cash and cash equivalents at beginning of period 62,599 60,670
- ------------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period $ 59,637 70,991
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
3
<PAGE>
LENNAR CORPORATION AND SUBSIDIARIES
Consolidated Condensed Statements of Cash Flows -- Continued
(Unaudited)
(In thousands)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
MAY 31,
--------------------------------
1998 1997
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Summary of cash and cash equivalent balances:
Homebuilding $ 39,075 43,705
Financial services 20,562 24,579
Discontinued operations - 2,707
- ------------------------------------------------------------------------------------------------------------------------------
$ 59,637 70,991
- ------------------------------------------------------------------------------------------------------------------------------
Supplemental disclosures of cash flow information:
Cash paid for interest, net of amounts capitalized $ 10,055 17,051
Cash paid for income taxes $ 34,548 43,437
Supplemental disclosures of non-cash investing and financing activities:
Purchases of inventory financed by sellers $ 20,500 25,300
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to consolidated condensed financial statements.
4
<PAGE>
LENNAR CORPORATION AND SUBSIDIARIES
Notes to Consolidated Condensed Financial Statements
(Unaudited)
(1) BASIS OF PRESENTATION
The accompanying consolidated condensed financial statements include the
accounts of Lennar Corporation, its wholly-owned subsidiaries and partnerships
in which it holds a controlling interest (the "Company"). The Company's
investments in partnerships (and similar entities) in which a significant, but
less than controlling, interest is held are accounted for by the equity method.
All significant intercompany transactions and balances have been eliminated. The
financial statements have been prepared by management without audit by
independent public accountants and should be read in conjunction with the
November 30, 1997 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. Certain prior year amounts in the consolidated condensed
financial statements have been reclassified to conform with the current period
presentation.
As a result of the Company's spin-off of its commercial real estate investment
and management business, including the Investment Division business segment, on
October 31, 1997 (the "Spin-off"), the accompanying financial statements have
been restated to reflect the Investment Division as a discontinued operation
(see Note 3). Accordingly, the revenues and expenses of the Investment Division
have been excluded from the respective captions in the consolidated condensed
statements of earnings and have been reported as "earnings from discontinued
operations" for the three and six-month periods ended May 31, 1997.
The Company historically has experienced, and expects to continue to experience,
variability in quarterly results. The consolidated condensed statements of
earnings for the three and six-month periods ended May 31, 1998 are not
necessarily indicative of the results to be expected for the full year.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
(2) BUSINESS SEGMENTS
The Company has two business segments: Homebuilding and Financial Services. The
limited-purpose finance subsidiaries are not considered a business segment. See
Note 3 regarding the discontinued Investment Division business segment.
Homebuilding operations include the construction and sale of single-family
attached and detached homes in Florida, California, Texas, Arizona and Nevada.
These activities also include the purchase, development and sale of residential
land. The Company has a non-controlling 50% interest in Lennar Land Partners
("LLP"), a general partnership formed with LNR Property Corporation ("LNR") at
the time of the Spin-off, to acquire, develop and sell land to Lennar, LNR and
others. The Company manages the day-to-day operations of LLP and receives a
management fee. On October 31, 1997, the Company completed a merger with Pacific
Greystone Corporation. The merger expanded the
5
<PAGE>
Company's homebuilding operations in California and Arizona and provided the
Company with operations in Nevada.
Financial services activities are conducted primarily through Lennar Financial
Services, Inc. ("LFS") and its subsidiaries. These companies provide mortgage
financing, title insurance and closing services for Lennar homebuyers and
others; acquire, package and resell mortgage loans and mortgage-backed
securities; perform mortgage loan servicing activities and provide cable
television and alarm monitoring services to residents of Lennar communities and
others.
In prior years, the limited-purpose finance subsidiaries of the Financial
Services Division placed mortgages and other receivables as collateral for
various long-term financings. These limited-purpose finance subsidiaries pay the
principal of, and interest on, these financings primarily from the cash flows
generated by the related pledged collateral which includes a combination of
mortgage notes, mortgage-backed securities and funds held by trustees. These
limited-purpose finance subsidiaries are not considered a part of the financial
services operations and are reported separately.
