<PAGE> 1
As Filed Pursuant to Rule 424(b)(2)
Registration No. 333-45527
INFORMATION CONTAINED IN THIS PROSPECTUS
SUPPLEMENT IS SUBJECT TO COMPLETION OR AMENDMENT.
SUBJECT TO COMPLETION, DATED FEBRUARY 10, 1999
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED FEBRUARY 12, 1998)
$200,000,000
[LENNAR CORPORATION LOGO]
% SENIOR NOTES DUE 2009
------------------
We are offering $200,000,000 aggregate principal amount of our % Senior
Notes due 2009. The Notes include the terms set forth below. This Prospectus
Supplement and the related Prospectus include additional information about the
terms of the Notes, including optional redemption prices and covenants.
The Notes will mature on , 2009. We will pay interest on the
Notes on each and beginning on , 1999.
We may redeem all or some of the Notes at any time for a Make-Whole
Price, which is described under "Description of Notes -- Redemption at Our
Option."
We will use the net proceeds of this offering to redeem the 10 3/4%
Senior Notes due 2004 of one of our subsidiaries, Greystone Homes, Inc., and to
reduce borrowings under our credit lines.
The Notes will not be listed on any securities exchange or included in
any quotation system.
The Notes will be offered on a firm commitment basis if and when an
underwriting agreement is executed by the underwriters at the time of pricing of
the offering.
------------------
SEE "RISK FACTORS," WHICH BEGINS ON PAGE S-10, FOR A DISCUSSION OF SOME
PARTICULARLY IMPORTANT ITEMS WHICH YOU SHOULD CONSIDER.
------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED THAT
THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS IS ACCURATE OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------
<TABLE>
<CAPTION>
PER NOTE TOTAL
------------------- -------------------
<S> <C> <C>
Public Offering Price............................ % $
Underwriting Discounts and Commissions........... % $
Proceeds to Us (before expenses)................. % $
</TABLE>
------------------
We expect that delivery of the Notes will be made on or about February
, 1999 through the book entry facilities of The Depository Trust Company.
Joint Book-Running Managers
BT ALEX. BROWN SALOMON SMITH BARNEY
WARBURG DILLON READ LLC
FIRST CHICAGO CAPITAL MARKETS, INC.
------------------
The date of this Prospectus Supplement is February , 1999.
<PAGE> 2
FORWARD-LOOKING INFORMATION
We make forward-looking statements in this Prospectus Supplement, the
related Prospectus and in our filings with the Securities and Exchange
Commission. Although we believe the expectations reflected in those
forward-looking statements are reasonable, it is possible they will prove not to
have been correct, particularly given the cyclical nature of the market for new
homes. Among the factors which can affect our future performance are changes in
interest rates, changes in demand for homes in areas in which we are developing
communities, the availability and cost of land suitable for residential
development, changes in the costs of labor and materials, competition,
environmental factors and changes in government regulations.
S-2
<PAGE> 3
PROSPECTUS SUPPLEMENT SUMMARY
On October 31, 1997, we (i) distributed to our stockholders all the stock
of LNR Property Corporation, to which we had transferred our commercial real
estate investment and management activities, (ii) acquired Pacific Greystone
Corporation through a merger, and (iii) transferred a portion of our land
inventory to Lennar Land Partners, of which we own 50% and LNR owns 50%. This
Prospectus Supplement, the accompanying Prospectus and materials we have filed
with the Securities and Exchange Commission include both historical information,
which gives effect to those transactions from the date they occurred, and pro
forma information, which gives effect to those transactions as though they had
taken place on December 1, 1996.
THE COMPANY
We are one of the nation's largest homebuilders. For over 40 years we have
been building and selling single family homes to first-time homebuyers and
move-up homebuyers. We currently operate in Florida, California, Texas, Arizona
and Nevada. According to data from the National Association of Home Builders,
these states accounted for approximately 32% of all single family housing starts
in the U.S. during the first 10 months of 1998.
Our revenues from homebuilding operations increased to $2.2 billion in
fiscal 1998 from $648 million in fiscal 1994. That is a compound annual growth
rate of 36%. Over the same period, our earnings before interest and taxes (EBIT)
grew to $288 million from $127 million, a compound annual growth rate of 23%. We
delivered 10,777 homes in fiscal 1998 compared with 6,702 homes in fiscal 1997
and 4,965 homes in fiscal 1994. At November 30, 1998, our backlog of homes under
contract totalled $840 million (4,100 homes), compared with $665 million (3,318
homes) at November 30, 1997.
Our financial services subsidiaries provide mortgage financing, title
insurance and closing services to people who buy our homes and others. These
subsidiaries also acquire, package and resell mortgage loans, perform mortgage
loan servicing activities and provide cable television and alarm monitoring
services to residents of our communities and others. Our subsidiaries sell their
loans in the secondary mortgage market, but usually retain the servicing rights.
In fiscal 1998, we originated $1.03 billion of mortgage loans compared with $420
million in the prior year. Approximately 77% of the loans we originated in
fiscal 1998 were to people who were buying our homes.
BUSINESS STRATEGY
We use a number of strategies to grow our business. They include the
following:
Acquire Land at Advantageous Prices. Throughout our history, we have
acquired land at what we believed to be favorable prices and benefitted from
appreciation in its value before we incorporated it into finished homes. We have
done this by (i) acquiring land in areas which are in early stages of becoming
homebuilding growth markets, or which we believe will shortly begin to emerge as
growth markets, (ii) entering major growth markets when they are recovering from
homebuilding slowdowns, and (iii) actively acquiring land during low points in
the real estate cycle. We employed this strategy in Florida and Arizona during
the 1970's and 1980's, and we have employed it in making major acquisitions in
Texas and California during the past several years. Appreciation in the price of
land between the time we acquire it and the time we build homes on it increases
our gross profit margins and often gives us an advantage over competing
homebuilders.
S-3
<PAGE> 4
Our recent expansion into California typifies our approach toward entering
new markets. We entered California in 1995 by acquiring Bramalea California,
which gave us a land position of 3,000 homesites. At that time, the California
housing market was beginning to emerge from a slowdown which had begun in 1989.
During 1996 and 1997, we increased our California position by acquiring other
homebuilders and attractive land parcels. In October 1997, we acquired Pacific
Greystone, a leading homebuilder in both Northern and Southern California. The
Pacific Greystone acquisition substantially increased our California inventory
and brought us the management structure we needed to conduct a major
homebuilding operation in California and elsewhere in the West. Since the
Pacific Greystone transaction, we have made three more acquisitions which have
helped increase our current California position to approximately 35,000
homesites owned and controlled. As a result of our expansion strategy, we
believe we currently are one of the best positioned builders in California.
We do not use all the land we acquire in our homebuilding operations. We
often reduce our inventory by selling parcels to other developers to help
achieve a higher return on our investment.
Growth Through Acquisitions. We have frequently acquired companies or
their assets to expand our homebuilding and financial services activities. This
has included acquiring homebuilding companies in order to obtain their
inventories and homebuilding operations. We did that in Florida with the
acquisition of H. Miller & Sons in 1984 and Development Corporation of America
in 1986, and in Texas with the 1996 acquisitions of Village Builders and
Friendswood Development Company. We also did that in California with the 1995
acquisition of Bramalea California, the 1996 acquisition of Renaissance Homes
and Regency Title, the 1997 acquisition of Pacific Greystone and the 1998
acquisitions of North American Title, Winncrest Homes, ColRich Communities and
Polygon Communities.
Focus on Fastest Growing Home Markets. From our origins in South Florida
to our expansion into Arizona, Texas, California and Nevada, we have
concentrated on the Sun Belt states. Demand for new homes has been substantially
greater in those states than in most other areas of the country. The five states
in which we currently operate collectively accounted for approximately 32% of
all the new single-family housing starts in the United States in the first 10
months of 1998.
Earnings From Financial Services Subsidiaries. Our financial services
subsidiaries generate significant earnings by originating and servicing mortgage
loans, providing title insurance and closing services for homebuyers and
packaging and reselling mortgage loans. Because the financial services
subsidiaries rapidly resell the loans they originate into the secondary mortgage
market, generally on a non-recourse basis, our financial services activities
involve a relatively low capital investment.
Commitment to Customer Care and Satisfaction. We are dedicated to
providing each homebuyer with high quality, service and value. We have a program
called "Zero Defects" to ensure that each Lennar home is as close as possible to
defect-free before the home sale closes. We also have a TLC Program (Total
Lennar Care), through which we provide proactive, customer-driven post-sale
service, which ultimately leads to enhanced customer retention and referrals.
Our focus on customer care has made customer referrals a major source of new
customer leads.
You should read the Risk Factors section of this Prospectus Supplement,
which begins on page S-10, for a discussion of some particularly important
factors you should consider in deciding whether to purchase Notes.
S-4
<PAGE> 5
RECENT DEVELOPMENTS
During fiscal 1998, we acquired the properties of Winncrest Homes, ColRich
Communities and Polygon Communities for a total of $172 million in cash and 3.5
million shares of our Common Stock. This gave us new opportunities in the
recovering Inland Empire area of California, and strengthened our positions in
Orange County, California, and in the Sacramento and San Diego areas of
California. In total, the three acquisitions provided us approximately 6,000
owned homesites and approximately 7,600 controlled homesites and a $170 million
backlog of home sales contracts.
We also acquired North American Title Group during fiscal 1998. This
acquisition, together with our 1996 acquisition of Regency Title Company,
significantly expanded our title insurance and closing business in Texas and
expanded our title insurance business into California, Arizona and Colorado.
In March 1998, we entered into an agreement with a banking firm which gave
us the option (but does not require us) to sell shares of our common stock to
that firm based upon market prices from time to time for a total of $120
million. As of January 31, 1999, we had made sales totaling $36 million under
that agreement.
In the third fiscal quarter of 1998, we sold $493 million aggregate
principal amount at maturity of our Zero Coupon Senior Convertible Debentures
due 2018 at an issue price of $229 million (the "Convertible Debentures"). The
issue price was 46.413% of the principal amount at maturity, and resulted in a
yield to maturity of 3.875% per annum (computed on a semi-annual bond equivalent
basis). The Convertible Debentures are convertible into 12.3768 shares of Common
Stock for each $1,000 principal amount at maturity (subject to adjustment to
prevent dilution).
S-5
<PAGE> 6
SUMMARY FINANCIAL INFORMATION
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
The following table contains summary financial and operating information
about us on an historical basis. The summary financial and operating information
as of and for the years ended November 30, 1994 through 1997 has been derived
from our consolidated financial statements, which were audited by Deloitte &
Touche LLP, independent auditors. The summary financial and operating
information as of and for the year ended November 30, 1998 has been derived from
unaudited financial statements. Our management believes the unaudited financial
statements include all adjustments, consisting only of normal recurring
adjustments, that are necessary for a fair presentation of our financial
position and results of operations.
Because we spun-off LNR in October 1997, the financial information for the
1994 through 1997 fiscal years has been restated to reflect our Investment
Division as a discontinued operation.
<TABLE>
<CAPTION>
YEARS ENDED NOVEMBER 30,
----------------------------------------------------------
1998 1997 1996 1995 1994
---------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
RESULTS OF OPERATIONS:
Revenues:
Homebuilding............................................ $2,204,428 1,208,570 952,648 665,510 647,750
Financial services...................................... $ 208,543 89,369 82,577 57,787 54,348
Limited-purpose finance subsidiaries.................... $ 3,894 5,143 6,436 7,689 9,485
Total revenues........................................ $2,416,865 1,303,082 1,041,661 730,986 711,583
Operating earnings -- business segments
Homebuilding............................................ $ 283,369 120,240 91,066 58,530 70,645
Financial services...................................... $ 33,335 35,532 28,653 19,013 14,844
Corporate general and administrative expenses............. $ 28,962 15,850 12,396 10,523 10,309
Earnings from continuing operations before income taxes
and cumulative effect of changes in accounting
principles.............................................. $ 240,114 85,727 84,429 53,310 64,626
Earnings from continuing operations....................... $ 144,068 50,605 51,502 32,519 39,422
Earnings from discontinued operations..................... $ -- 33,826 36,484 37,908 28,743
Net earnings.............................................. $ 144,068 84,431 87,986 70,427 69,126
PER SHARE AMOUNTS:
Earnings from continuing operations(1).................... $ 2.49 1.34 1.42 0.90 1.09
Earnings from discontinued operations(1).................. $ -- 0.89 1.01 1.05 0.80
Cumulative effect of changes in accounting
principles(1)........................................... $ -- -- -- -- 0.03
Net earnings(1)........................................... $ 2.49 2.23 2.43 1.95 1.92
FINANCIAL POSITION (AT END OF YEAR):
Total assets.............................................. $1,917,834 1,343,284 1,589,593 1,341,065 1,205,214
Total debt................................................ $ 798,838 661,695 689,159 557,055 493,203
Stockholders' equity...................................... $ 715,665 438,999 695,456 607,794 534,088
OTHER DATA:
Ratio of earnings to fixed charges........................ 4.7x 2.2x 2.7x 2.3x 3.0x
Ratio of earnings to fixed charges (excluding
limited-purpose finance subsidiaries)................... 4.9x 2.3x 2.9x 2.6x 3.9x
Homebuilding debt as a percentage of total
capitalization(2)....................................... 43% 55% 34% 30% 32%
Total debt as a percentage of total capitalization(3)..... 53% 60% 50% 48% 48%
DELIVERY AND YEAR-END BACKLOG INFORMATION:
Number of homes delivered................................. 10,777 6,702 5,968 4,680 4,965
Backlog of home sales contracts........................... 4,100 3,318 1,929 1,802 1,703
Dollar value of backlog................................... $ 840,000 665,000 312,000 255,000 247,000
</TABLE>
- ------------------------------
(1) Calculated using diluted share amounts.
