[Sign Up Now] to Receive Our FREE Daily SCVTV-SCVNews Digest by E-Mail

Inside
Weather
Santa Clarita CA
Sunny
Sunny
89°F
 
Calendar
Today in
S.C.V. History
July 20
2001 - Then-Assemblyman George Runner introduces legislation to memorialize the historic Ridge Route. Enacted Oct. 4. [story]


lennarlogo* Net earnings of $144.1 million, or $0.63 per diluted share, compared to net earnings of $115.0 million, or $0.50 per diluted share

* Deliveries of 4,832 homes – up 12%

* New orders of 5,794 homes – up 10%; new orders dollar value of $2.1 billion – up 15%

* Backlog of 7,670 homes – up 13%; backlog dollar value of $2.8 billion – up 19%

* Revenues of $2.0 billion – up 21%

* Lennar Homebuilding operating earnings of $220.6 million, compared to $207.6 million – up 6%

* Gross margin on home sales of 22.7%, compared to 23.1% in Q1 2015

* S,G&A expenses as a % of revenues from home sales improved to 10.8% from 11.4% in Q1 2015

* Operating margin on home sales improved to 11.9% from 11.7% in Q1 2015

* Lennar Financial Services operating earnings of $14.9 million, compared to $15.5 million

* Rialto operating earnings (net of noncontrolling interests) of $1.9 million, compared to $4.6 million

* Lennar Multifamily operating earnings of $12.2 million, compared to an operating loss of $5.7 million

* Lennar Multifamily Venture received an additional $300 million of equity commitments, increasing total equity commitments to $1.4 billion

* Lennar Homebuilding cash and cash equivalents of $511 million

* Lennar Homebuilding debt to total capital, net of cash and cash equivalents, of 45.3%

* In March 2016, Lennar issued $500 million of 4.750% senior notes due 2021

 

Lennar Corp., one of the nation’s largest homebuilders, reported results March 29 for its first quarter ended February 29, 2016. First quarter net earnings attributable to Lennar in 2016 were $144.1 million, or $0.63 per diluted share, compared to first quarter net earnings attributable to Lennar in 2015 of $115.0 million, or $0.50 per diluted share.

Stuart Miller, Chief Executive Officer of Lennar Corporation, said, “We are very pleased with our first quarter results as we achieved pre-tax earnings of $201.7 million, our highest first quarter pre-tax earnings since 2006. Despite global economic concerns and volatility in the stock market, our net earnings increased 25% year-over-year and we had solid performances in most of our businesses. We continue to believe that the housing market is continuing its slow and steady recovery driven by years of under production, tight inventory levels, attractive interest rates and the lowest unemployment levels since 2008.”

Mr. Miller continued, “Our core homebuilding business continued to produce strong operating results in the first quarter of 2016 as gross and operating margins were 22.7% and 11.9%, respectively. The continued focus on digital marketing helped to improve S,G&A as a percentage of revenues from home sales to 10.8%, our lowest first quarter percentage. In the first quarter of 2016, our average sales price of homes delivered increased 12% year-over-year to $365,000, the highest in the Company’s history, from $326,000 in the first quarter of 2015. Our home sales revenues and new orders dollar value increased 25% and 15%, respectively, compared to the same period last year. Our sales backlog dollar value increased 19% from last year to approximately $2.8 billion, keeping us well positioned going forward.

“Complementing our homebuilding business, our Financial Services business reported strong earnings of $14.9 million in our first quarter, consistent with prior year, despite a decrease in refinance transactions year-over-year.

“Our Multifamily business generated $12.2 million of earnings in the first quarter of 2016, primarily due to the sale of an apartment property by one of its joint ventures. In addition, during the first quarter of 2016, the Lennar Multifamily Venture continued to grow as it received an additional $300 million of equity commitments, increasing its total equity commitments to $1.4 billion.

“Finally, our Rialto business generated $1.9 million of income as the turmoil in the capital markets in the first quarter impacted the short-term performance of our Rialto mortgage finance and investment management businesses.  While the volatility in the markets leads us to reduce Rialto’s earnings expectations for the current year, it also has provided excellent investment opportunities to grow our best-in-class investment management platform.”

Mr. Miller concluded, “We began fiscal 2016 with strong operational results and a solid balance sheet. We believe we are well positioned across all of our platforms and for another year of strong profits in 2016.”