(3) DISCONTINUED OPERATIONS
On June 10, 1997, the Company's Board of Directors approved a plan to spin-off
the commercial real estate investment and management business, which primarily
consisted of the Investment Division segment. The Spin-off, which was conducted
through the distribution of the stock of LNR Property Corporation to existing
shareholders of the Company in the form of a tax-free distribution, was
completed effective October 31, 1997. The components of earnings from
discontinued operations were as follows for the three and six months ended May
31, 1997 (unaudited):
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
(IN THOUSANDS) MAY 31, 1997 MAY 31, 1997
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
Revenues $ 38,726 78,437
Costs and expenses 20,333 41,434
- ----------------------------------------------------------------------------------------------------
Operating earnings 18,393 37,003
Interest 3,187 6,031
- ----------------------------------------------------------------------------------------------------
Earnings from discontinued operations before income
taxes 15,206 30,972
Income taxes 5,930 12,079
- ----------------------------------------------------------------------------------------------------
Earnings from discontinued operations $ 9,276 18,893
- ----------------------------------------------------------------------------------------------------
</TABLE>
(4) ACQUISITIONS
In February 1998, the Company acquired a Northern California homebuilder,
Winncrest Homes. Additionally, a joint venture was formed between Lennar Land
Partners and a Winncrest entity to develop and sell finished homesites to third
party builders as well as to Lennar homebuilding operations. In January 1998,
the Company acquired the North American Asset Development Group of companies,
which provide title and escrow services in California, Arizona and Colorado. In
connection with the acquisitions of these Companies for $76 million in cash
(inclusive of cash acquired of $12 million) and the issuance of $9 million in
common stock (413,000 shares), the Company received assets with a fair value of
$118 million, assumed liabilities totaling $40 million
6
<PAGE>
and recorded goodwill of $7 million. The Company financed the cash components of
the transactions through borrowings under its existing revolving credit
facilities and proceeds from common stock issued. The acquisitions were
accounted for using the purchase method of accounting.
(5) EARNINGS PER SHARE
In February 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 128, "Earnings per Share", which
requires a dual presentation of basic and diluted earnings per share on the face
of the statement of earnings. Basic earnings per share is computed by dividing
earnings attributable to common shareholders by the weighted-average number of
common shares outstanding for the period. Diluted earnings per share reflects
the potential dilution that could occur if securities or other contracts to
issue common stock were exercised or converted into common stock or resulted in
the issuance of common stock that then shared in the earnings of the Company.
The Company adopted SFAS No. 128 in the first quarter of 1998. Earnings per
share for all prior periods presented have been restated to conform with SFAS
No. 128.
The following table provides a reconciliation of the number of shares used in
computing basic and diluted earnings per share for the periods indicated
(unaudited):
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
MAY 31, MAY 31,
--------------------------- -----------------------------
(IN THOUSANDS) 1998 1997 1998 1997
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Weighted average shares - basic 53,806 36,001 53,527 35,979
Effect of potentially dilutive
employee stock options 1,135 315 1,022 320
- ------------------------------------------------------------------------------------------------
Weighted average shares - diluted 54,941 36,316 54,549 36,299
- ------------------------------------------------------------------------------------------------
</TABLE>
(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) 1998 1997
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS:
Cash and receivables, net $ 29,517 14,993
Mortgage loans, net 19,029 19,600
Loans held for sale or disposition, net 135,653 106,020
Title plants 15,917 800
Other 35,313 15,575
- ---------------------------------------------------------------------------------------------------
$ 235,429 156,988
- ---------------------------------------------------------------------------------------------------
LIABILITIES:
Notes and other debts payable $ 133,097 86,936
Other 47,468 21,570
- ---------------------------------------------------------------------------------------------------
$ 180,565 108,506
- ---------------------------------------------------------------------------------------------------
</TABLE>
7
<PAGE>
(7) SUPPLEMENTAL INFORMATION ON GREYSTONE HOMES, INC.
Greystone Homes, Inc. ("Greystone Homes") is a wholly-owned subsidiary of the
Company. Greystone Homes is the obligor on 10.75% Senior Notes with a current
aggregate principal amount of $124.8 million. The Notes were recorded at fair
value of $138.2 million at the time of the merger between the Company and
Pacific Greystone Corporation. The Notes are fully and unconditionally
guaranteed by the Company. Separate financial statements and other related
disclosures for Greystone Homes are not presented, as the Company's management
does not consider the information material to investors. Summarized financial
information for Greystone Homes for the periods indicated is presented below.
SUMMARY CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(Unaudited)
(IN THOUSANDS) MAY 31, NOVEMBER 30,
1998 1997
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS:
Cash and cash equivalents $ 1,084 5,565
Inventories 360,532 330,568
Goodwill, net 44,467 45,612
Other assets 8,933 42,521
- ---------------------------------------------------------------------------------------------------
$ 415,016 424,266
- ---------------------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDER'S EQUITY:
Accounts payable and other liabilities $ 49,442 47,460
Intercompany payable to Lennar Corporation 3,186 19,600
Notes payable 103 4,160
Senior unsecured notes payable 135,688 137,812
- ---------------------------------------------------------------------------------------------------
188,419 209,032
Stockholder's equity 226,597 215,234
- ---------------------------------------------------------------------------------------------------
$ 415,016 424,266
- ---------------------------------------------------------------------------------------------------
</TABLE>
SUMMARY CONSOLIDATED STATEMENTS OF EARNINGS
<TABLE>
<CAPTION>
(Unaudited)
---------------------------------------------------------------------
THREE MONTHS ENDED SIX MONTHS ENDED
----------------------------- ------------------------------------
PRO FORMA PRO FORMA
MAY 31, JUNE 30, MAY 31, JUNE 30,
(IN THOUSANDS) 1998 1997 1998 1997
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
HOMEBUILDING REVENUES $ 130,916 149,051 270,683 250,723
COSTS AND EXPENSES:
Costs of homes sold 101,135 118,253 210,783 198,811
Selling, general and
administrative 16,771 13,806 34,549 25,745
Interest and other, net 3,688 3,563 6,412 5,908
- ---------------------------------------------------------------------------------------------------
Total costs and expenses 121,594 135,622 251,744 230,464
EARNINGS BEFORE INCOME
TAXES 9,322 13,429 18,939 20,259
Income taxes 3,729 5,596 7,576 8,554
- ---------------------------------------------------------------------------------------------------
NET EARNINGS $ 5,593 7,833 11,363 11,705
- ---------------------------------------------------------------------------------------------------
</TABLE>
The pro forma results for the three and six months ended June 30, 1997 reflect
all relevant purchase accounting adjustments resulting from the Company's merger
with Pacific Greystone Corporation.
