Lennar Corporation · NYSE:LEN
Lennar — Lennar Corp /New/ — UBS Building & Building Products 6th Annual CEO Conference 2008
27 slides from Lennar's conference presentation, Nov 12, 2008
Slide 1: UBS Building & Building Products 6th Annual CEO Conference
UBS Building & Building Products 6 Annual CEO Conference November 2008 Exhibit 99.1 th
Slide 2: Disclaimer Statement
1 This presentation includes "forward-looking statements," as that term is defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements regarding our business, financial condition, results of operations, cash flows, strategies and prospects. Yo
Slide 3: Business Overview
2 Business Overview
Slide 4: Market Conditions Remain Challenging
3 Business Overview Market Conditions Remain Challenging Business Overview Market Conditions Remain Challenging Market weakness has accelerated as a result of increased foreclosures, weakened consumer confidence and tightened mortgage lending standards. Additional government actions will be necessar
Slide 5: Operating Focus
4 Business Overview Operating Focus Significant Progress on Our Balance Sheet Significant Progress On JV’s & Recourse Debt Significant Progress on Rebuilding Operating Profitability Business Overview Operating Focus Focus on a Strong Balance Sheet: Aggressive Asset Management Leading to Strong Cash
Slide 6: Maintained Key Senior Management Associates
5 Business Overview Maintained Key Senior Management Associates Jon Jaffe Rick Beckwitt Bruce Gross Emile Haddad Jeff Krasnoff COO since 2004 Lennar associate for 25 years Spearheaded many key strategic initiatives Chief Investment Officer – responsible for the management of Lennar’s asset portfolio
Slide 7: Significant Balance Sheet Progress
6 Significant Balance Sheet Progress
Slide 8: Strong Cash Flow Generation and Low Leverage
7 Significant Balance Sheet Progress Strong Cash Flow Generation and Low Leverage 25% 30% 35% 40% 45% 50% 55% 60% 65% 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 YTD '08 $0 $100 $200 $300 $400 $500 $600 $700 $800 $900 $1,000 Significant Balance HB Debt / Total Capital Goal 35% - 45% Operating
Slide 9: Long-Term Fixed Rate Debt Maturities
8 Significant Balance Sheet Progress Long-Term Fixed Rate Debt Maturities $300 $250 $350 $250 $500 $250 $282 2008 Mar-09 Oct-10 Oct-11 2012 Mar-13 Sep-14 May-15 Apr-16 Weighted average maturity of 4.4 years Weighted average interest rate of 5.9% At August 31, 2008 Repayment Schedule 6.50% Senior Not
Slide 10: Aggressive Inventory Reduction
9 Significant Balance Sheet Progress Aggressive Inventory Reduction $3.2 $5.4 $1.8 $2.3 (Dollars in Billions) $8.6* $4.1* Peak 2006 Q3 2008 *Excludes consolidated inventory not owned Inventory 52% Land, Land Under Development and Option Deposits Construction in Progress and Finished Homesites
Slide 11: Land Acquisition & Development
10 Significant Balance Sheet Progress Land Acquisition & Development $2,891.5 $1,432.3 $2,134.9 $787.2 $656.1 $153.0 (Dollars in Millions) $809.1 YTD 2008 Land Development Land Acquisition $4,323.8 $2,922.1 2006 2007
Slide 12: Aggressive Inventory Management
11 Significant Balance Sheet Progress Aggressive Inventory Management Homesites Owned and Controlled 345,000 130,000 Peak 2006 Q3 2008 62% 130,000 39,000 15,000 76,000 Q3 2008 -62% 345,000 Total -63% 105,000 Controlled-JVs -89% 134,000 Optioned -28% 106,000 Owned Change Peak 2006
Slide 13: Significant Joint Venture Progress
12 Significant Joint Venture Progress
Slide 14: Joint Ventures Mitigating Risk