 

RESULTS OF OPERATIONS

THREE MONTHS ENDED FEBRUARY 29, 2016 COMPARED TO THREE MONTHS ENDED FEBRUARY 28, 2015

Lennar Homebuilding

Revenues from home sales increased 25% in the first quarter of 2016 to $1.8 billion from $1.4 billion in the first quarter of 2015. Revenues were higher primarily due to a 12% increase in the number of home deliveries, excluding unconsolidated entities, and a 12% increase in the average sales price of homes delivered. New home deliveries, excluding unconsolidated entities, increased to 4,806 homes in the first quarter of 2016 from 4,301 homes in the first quarter of 2015. There was an increase in home deliveries in all of the Company’s Homebuilding segments, except in Homebuilding Houston. The decrease in home deliveries in Houston was primarily due to less demand driven by volatility in the energy sector. The average sales price of homes delivered increased to $365,000 in the first quarter of 2016 from $326,000 in the first quarter of 2015. Sales incentives offered to homebuyers were $21,600 per home delivered in the first quarter of 2016, or 5.6% as a percentage of home sales revenue, compared to $21,800 per home delivered in the first quarter of 2015, or 6.3% as a percentage of home sales revenue, and $21,700 per home delivered in the fourth quarter of 2015, or 5.9% as a percentage of home sales revenue.

Gross margins on home sales were $398.9 million, or 22.7%, in the first quarter of 2016, compared to $324.8 million, or 23.1%, in the first quarter of 2015. Gross margin percentage on home sales decreased compared to the first quarter of 2015 primarily due to an increase in land costs, partially offset by an increase in the average sales price of homes delivered. Gross profits on land sales were $9.2 million in the first quarter of 2016, compared to $12.1 million in the first quarter of 2015.

Selling, general and administrative expenses were $189.8 million in the first quarter of 2016, compared to $160.4 million in the first quarter of 2015. As a percentage of revenues from home sales, selling, general and administrative expenses improved to 10.8% in the first quarter of 2016, from 11.4% in the first quarter of 2015, due to improved operating leverage as a result of an increase in home deliveries and benefits from the Company’s focus on digital marketing.

Lennar Homebuilding equity in earnings from unconsolidated entities was $3.0 million in the first quarter of 2016, compared to $28.9 million in the first quarter of 2015. In the first quarter of 2016, Lennar Homebuilding equity in earnings from unconsolidated entities included $6.0 million of equity in earnings from Heritage Fields El Toro, LLC, one of the Company’s unconsolidated entities (“El Toro”), primarily due to sales of approximately 220 homesites to third parties. This was partially offset by the Company’s share of net operating losses from various Lennar Homebuilding unconsolidated entities. In the first quarter of 2015, Lennar Homebuilding equity in earnings from unconsolidated entities included $31.3 million of equity in earnings primarily related to sales of approximately 600 homesites to third parties by El Toro, partially offset by the Company’s share of net operating losses from various Lennar Homebuilding unconsolidated entities.

Lennar Homebuilding other income, net, was $0.5 million in the first quarter of 2016, compared to $6.3 million in the first quarter of 2015. In the first quarter of 2015, other income, net included a $6.5 million gain on the sale of an operating property.

Lennar Homebuilding interest expense was $45.2 million in the first quarter of 2016 ($43.4 million was included in cost of homes sold, $0.7 million in cost of land sold and $1.2 million in other interest expense), compared to $38.0 million in the first quarter of 2015 ($33.5 million was included in cost of homes sold, $0.4 million in cost of land sold and $4.1 million in other interest expense). Interest expense included in cost of homes sold increased primarily due to an increase in the Company’s outstanding homebuilding debt and an increase in home deliveries. Other interest expense decreased due to an increase in qualifying assets eligible for interest capitalization.

 

Lennar Financial Services

Operating earnings for the Lennar Financial Services segment were $14.9 million in the first quarter of 2016, compared to $15.5 million in the first quarter of 2015. The slight decrease in profitability was primarily due to a decrease in refinance volume in the segment’s mortgage and title operations.

 

Rialto

Operating earnings for the Rialto segment were $1.9 million in the first quarter of 2016 (which included $1.6 million of operating earnings and an add back of $0.3 million of net loss attributable to noncontrolling interests), compared to operating earnings of $4.6 million in the first quarter of 2015 (which included $2.8 million of operating earnings and an add back of $1.8 million of net loss attributable to noncontrolling interests).