8
<PAGE>
(8) CASH AND CASH EQUIVALENTS
Cash and cash equivalents as of May 31, 1998 and November 30, 1997 included
$35.2 million and $41.9 million, respectively, of cash held in escrow for
periods of up to three days.
(9) SUBSEQUENT EVENTS
In June 1998, the Company completed the acquisition of the properties of two
separate homebuilders with operations in California for approximately $205
million. Total consideration for the properties consisted of a combination of
cash and Lennar common stock (approximately 3.1 million shares). In June 1998,
the Company also announced it had elected not to proceed with the previously
announced acquisition of a third homebuilder with operations in California and
Arizona.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
CERTAIN STATEMENTS CONTAINED IN THE FOLLOWING MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS MAY BE
"FORWARD-LOOKING STATEMENTS" AS DEFINED IN THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995. SUCH STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS,
UNCERTAINTIES AND OTHER FACTORS THAT MAY CAUSE ACTUAL RESULTS TO DIFFER
MATERIALLY. SUCH FACTORS INCLUDE, BUT ARE NOT LIMITED TO, CHANGES IN GENERAL
ECONOMIC CONDITIONS, THE MARKET FOR HOMES GENERALLY AND IN AREAS WHERE THE
COMPANY HAS DEVELOPMENTS, THE AVAILABILITY AND COST OF LAND SUITABLE FOR
RESIDENTIAL DEVELOPMENT, MATERIALS PRICES, LABOR COSTS, INTEREST RATES, CONSUMER
CONFIDENCE, COMPETITION, ENVIRONMENTAL FACTORS AND GOVERNMENT REGULATIONS
AFFECTING THE COMPANY'S OPERATIONS. SEE THE COMPANY'S ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED NOVEMBER 30, 1997 FOR A FURTHER DISCUSSION OF THESE AND OTHER
RISKS AND UNCERTAINTIES APPLICABLE TO THE COMPANY'S BUSINESS.
(1) RESULTS OF OPERATIONS
OVERVIEW
On October 31, 1997, Lennar completed the spin-off of its commercial real estate
investment and management business consisting of the Investment Division
segment, the portions of the Financial Services Division involved in commercial
mortgage lending and investments and certain assets of the Homebuilding Division
utilized in related businesses. The spin-off was conducted through the
distribution of the stock of LNR Property Corporation ("LNR"). At the time of
the spin-off transaction, Lennar and LNR formed a general partnership ("Lennar
Land Partners") to acquire, develop and sell land. Lennar and LNR contributed
properties to Lennar Land Partners in exchange for 50% general partnership
interests in Lennar Land Partners. Lennar also completed a merger with Pacific
Greystone Corporation ("Greystone"), thereby significantly expanding its
homebuilding operations in California and Arizona and entering the Nevada
market. The merger was effective October 31, 1997.
Earnings from continuing operations increased to $25.6 million, or $0.47 per
share diluted ($0.48 per share basic), in the second quarter of 1998, from $12.7
million, or $0.35 per share (basic and diluted) in the second quarter of 1997.
For the six months ended May 31, 1998, earnings from continuing operations were
$41.8 million, or $0.77 per share diluted ($0.78 per share basic), compared to
$22.5 million, or $0.62 per share diluted ($0.63 per share basic), a year
earlier. Homebuilding operating earnings increased significantly in both periods
due to growth in the Company's California market as a result of the merger with
Greystone on October 31, 1997 and growth in the Company's existing
9
<PAGE>
California operations, as well as growth in the Texas market. Financial Services
operating earnings in the second quarter and first six months of 1998 were lower
than the comparable periods in 1997 due to the spin-off of the portions of this
division involved in commercial mortgage lending and investments on October 31,
1997.