(2) Total capitalization for purposes of this ratio represents homebuilding debt
and stockholders' equity. It does not reflect the issuance of the Notes or
the application of the net proceeds from that issuance.
(3) Total capitalization for purposes of this ratio represents total debt and
stockholders' equity. It does not reflect the issuance of the Notes or the
application of the net proceeds from that issuance.
S-6
<PAGE> 7
PRO FORMA FINANCIAL DATA
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
The following table sets forth unaudited pro forma operating information
about us giving effect to (i) the spin-off of LNR, (ii) the Pacific Greystone
merger and (iii) the formation of Lennar Land Partners, as if those transactions
had taken place on December 1, 1996. The pro forma financial information for the
1997 year includes information for Lennar for the year ended November 30, 1997
and information for Pacific Greystone for the year ended December 31, 1997. The
pro forma financial information is not necessarily indicative of the results of
operations which would actually have been reported if the transactions had
occurred on the dates or for the periods indicated.
<TABLE>
<CAPTION>
YEARS ENDED
--------------------------
NOV. 30/
NOVEMBER 30, DEC. 31,
1998 1997
------------ ----------
ACTUAL PRO FORMA
(UNAUDITED)
<S> <C> <C>
RESULTS OF OPERATIONS:
Revenues:
Homebuilding.......................................... $2,204,428 1,692,083
Financial services.................................... 208,543 52,305
Limited-purpose finance subsidiaries.................. 3,894 5,143
---------- ---------
Total revenues..................................... $2,416,865 1,749,531
---------- ---------
Operating earnings:
Homebuilding.......................................... $ 283,369 172,141
Financial services.................................... 33,335 11,642
Limited-purpose finance subsidiaries.................. -- 13
---------- ---------
Total operating earnings........................... 316,704 183,796
Corporate, general and administrative expenses........ 28,962 23,212
Interest expense...................................... 47,628 30,657
---------- ---------
Earnings before income taxes............................ 240,114 129,927
Income taxes.......................................... 96,046 52,646
---------- ---------
Net earnings............................................ $ 144,068 77,281
---------- ---------
Earnings per share:
Basic................................................. $ 2.59 1.46
Diluted............................................... $ 2.49 1.44
---------- ---------
Earnings before interest and income taxes............... $ 287,742 160,584
---------- ---------
OTHER DATA:
Number of homes delivered............................. 10,777 8,943
Backlog of home sales contracts at end of year........ 4,100 3,201
Dollar value of backlog at end of year................ $ 840,000 628,000
Interest incurred -- Homebuilding..................... $ 50,464 36,314
</TABLE>
S-7
<PAGE> 8
THE OFFERING
The summary below describes the principal terms of the Notes. Certain of
the terms and conditions described below are subject to limitations and
exceptions. The "Description of Notes" section of this Prospectus Supplement
contains a more detailed description of the terms and conditions of the Notes.
Securities Offered.............. $200,000,000 aggregate principal amount of
% Senior Notes due 2009.
Maturity Date................... , 2009.
Interest Payment Dates.......... Payable semi-annually on and
of each year, beginning
, 1999.
Sinking Fund.................... None.
Optional Redemption............. We may redeem all or some of the Notes at
any time by paying the Make-Whole Price. See
"Description of Notes -- Redemption at Our
Option."
Change in Control............... If there is a change in control of us, each
holder of Notes may require us to repurchase
all or a part of the holder's Notes for the
Make-Whole Price. See "Description of
Notes -- Repurchase at Option of Holders
Upon Change in Control."
Ranking......................... The Notes are our senior unsecured
obligations. They have the same priority as
all our other unsecured and unsubordinated
indebtedness. However, the Notes are in
effect subordinate to our subsidiaries'
obligations to pay their debts. The
Indenture governing the Notes does not limit
the amount of indebtedness we or our
subsidiaries may incur.
Covenants....................... The Indenture relating to the Notes has
covenants limiting (i) our ability to
create liens securing indebtedness and
(ii) sale and leaseback transactions.
See "Description of Notes -- Certain
Covenants."
Maximum Principal Amount of
Notes......................... The Notes are limited in aggregate principal
amount to $500,000,000, of which
$200,000,000 will be issued in this
offering.
Denomination and Registration of
Notes......................... The Notes will be represented by one or more
global securities, without coupons, which
will be deposited with or on behalf of a
custodian for The Depository Trust Company
("DTC"). DTC will keep records of the owners
of beneficial interests in the global
securities. The only way to transfer those
beneficial circumstances will be to have DTC
record the transfers. Except under very
limited exceptions, we will not issue
certificates evidencing Notes to anyone
other than DTC. See
S-8
<PAGE> 9
"Description of Notes -- Global Securities"
and "-- Book-Entry System."
Use of Proceeds................. We will use the net proceeds from the sale
of the Notes to redeem the 10 3/4% Senior
Notes due 2004 of one of our subsidiaries,
Greystone Homes, Inc., and to reduce
borrowings under our credit lines. See "Use
of Proceeds."
S-9
<PAGE> 10
RISK FACTORS
The following factors should be given particular consideration by people
considering an investment in the Notes.
CYCLICAL AND OTHER FACTORS AFFECTING HOMEBUILDERS
The residential homebuilding industry is cyclical. It is strongly affected
by changes in general economic conditions and changes in interest rates. It is
also affected by changes in levels of employment, consumer confidence and
income, availability of mortgage financing and demand for housing. In addition,
sales of new homes are affected by the market for used homes, including
foreclosed homes.
The residential homebuilding industry has, from time to time, experienced
fluctuating lumber prices and supply, as well as serious shortages of labor and
materials. We could be adversely affected by these factors or by other factors,
such as weather conditions, which delay our homebuilding activities.
Inflation can increase the cost of building materials, labor and other
construction related costs. Conversely, deflation can reduce the value of our
inventory and can make it more difficult to include the full cost of previously
purchased land in home sale prices.
INTEREST RATES AND MORTGAGE FINANCING
Most homebuyers finance a substantial portion of their purchase prices with
mortgage loans. Because of this, demand for homes usually is adversely affected
by increases in interest rates or by reduced availability of mortgage financing.
Our financial services subsidiaries provide mortgage financing to many buyers of
our homes. While this reduces our vulnerability to decreases in the availability
of mortgage financing, it does not reduce our vulnerability to lower demand
because of high interest rates. Even if financing is available to people who
want to purchase our homes, they may not be able to purchase our homes if the
people to whom they want to sell their current homes cannot obtain financing for
those purchases.
VARYING QUARTERLY RESULTS
There are a number of factors which can cause our operating results to vary
from quarter to quarter. They include the following:
- the timing of home closings,
- when we receive regulatory approvals to begin building homes in
particular communities,
- promotional pricing by our competitors,
- when we open new residential communities,
- weather,
- changes in the cost and availability of labor and materials, and
- short term changes in general economic conditions, interest rates and
other factors which affect the demand for homes.
DEPENDENCE ON KEY PERSONNEL
Our success depends to a significant degree on the efforts of our senior
management, especially our president and chief executive officer and other
officers.
S-10
<PAGE> 11
Our operations may be adversely affected if one or more members of senior
management cease to be active in our company. We have designed our compensation
structure and employee benefit programs to encourage long-term employment of
executive officers and other members of senior management.
STRUCTURAL SUBORDINATION TO SUBSIDIARY INDEBTEDNESS
We are a holding company and our principal source of revenues is dividends
or other payments from our subsidiaries. A subsidiary cannot make distributions
to us, as its stockholder, unless it has paid or is able to pay everything it
owes to its creditors. This means that our obligations with regard to the Notes
will in effect be subordinated to the liabilities of our subsidiaries. In
addition to incurring debt in connection with their business activities,
essentially all our subsidiaries are borrowers under our revolving credit
agreement. Because of that, each subsidiary is directly obligated with regard to
all borrowings under that agreement. Therefore, if we were unable to pay our
debts, the lenders under our revolving credit agreement would probably be
entitled to be paid by our subsidiaries what is due to them before the
subsidiaries' assets become available for holders of the Notes. There is nothing
which limits the amount of debt our subsidiaries may incur, and nothing which
prevents our subsidiaries from agreeing not to pay dividends.
YEAR 2000
We do not believe the financial impact of our being sure all of our
computer systems properly recognize the year 2000 will be material. However, it
is possible we will be adversely affected by failure of vendors, subcontractors,
suppliers or others with whom we do business to make their computer systems year
2000 compliant. Also, we could be adversely affected if governmental agencies
are impeded because their computer systems are not year 2000 compliant.
CONTROLLING STOCKHOLDER
We have two classes of stock: Common Stock, which is entitled to one vote
per share; and Class B Common Stock, which is entitled to ten votes per share.
Leonard Miller owns, through family partnerships, Class B Common Stock which is
entitled to approximately 67% of the combined votes which could be cast by the
holders of the Common Stock and the Class B Common Stock. That gives Mr. Miller
the power to elect all our directors and to approve most matters which are
presented to our stockholders, even if no other stockholders vote in favor of
them. Mr. Miller's ownership might discourage someone from making a significant
equity investment in us, even if we needed the investment to meet our
obligations (including those on the Notes) and to operate our business.
S-11
<PAGE> 12
USE OF PROCEEDS
We expect to receive net proceeds of approximately $198.5 million from the
sale of the Notes in the offering. We will use $131.5 million of these net
proceeds to redeem the $124.8 million principal amount of outstanding 10 3/4%
Senior Notes due 2004, which were issued by Greystone Homes, Inc., one of our
homebuilding subsidiaries, before we acquired it. The 10 3/4% Senior Notes are
guaranteed by us and may be redeemed on or after March 1, 1999 by Greystone
Homes, Inc. at a redemption price equal to 105.375% of the principal amount of
the notes redeemed. We will use the remainder of the net proceeds to reduce
borrowings under our credit lines, which bear interest at floating rates (6.4%
per annum at November 30, 1998). We may in the future re-borrow under our credit
lines amounts which we have repaid with proceeds of the sale of the Notes in the
offering.
S-12
<PAGE> 13
CAPITALIZATION
The table below shows our capitalization at November 30, 1998 on an actual
basis, and as adjusted to take account of the issuance of the Notes in the
offering and the use of the net proceeds from that issuance:
<TABLE>
<CAPTION>
AS OF NOVEMBER 30, 1998
-------------------------------
ACTUAL AS ADJUSTED
----------- ------------
(IN THOUSANDS, EXCEPT PER SHARE
AMOUNTS)
(UNAUDITED)
<S> <C> <C>
DEBT:
Unsecured revolving credit notes payable with
floating interest rates......................... $ 136,650 $ 86,062(3)
Senior unsecured notes payable.................... 133,812 --
Convertible Debentures............................ 231,897 231,897
% Notes......................................... -- 200,000
Other long-term debt.............................. 28,271 28,271
---------- ----------
Total homebuilding debt...................... 530,630 546,230
---------- ----------
Limited-purpose finance subsidiaries debt......... 34,892 34,892
Financial services debt........................... 233,316 233,316
---------- ----------
Total debt...................................... 798,838 814,438
---------- ----------
STOCKHOLDERS' EQUITY:
Common stock of $0.10 par value per share, 48,241
shares outstanding at November 30, 1998(1)(2)... 4,824 4,824
Class B common stock of $0.10 par value per share,
9,910 shares outstanding at November 30, 1998... 991 991
Additional paid-in capital........................ 523,645 523,645
Retained earnings................................. 186,205 187,605(4)
---------- ----------
Total stockholders' equity...................... 715,665 717,065
---------- ----------
Total capitalization......................... $1,514,503 $1,531,503
========== ==========
</TABLE>
- ------------------------------
(1) In March 1998, we entered into an agreement with a banking firm which gave
us the option (but does not require us) to sell Common Stock to that firm
based upon market prices from time to time for a total of $120 million.
Through November 30, 1998, we had made sales totaling $36 million under the
agreement.
(2) Does not include 6.1 million shares of Common Stock issuable upon conversion
of the Convertible Debentures or 3.7 million shares of Common Stock issuable
upon exercise of stock options which were outstanding on November 30, 1998.