Revenues in this segment were $43.7 million in the first quarter of 2016, compared to $41.2 million in the first quarter of 2015. Revenues increased primarily due to higher interest income and the collection of deficiency settlements related to the loan portfolios, partially offset by a decrease in Rialto Mortgage Finance (“RMF”) securitization revenues due to lower securitization volume and margins. During the first quarter of 2016 and 2015, Rialto received $4.9 million and $6.5 million, respectively, of advanced distributions with regard to Rialto’s carried interests in its real estate funds in order to cover income tax obligations resulting from allocations of taxable income to Rialto’s carried interests in these funds.

Expenses in this segment were $42.9 million in the first quarter of 2016, compared to $40.8 million in the first quarter of 2015. Expenses increased primarily due to an increase in securitization expenses related to RMF and interest expense.

Rialto equity in earnings from unconsolidated entities was $1.5 million and $2.7 million in the first quarter of 2016 and 2015, respectively, related to Rialto’s share of earnings from its real estate funds. The decrease in equity in earnings was primarily related to mark downs of certain assets in the Rialto real estate funds (the “Funds”) and smaller net increases in the fair value of certain assets in the Funds in the first quarter of 2016 than in the same period last year.

 

Lennar Multifamily

Operating earnings for the Lennar Multifamily segment were $12.2 million in the first quarter of 2016, compared to an operating loss of $5.7 million in the first quarter of 2015. The increase in profitability was primarily due to the segment’s $20.4 million share of a gain as a result of the sale of an operating property by one of Lennar Multifamily’s unconsolidated entities.

Corporate General and Administrative Expenses

Corporate general and administrative expenses were $47.7 million, or 2.4% as a percentage of total revenues, in the first quarter of 2016, compared to $43.7 million, or 2.7% as a percentage of total revenues, in the first quarter of 2015. As a percentage of total revenues, corporate general and administrative expenses improved due to increased operating leverage.

 

Noncontrolling Interests

Net earnings attributable to noncontrolling interests were $1.4 million and $2.0 million in the first quarter of 2016 and 2015, respectively. Net earnings attributable to noncontrolling interests during both the first quarter of 2016 and 2015 were primarily attributable to earnings related to Lennar Homebuilding consolidated joint ventures, partially offset by a net loss related to the FDIC’s interest in the portfolio of real estate loans that the Company acquired in partnership with the FDIC.

 

Tax

The tax rate for the first quarter of 2016 was 28.08%, compared to 34.19% in the first quarter of 2015. The reduction was primarily the result of the reversal of an accrual due to a settlement with the IRS and increased benefit from energy tax credits.

 

Debt Transactions

During the first quarter of 2016, the Company paid and delivered approximately $163 million in cash and 3.6 million shares of Class A common stock on exchange or conversion of approximately $163 million aggregate principal amount of its 2.75% convertible senior notes due 2020. At February 29, 2016, approximately $71 million aggregate principal amount of the Company’s 2.75% convertible senior notes due 2020 was outstanding.

Subsequent to the first quarter of 2016, the Company issued $500 million of 4.750% senior notes due 2021. The net proceeds from the offering will be used for general corporate purposes, including the repayment of the 6.50% senior notes due 2016.

 

About Lennar

Lennar Corporation, founded in 1954, is one of the nation’s largest builders of quality homes for all generations. The Company builds affordable, move-up and retirement homes primarily under the Lennar brand name. Lennar’s Financial Services segment provides mortgage financing, title insurance and closing services for both buyers of the Company’s homes and others. Lennar’s Rialto segment is a vertically integrated asset management platform focused on investing throughout the commercial real estate capital structure. Lennar’s Multifamily segment is a nationwide developer of high-quality multifamily rental properties. Previous press releases and further information about the Company may be obtained at the “Investor Relations” section of the Company’s website,www.lennar.com.

Comment On This Story
COMMENT POLICY: We welcome comments from individuals and businesses. All comments are moderated. Comments are subject to rejection if they are vulgar, combative, or in poor taste.
REAL NAMES ONLY: All posters must use their real individual or business name. This applies equally to Twitter account holders who use a nickname.

0 Comments

You can be the first one to leave a comment.