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
MAY 31, MAY 31,
(DOLLARS IN THOUSANDS, EXCEPT ---------------------------- -------------------------
AVERAGE SALES PRICES) 1998 1997 1998 1997
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
REVENUES:
Sales of homes $ 455,732 221,356 849,558 418,305
Sales of land and other revenues 20,365 26,068 35,077 36,966
- ------------------------------------------------------------------------------------------------------------------
Total revenues 476,097 247,424 884,635 455,271
COSTS AND EXPENSES:
Cost of homes sold 358,359 179,640 672,829 340,681
Cost of land and other expenses 15,363 19,499 24,253 24,466
Selling, general and administrative 48,771 29,927 94,395 57,544
- ------------------------------------------------------------------------------------------------------------------
Total costs and expenses 422,493 229,066 791,477 422,691
- ------------------------------------------------------------------------------------------------------------------
OPERATING EARNINGS $ 53,604 18,358 93,158 32,580
- ------------------------------------------------------------------------------------------------------------------
Gross margin - home sales $ 97,373 41,716 176,729 77,624
Gross margin percentage 21.4% 18.8% 20.8% 18.6%
S,G&A as a percentage of total
homebuilding revenues 10.2% 12.1% 10.7% 12.6%
Average sales price $ 188,000 158,000 190,000 157,000
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
SUMMARY OF HOME AND BACKLOG DATA
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
MAY 31, MAY 31,
---------------------------- --------------------------
DELIVERIES 1998 1997 1998 1997
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Florida 853 759 1,570 1,371
California 603 68 1,071 100
Texas 662 427 1,179 898
Arizona 245 150 511 292
Nevada 66 - 142 -
- ------------------------------------------------------------------------------------------------------------------
2,429 1,404 4,473 2,661
- ------------------------------------------------------------------------------------------------------------------
NEW ORDERS
- ------------------------------------------------------------------------------------------------------------------
Florida 1,157 1,057 2,094 1,837
California 809 225 1,502 316
Texas 840 662 1,413 1,099
Arizona 369 155 649 302
Nevada 145 - 220 -
- ------------------------------------------------------------------------------------------------------------------
3,320 2,099 5,878 3,554
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
MAY 31,
---------------------------
BACKLOG - HOMES 1998 1997
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Florida 1,819 1,671
California 1,418 255
Texas 902 639
Arizona 592 257
Nevada 196 -
- ----------------------------------------------------------------------------------------------------------------
4,927 2,822
- ----------------------------------------------------------------------------------------------------------------
BACKLOG - DOLLAR VALUE (IN THOUSANDS) $ 959,765 500,456
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
Homebuilding revenues increased significantly in the second quarter and first
six months of 1998 compared to the same periods in 1997 due to increases in the
number of home deliveries and average sales price in both periods. The fourth
quarter 1997 merger with Greystone (which has operations primarily in
California) significantly contributed to the increases in both new home
deliveries and the average sales price of homes delivered. In addition, the
Company's Texas homebuilding operations contributed to the increase in the
number of homes delivered in both 1998 periods.
Gross margin percentages from sales of homes increased approximately 260
basis points and 220 basis points in the second quarter and first six months of
1998, respectively, compared to the same periods in 1997. These increases were
primarily due to expansion in California where the Company currently generates
higher margins than the overall Company average.
Sales of land and other revenues were lower in the second quarter and first six
months of 1998 compared to the same periods last year. These decreases were
primarily due to the transfer of land to Lennar Land Partners on October 31,
1997 and the resulting reduction in third party land sales by the Company. In
addition, land sales and margins on land sales may vary significantly from
period to period. Other revenues included equity in earnings from partnerships
of $2.8 million and $7.1 million in the second quarter and first six months of
1998, respectively, compared to $2.0 million and $4.0 million in the same
periods in 1997, respectively. The 1998 increases were due primarily to the
Company's equity in earnings from Lennar Land Partners.
Selling, general and administrative expenses as a percentage of homebuilding
revenues decreased in both the second quarter and first six months of 1998
compared to the same periods in 1997. These decreases were due primarily to the
increase in revenues.
At May 31, 1998, the Company's backlog of sales contracts increased to 4,927
homes ($959.8 million) compared to 2,822 ($500.5 million) at May 31, 1997. The
increase in backlog was primarily attributable to an increase in new orders in
all states in which the Company operates. The most significant increases in new
orders and backlog were generated in California, primarily as a result of the
merger with Greystone in October 1997.
11
<PAGE>
FINANCIAL SERVICES
The following table presents 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) 1998 1997 1998 1997
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues $ 54,977 23,116 86,074 46,404
Costs and expenses 47,012 11,770 73,752 25,995
- ---------------------------------------------------------------------------------------------------------------
Operating earnings $ 7,965 11,346 12,322 20,409
- ---------------------------------------------------------------------------------------------------------------
Dollar volume of mortgages originated $ 239,286 88,228 413,747 156,047
- ---------------------------------------------------------------------------------------------------------------
Number of mortgages originated 1,841 792 3,225 1,389
- ---------------------------------------------------------------------------------------------------------------
Principal balance of servicing portfolio $ 3,083,000 3,185,000
- ---------------------------------------------------------------------------------------------------------------
Number of loans serviced 41,000 41,000
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
Operating earnings from the Financial Services Division decreased in both the
second quarter and first six months of 1998 compared to the same periods last
year. These decreases were primarily due to prior year amounts including
earnings from the Division's investment in commercial real estate
mortgage-backed securities, partnerships and commercial loans ("Distributed
Investments") which were distributed as part of the spin-off of the Company's
commercial real estate investment and management business in 1997. Excluding the
1997 operating results related to the Distributed Investments, operating
earnings increased $4.3 million and $5.4 million in the second quarter and first
six months of 1998 compared to the same periods last year. These increases were
primarily due to strong performance by North American Title, a provider of title
and escrow services in California, Arizona and Colorado, which was acquired by
the Company in January 1998. Higher mortgage profits, which resulted from
increased mortgage originations, also contributed to the increases. The
increases in dollar value and number of mortgages originated resulted primarily
from higher homebuilding deliveries and a greater capture rate of Lennar
homebuyers.