(3) This amount includes borrowings to pay amounts due under an agreement
entered into to hedge interest rate risk associated with the issuance of the
Notes.
(4) The increase in retained earnings reflects the estimated gain which we
expect to realize upon the redemption of Greystone Homes, Inc.'s 10 3/4%
Senior Notes due 2004.
S-13
<PAGE> 14
BUSINESS
We are one of the nation's largest homebuilders and a provider of
residential financial services. Our homebuilding operations include the sale and
construction of homes, as well as the purchase, development and sale of
residential land, both directly and through partnerships. Our financial services
subsidiaries provide mortgage financing, title insurance and closing services
for buyers of our homes and others; acquire, package and resell mortgage loans;
perform mortgage loan servicing activities and provide cable television and
alarm monitoring services to residents of our communities and others.
HOMEBUILDING
We and our predecessor have been building homes in Florida since 1954. We
entered the Arizona market in 1972. In 1991, we began building homes in the
Dallas/ Fort Worth area of Texas. In 1992, we started homebuilding operations in
Houston, Texas. During 1995, we entered the California homebuilding market
through the acquisition of Bramalea California and during 1996 we expanded our
California presence by acquiring Renaissance Homes and through several
partnership investments. During 1996, we also significantly expanded our
operations in Texas with the acquisition of the assets and operations of
Houston-based Village Builders (a homebuilder) and Friendswood Development
Company (a developer of master-planned communities).
During 1997, we substantially expanded our California operations, as well
as expanding in Arizona and entering the Nevada homebuilding market, by
acquiring Pacific Greystone. At the time of the acquisition, Pacific Greystone's
homebuilding revenues equalled approximately half of ours. During our fiscal
year ended November 30, 1998, we made three acquisitions, which helped increase
our current California inventory to approximately 35,000 homesites owned and
controlled.
Through our own efforts and our partnership interests, we are involved in
all phases of planning and building in our residential communities, including
land acquisition, site planning, preparation and improvement of land, and
design, construction and marketing of homes. We subcontract virtually all
segments of development and construction to others. We generally have an
inventory of homes under construction. A majority of these homes are sold (i.e.,
we have received executed sales contracts and deposits) before we start
construction. We usually finance construction with our own funds or borrowings
under our unsecured working capital arrangements.
We sell primarily single-family attached and detached homes. Most of our
homes are in the moderate price range for the areas in which they are located.
They are targeted primarily at first-time homebuyers, initial move-up homebuyers
and, in some communities, active adults.
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CURRENT HOMEBUILDING ACTIVITIES
The table below summarizes information about our homebuilding activities at
November 30, 1998:
<TABLE>
<CAPTION>
HOMES DELIVERED HOMESITES AT NOVEMBER 30, 1998
---------------------- -----------------------------------------------------
HOMES COMPLETED
OR UNDER LENNAR
YEARS ENDED CONSTRUCTION CORPORATION(3)
---------------------- ------------------- ------------------
SOLD HOMES
AVAILABLE NOT YET
1998 1997 1996 SOLD(2) FOR SALE STARTED(2) OWNED CONTROLLED
------ ----- ----- ------- --------- ---------- ----- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Florida.................. 3,761 3,367 3,363 825 488 719 6,600 2,800
California............... 3,029 587 58 1,123 619 25 12,800 800
Texas.................... 2,484 2,075 1,832 575 599 128 6,200 900
Arizona/Nevada........... 1,503 673 715 479 75 226 2,900 1,100
------ ----- ----- ----- ----- ------ ----- -----
Total................. 10,777 6,702 5,968 3,002 1,781 1,098 28,500 5,600
====== ===== ===== ===== ===== ====== ===== =====
<CAPTION>
HOMESITES AT NOVEMBER 30, 1998
--------------------------------
PARTNERSHIPS(1)(3)
------------------- TOTAL
HOMESITES
OWNED AND
OWNED CONTROLLED CONTROLLED
------ ---------- ----------
<S> <C> <C> <C>
Florida.................. 17,000 2,800 29,200
California............... 14,600 6,500 34,700
Texas.................... 4,300 -- 11,400
Arizona/Nevada........... 600 -- 4,600
------ ------ ------
Total................. 36,500 9,300 79,900
====== ====== ======
</TABLE>
- ------------------------------
(1) Represents partnerships and similar entities in which we have less than
controlling interests and which are accounted for by the equity method.
(2) Although firm contracts relating to these homes were executed, there can be
no assurance that purchasers will meet their obligations under the
contracts.
(3) Based on current management estimates, which are subject to change. Includes
homesites that are currently designated for sale to other builders.
PARTNERSHIPS AND SIMILAR ENTITIES
We view partnerships and similar entities as a means both to expand our
market opportunities and to manage our risk profile. Typically, we act as the
general partner and the day-to-day manager.
In October 1997, we, directly and through LNR, transferred to Lennar Land
Partners, which is 50% owned by us and 50% owned by LNR, parcels of land or
interests in land and other assets which had a total book value on our books of
approximately $372.4 million. We had acquired this land for residential home
development. It consisted of approximately 31,000 potential homesites in 35
communities, of which 19 communities with 19,300 potential homesites were in
Florida, two communities with 760 potential homesites were in Arizona, five
communities with 4,800 potential homesites were in Texas and nine communities
with 6,500 potential homesites were in California. When we transferred the land,
we retained options to purchase approximately 22% of it at prices we had
established. The remaining land was available for sale to independent
homebuilders or to us at prices which must be approved by LNR.
We have an agreement with Lennar Land Partners under which, for a fee, we
administer all its day-to-day activities, including overseeing planning and
development of properties and overseeing sales of land to ourselves and other
builders. During the year ended November 30, 1998, Lennar Land Partners had land
sale revenues of $224 million, of which $91 million was from sales to us. During
that period, Lennar Land Partners obtained control of approximately 8,000
additional homesites, primarily through partnership arrangements.
Our interest in Lennar Land Partners is reflected in our financial
statements by the equity method, and therefore neither its assets nor its
liabilities are included in our consolidated balance sheet. However, we are
contingently obligated, together with LNR, to ensure that it will meet financial
covenants under its principal borrowing agreements.
FINANCIAL SERVICES
Our financial services subsidiaries provide mortgage financing, title
insurance and closing services for buyers of our homes and others; acquire,
package and resell
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mortgage loans; perform mortgage loan servicing activities and provide cable
television and alarm monitoring services to residents of our communities and
others.
MORTGAGE ORIGINATION
We make available conventional, FHA-insured and VA-guaranteed mortgage
loans to buyers of the our homes and others from offices located in Florida,
California, Arizona, Texas and Nevada. In 1998, loans to buyers of our homes
represented approximately 77% of our $1.03 billion of loan originations.
We sell the loans we originate in the secondary mortgage market, generally
on a non-recourse basis, and usually retain the servicing rights. We have an
interest rate risk management policy under which we hedge our interest rate
locked loan commitments and loans held for sale against exposure to interest
rate fluctuations. We finance our loans held for sale with borrowings under our
financial services subsidiaries' $200 million line of credit (secured by the
loans and by certain servicing rights) or with our own funds (which may have
been borrowed under our general credit lines) when, on a consolidated basis,
this enables us to minimize the overall cost of funds.
MORTGAGE SERVICING
We generate earnings from servicing loans our finance subsidiaries
originate or acquire and from servicing loans for the Government National
Mortgage Association (Ginnie Mae), the Federal National Mortgage Association
(Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac) and other
mortgage investors. At November 30, 1998, we had a servicing portfolio of
approximately 41,000 loans with an unpaid principal balance of approximately
$3.2 billion.
TITLE INSURANCE AND CLOSING SERVICES
We provide title insurance and closing services to buyers of our homes and
others. We provided these services in connection with approximately 117,000 real
estate transactions during fiscal 1998. In 1994, we formed TitleAmerica
Insurance Corporation, a title insurance underwriter, which makes title
insurance available to buyers of our homes and others. In 1996, we acquired the
assets and business of Regency Title Company in Texas, and thereby significantly
expanded our title insurance and closing business. During the 1998 fiscal year,
we acquired the North American Title Group, which expanded our title insurance
business into California, Arizona and Colorado.
RELATIONSHIP WITH LNR
On October 31, 1997, we distributed to our stockholders all the stock of
LNR, to which we had transferred our commercial real estate investment and
management business. In connection with the spin-off, we entered into an
agreement which, among other things, prevents us from engaging, at least until
2002, in any of the businesses in which LNR was engaged, or anticipated becoming
engaged, at the time of the spin-off, and prohibited LNR from engaging, at least
until 2002, in any business in which we were engaged, or anticipated becoming
engaged, at the time of the spin-off (except in limited instances in which our
activities or anticipated activities overlapped with those of LNR).
Specifically, we are precluded, at least until 2002, from engaging in the
business of (i) acquiring and actively managing commercial or residential
multi-family rental real estate, other than as an incident to, or otherwise in
connection with, our homebuilding business, (ii) acquiring portfolios of
commercial mortgage loans or real estate assets acquired through foreclosures of
mortgage loans, other than real estate acquired as sites of homes to be built or
sold as part of our homebuilding business, (iii) making or acquiring mortgage
loans, other than mortgage loans secured by
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<PAGE> 17
detached or attached homes or residential condominium units, (iv) constructing
office buildings or other commercial or industrial buildings, other than small
shopping centers, professional office buildings and similar facilities which
will be adjuncts to our residential developments, (v) purchasing commercial
mortgage-backed securities or real estate asset-backed securities or (vi) acting
as a servicer or special servicer with regard to securitized commercial mortgage
pools. We are not, however, prevented from owning or leasing office buildings in
which we occupy a majority of the space; acquiring securities backed by pools of
residential mortgages; acquiring an entity which, when it is acquired, is
engaged in one of the prohibited activities as an incidental part of its
activities; owning as a passive investor an interest of less than 10% of a
publicly traded company which is engaged in a prohibited business; acquiring
commercial paper or short-term debt instruments of entities engaged in one or
more of the prohibited businesses; or owning an interest in, and managing,
Lennar Land Partners.
Although LNR and we are separate companies, Stuart Miller, our President
and Chief Executive Officer, is also the Chairman of LNR, and Steven Saiontz,
one of our Directors, is the Chief Executive Officer and a Director of LNR. In
addition, Leonard Miller owns stock which gives him voting control of both
companies. There are provisions both in our by-laws and in LNR's requiring
approval by an Independent Directors Committee of any significant transactions
between LNR and us or any of our subsidiaries.
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<PAGE> 18
DESCRIPTION OF NOTES
We have summarized certain terms of the Notes and the Indenture in this
section. This summary is not complete. The following description of the
particular terms of the Notes supplements the description in the accompanying
Prospectus of the general terms and provisions of the Debt Securities. To the
extent that the following description of Notes is inconsistent with that general
description in the Prospectus, the following description replaces that in the
Prospectus.
We will issue the Notes under an Indenture dated as of December 31, 1997
between us and First National Bank of Chicago, as trustee (the "Trustee"), as
supplemented by a Supplemental Indenture to be dated as of February , 1999
(the "Indenture"). We have filed the Indenture with the SEC. You should read the
Indenture for additional information before you purchase any Notes. The
Indenture is subject to, and governed by, the Trust Indenture Act of 1939, as
amended (the "TIA"). Capitalized terms used but not defined in this section have
the meanings specified in the Indenture. For purposes of this "Description of
Notes," "we" or "us" refers to Lennar Corporation and does not include our
subsidiaries except in references to financial data determined on a consolidated
basis.
GENERAL
The Notes will be our direct, unsecured obligations and will rank equal in
right of payment with all of our other unsecured and unsubordinated
indebtedness. The Notes will be issued in denominations of $1,000 principal
amount and integral multiples of that amount and will be payable, and may be
presented for registration of transfer and exchange, without service charge, at
our office maintained for such purpose in New York, New York. Initially, that
office will be the office or agency of the Trustee.
The Notes are limited in aggregate principal amount to $500,000,000, of
which $200,000,000 will be issued in this offering. The Notes will mature on
, 2009 and will bear interest at the rate per annum set forth on
the front cover of this Prospectus Supplement. Interest on the Notes will be
payable semi-annually on and of each year, commencing
, 1999. We will pay interest to the persons in whose names the Notes
are registered at the close of business on the and
immediately preceding each interest payment date. Interest will
be calculated on the basis of a 360-day year consisting of twelve 30-day months.
There is no sinking fund applicable to the Notes.
In connection with the Notes, we have not agreed to any financial covenants
or any restrictions on the payment of dividends or the issuance or repurchase of
our securities. We have agreed to no covenants or other provisions to protect
Holders of the Notes in the event of a highly leveraged transaction or a Change
in Control, except to the extent described under "-- Repurchase at Option of
Holders upon Change in Control."