Leave a Comment


Latest Additions to SCVNews.com
Four men allegedly stole a van and crashed it at Cinema Drive and Valencia Boulevard late Friday afternoon, breaking gas and water lines and snarling rush-hour traffic in the center of the city.
Suspected Van Thieves Crash, Rupture Gas, Water Lines in Valencia
The L.A. County Superior Court on July 17 sided with Los Angeles County and dismissed a portion of Chiquita Canyon LLC's complaint, which challenged 13 conditions of the county's conditional use permit governing how the landfill operates, Supervisor Kathryn Barger announced Friday.
Court Orders Chiquita Landfill to Comply with CUP, Pay County Nearly $12M
The Los Angeles County Arts Commission has announced $4,518,000 in two-year grants to 216 nonprofit arts organizations through its Organizational Grant Program, and the Santa Clarita Philharmonic Orchestra and the Santa Clarita Shakespeare Festival are among the grantees.
Santa Clarita Philharmonic, Shakespeare Festival Win County Arts Grants
The Santa Clarita Valley Water Agency's board of directors voted in its Tuesday meeting to revise its per-diem payment policy for board members attending industry-related meetings and conferences.
SCV Water Board Trims Own Meeting Attendance Pay
College of the Canyons men's basketball player Robert Moss will continue his playing career at University of Saint Katherine after committing to join the Firebirds program.
COC Hoopster Robert Moss Commits to University of Saint Katherine
When wives earn more than their husbands, a puzzling thing can happen: Husbands say they earn more than they are and wives underreport their income, according to new Census Bureau research.
Census Research: Spouses Report Earnings Differently When Wives Earn More
Responding to a booming economy and a generous state budget, administrators on Thursday approved the first tuition decrease for the University of California system in nearly 20 years.
University of California Cuts Tuition for First Time in 20 Years
The William S. Hart Union High School District and Spirit Holding, developers of Castaic High School, will host a community kick-off event on Friday, Aug. 3, from 8 a.m. to 10 a.m. celebrating the one-year countdown to the grand opening of the new school, currently under construction.
Aug. 3: ‘Countdown to Castaic High’ Public Celebration
The next meeting of the Los Angeles County Board of Supervisors is set for Tuesday, July 24, starting at 9:30 a.m.
July 24: LA County Board of Supervisors Meeting
The Los Angeles County Health Officer has issued a Heat Alert for Monday, July 23 and Tuesday, July 24, as high temperatures have been forecast for the Santa Clarita Valley.
SCV Heat Alert Called for Monday, Tuesday
The Lancaster JetHawks jumped out to a 4-0 lead, but two late home runs from Stockton's Sandber Pimentel led the Ports to victory in a 5-4 final on Thursday night at Banner Island Ballpark.
Lancaster Can’t Stop Pimentel, Ports
The U.S. Department of Health & Human Services and Department of Justice have made public the government's plan for the court-ordered reunification of children ages 5 years and older who were separated from their parents by immigration authorities.
Feds Detail Plan to Reunite Immigrant Children with Parents
2001 - Then-Assemblyman George Runner introduces legislation to memorialize the historic Ridge Route. Enacted Oct. 4. [story]
During a press conference on Thursday at the Gerdau steel mill in Rancho Cucamonga, Chief Eric Parra announced the destruction of 3,566 weapons confiscated within in Los Angeles County. This event comes typically in July, in compliance with California Penal Code 18005(c), which calls for weapons unable to be sold to the public or returned to their owners, to be destroyed.
More than 3,500 Weapons Destroyed at Annual Destruction Event
The Summer Art Festival, at the Oaks Club of Valencia, invites you to a fun, free artists’ reception on Saturday, Aug. 11, 5:00 p.m. - 8:00 p.m.
Aug. 11: Summer Art Festival at Oaks Club
When you think "Advanced Manufacturing," Santa Clarita Valley probably isn't the first thing that comes to mind.
SCV Paves the Way for Advanced Manufacturing
(CN) – Delivering a blow to a Silicon Valley billionaire, the California Supreme Court on Wednesday erased a November ballot measure proposing to divide the Golden State in three.
State Supreme Court Tosses Ballot Measure to Split California in Three
Internationally famous Doña Oxford aka “The Goddess of Soul,” is fronting one of the hottest Blues bands of the 21st century. She has toured all over the world, bringing her amazing keyboard playing and vocals to devoted fans in Europe, Japan, Canada and the United States.
July 20: Valencia Jazz & Blues Series to Feature Doña Oxford