CORPORATE GENERAL AND ADMINISTRATIVE EXPENSES
Corporate general and administrative expenses as a percentage of total revenues
were 1.2% in the second quarter of both 1998 and 1997 and 1.3% in the first six
months of both 1998 and 1997.
INTEREST EXPENSE
Interest expense was higher in the second quarter and first six months of 1998
compared to the same periods last year as a result of higher debt levels due to
the Company's expansion and an increase in the amount of previously
capitalized interest charged to expense due to a greater number of homes
delivered and an increase in interest per home delivered.
DISCONTINUED OPERATIONS
On June 10, 1997, the Company's Board of Directors approved a plan to spin-off
the commercial real estate investment and management business, which
primarily consisted of the Investment Division segment. The spin-off, which was
conducted through the distribution of the stock of LNR Property Corporation to
existing shareholders of the Company in the form of a tax-free distribution, was
completed effective October 31, 1997. Earnings from discontinued operations
totaled $9.3 million, or $0.26 per share (basic and diluted) in the second
quarter of 1997 and $18.9 million, or $0.52 per share (basic and diluted) in the
first six months of 1997.
12
<PAGE>
(2) PRO FORMA RESULTS OF OPERATIONS
The following pro forma results of operations for 1997 give effect to the
spin-off of the Company's commercial real estate investment and management
business, the merger with Pacific Greystone Corporation and the formation of
Lennar Land Partners, all of which were completed on October 31, 1997, as if
such transactions had occurred at the beginning of the periods. Lennar
Corporation pro forma results were derived from the three and six months ended
May 31; Pacific Greystone Corporation pro forma results were derived from the
three and six months ended June 30. The following pro forma information is
presented to show results of operations for 1998 and 1997 on a more comparable
basis. The following pro forma financial information for the 1997 periods is
not necessarily indicative of the results of operations which would have been
reported if the transactions had occurred on the dates or for the periods
indicated.
The 1998 actual and 1997 pro forma results of operations and selected
Homebuilding financial data were as follows for the periods indicated
(unaudited):
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
--------------------------- ----------------------------
MAY 31/ MAY 31/
(DOLLARS IN THOUSANDS, EXCEPT MAY 31, JUNE 30, MAY 31, JUNE 30,
AVERAGE SALES PRICES) 1998 1997 1998 1997
- ----------------------------------------------------------------------------------------------------
REVENUES:
<S> <C> <C> <C> <C>
Homebuilding $ 476,097 379,298 884,635 684,120
Financial services 54,977 12,270 86,074 24,016
Limited-purpose finance
subsidiaries 1,032 1,384 2,109 2,704
- ----------------------------------------------------------------------------------------------------
Total revenues $ 532,106 392,952 972,818 710,840
- ----------------------------------------------------------------------------------------------------
OPERATING EARNINGS:
Homebuilding $ 53,604 35,445 93,158 59,849
Financial services 7,965 3,629 12,322 6,943
Limited-purpose finance
subsidiaries - (6) - -
- ----------------------------------------------------------------------------------------------------
Total operating earnings 61,569 39,068 105,480 66,792
Corporate general and
administrative expenses 6,503 5,224 12,792 10,446
Interest expense 12,389 6,689 23,006 11,381
- ----------------------------------------------------------------------------------------------------
EARNINGS BEFORE INCOME TAXES 42,677 27,155 69,682 44,965
Income taxes 17,071 11,086 27,873 18,436
- ----------------------------------------------------------------------------------------------------
NET EARNINGS $ 25,606 16,069 41,809 26,529
- ----------------------------------------------------------------------------------------------------
HOMEBUILDING:
Gross margin - home sales $ 97,373 70,069 176,729 126,216
Gross margin percentage 21.4% 18.9% 20.8% 18.9%
S,G&A as a percentage of total
homebuilding revenues 10.2% 10.0% 10.7% 10.7%
Average sales price $ 188,000 181,000 190,000 178,000
New home deliveries 2,429 2,044 4,473 3,749
New orders 3,320 2,884 5,878 4,857
Backlog - homes 4,927 3,743
Backlog - dollar value $ 959,765 734,531
- ----------------------------------------------------------------------------------------------------
</TABLE>
13
<PAGE>
HOMEBUILDING
Homebuilding revenues, on a pro forma basis, increased 26% in the second quarter
and 29% in the first six months of 1998 compared to the same periods in 1997.