REDEMPTION AT OUR OPTION
The Notes will be redeemable at our option at any time and from time to
time, in whole or in part, at a redemption price (the "Redemption Price") equal
to the Make-Whole Price. Unless we default in payment of the Redemption Price,
on and after the date of redemption, interest will cease to accrue on the Notes
or the portions of the Notes called for redemption. Notice of any redemption
must be given by us to the Holders not less than 30 nor more than 60 days prior
to the Redemption Date. If fewer than all the Notes are to be redeemed, the
Trustee will select the particular Notes to be redeemed in principal amounts of
$1,000 or integral multiples of that amount by lot or, in its discretion, on a
pro rata basis. If any Note is to be redeemed only in part, a new Note or Notes
in the principal amount equal to the unredeemed portion of such Note will be
issued.
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<PAGE> 19
We may purchase the Notes in the open market, by tender or otherwise. The
Notes so purchased may be held, resold or surrendered to the Trustee for
cancellation. To the extent applicable, we will comply with the provisions of
Rule 14e-1 under the Securities Exchange Act of 1934 (the "Exchange Act"), and
other securities laws and regulations in connection with any such purchase.
REPURCHASE AT OPTION OF HOLDERS UPON CHANGE IN CONTROL
If a Change in Control occurs, each Holder of Notes can require us to
repurchase all of that Holder's Notes, or any portion of the principal amount of
those Notes that is an integral multiple of $1,000. We will make the repurchase
on the date (the "Change in Control Purchase Date") that is 35 days after the
date of the Change in Control at a cash purchase price (the "Change in Control
Purchase Price") equal to the Make-Whole Price at the Change in Control Purchase
Date.
Within 15 days after a Change in Control, we or, at our request, the
Trustee, will mail to all Holders a notice (a "Change in Control Notice") of
such Change in Control and of the resulting repurchase right. We will also
deliver a copy of our Change in Control Notice to the Trustee. To exercise the
repurchase right, a Holder must deliver to the Trustee on or before the Change
in Control Purchase Date, written notice of the Holder's exercise of that right,
together with the Notes with respect to which the right is being exercised, duly
endorsed for transfer to us (a "Change in Control Purchase Notice").
A "Change in Control" will be deemed to have occurred at such time after
the original issuance of the Notes as:
(i) any Person (as defined) (including any syndicate or group deemed
to be a "person" under Section 13(d)(3) of the Exchange Act), other than
us, any Subsidiary, any employee benefit plan of ours or any Subsidiary, or
Permitted Holders is or becomes the beneficial owner, directly or
indirectly, through a purchase or other acquisition transaction or series
of transactions (other than a merger or consolidation involving us), of
shares of our capital stock entitling such Person to exercise in excess of
50% of the total voting power of all shares of our capital stock entitled
to vote generally in the election of directors;
(ii) we consolidate with, or we merge into, any other Person, any
other Person merges into us or we sell or transfer our assets, as an
entirety or substantially as an entirety, to another Person (other than (a)
any such transaction pursuant to which the holders of our Voting Stock,
immediately prior to such transaction have, directly or indirectly, shares
of capital stock of the continuing or surviving corporation immediately
after such transaction which entitle such holders to exercise in excess of
50% of the total voting power of all shares of capital stock of the
continuing or surviving corporation entitled to vote generally in the
election of directors and (b) any merger (1) which does not result in any
reclassification, conversion, exchange or cancellation of our outstanding
shares of Voting Stock or (2) which we effect solely to change the
jurisdiction of our incorporation and results in a reclassification,
conversion or exchange of outstanding shares of Voting Stock solely into
shares of stock carrying substantially the same relative rights as the
Voting Stock); or
(iii) if the individuals who serve on our Board of Directors at the
beginning of the two-year period immediately preceding such change
(together with any other individual whose election to our Board of
Directors or whose nomination for election by our stockholders was approved
by a vote of at least a majority of the directors then in office either who
were directors at the beginning of such period
S-19
<PAGE> 20
or whose election or nomination for election was previously so approved)
cease for any reason to constitute a majority of the directors then in
office.
The term "beneficial owner" will be determined in accordance with Rule
13d-3 under the Exchange Act.
The term "Permitted Holders" means any holder of our Class B Common Stock
as of February 10, 1999 and any permitted transferee of our Class B Common Stock
under the terms of Lennar's Certificate of Incorporation as it exists on
February 10, 1999.
To the extent applicable, we will comply with the provisions of Rule 14e-1
under the Exchange Act and other securities laws and regulations in connection
with any offer by us to repurchase Notes upon a Change in Control.
The Change in Control feature of the Notes may discourage a takeover of us
or make such a takeover and, thus, the removal of incumbent management, more
difficult. These provisions would not necessarily protect Holders of the Notes
from (1) a highly leveraged transaction, (2) certain changes in who controls us
or (3) other transactions involving us that may adversely affect Holders.
If a Change in Control were to occur, there could be no assurance that we
would have sufficient financial resources, or would be able to arrange
financing, to pay the repurchase price for all Notes tendered by Holders. Any
failure by us to repurchase the Notes when required following a Change in
Control would result in an Event of Default under the Indenture.
CERTAIN COVENANTS
Limitation on Liens. We will not, nor will we permit any Subsidiary to,
create, assume, incur or suffer to exist any Lien upon any of our or its
properties or assets, whether owned on the date of original issuance of the
Notes ("Issue Date") or thereafter acquired, unless:
- if such Lien secures Indebtedness ranking equal in right of payment with
the Notes, then the Notes are secured on an equal and ratable basis with
the obligation so secured until such time as such obligation is no longer
secured by a Lien;
- if such Lien secures Indebtedness which is subordinated to the Notes,
then the Notes are secured and the Lien securing such Indebtedness is
subordinated to the Lien granted to the holders of the Notes to the same
extent as such Indebtedness is subordinated to the Notes; or
- such Lien is a Permitted Lien (as defined below).
The following Liens are "Permitted Liens":
- Liens on property of a Person existing at the time such Person is merged
into or consolidated with or otherwise acquired by us or any Subsidiary,
provided that such Liens were in existence prior to, and were not created
in contemplation of, such merger, consolidation or acquisitions and do
not extend to any assets other than those of the Person merged into or
consolidated with us or any Subsidiary;
- Liens on property existing at the time of acquisition thereof by us or
any Subsidiary; provided that such Liens were in existence prior to, and
were not created in contemplation of, such acquisition and do not extend
to any assets other than the property acquired;
- Liens imposed by law such as carriers', warehouseman's or mechanics'
Liens, and other Liens to secure the performance of statutory
obligations, surety or appeal bonds, performance bonds or other
obligations of a like nature incurred in the ordinary course of business;
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<PAGE> 21
- Liens securing Indebtedness representing, or incurred to finance, the
cost of acquiring, constructing or improving any assets, provided that
the principal amount of such Indebtedness does not exceed 100% of such
cost, including construction charges;
- Liens existing on the Issue Date;
- Liens for taxes, assessments or governmental charges or claims that are
not yet delinquent or that are being contested in good faith by
appropriate proceedings promptly instituted and diligently concluded;
provided that any reserve or other appropriate provision as shall be
required in conformity with GAAP shall have been made therefor;
- Liens securing refinancing Indebtedness; provided that any such Lien does
not extend to or cover any property or assets other than the property or
assets securing Indebtedness so refunded, refinanced or extended;
- any extensions, substitutions, modifications, replacements or renewals of
the foregoing; and
- easements, rights-of-way and other similar encumbrances incurred in the
ordinary course of business and encumbrances consisting of zoning
restrictions, licenses, restrictions on the use of property or minor
imperfections in title thereto which, in the aggregate, are not material
in amount, and which do not in any case materially detract from our
properties subject thereto.
Notwithstanding the foregoing, we may, and any Subsidiary may, create,
assume, incur or suffer to exist any Lien upon any of our properties or assets
without equally and ratably securing the Notes if the aggregate amount of all
Indebtedness then outstanding secured by such Lien and all other Liens which are
not Permitted Liens, together with the aggregate net sales proceeds from all
Sale-Leaseback Transactions which are not Permitted Sale-Leaseback Transactions
(as defined below), does not exceed 15% of Total Consolidated Stockholders'
Equity.
Sale and Leaseback Transactions. We will not, nor will we permit any
Subsidiary to, enter into any arrangement for the sale and releasing to us or
any Subsidiary of any assets (such transaction, a "Sale-Leaseback Transaction"),
except for any of the following "Permitted Sale-Leaseback Transactions":
- a Sale-Leaseback Transaction involving the leasing by us and any
Subsidiary of model homes in their communities;
- a Sale-Leaseback Transaction relating to a property which occurs within
120 days from the date of acquisition of such property by us or a
Subsidiary or the date of the completion of construction or commencement
of full operations on such property, whichever is later; or
- a Sale-Leaseback Transaction where we, within 120 days after such Sale-
Leaseback Transaction, apply or cause to be applied to the retirement of
our or any Subsidiary's Funded Debt (other than our Funded Debt which by
its terms or the terms of the instrument pursuant to which it was issued
is subordinate in right of payment to the Notes) proceeds of the sale of
such property, but only to the extent of the amount of proceeds so
applied.
Notwithstanding the foregoing provisions, we may, and may permit any
Subsidiary to, effect any Sale-Leaseback Transaction involving any real or
tangible personal property which is not a Permitted Sale-Leaseback Transaction,
provided that the aggregate net sales proceeds from all Sale-Leaseback
Transactions which are not Permitted Sale-Leaseback Transactions, together with
all Indebtedness secured by Liens
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<PAGE> 22
other than Permitted Liens, does not exceed 15% of Total Consolidated
Stockholders' Equity.
COMPLIANCE CERTIFICATE
We must deliver to the Trustee, within 120 days after the end of each
fiscal year, an Officers' Certificate as to the signer's knowledge of our
compliance with all conditions and our covenants in the Indenture. The Officers'
Certificate also must state whether or not the signer knows of any Default or
Event of Default. If the signer knows of such a Default or Event of Default, the
Officers' Certificate must describe the Default or Event of Default and the
efforts to remedy it. For the purposes of this provision of the Indenture,
compliance is determined without regard to any grace period or requirement of
notice under the Indenture.
EVENTS OF DEFAULT AND REMEDIES
The following are Events of Default under the Indenture:
- if we fail to pay any interest on the Notes continuing for 30 days after
it was due;
- if we fail to pay any principal, Redemption Price or Change in Control
Purchase Price due with respect to the Notes;
- our or any Subsidiary's failure to fulfill an obligation to pay
Indebtedness for borrowed money (other than Indebtedness which is
non-recourse to us or any Subsidiary), which such failure shall have
resulted in the acceleration of, or be a failure to pay at final
maturity, Indebtedness aggregating more than $20 million;
- our failure to perform any other covenant or warranty in the Indenture,
continued for 30 days after written notice as provided in the Indenture;
- final judgments or orders are rendered against us or any Subsidiary which
require the payment by us or any Subsidiary of an amount (to the extent
not covered by insurance) in excess of $20 million and such judgments or
orders remain unstayed or unsatisfied for more than 60 days and are not
being contested in good faith by appropriate proceedings; and
- certain events of bankruptcy, insolvency or reorganization with respect
to us or any Subsidiary.
If an Event of Default has occurred and is continuing, the Trustee or the
Holders of not less than 25% in principal amount of the Notes then outstanding
may declare the Make-Whole Price of all the Notes to be due and payable
immediately. However, if we cure all defaults (except the nonpayment of the
Make-Whole Price on any of the Notes that have become due by acceleration) and
certain other conditions in the Indenture are met, with certain exceptions, such
declaration may be annulled and past defaults may be waived by the Holders of a
majority of the principal amount of the Notes then outstanding. In the case of
certain events of bankruptcy or insolvency, the Make-Whole Price accrued to the
date of the occurrence of the bankruptcy or insolvency will automatically become
and be immediately due and payable. If the Make-Whole Price is not paid in full
when it is due, it will bear interest, to the extent permitted by law, at the
rate borne by the Notes, until paid in full.
Within 90 days after a Trust Officer (as defined in the Indenture) has
knowledge of the occurrence of a Default or any Event of Default, the Trustee
must mail to all Holders notice of all Defaults or Events of Default known to a
Trust Officer, unless such Default or Event of Default is cured or waived before
the giving of such notice. However, except in the case of a payment default on
any of the Notes, the Trustee will be protected in withholding such notice if
and so long as a trust committee of
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directors and/or officers of the Trustee in good faith determines that the
withholding of such notice is in the interest of the Holders.
The Holders of a majority in principal amount of the Notes then outstanding
will have the right to direct the time, method and place of conducting any
proceedings for any remedy available to the Trustee with regard to the Notes,
subject to certain limitations specified in the Indenture.
MODIFICATIONS OF THE INDENTURE
With the consent of the Holders of not less than a majority in principal
amount of the Notes at the time outstanding, we and the Trustee may modify the
Indenture or any supplemental indenture or the rights of the Holders of the
Notes. However, without the consent of each Holder of Notes which is affected,
we cannot:
- extend the fixed maturity of any Note;
- reduce the rate or extend the time for the payment of interest;
- reduce the principal amount of any Note or the Make-Whole Price;
- change our obligation to repurchase any Note upon the occurrence of any
Change in Control in a manner adverse to Holders of the Notes;
- impair the right of a Holder to institute suit for the payment thereof;
or
- change the currency in which the Notes are payable.