No business is immune from the unthinkable. Workplace violence is an increasingly important topic for organizations of all types.
Aug. 21: Active Shooter Awareness Training at VIA Luncheon
St. Kateri Tekakwitha Parish Church is holding their 2nd Annual Summer Night Car Show Friday, Aug. 24 from 6:00 p.m. - 9:30 p.m.
Aug. 24: St. Kateri 2nd Annual Summer Night Car Show
The Los Angeles County Homeless Initiative and Los Angeles Homeless Services Authority on Thursday launched the Los Angeles Homeless Outreach Portal, dubbed LA-HOP, the new Countywide Web-based portal that channels outreach support to people experiencing homelessness.
County Launches Online Portal to Combat Homelessness
LOS ANGELES - Southern California Gas Co. (SoCalGas) announced Tuesday the company is now offering $75 rebates for residential customers who purchase eligible Energy Star certified smart thermostats that help residents manage their heating and cooling costs and conserve energy.
SoCal Gas Offering Rebates for Customers with Smart Thermostats
STOCKTON – Brian Serven put together one of his best offensive performances of the season to lead the JetHakwks to a 7-2 to win over the Stockton Ports on Wednesday night at Banner Island Ballpark.
Serven Leads JetHawks to Victory in Series Opener Against Stockton
The William S. Hart Union High School District’s Governing Board voted unanimously to approve the appointment of Brad Renison to become the new Director of Transportation. Most recently, Mr. Renison has been serving as the Interim Director of Transportation.
Hart District Names Brad Renison New Transportation Director
LOS ANGELES – The Los Angeles Dodgers today acquired four-time All-Star shortstop Manny Machado from the Baltimore Orioles in exchange for Rylan Bannon, Yusniel Díaz, Dean Kremer, Zach Pop and Breyvic Valera.
Dodgers Acquire 4-Time All-Star Manny Machado
The William S. Hart Union High School District’s Governing Board voted unanimously to approve the appointment of Dr. Catherine Nicholas to become the new principal of Sequoia School.
Hart District Appoints Dr. Catherine Nicholas as New Sequoia School Principal
Welcome to paradise at a high-energy, live show coming up in Santa Clarita’s Concerts in the Park series, presented by Logix Federal Credit Union, this Saturday, July 21, at 7:00 p.m., in Central Park (27150 Bouquet Canyon Road).
July 21: Concerts in the Park to Feature Green Day Tribute Band
SCV Sheriff's Crime Prevention Unit deputies and station detectives have noted an increase in the thefts of catalytic converters from cars in Santa Clarita Valley. The favored target of thieves has been the Toyota Prius (2005-2009).
Deputies Warn of Rise in Catalytic Converter Thefts from Prius Cars
LOS ANGELES – According to the South Coast Air Quality Management District, air quality will be unhealthy Thursday for sensitive individuals in San Gabriel Valley, Santa Clarita Valley and Antelope Valley.
Air Quality Advisory Issued for SCV
Would you like to be a volunteer at beautiful Red Rock Canyon State Park? Learn about the volunteer program and the park’s natural and cultural history at our two-day volunteer training, Saturdays, Sept. 1st and 8th from 9:00 a.m. - 3:00 p.m. at the Ricardo Visitor Center (new volunteers must attend both days).
Red Rock Canyon State Park to Hold 2-Day Volunteer Training
The California Department of Transportation (Caltrans) announces the scheduled closure of the Tejon Safety Roadside Rest Areas on Interstate 5 (Golden State Freeway) to replace a water main line.
Caltrans Announces Temporary Rest Area Closure on I-5 at Tejon
1924 - Sherman Block, L.A. County's 29th Sheriff (1982-1998), born in Chicago [story]
Santa Clarita Valley Sheriff's Station deputies have arrested a Santa Clarita woman who allegedly spray-painted walls on a city park building in Saugus early Tuesday morning, also discovering she was allegedly in possession of forged checks.
Woman Charged with Defacing Park Building, Check Forgery
The Paramount Network has set Aug. 11 as the premiere date of 'I Am Paul Walker,' a new film documentary tracing the life of the late actor, who was killed in a 2013 car crash in Valencia.
Aug. 11: Paul Walker Film Doc to Debut on Paramount Network
Marston's Restaurant in Valencia is helping raise funds for Carousel Ranch, Santa Clarita Valley nonprofit organization that provides equestrian therapy for disabled and special needs children and adults.
July 15-Aug. 15: Marston’s Restaurant Fundraising for Carousel Ranch
Members of Santa Clarita Valley home haunters Beware the Dark Realm will appear on a panel at the third annual "Midsummer Scream" Halloween Festival and scarefest at the Long Beach Convention Center on Saturday and Sunday, July 28-29.
July 28: SCV’s Beware the Dark Realm to Join Panel at Midsummer Scream