Revenues were higher primarily due to increases in the number of home deliveries
and average sales prices in both periods. The California, Texas and Florida
homebuilding markets each generated increases in new home deliveries in the
second quarter and first six months of 1998 compared to the same periods last
year. The higher average sales prices in the 1998 periods were due primarily to
price increases in the California and Texas markets. Homebuilding revenues
included land sales of $15.3 million and $23.4 million in the second quarter and
first six months of 1998, respectively, compared to pro forma land sales of $2.5
million and $4.3 million, respectively, in the same periods last year. Land
sales in both 1998 periods included one sale totaling $12.6 million.
Gross margin percentages on home sales, on a pro forma basis, increased in both
the second quarter and first six months of 1998 compared to the same periods in
1997. Growth in the California market, where the Company currently generates
higher gross margins, contributed to the increases in both periods. Higher gross
margins in the Texas market also contributed to the six month increase. Gross
margins from land sales totaled $0.7 million and $2.1 million in the second
quarter and first six months of 1998, respectively, compared to $0.8 million and
$1.6 million, respectively, in the same periods in 1997. Margins achieved on
sales of land may vary significantly from period to period.
Selling, general and administrative expenses as a percentage of homebuilding
revenues were 10.2% in the second quarter of 1998 compared to 10.0% (pro forma)
in 1997. This increase was primarily due to the Company's expansion in
California, which resulted in certain general and administrative expenses being
incurred prior to generation of the related revenues. Selling, general and
administrative expenses as a percentage of homebuilding revenues in the first
six months of 1998 were unchanged from the first six months of 1997.
FINANCIAL SERVICES
Operating earnings for the Financial Services Division increased in both the
second quarter and first six months of 1998, on a pro forma basis, due primarily
to contributions from North American Title, which was acquired in January 1998,
and, to a lesser extent, increased mortgage profits.
CORPORATE GENERAL AND ADMINISTRATIVE EXPENSES
Corporate general and administrative expenses as a percentage of total revenues
were 1.2% in the second quarter of 1998 compared to 1.3% (pro forma) in the
same period last year, and 1.3% in the first six months of 1998 compared to
1.5% (pro forma) in the first six months of 1997. The decrease in both 1998
periods was due primarily to the growth in revenues.
INTEREST
In the second quarter of 1998, interest incurred was $12.3 million and interest
expense was $12.4 million. This compares to interest incurred of $9.2 million
(pro forma) and interest expense of $6.7 million (pro forma) in the second
quarter of 1997. In the first six months of 1998, interest incurred was $23.2
million and interest expense was $23.0 million compared to interest incurred of
$17.2 million (pro forma) and interest expense of $11.4 million (pro forma) in
the first six months of 1997. The increase in interest expense in both periods
was primarily the result of higher debt levels due to the Company's expansion
and an increase in the amount of previously capitalized interest charged to
expense due to a greater number of homes delivered and an increase in interest
per home delivered.
14
<PAGE>
(3) LIQUIDITY AND FINANCIAL RESOURCES
In the first six months of 1998, $116.2 million in cash was used in the
Company's operating activities compared to $103.0 million in the corresponding
period in 1997. In the first six months of 1998, $118.0 million of cash was used
to increase inventories through land purchases, land development and
construction, $29.6 million was used by the Financial Services Division in its
mortgage loan origination operations and $18.0 million was used to reduce
current income taxes payable. These uses of cash were partially offset by $41.8
million of net earnings and a reduction in receivables of $23.4 million.
In the first six months of 1997, cash flows used in operating
activities related primarily to $114.2 million of cash used to increase
inventories through land purchases, land development and construction.
Cash used in investing activities totaled $87.0 million in the first six months
of 1998, compared to cash generated from investing activities of $39.8 million
in the corresponding period in 1997. In the first six months of 1998, $63.8
million of cash was used in the acquisitions of businesses and $19.2 million was
used to increase the Company's investments in partnerships. In the first six
months of 1997, $102.0 million of cash was used to purchase investment
securities by both the discontinued Investment Division and the Financial
Services Division and $30.4 million was used to purchase operating properties
and equipment, primarily by the discontinued Investment Division. These
purchases were more than offset by $121.2 million of proceeds from investment
securities and $40.6 million of cash provided from partnership investments, both
of which related primarily to the spun-off real estate investment and management
business.
The Company meets the majority of its short-term financing needs with cash
generated from operations and funds available under its unsecured revolving
credit agreement. At May 31, 1998, the Company had unsecured revolving credit
facilities in the aggregate amount of $650.0 million, which may be used to
refinance existing indebtedness, for working capital, for acquisitions and for
general corporate purposes. At May 31, 1998, $538.8 million was outstanding
under the Company's revolving credit facilities, compared to $376.5 million
outstanding at November 30, 1997. The increase was a result of the Company's
continued growth, including acquisitions.
In February 1998, the Company filed a shelf registration statement and
prospectus with the Securities and Exchange Commission to offer, from time to
time, its common stock, preferred stock, depositary shares, debt securities or
warrants at an aggregate initial offering price not to exceed $500 million.