In addition, without the consent of the Holders of all of the Notes then
outstanding, we cannot reduce the percentage of Notes the Holders of which are
required to consent to any such supplemental indenture.
GLOBAL SECURITIES
The Notes will be issued in the form of one or more global securities
("Global Securities") that will be deposited with, or on behalf of, The
Depository Trust Company, New York, New York (the "Depositary"). Interests in
the Global Securities will be issued only in denominations of $1,000 principal
amount or integral multiples of that amount. Unless and until it is exchanged in
whole or in part for securities in definitive form, a Global Security may not be
transferred except as a whole to a nominee of the Depositary for such Global
Security, or by a nominee of the Depositary to the Depositary or another nominee
of the Depositary, or by the Depositary or any such nominee to a successor
Depositary or a nominee of such successor Depositary.
BOOK-ENTRY SYSTEM
Initially, the Notes will be registered in the name of Cede & Co., the
nominee of the Depositary. Accordingly, beneficial interests in the Notes will
be shown on, and transfers thereof will be effected only through, records
maintained by the Depositary and its participants.
The Depositary has advised us and the Underwriters as follows: the
Depositary is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York Banking
Law, a member of the United States Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code and a
"clearing agency" registered pursuant to the provisions of Section 17A of the
United States Securities Exchange Act of 1934, as amended. The Depositary holds
securities that its participants ("Direct Participants") deposit with the
Depositary. The Depositary also facilitates the settlement among Direct
Participants of securities transactions, such as transfers and pledges, in
deposited securities through electronic computerized book-entry changes in such
Direct Participants' accounts, eliminating the need for physical movement of
securities
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certificates. Direct Participants include securities brokers and dealers
(including the Underwriters), banks, trust companies, clearing corporations and
certain other organizations. The Depositary is owned by a number of its Direct
Participants and by the New York Stock Exchange, Inc., the American Stock
Exchange, Inc. and the National Association of Securities Dealers, Inc. Access
to the Depositary's book-entry system is also available to others such as
securities brokers and dealers, banks and trust companies that clear through or
maintain a custodial relationship with a Direct Participant, either directly or
indirectly ("Indirect Participants"). The rules applicable to the Depositary and
its Direct and Indirect Participants are on file with the SEC.
Payments on the Notes registered in the name of the Depositary's nominee
will be made in immediately available funds to the Depositary's nominee as the
registered owner of the Global Securities. We and the Trustee will treat the
Depositary's nominee as the owner of such Notes for all other purposes as well.
Therefore, neither we, the Trustee nor any paying agent has any direct
responsibility or liability for the payment of any amount due on the Notes to
owners of beneficial interests in the Global Securities. It is the Depositary's
current practice, upon receipt of any payment, to credit Direct Participants'
accounts on the payment date according to their respective holdings of
beneficial interests in the Global Securities as shown on the Depositary's
records unless the Depositary has reason to believe that it will not receive
payment. Payments by Direct and Indirect Participants to owners of beneficial
interests in the Global Securities will be governed by standing instructions and
customary practices, as is the case with Securities held for the accounts of
customers in bearer form or registered in "street name." Such payments will be
the responsibility of such Direct and Indirect Participants and not of the
Depositary, the Trustee or us.
Notes represented by a Global Security will be exchangeable for Notes in
definitive form of like tenor in authorized denominations only if:
- the Depositary notifies us that it is unwilling or unable to continue as
Depositary;
- the Depositary ceases to be a clearing agency registered under applicable
law and a successor depositary is not appointed by us within 90 days; or
- we, in our discretion, determine not to require all of the Notes to be
represented by a Global Security and notify the Trustee of our decision.
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Notes will be made by the Underwriters in immediately
available funds. So long as the Depositary continues to make its Same-Day Funds
Settlement System available to us, all payments on the Notes will be made by us
in immediately available funds.
Secondary trading in long-term notes and debentures of corporate issues is
generally settled in clearing-house or next-day funds. In contrast, the Notes
will trade in the Depositary's Same-Day Funds Settlement System until maturity,
and secondary market trading in the Notes; therefore, the Depositary will
require that trades be settled in immediately available funds.
CONCERNING THE TRUSTEE
The First National Bank of Chicago, the Trustee under the Indenture, will
be appointed by us as the initial paying agent, registrar and custodian with
regard to the Notes. We may maintain deposit accounts and conduct other banking
transactions with the Trustee or its affiliates in the ordinary course of
business. The Trustee and its affiliates may from time to time in the future
provide banking and other services to us in the ordinary course of their
business. Currently, The First National Bank of Chicago
S-24
<PAGE> 25
is the agent and a lender under our revolving credit lines and serves as trustee
with respect to the Convertible Debentures.
DISCHARGE OF THE INDENTURE
We may satisfy and discharge our obligations under the Indenture with
respect to the Notes by:
- delivering to the Trustee for cancellation all outstanding Notes; or
- depositing with the Trustee, after all outstanding Notes have become due
and payable (or are by their terms to become due and payable within one
year), whether at stated maturity, or otherwise, cash sufficient to pay
all of the outstanding Notes and paying all other sums payable under the
Indenture by us with respect to the Notes.
Upon the deposit of such funds with the Trustee, the Indenture will, with
certain limited exceptions, cease to be of further effect with respect to the
Notes. The rights that would continue following the deposit of those funds with
the Trustee are:
- the remaining rights of registration of transfer, substitution and
exchange of the Notes;
- the rights of Holders under the Indenture to receive payments due with
respect to the Notes and the other rights, duties and obligations of
Holders, as beneficiaries with respect to the amounts, if any, so
deposited with the Trustee; and
- the rights, obligations and immunities of the Trustee under the
Indenture.
CERTAIN DEFINITIONS
The following are definitions of certain of the terms used in the
Indenture.
"Adjusted Treasury Rate" means, with respect to any Determination Date, the
rate per annum equal to the semi-annual yield to maturity of the Comparable
Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as
a percentage of its principal amount) equal to the Comparable Treasury Price for
such Determination Date, plus basis points.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday or Friday
which is not a legal holiday in New York, New York.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Independent Investment Banker as having a maturity comparable to
the remaining term of the Notes that would be utilized, at the time of selection
and in accordance with customary financial practice, in pricing new issues of
corporate debt securities of comparable maturity to the remaining term of the
Notes.
"Comparable Treasury Price" means, with respect to any Determination Date:
- the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the
third Business Day preceding such Determination Date, as set forth in the
daily statistical release (or any successor release) published by the
Federal Reserve Bank of New York and designated "Composite 3:30 p.m.
Quotations for U.S. Government Securities;" or
- if such release (or any successor release) is not published or does not
contain such prices on such Business Day, (1) the average of the
Reference Treasury Dealer Quotations for such date, after excluding the
highest and lowest such Reference Treasury Dealer Quotations, or (2) if
fewer than three such Reference
S-25
<PAGE> 26
Treasury Dealer Quotations are obtained, the average of all such
Reference Treasury Dealer Quotations.
"Default" means any event which upon the giving of notice or the passage of
time, or both, would be an Event of Default.
"Determination Date" means, with respect to the calculation of the
Make-Whole Price in connection with any redemption, repurchase or acceleration
of the Notes, the date of redemption, repurchase or acceleration.
"Funded Debt" of any Person means all Indebtedness for borrowed money
created, incurred, assumed or guaranteed in any manner by such person, and all
Indebtedness, contingent or otherwise, incurred or assumed by such person in
connection with the acquisition of any business, property or asset, which in
each case matures more than one year after, or which by its terms is renewable
or extendible or payable out of the proceeds of similar Indebtedness incurred
pursuant to the terms of any revolving credit agreement or any similar agreement
at the option of such person for a period ending more than one year after the
date as of which Funded Debt is being determined. However, Funded Debt shall not
include:
- any Indebtedness for the payment, redemption or satisfaction of which
money (or evidences of indebtedness, if permitted under the instrument
creating or evidencing such indebtedness) in the necessary amount shall
have been irrevocably deposited in trust with a trustee or proper
depository either on or before the maturity or redemption date thereof;
- any Indebtedness of such person to any of its subsidiaries or of any
subsidiary to such person or any other subsidiary; or
- any Indebtedness incurred in connection with the financing of operating,
construction or acquisition projects, provided that the recourse for such
indebtedness is limited to the assets of such projects.
"Holder" means a Person in whose name a Note is registered on the
Registrar's books.
"Indebtedness" means, with respect to us or any Subsidiary, and without
duplication:
(1) the principal of and premium, if any, and interest on, and fees,
costs, enforcement expenses, collateral protection expenses and other
reimbursement or indemnity obligations in respect to all our or any
Subsidiary's indebtedness or obligations to any Person, including but not
limited to banks and other lending institutions, for money borrowed that is
evidenced by a note, bond, debenture, loan agreement, or similar instrument
or agreement (including purchase money obligations with original maturities
in excess of one year and noncontingent reimbursement obligations in
respect of amounts paid under letters of credit);
(2) all our or any Subsidiary's reimbursement obligations and other
liabilities (contingent or otherwise) with respect to letters of credit,
bank guarantees or bankers' acceptances;
(3) all obligations and liabilities (contingent or otherwise) in
respect of our or any Subsidiary's leases required, in conformity with
generally accepted accounting principles, to be accounted for as capital
lease obligations on our balance sheet;
(4) all our or any Subsidiary's obligations (contingent or otherwise)
with respect to an interest rate or other swap, cap or collar agreement or
other similar instrument or agreement or foreign currency hedge, exchange,
purchase or similar instrument or agreement;
S-26
<PAGE> 27
(5) all direct or indirect guaranties or similar agreements by us or
any Subsidiary in respect of, and our or such Subsidiary's obligations or
liabilities (contingent or otherwise) to purchase or otherwise acquire, or
otherwise assure a creditor against loss in respect of, indebtedness,
obligations or liabilities of another Person of the kind described in
clauses (1) through (4);
(6) any indebtedness or other obligations, excluding any operating
leases we or any Subsidiary is currently (or may become) a party to,
described in clauses (1) through (4) secured by any Lien existing on
property which is owned or held by us or such Subsidiary, regardless of
whether the indebtedness or other obligation secured thereby shall have
been assumed by us or such Subsidiary; and
(7) any and all deferrals, renewals, extensions and refinancing of, or
amendments, modifications or supplements to, any indebtedness, obligation
or liability of the kind described in clauses (1) through (6).
"Independent Investment Banker" means one of the Reference Treasury Dealers
appointed by the Trustee after consultation with us.
"Lien" means any mortgage, pledge, lien, encumbrance, charge or security
interest of any kind.
"Make-Whole Price" means, with respect to any Note as of any Determination
Date, an amount equal to the greater of:
- 100% of the principal amount of the Note; and
- as determined by an Independent Investment Banker, the sum of the
present values of the remaining scheduled payments of principal and
interest thereon (not including any portion of such payments of
interest accrued as of the Determination Date) discounted to the
Determination Date on a semi-annual basis (assuming a 360-day year
consisting of twelve 30-day months) at the Adjusted Treasury Rate,
plus, in each case, accrued and unpaid interest thereon to such
Determination Date.
"Officers' Certificate" when used with respect to us means a certificate
signed by two of our officers (as specified in the Indenture), each such
certificate will comply with Section 314 of the TIA and include the statements
required under the Indenture.
"Paying Agent" means the office or agency designated by us where the Notes
may be presented for payment.
"Person" means any individual, corporation, partnership, joint venture,
joint-stock company, trust, unincorporated organization or government or any
government agency or political subdivision.
"Redemption Date," when used with respect to any Note to be redeemed, means
the date fixed for such redemption by or pursuant to the Indenture.
"Redemption Price," when used with respect to any Note to be redeemed,
means the price at which it is to be redeemed pursuant to the Indenture.
"Reference Treasury Dealer" means each of BT Alex. Brown Incorporated,
Salomon Smith Barney Inc., Warburg Dillon Read LLC and First Chicago Capital
Markets, Inc. and their respective successors; provided, however, that if any of
the foregoing shall not be a primary U.S. Government securities dealer in New
York City (a "Primary Treasury Dealer"), we shall substitute therefor another
Primary Treasury Dealer.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any Determination Date, the average of the bid and
asked prices for the Comparable Treasury Issue (expressed in each case as a
percentage of its
S-27
<PAGE> 28
principal amount) quoted in writing by such Reference Treasury Dealer at 5:00
p.m. on the third Business Day preceding such Determination Date.
"Subsidiary," means (1) a corporation or other entity of which a majority
in voting power of the stock or other interests is owned by us, by a Subsidiary
or by us and one or more Subsidiaries or (2) a partnership, of which we or any
Subsidiary is the sole general partner.