13 Joint Ventures Mitigating Risk Joint Ventures Mitigating Risk Joint ventures were structured strategically to mitigate risk. Strategic partners with specific expertise JV with partner who brings specific expertise (e.g. commercial or infill experience) JV with other builders Joint bid on land par
Slide 15: Number of Joint Ventures
14 Significant Joint Venture Progress Number of Joint Ventures Peak 2006 Q3 2008 Number of Joint Ventures 46% Joint Venture Detail JVs with recourse debt JVs with non-recourse debt JVs without debt ____________________________ JV total
Slide 16: Recourse Debt Exposure & Capital Structure
15 Significant Joint Venture Progress Recourse Debt Exposure & Capital Structure $1,764 $630 Peak 2006 Q3 2008 Maximum JV Recourse Debt Exposure (Dollars in Millions) 64% JVs with Recourse Debt At 11/30/06 (Peak) Assets $6.7B Equity $2.2B Maximum Recourse Debt $1.8B Max Recourse to Net Cap 44% At 8/
Slide 17: Significant Operating Profitability Progress
16 Significant Operating Profitability Progress
Slide 18: Significant Operating Profitability Progress
17 Significant Operating Profitability Progress Momentum of Costs Overshooting Stabilization – Rightsizing of Business
Slide 19: Focus on Rebuilding Gross Margin
18 Significant Operating Profitability Progress Focus on Rebuilding Gross Margin 25% 25% 26% 27% 25% 24% 20% 14% 16% 14% 14% 12% 17% 16% 18% 0% 5% 10% 15% 20% 25% 30% Q1 '05 Q2 '05 Q3 '05 Q4 '05 Q1 '06 Q2 '06 Q3 '06 Q4 '06 Q1' 07 Q2 '07 Q3 '07 Q4 '07 Q1 '08 Q2 '08 Q3 '08 Lennar was ahead of the curv
Slide 20: Aggressive Reduction of Floor Plans
19 Significant Operating Profitability Progress Aggressive Reduction of Floor Plans 2,991 1,700 1,331 2006 2007 2008P 2009P Total Floor Plan Count Will Be Reduced Approximately 75%
Slide 21: Materially Simplified Offerings
20 Significant Operating Profitability Progress Materially Simplified Offerings 1,200 1,000+ 1,000+ 1,500 Faucets Interior Paint Appliances Lighting 2007 2008P Comprehensive SKU Reductions
Slide 22: Focus on S,G&A Reduction
21 Significant Operating Profitability Progress Focus on S,G&A Reduction S,G&A Expenses ($) Associate Headcount $484 $156 Peak 2006 Q3 2008 5,404 14,045 Peak 2006 Q3 2008 (Dollars in Millions) 68% 62%
Slide 23: Focus on Positive Operating Margins
22 Significant Operating Profitability Progress Focus on Positive Operating Margins 2% 1% -1% -3% 0% -1% 2% 2% 9% 12% 12% 17% 15% 13% 13% -5% 0% 5% 10% 15% 20% 25% Q1 '05 Q2 '05 Q3 '05 Q4 '05 Q1 '06 Q2 '06 Q3 '06 Q4 '06 Q1' 07 Q2 '07 Q3 '07 Q4 '07 Q1 '08 Q2 '08 Q3 '08 (Pre-impairment OM%)
Slide 24: Conclusion
23 Conclusion
Slide 25: Moving From Defense to Offense
24 Conclusion “Moving From Defense to Offense” Lennar has traditionally maintained expertise in both homebuilding manufacturing and land acquisition and management The Company has been working for years on separately leveraging the expertise in these respective disciplines Lennar has been “incubatin
Slide 26: Moving From Defense to Offense: Lennar Fund
25 Conclusion “Moving From Defense to Offense” Lennar Fund Fund Homebuilding Manufacturing Plant Product simplification & offering Cost reduction Cycle time reduction Customer experience Land Asset Manager Due diligence focused Evaluate & underwrite distressed opportunities Ability to manage assets
Slide 27: Will The Cycle Be Our Ally?
26 Lennar Will The Cycle Be Our Ally? Starts * Excludes income tax benefit. * $- $200 $400 $600 $800 $1,000 $1,200 $1,400 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 - 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000 1,800,000 2,000,000
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