Proceeds are expected to be used for general corporate purposes, which may
include the repayment of debt, acquisitions and other general corporate
purposes. As of May 31, 1998 the Company had $484 million available under the
shelf registration statement.
In March 1998, the Company entered into an equity draw-down agreement with a
major international banking firm (the "Firm") under which the Company will have
the option to sell common stock, up to a value of $120 million, to the Firm in
increments of up to $15 million (or such higher amount as may be agreed to by
the parties) per month. Proceeds are expected to be used in conjunction with
potential acquisitions of assets and businesses. The Company filed a prospectus
supplement to the shelf registration statement described above regarding this
agreement. As of May 31, 1998 the Company had issued 476,000 shares under the
agreement resulting in proceeds to the Company of $16 million.
15
<PAGE>
In the second quarter of 1998, the Company issued 413,000 shares of common stock
to satisfy remaining obligations in connection with the first quarter
acquisition of Winncrest Homes. Subsequent to May 31, 1998 the Company completed
separate acquisitions of the properties of two homebuilders with operations in
California for approximately $205 million. Total consideration for the
properties consisted of a combination of cash and Lennar common stock
(approximately 3.1 million shares). In connection with these acquisitions, the
Company executed a 180-day, $100 million bridge loan with the agent bank for its
unsecured revolving credit facility. Proceeds were used to partially fund the
cash portions of these acquisitions. The Company may repay this facility with
proceeds from issuance of public securities under the shelf registration
statement.
Based on the Company's current financial condition and financial market
resources, management believes that its operations and capital resources will
provide for its current and long-term capital requirements at the Company's
anticipated levels of growth.
PART II. OTHER INFORMATION
ITEMS 1-5. NOT APPLICABLE.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits:
(27.1) Financial Data Schedule.
(27.2) Financial Data Schedule.
(27.3) 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.
16
<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 13, 1998 /S/ BRUCE GROSS
----------------------------------
Bruce Gross
Chief Financial Officer
Date: JULY 13, 1998 /S/ DIANE J. BESSETTE
----------------------------------
Diane J. Bessette
Controller
17
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION
- ------- -----------
27.1 Financial Data Schedule
27.2 Financial Data Schedule
27.3 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE LENNAR
CORPORATION CONSOLIDATED BALANCE SHEETS AND CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE PERIODS INDICATED AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS. PRIOR PERIOD INFORMATION HAS BEEN RESTATED FOR
DISCONTINUED OPERATIONS AND FOR PRESENTATION OF EARNINGS PER SHARE IN
ACCORDANCE WITH SFAS 128.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C> <C> <C> <C>
<PERIOD-TYPE> YEAR 3-MOS 6-MOS 9-MOS
<FISCAL-YEAR-END> NOV-30-1995 NOV-30-1996 NOV-30-1996 NOV-30-1996
<PERIOD-END> NOV-30-1995 FEB-29-1996 MAY-31-1996 AUG-31-1996
<CASH> 35,549 27,758 25,150 32,535
<SECURITIES> 0 0 0 0
<RECEIVABLES> 5,419 63,291 57,266 19,909
<ALLOWANCES> 0 0 0 0
<INVENTORY> 503,973 620,694 656,301 679,053
<CURRENT-ASSETS> 544,941 711,743 738,717 731,497
<PP&E> 6,481 9,194 9,956 11,490
<DEPRECIATION> 2,568 2,903 3,327 3,976
<TOTAL-ASSETS> 1,341,065 1,488,262 1,551,573 1,579,280
<CURRENT-LIABILITIES> 133,605 123,127 118,167 161,468
<BONDS> 565,061 678,067 738,470 736,224
0 0 0 0
0 0 0 0
<COMMON> 3,587 3,589 3,591 3,592
<OTHER-SE> 604,207 621,253 637,470 661,975
<TOTAL-LIABILITY-AND-EQUITY> 1,341,065 1,488,262 1,551,573 1,579,280
<SALES> 646,986 169,396 361,141 609,939