"Total Consolidated Stockholders' Equity" means, with respect to any date
of determination, our total consolidated stockholders' equity as shown on the
most recent consolidated balance sheet that is contained or incorporated in the
latest annual report on Form 10-K (or equivalent report) or quarterly report on
Form 10-Q (or equivalent report) filed with the SEC, and is as of a date not
more than 181 days prior to the date of determination, in the case of the
consolidated balance sheet contained or incorporated in an annual report on Form
10-K, or 135 days prior to the date of determination, in the case of the
consolidated balance sheet contained in a quarterly report on Form 10-Q.
"Voting Stock," means our Common Stock, our Class B Common Stock and any
other of our capital stock which votes together with our Common Stock in the
election of directors (without regard to whether there has been an arrearage in
the payment of dividends on preferred stock).
S-28
<PAGE> 29
UNDERWRITING
Subject to the terms and conditions contained in the Underwriting
Agreement, the Underwriters named below (the "Underwriters') have severally
agreed to purchase from us the following respective principal amounts of Notes
at the public offering price less the underwriting discounts and commissions set
forth on the cover page of this prospectus supplement:
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
UNDERWRITER OF NOTES
----------- ------------
<S> <C>
BT Alex. Brown Incorporated................................. $
Salomon Smith Barney Inc....................................
Warburg Dillon Read LLC.....................................
First Chicago Capital Markets, Inc..........................
------------
Total............................................. $200,000,000
============
</TABLE>
The Underwriting Agreement provides that the obligations of the
Underwriters are subject to certain conditions precedent.
We have been advised by the Underwriters that the Underwriters propose to
offer the Notes to the public at the public offering price set forth on the
cover page of this prospectus supplement and to certain dealers at such price
less a concession not in excess of % of the principal amount of the Notes.
The Underwriters may allow, and such dealers may reallow, a concession not in
excess of % of the principal amount of the Notes to certain other dealers.
After commencement of the offering, the offering price and other selling terms
may be changed by the Underwriters.
The Notes are a new issue of securities with no established trading market.
The Notes will not be listed on any securities exchange. Each of the
Underwriters has advised us that it intends to act as a market maker for the
Notes. However, the Underwriters are not obligated to do so and may discontinue
any market making at any time without notice. No assurance can be given as to
the liquidity of the trading market for the Notes.
We have agreed to indemnify the Underwriters and certain controlling
persons against certain liabilities, including liabilities under the Securities
Act of 1933, as amended.
The Underwriters have advised us that, pursuant to Regulation M under the
Securities Exchange Act of 1934, as amended, certain persons participating in
the offering may engage in transactions, including over-allotment, stabilizing
bids, syndicate covering transactions or the imposition of penalty bids, which
may have the effect of stabilizing or maintaining the market price of the Notes
at a level above that which might otherwise prevail in the open market.
Over-allotment involves syndicate sales in excess of the offering size, which
creates a syndicate short position. A stabilizing bid is a bid for the purchase
of Notes on behalf of the Underwriters for the purpose of fixing or maintaining
the price of the Notes. A syndicate covering transaction is the bid for or the
purchase of Notes on behalf of the Underwriters to reduce a short position
incurred by the Underwriters in connection with the offering. A penalty bid is
an arrangement permitting the Underwriters to reclaim the selling concession
otherwise accruing to a syndicate member in connection with the offering if the
Notes originally sold by such syndicate member are purchased in a syndicate
covering transaction and therefore have not been effectively placed by such
syndicate member. The Underwriters are not obligated to engage in these
activities and, if commenced, any of these activities may be discontinued at any
time.
S-29
<PAGE> 30
The Underwriters have advised us that the Underwriters do not intend to
confirm sales to any account over which they exercise discretionary authority.
In the ordinary course of their respective businesses, certain of the
Underwriters and their affiliates have provided, and in the future may provide,
investment banking and commercial banking services to us for customary
compensation. First Chicago Capital Markets, Inc. is an affiliate of The First
National Bank of Chicago, the agent and a lender under our revolving credit
lines, as well as the Trustee for the Notes. The net proceeds from the sale of
the Notes will be used to reduce borrowings under our credit lines. The sale of
the Notes is being made pursuant to the provisions of Section 2710(c)(8) of the
Conduct Rules of the National Association of Securities Dealers, Inc. In
addition, The First National Bank of Chicago is trustee under the Indenture
relating to Convertible Debentures.
LEGAL MATTERS
Rogers & Wells LLP, New York, New York, is passing on the validity of the
Notes for us. Willkie Farr & Gallagher, New York, New York, will pass upon
certain legal matters relating to the offering of the Notes for the
Underwriters.
EXPERTS
Our consolidated financial statements and the related financial statement
schedules which are incorporated by reference into this Prospectus Supplement,
the Prospectus and the Registration Statement of which they are a part from our
Annual Report on Form 10-K for the fiscal year ended November 30, 1997, have
been audited by Deloitte & Touche LLP, independent auditors, as stated in their
report, which is incorporated by reference in this Prospectus Supplement in
reliance upon the report of such firm given upon their authority as experts in
accounting and auditing.
S-30
<PAGE> 31
LENNAR CORPORATION
COMMON STOCK
PREFERRED STOCK
DEPOSITARY SHARES
DEBT SECURITIES
AND
WARRANTS
------------------------
Lennar Corporation (the "Company") may from time to time offer its Common
Stock, Preferred Stock (which may be issued in one or more series), depositary
shares representing shares of Preferred Stock ("Depositary Shares"), Debt
Securities (which may be issued in one or more series) or Warrants entitling the
holders to purchase Common Stock, Preferred Stock, Depositary Shares or Debt
Securities (together "Securities") at an aggregate initial offering price which
will not exceed $500,000,000. Securities may be offered from time to time in
amounts, at prices and on terms which will be determined at the time of sale.
Offerings may be of particular Securities or of units consisting of two or more
types of Securities. The Company may sell Securities to or through underwriters,
through agents or directly to purchasers.
The terms of particular Securities offered by the Company will be described
in a Prospectus Supplement which will accompany this Prospectus, and may be
described in a term sheet which precedes the Prospectus Supplement. A Prospectus
Supplement relating to a series of Preferred Stock will describe, to the extent
applicable, its title, the maximum number of shares, the liquidation preference
per share, dividend rights (which may be fixed or participating and may be
cumulative or non-cumulative), voting rights, conversion rights, redemption
provisions and sinking fund or purchase fund requirements, as well as any other
material terms. A Prospectus Supplement relating to Depositary Shares will
describe, to the extent applicable, the fractional share of Preferred Stock
represented by each Depositary Share. A Prospectus Supplement relating to a
series of Debt Securities will describe, to the extent applicable, its title,
the maximum aggregate principal amount, its maturity, the interest rate (which
may be fixed or variable), the currency of payment, the interest payment dates,
conversion rights, redemption provisions and sinking fund or purchase fund
requirements, as well as any other material terms. A Prospectus Supplement
relating to an issue of Warrants will describe the Securities which can be
purchased by exercise of the Warrants, the exercise price of the Warrants (which
may be wholly or partly consideration other than cash) and the period during
which the Warrants can be exercised, as well as any other material terms.
Each Prospectus Supplement will also contain the names of the underwriters
or agents, if any, through which the Securities to which it relates will be
sold, the proposed amounts, if any, to be purchased by underwriters, and the
compensation, if any, of those underwriters or agents, the initial public
offering price, information about securities exchanges or automated quotation
systems on which the Securities will be listed or traded and any other material
information about the offering and sale of the Securities.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
THE DATE OF THIS PROSPECTUS IS FEBRUARY 12, 1998
<PAGE> 32
NO DEALER, SALESMAN OR OTHER PERSON IS AUTHORIZED TO GIVE ANY INFORMATION
OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS OR THE APPLICABLE
PROSPECTUS SUPPLEMENT. IF GIVEN OR MADE, THAT INFORMATION OR REPRESENTATION MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR BY ANY AGENT,
UNDERWRITER OR DEALER. THIS PROSPECTUS DOES NOT, AND NO PROSPECTUS SUPPLEMENT
WILL, CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, BY ANY
PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL FOR THAT PERSON TO MAKE SUCH
AN OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS OR ANY
PROSPECTUS SUPPLEMENT NOR ANY SALE OF SECURITIES WILL, UNDER ANY CIRCUMSTANCES,
IMPLY THAT THE INFORMATION IN THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT IS
CORRECT AT ANY TIME AFTER ITS DATE.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
AVAILABLE INFORMATION....................................... 2
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE............. 3
THE COMPANY................................................. 4
USE OF PROCEEDS............................................. 4
RATIO OF EARNINGS TO FIXED CHARGES.......................... 5
DESCRIPTION OF DEBT SECURITIES.............................. 5
DESCRIPTION OF WARRANTS..................................... 8
DESCRIPTION OF CAPITAL STOCK................................ 8
DESCRIPTION OF DEPOSITARY SHARES............................ 9
LEGAL MATTERS............................................... 11
EXPERTS..................................................... 11
</TABLE>
AVAILABLE INFORMATION
Lennar Corporation ("Lennar" or the "Company") is subject to the
informational requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and in accordance therewith files reports, proxy
statements and other information with the Securities and Exchange Commission
(the "Commission"). The reports, proxy statements and other information filed by
the Company with the Commission can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549, and at the Regional Offices of
the Commission located at 7 World Trade Center, New York, New York 10048 and
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Copies of such information also can be obtained from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. The Commission maintains a web site that contains reports,
proxy and information statements and other information regarding registrants
that file electronically with the Commission. The Commission's web site can be
accessed at http://www.sec.gov. The Common Stock of the Company is listed on the
New York Stock Exchange. Reports, proxy statements and other information filed
by the Company can be inspected at the offices of the New York Stock Exchange,
20 Broad Street, New York, New York 10005.
The Company has filed with the Commission a Registration Statement on Form
S-3 (together with any amendments or supplements, the "Registration Statement")
under the Securities Act of 1933, as amended (the "Securities Act"), of which
this Prospectus is a part. This Prospectus does not contain all the information
set forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. For further
information, reference is made to the Registration Statement, which may be
inspected and copied at, or obtained from, the Commission or the New York Stock
Exchange in the manner described above.
2
<PAGE> 33
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company is the surviving corporation of a merger of Lennar and Pacific
Greystone Corporation ("Greystone") which became effective on October 31, 1997.
The following documents previously filed by Greystone with the Commission
under the File Number 1-11749 (unless otherwise indicated) are incorporated by
reference in this Prospectus:
(a) Greystone's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996, as amended by a Form 10-K/A dated September 26, 1997;
(b) Greystone's Quarterly Reports on Form 10-Q for the calendar
quarters ended March 31, 1997, as amended by a Form 10-Q/A dated September
26, 1997, June 30, 1997, as amended by a Form 10-Q/A dated September 26,
1997, and September 30, 1997;
(c) Greystone's Current Report on Form 8-K, dated June 17, 1997;
(d) Greystone's Registration Statement on Form S-4 under the
Securities Act, File Number 333-35671; and
(e) the description of Greystone's common stock contained in
Greystone's Registration Statement on Form 8-A, dated May 20, 1996.
The following documents previously filed by Lennar with the Commission
under the File Number 1-6643 are incorporated by reference in this Prospectus:
(a) Lennar's Annual Report on Form 10-K for the fiscal year ended
November 30, 1996 as amended by a Form 10-K/A dated September 26, 1997; and
(b) Lennar's Quarterly Reports on Form 10-Q for the quarters ended
February 28, 1997, May 31, 1997 and August 31, 1997.
The following documents previously filed by the Company with the Commission
under the File Number 1-11749 are incorporated by reference in this Prospectus:
(a) the Company's Report on Form 8-K filed on November 17, 1997; and
(b) the Company's Report on Form 8-K filed on December 18, 1997.
All documents and reports filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus and
prior to the termination of the offering made by this Prospectus will be deemed
to be incorporated by reference in this Prospectus and to be a part of this
Prospectus from the dates they are filed. Any statement contained in a document
incorporated or deemed to be incorporated by reference in this Prospectus will
be deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained in this Prospectus or in any subsequently
filed document which also is or is deemed to be incorporated by reference in
this Prospectus modifies or supersedes the statement in the earlier document.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon written or oral request, a copy of the documents
incorporated by reference in this Prospectus, other than exhibits to those
documents which are not specifically incorporated by reference. Requests should
be directed to: Lennar Corporation, 700 Northwest 107th Avenue, Miami, Florida
33172, Attention: Director of Shareholder Relations (Telephone: (305) 559-4000).
3
<PAGE> 34
THE COMPANY
The Company is engaged in homebuilding and related activities, primarily in
Florida, California, Texas, Arizona and Nevada. It is the surviving corporation
of a merger between Lennar Corporation and Pacific Greystone Corporation, which
became effective on October 31, 1997. Prior to October 31, 1997, Lennar also was
engaged in real estate investment and management activities. However, on October
31, 1997, Lennar distributed to its stockholders all the shares of LNR Property
Corporation, the parent of the group of Lennar subsidiaries which conducted real
estate investment and management activities.
Lennar Corporation and its predecessor had been building homes since 1954.
The Company believes that since 1986, Lennar each year delivered more homes in
Florida than any other homebuilder. Lennar had been building homes in Arizona
since 1972. It began building homes in Texas in 1991 and in 1996 it entered the
California homebuilding market. By the time of the merger, Lennar had
constructed and sold over 130,000 homes.
Through financial services subsidiaries, Lennar provided (and the Company
continues to provide) conventional, FHA-insured and VA-guaranteed mortgage loans
to buyers of Lennar's homes and others from offices in Florida, California,
Arizona, Texas, North Carolina and Maryland. In 1996, loans to buyers of
Lennar's homes represented approximately one-third of Lennar's $527 million of
residential loan originations. Lennar also arranged and provided (and the
Company continues to arrange and provide) title insurance for, and closing
services to, buyers of its homes and others. During 1996, Lennar formed a
subsidiary (which now is a subsidiary of the Company) to provide cable
television, alarm monitoring and telephone services to residents of Lennar
communities and possibly others.
Greystone was a regional builder of high quality, single family homes
primarily targeted to first-time and move-up homebuyers in infill and emerging
markets located throughout northern and southern California, as well as in the
Las Vegas and Phoenix areas. Greystone offered mortgage brokerage services
exclusively to its customers in most of its markets. It did not originate, fund
or service loans.
USE OF PROCEEDS
Except as may be set forth in the accompanying Prospectus Supplement, the
net proceeds from the sale of Securities will be applied by the Company for
general corporate purposes, which may include the repayment of indebtedness
outstanding from time to time, acquisitions and other general corporate
purposes.
4
<PAGE> 35
RATIO OF EARNINGS TO FIXED CHARGES
The Company's ratios of earnings to fixed charges for the nine months ended
August 31, 1997 and for the years ended November 30, 1992 through 1996 (which
are the historical amounts for Lennar before its merger with Pacific Greystone
and before the distribution to its stockholders of the subsidiaries which
conducted its real estate investment and management activities), were as
follows:
<TABLE>
<CAPTION>
NINE MONTHS
ENDED YEARS ENDED NOVEMBER 30,
AUGUST 31, ------------------------------------
1997 1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed
charges(1)........................ 3.2x 3.7x 3.7x 3.8x 3.3x 2.1x
Ratio of earnings to fixed charges
(excluding limited purpose finance
subsidiaries)(1).................. 3.3x 3.9x 4.2x 4.9x 4.9x 3.4x
</TABLE>
- ------------------------------
(1) For the purpose of calculating the ratio of earnings to fixed charges,
"earnings" consist of income before income taxes and cumulative effect of
changes in accounting principles plus "fixed charges." "Fixed charges"
consist of interest on all indebtedness (neither the Company nor any of its
subsidiaries has any material original issue discount or capitalized lease
obligations).
There was no Preferred Stock outstanding for any of the periods shown
above. Accordingly, the ratio of earnings to combined fixed charges and
Preferred Stock dividends is identical to the ratio of earnings to fixed
charges.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities will be issued under an Indenture (the "Indenture")
dated as of December 31, 1997 between the Company and The First National Bank of
Chicago, as Trustee (the "Trustee"). The following statements are subject to the
detailed provisions of the Indenture and are qualified in their entirety by
reference to the Indenture, a copy of which is filed as an exhibit to the
Registration Statement of which this Prospectus is a part and is also available
for inspection at the office of the Trustee. All references to "Section,"
"Article" or "Paragraph" in this section refer to the applicable Section or
Article of the Indenture or the applicable Paragraph in the form of Debenture
included in the Indenture, as the case may be.
GENERAL
The Debt Securities will be direct, unsecured obligations of the Company
and will rank equally with all other unsecured and unsubordinated indebtedness
of the Company. The Indenture does not limit the principal amount of Debt
Securities that may be issued. The Debt Securities may be issued in one or more
series. Specific terms of each series of Debt Securities will be contained in a
supplemental indenture relating to that series. There will be Prospectus
Supplements relating to particular series of Debt Securities. Each Prospectus
Supplement will describe, as to the Debt Securities to which it relates: (i) the
title of the Debt Securities; (ii) any limit upon the aggregate principal amount
of a series of Debt Securities which may be issued; (iii) the date or dates on
which principal of the Debt Securities will be payable and the amount of
principal which will be payable; (iv) the rate or rates (which may be fixed or
variable) at which the Debt Securities will bear interest, if any, as well as
the dates from which interest will accrue, the dates on which interest will be
payable, the persons to whom interest will be payable, if other than the
registered holders on the record date and the record date for the interest
payable on any payment date; (v) the currency or currencies in which principal,
premium, if any, and interest, if any, will be paid; (vi) the place or places
where principal,
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<PAGE> 36
premium, if any, and interest, if any, on the Debt Securities will be payable
and where Debt Securities which are in registered form can be presented for
registration of transfer or exchange; (vii) any provisions regarding the right
of the Company to redeem Debt Securities or of holders to require the Company to
redeem Debt Securities; (viii) the right, if any, of holders of the Debt
Securities to convert them into Common Stock or other Securities of the Company,
including any provisions intended to prevent dilution of the conversion rights
or otherwise; (ix) any provisions by which the Company will be required or
permitted to make payments to a sinking fund which will be used to redeem Debt
Securities or a purchase fund which will be used to purchase Debt Securities;
(x) any index or formula used to determine the required payments of principal,
premium, if any, or interest; (xi) the percentage of the principal amount of the
Debt Securities which is payable if maturity of the Debt Securities is
accelerated because of a default; (xii) any special or modified Events of
Default or covenants with respect to the Debt Securities; and (xiii) any other
material terms of the Debt Securities.
The Indenture does not contain any restrictions on the payment of dividends
or the repurchase of securities of the Company or any financial covenants.
However, supplemental indentures relating to particular series of Debt
Securities may contain provisions of that type.
Debt Securities may be issued at a discount from their stated principal
amount. Federal income tax considerations and other special considerations
applicable to a Debt Security issued with original issue discount may be
described in the Prospectus Supplement relating to that Debt Security.
If the principal of, premium, if any, or interest with regard to any series
of Debt Securities is payable in a foreign currency, any restrictions on
conversion, tax consideration or other material restrictions with respect to
that issue of Debt Securities will be described in the Prospectus Supplement
relating to those Debt Securities.
FORM OF DEBT SECURITIES
Debt Securities may be certificated or uncertificated and may be issued in
registered form with or without coupons or in bearer form with coupons, if
applicable.
Debt Securities of a series may be evidenced by one or more global
certificates, which will be in denominations equal to all or a portion of the
aggregate principal amount of the Debt Securities of that series. The global
certificates may be deposited with depositaries and may be subject to
restrictions upon transfer or upon exchange for Debt Securities in individually
certificated form.
EVENTS OF DEFAULT AND REMEDIES
An Event of Default with respect to the Debt Securities of any series
("Series Debt") is defined in the Indenture as being a default in payment of the
principal of or premium, if any, on any of the Series Debt; default for 30 days
(or another period specified in a Supplemental Indenture, which may be no
period) in payment of any installment of interest on the Series Debt; default by
the Company for 60 days after notice in the observance or performance of any
other covenants in the Indenture and certain events involving bankruptcy,
insolvency or reorganization of the Company (Section 6.01). The Indenture
provides that the Trustee may withhold notice to the holders of Series Debt of
any default (except a default in payment of principal, premium, if any, or
interest, if any, with respect to the Series Debt) if the Trustee considers it
in the interest of the holders of the Series Debt to do so (Section 7.05).
The Indenture provides that if any Event of Default has occurred and is
continuing, the Trustee or the holders of not less than 25% in principal amount
of the Series Debt then outstanding may declare the principal of and accrued
interest, if any, on all the Series Debt to be due and payable immediately.
However, if the Company cures all defaults (except the
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<PAGE> 37
failure to pay principal, premium or interest which became due solely because of
the acceleration) and certain other conditions are met, that declaration may be
annulled and past defaults may be waived by the holders of a majority in
principal amount of the Series Debt then outstanding (Section 6.02).
The holders of a majority in principal amount of the Series Debt then
outstanding will have the right to direct the time, method and place of
conducting any proceedings for any remedy available to the Trustee, subject to
certain limitations specified in the Indenture (Section 6.05).
Any additional Events of Default with respect to any series of Debt
Securities, and any variations from the Events of Default described above, which
apply to any series of Debt Securities, will be described in a Prospectus
Supplement.
MODIFICATION OF THE INDENTURE
The Indenture contains provisions permitting the Company and the Trustee,
(a) with the consent of the holders of not less than a majority in principal
amount of the Debt Securities at the time outstanding, to modify the Indenture
or any supplemental indenture or the rights of the holders of the Debt
Securities generally, and (b) with the consent of the holders of not less than a
majority in principal amount of any Series Debt, to modify any supplemental
indenture relating solely to that Series Debt or the rights of the holders of
that Series Debt, except that no modification may (i) extend the fixed maturity
of any Debt Securities, reduce the rate or extend the time for payment of
interest on any Debt Securities, reduce the principal amount of any Debt
Securities or premium, if any, on Debt Securities, impair or affect the right of
a holder to institute suit for the payment of principal, premium, if any, or
interest, if any, change the currency in which any Debt Securities are payable
or impair the right, if any, to convert any Debt Securities into Common Stock or
other securities of the Company, without the consent of each holder of Debt
Securities who will be affected, or (ii) reduce the percentage of Debt
Securities or Series Debt required to consent to an amendment, supplement or
waiver, without the consent of the holders of all the then outstanding Debt
Securities or of the Series Debt which will be affected (Section 9.02).
MERGERS AND OTHER TRANSACTIONS
The Company may not consolidate with or merge into any other corporation,
or transfer or lease its properties and assets substantially as an entirety to
another person unless (i) the corporation formed by the consolidation or into
which the Company is merged, or which acquires or leases the properties and
assets of the Company substantially as an entirety, assumes by a supplemental
indenture the Company's obligations with regard to outstanding Debt Securities
and the other covenants of the Company under the Indenture, and (ii) immediately
after giving effect to the transaction no Event of Default, and no event which
would become an Event of Default, will have occurred and be continuing.
CONCERNING THE TRUSTEE
The First National Bank of Chicago, the Trustee under the Indenture,
provides, and may continue to provide, banking services to the Company in the
ordinary course of its business.
GOVERNING LAW
The Indenture, each Supplemental Indenture, and the Debt Securities will be
governed by, and construed in accordance with, the laws of the State of New York
(Section 12.09).
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<PAGE> 38
DESCRIPTION OF WARRANTS
Each issue of Warrants will be the subject of an agreement (a "Warrant
Agreement") which will contain the terms of the Warrants. There will be a
Prospectus Supplement with regard to each issue of Warrants. Each Prospectus
Supplement will describe, as to the Warrants to which it relates: (i) the
securities which may be purchased by exercising the Warrants (which may be
Common Stock, Preferred Stock, Debt Securities, Depositary Shares or units
consisting of two or more of those types of Securities); (ii) the exercise price
of the Warrants (which may be wholly or partly payable in cash or wholly or
partly payable with other types of consideration); (iii) the period during which
the Warrants may be exercised; (iv) any provision adjusting the Securities which
may be purchased on exercise of the Warrants and the exercise price of the
Warrants in order to prevent dilution or otherwise; (v) the place or places
where Warrants can be presented for exercise or for registration of transfer or
exchange; and (vi) any other material terms of the Warrants.
DESCRIPTION OF CAPITAL STOCK
The Company's authorized capital stock is 100,000,000 shares of Common
Stock, $.10 par value, 30,000,000 shares of Class B Common Stock, $.10 par
value, and 500,000 shares of Preferred Stock, $10 par value. At November 30,
1997, 43,227,081 shares of Common Stock and 9,936,631 shares of Class B Common
Stock were outstanding.
PREFERRED STOCK
The Preferred Stock may be issued in series with any rights and preferences
which may be authorized by the Company's Board of Directors. There will be
Prospectus Supplements relating to particular series of Preferred Stock. Each
Prospectus Supplement will describe, as to the Preferred Stock to which it
relates: (i) the title of the Preferred Stock; (ii) any limit upon the number of
shares of the series of Preferred Stock which may be issued; (iii) the
preference, if any, to which holders of the series of Preferred Stock will be
entitled upon liquidation of the Company; (iv) the date or dates on which the
Company will be required or permitted to redeem the Preferred Stock; (v) the
terms, if any, on which the Company or holders of the Preferred Stock will have
the option to cause the Preferred Stock to be redeemed; (vi) the voting rights
of the holders of the Preferred Stock; (vii) the dividends, if any, which will
be payable with regard to the series of Preferred Stock (which may be fixed
dividends or participating dividends and may be cumulative or non-cumulative);
(viii) the right, if any, of holders of the Preferred Stock to convert it into
another class of stock or Securities of the Company, including provisions
intended to prevent dilution of those conversion rights; (ix) any provisions by
which the Company will be required or permitted to make payments to a sinking
fund which will be used to redeem Preferred Stock or a purchase fund which will
be used to purchase Preferred Stock; and (x) any other material terms of the
Preferred Stock. Holders of shares of Preferred Stock do not have preemptive
rights.