<TOTAL-REVENUES> 730,986 194,963 419,706 703,359
<CGS> 523,028 138,135 294,874 495,562
<TOTAL-COSTS> 536,976 140,891 303,838 511,555
<OTHER-EXPENSES> 126,988 36,147 78,241 123,989
<LOSS-PROVISION> 0 0 0 0
<INTEREST-EXPENSE> 13,712 4,447 9,861 15,717
<INCOME-PRETAX> 53,310 13,478 27,766 52,098
<INCOME-TAX> 20,791 5,256 10,829 20,318
<INCOME-CONTINUING> 32,519 8,222 16,937 31,780
<DISCONTINUED> 37,908 8,981 18,559 27,600
<EXTRAORDINARY> 0 0 0 0
<CHANGES> 0 0 0 0
<NET-INCOME> 70,427 17,203 35,496 59,380
<EPS-PRIMARY> 1.97<F1> 0.48<F1> 0.99<F1> 1.65<F1>
<EPS-DILUTED> 1.95 0.48 0.98 1.64
<FN>
<F1> REPRESENTS BASIC EPS IN ACCORDANCE WITH SFAS 128.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE LENNAR
CORPORATION CONSOLIDATED BALANCE SHEETS AND CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE PERIODS INDICATED AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS. PRIOR PERIOD INFORMATION HAS BEEN RESTATED FOR
DISCONTINUED OPERATIONS AND FOR PRESENTATION OF EARNINGS PER SHARE IN ACCORDANCE
WITH SFAS 128.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C> <C> <C> <C>
<PERIOD-TYPE> YEAR 3-MOS 6-MOS 9-MOS
<FISCAL-YEAR-END> NOV-30-1996 NOV-30-1997 NOV-30-1997 NOV-30-1997
<PERIOD-END> NOV-30-1996 FEB-28-1997 MAY-31-1997 AUG-31-1997
<CASH> 43,312 35,099 43,705 51,950
<SECURITIES> 0 0 0 0
<RECEIVABLES> 16,411 13,432 6,700 4,177
<ALLOWANCES> 0 0 0 0
<INVENTORY> 696,327 746,090 834,216 845,254
<CURRENT-ASSETS> 756,050 794,621 884,621 901,381
<PP&E> 13,600 19,728 22,422 23,412
<DEPRECIATION> 4,270 4,626 5,351 5,425
<TOTAL-ASSETS> 1,589,593 1,645,275 1,702,275 1,681,932
<CURRENT-LIABILITIES> 204,978 156,581 167,057 159,553
<BONDS> 689,159 750,377 766,569 718,115
0 0 0 0
0 0 0 0
<COMMON> 3,593 3,599 3,603 3,607
<OTHER-SE> 691,863 711,675 738,914 771,916
<TOTAL-LIABILITY-AND-EQUITY> 1,589,593 1,645,275 1,702,275 1,681,932
<SALES> 894,663 196,949 418,305 708,992
<TOTAL-REVENUES> 1,041,661 232,455 504,379 836,999
<CGS> 723,150 161,041 340,681 573,287
<TOTAL-COSTS> 762,281 166,008 365,147 610,318
<OTHER-EXPENSES> 172,060 46,511 92,853 142,208
<LOSS-PROVISION> 0 0 0 0
<INTEREST-EXPENSE> 22,891 3,854 9,431 14,891
<INCOME-PRETAX> 84,429 16,082 36,948 69,582
<INCOME-TAX> 32,927 6,272 14,410 27,137
<INCOME-CONTINUING> 51,502 9,810 22,538 42,445
<DISCONTINUED> 36,484 9,617 18,893 27,267
<EXTRAORDINARY> 0 0 0 0
<CHANGES> 0 0 0 0
<NET-INCOME> 87,986 19,427 41,431 69,712
<EPS-PRIMARY> 2.45<F1> 0.54<F1> 1.15<F1> 1.94<F1>
<EPS-DILUTED> 2.43 0.54 1.14 1.92
<FN>
<F1> REPRESENTS BASIC EPS IN ACCORDANCE WITH SFAS 128.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE LENNAR
CORPORATION CONSOLIDATED BALANCE SHEETS AND CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE PERIODS INDICATED AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS. PRIOR PERIOD INFORMATION HAS BEEN RESTATED FOR
DISCONTINUED OPERATIONS AND FOR PRESENTATION OF EARNINGS PER SHARE IN ACCORDANCE
WITH SFAS 128.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> YEAR 6-MOS
<FISCAL-YEAR-END> NOV-30-1997 NOV-30-1998
<PERIOD-END> NOV-30-1997 MAY-31-1998
<CASH> 52,926 39,075
<SECURITIES> 0 0
<RECEIVABLES> 34,646 11,802
<ALLOWANCES> 0 0
<INVENTORY> 806,975 1,010,819
<CURRENT-ASSETS> 894,547 1,061,696
<PP&E> 14,861 20,254
<DEPRECIATION> 6,263 10,430
<TOTAL-ASSETS> 1,343,284 1,617,245
<CURRENT-LIABILITIES> 221,020 199,723
<BONDS> 661,695 861,101
0 0
0 0
<COMMON> 5,316 5,435
<OTHER-SE> 433,683 503,518
<TOTAL-LIABILITY-AND-EQUITY> 1,343,284 1,617,245
<SALES> 1,130,989 849,558
<TOTAL-REVENUES> 1,303,082 972,818
<CGS> 907,691 672,829
<TOTAL-COSTS> 958,324 697,082
<OTHER-EXPENSES> 234,052 183,048
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 24,979 23,006
<INCOME-PRETAX> 85,727 69,682
<INCOME-TAX> 35,122 27,873
<INCOME-CONTINUING> 50,605 41,809
<DISCONTINUED> 33,826 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 84,431 41,809
<EPS-PRIMARY> 2.25<F1> 0.78<F1>
<EPS-DILUTED> 2.23 0.77
<FN>
<F1> REPRESENTS BASIC EPS IN ACCORDANCE WITH SFAS 128.
</FN>
</TABLE>