COMMON STOCK
All the outstanding shares of Common Stock are fully paid and nonassessable
and entitled to participate equally and ratably in dividends and in
distributions available for the Common Stock on liquidation. Each share is
entitled to one vote for the election of directors and upon all other matters on
which the common stockholders vote. Holders of Common Stock are not entitled to
cumulative votes in the election of Directors.
The transfer agent and registrar for the Common Stock is Boston Equiserve
L.P., Canton, Massachusetts.
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<PAGE> 39
CLASS B COMMON STOCK
The Class B Common Stock is identical in every respect with the Common
Stock, except that (a) each share of Class B Common Stock is entitled to ten
votes on each matter submitted to the vote of the common stockholders, while
each share of Common Stock is entitled to only one vote on each matter submitted
to the vote of the common stockholders, (b) the cash dividends, if any, paid
with regard to the Class B Common Stock in a year cannot be more than 90% of the
cash dividends, if any, paid with regard to the Common Stock in that year, (c)
Class B Common Stock cannot be transferred, except to a limited group of
Permitted Transferees (primarily close relatives of the Class B stockholder,
fiduciaries for the Class B stockholder or for close relatives, and entities of
which the Class B stockholder or close relatives are majority owners), (d) Class
B Common Stock may at any time be converted into Common Stock, but Common Stock
may not be converted into Class B Common Stock, (e) amendments to provisions of
the Company's Certificate of Incorporation relating to the Common Stock or the
Class B Common Stock require the approval of a majority of the shares of Common
Stock which are voted with regard to them (as well as a majority in voting power
of all the outstanding Common Stock and Class B Common Stock combined), and (f)
under Delaware law, certain matters affecting the rights of holders of Class B
Common Stock may require approval of the holders of the Class B Common Stock
voting as a separate class.
Leonard Miller, the Chairman of the Board of the Company, currently owns,
through two limited partnerships of which a corporation wholly-owned by him is
the sole general partner, 9,897,930 shares of Class B Common Stock, which is
99.6% of the outstanding Class B Common Stock and 18.6% of the outstanding
common stock of both classes. Mr. Miller's Class B Common Stock gives him 69.4%
of the total votes which can be cast by the holders of both classes of Common
Stock. Even if Mr. Miller converted 4,581,558 shares of Class B Common Stock
into Common Stock and sold that Common Stock, thereby reducing his holdings to
10% of the total common stock of both classes, Mr. Miller would be entitled to
cast more than 50% of the votes. Mr. Miller has no current intention to convert
any Class B Common Stock into Common Stock, or to sell any Common Stock,
although, unless otherwise stated in a particular Prospectus Supplement under
"Underwriting," he would be free to do so at any time.
The existence of Class B Common Stock, which has substantially greater
voting rights than the Common Stock, probably would have the effect of
discouraging non-negotiated tender offers and other types of non-negotiated
takeovers, if any were contemplated. Mr. Miller's ownership of Class B Common
Stock would make it impossible for anyone to acquire shares which have voting
control of the Company as long as Mr. Miller's Class B Common Stock represents
at least 9.6% of the combined common stock of both classes and the total
outstanding Class B Common Stock is at least 10% of the combined common stock of
both classes (if at any time the outstanding shares of Class B Common Stock are
less than 10% of the outstanding shares of both classes of common stock taken
together, the Class B Common Stock will automatically be converted into Common
Stock). However, because Mr. Miller owns 99.6% of the outstanding Class B Common
Stock, at the current level of outstanding Common Stock, in order for the Class
B Common Stock to be at least 10% of the outstanding shares of both classes of
common stock, Mr. Miller's Class B Common Stock would be at least 9.93% of the
common stock of both classes.
DESCRIPTION OF DEPOSITARY SHARES
The Company may issue receipts ("Depositary Receipts") representing
fractional interests in shares of particular series of Preferred Stock
("Depositary Shares"). The Company will deposit the Preferred Stock of a series
which is the subject of Depositary Shares with a Depositary, which will hold
that Preferred Stock for the benefit of the holders of the Depositary Shares, in
accordance with a Deposit Agreement between the Company and the Depositary.
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<PAGE> 40
The holders of Depositary Shares will be entitled to all the rights and
preferences of the series of Preferred Stock to which the Depositary Shares
relate, including dividend, voting, conversion, redemption and liquidation
rights, to the extent of their interests in that Preferred Stock.
While the Deposit Agreement relating to a particular series of Preferred
Stock may have provisions applicable solely to that series of Preferred Stock,
all Deposit Agreements relating to Preferred Stock issued by the Company will
include the following provisions:
Dividends and Other Distributions. Each time the Company pays a cash
dividend or makes any other type of cash distribution with regard to Preferred
Stock of a series, the Depositary will distribute to the holder of record of
each Depositary Share relating to that series of Preferred Stock an amount equal
to the total dividend or other distribution received by the Depositary on the
Preferred Stock of the series held by it divided by the total number of
outstanding Depositary Shares relating to the series (which will be the same
fraction of the dividend or other distribution paid per share of Preferred Stock
that each Depositary Share is of a share of Preferred Stock). If there is a
distribution of property other than cash, the Depositary either will distribute
the property to the record holders of Depositary Shares in proportion to the
Depositary Shares held by each of them, or the Depositary will, with the
approval of the Company, sell the property and distribute the net proceeds from
the sale to the record holders of the Depositary Shares in proportion to the
Depositary Shares held by them.
Withdrawal of Preferred Stock. A holder of Depositary Shares will be
entitled to receive, upon surrender of Depositary Receipts representing
Depositary Shares, the number of whole or fractional shares of the applicable
series of Preferred Stock, and any money or other property, to which the
Depositary Shares relate.
Redemption of Depositary Shares. Whenever the Company redeems shares of
Preferred Stock held by a Depositary, the Depositary will be required to redeem,
on the same redemption date, Depositary Shares constituting, in total, the
number of shares of Preferred Stock held by the Depositary which are redeemed,
subject to the Depositary's receiving the redemption price of those shares of
Preferred Stock. If fewer than all the Depositary Shares are to be redeemed, the
Depositary Shares to be redeemed will be selected pro rata or by another method
determined by the Company to be equitable.
Voting. Any time the Company sends the holders of a series of Preferred
Stock to which Depositary Shares relate a notice of meeting or other materials
relating to a meeting of the holders of that series of Preferred Stock, the
Company will provide the Depositary with sufficient copies of those materials so
they can be sent to all holders of record of the applicable Depositary Shares on
the record date for the meeting, and the Depositary will send those materials to
the holders of record of the Depositary Shares on that record date. The
Depositary will solicit voting instructions from holders of Depositary Shares
and will vote or not vote the Preferred Stock to which the Depositary Shares
relate in accordance with those instructions.
Liquidation Preference. Upon liquidation, dissolution or winding up of the
Company, the holder of each Depositary Share will be entitled to a fraction of
the sum distributed to the holder of a share of the applicable series of
Preferred Stock equal to the fraction of a share of that Preferred Stock
represented by the Depositary Share.
Conversion. If shares of a series of Preferred Stock are convertible into
Common Stock or other securities or property of the Company, holders of
Depositary Shares relating to that series of Preferred Stock will, if they
surrender Depositary Receipts representing Depositary Shares and appropriate
instructions to convert them, receive the shares of Common Stock or other
securities or property into which the number of shares (or fractions of shares)
of Preferred Stock to which the Depositary Shares relate could at the time be
converted.
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Amendment and Termination of a Deposit Agreement. A Deposit Agreement may
be amended by the Company and the Depositary, except that an amendment which
materially and adversely affects the rights of holders of Depositary Shares or
would be materially and adversely inconsistent with the rights granted to the
holders of the Preferred Stock to which they relate, must be approved by holders
of at least two-thirds of the outstanding Depositary Shares. No amendment will
impair the right of a holder of Depositary Shares to surrender the Depositary
Receipts evidencing those Depositary Shares and receive the Preferred Stock to
which they relate, except as required to comply with law. A Deposit Agreement
may be terminated by the Company with the consent of holders of a majority of
the Depositary Shares to which it relates. Upon termination of a Deposit
Agreement, the Depositary will make the whole or fractional shares of Preferred
Stock to which the Depositary Shares issued under the Deposit Agreement relate
available to the holders of those Depositary Shares. A Deposit Agreement will
automatically terminate if (i) all outstanding Depositary Shares to which it
relates have been redeemed or converted or (ii) a final distribution upon
liquidation, dissolution or winding up of the Company has been made to the
holders of the Depositary Shares issued under the Deposit Agreement.
Miscellaneous. There will be provisions (i) requiring the Depositary to
forward to holders of record of Depositary Shares any reports or communications
from the Company which are received by the Depositary with respect to the
Preferred Stock to which the Depositary Shares relate, (ii) regarding
compensation of the Depositary, (iii) regarding resignation of the Depositary,
(iv) limiting the liability of the Company and the Depositary under the Deposit
Agreement (usually to failure to act in good faith, gross negligence or wilful
misconduct) and (v) indemnifying the Depositary against certain possible
liabilities.
LEGAL MATTERS
The validity of the Securities offered by this Prospectus will be passed
upon for the Company by Rogers & Wells, 200 Park Avenue, New York, New York
10166. If the validity of any Securities is also passed upon by counsel for the
underwriters of an offering of those Securities, that counsel will be named in
the Prospectus Supplement relating to that offering.
EXPERTS
The consolidated financial statements and the related financial statement
schedules of Lennar Corporation and subsidiaries incorporated by reference
herein and elsewhere in the Registration Statement from Lennar's Annual Report
on Form 10-K for the fiscal year ended November 30, 1996, as amended by a Form
10-K/A dated September 26, 1997, have been audited by Deloitte & Touche LLP,
independent auditors, as stated in their reports, which are incorporated by
reference herein, and have been so incorporated in reliance upon the reports of
such firm given upon their authority as experts in accounting and auditing.
The consolidated financial statements of Pacific Greystone Corporation
appearing in Pacific Greystone Corporation's Annual Report, as amended, (Form
10-K/A) for the year ended December 31, 1996, have been audited by Ernst & Young
LLP, independent auditors, as set forth in their report thereon included therein
and incorporated herein by reference. Such consolidated financial statements are
incorporated herein by reference in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
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WE HAVE NOT AUTHORIZED ANYONE TO GIVE YOU ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS ABOUT THE TRANSACTIONS WE DISCUSS IN THIS PROSPECTUS SUPPLEMENT
OR THE ACCOMPANYING PROSPECTUS OTHER THAN THOSE CONTAINED IN THEM. IF YOU ARE
GIVEN ANY INFORMATION OR REPRESENTATIONS ABOUT THESE MATTERS THAT IS NOT
DISCUSSED IN THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS, YOU MUST
NOT RELY ON THAT INFORMATION. THIS PROSPECTUS SUPPLEMENT IS NOT AN OFFER TO SELL
OR A SOLICITATION OF AN OFFER TO BUY SECURITIES ANYWHERE OR TO ANYONE WHERE OR
TO WHOM WE ARE NOT PERMITTED TO OFFER OR SELL SECURITIES UNDER APPLICABLE LAW.
THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND ANY SALE OF SECURITIES OFFERED BY
THIS PROSPECTUS SUPPLEMENT DOES NOT, UNDER ANY CIRCUMSTANCES, MEAN THAT THERE
HAS NOT BEEN A CHANGE IN OUR AFFAIRS SINCE THE DATE HEREOF. IT ALSO DOES NOT
MEAN THAT THE INFORMATION IN THIS PROSPECTUS SUPPLEMENT IS CORRECT AFTER THIS
DATE.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
PROSPECTUS SUPPLEMENT
Prospectus Supplement Summary......... S-3
Risk Factors.......................... S-10
Use of Proceeds....................... S-12
Capitalization........................ S-13
Business.............................. S-14
Description of Notes.................. S-18
Underwriting.......................... S-29
Legal Matters......................... S-30
Experts............................... S-30
PROSPECTUS
Available Information................. 2
Incorporation of Certain Documents by
Reference........................... 3
The Company........................... 4
Use of Proceeds....................... 4
Ratio of Earnings to Fixed Charges.... 5
Description of Debt Securities........ 5
Description of Warrants............... 8
Description of Capital Stock.......... 8
Description of Depositary Shares...... 9
Legal Matters......................... 11
Experts............................... 11
</TABLE>
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$200,000,000
[LENNAR CORPORATION LOGO]
% SENIOR NOTES
DUE 2009
----------------------------------------
PROSPECTUS SUPPLEMENT
----------------------------------------
Joint Book-Running Managers
BT ALEX. BROWN
SALOMON SMITH BARNEY
Co-Managers
WARBURG DILLON READ LLC
FIRST CHICAGO CAPITAL
MARKETS, INC.
FEBRUARY , 1999
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