Slide 1: Lennar's Strategic Business Combination With CalAtlantic
Lennar’s Strategic Business Combination With CalAtlantic Creating a Best-in-Class National Homebuilder October 30, 2017
Slide 2: Disclaimer
Disclaimer Forward Looking Statements Some of the statements in this Investor Presentation are “forward-looking statements,” as that term is defined in the Private Securities Litigation Reform Act of 1995, including statements regarding the expected time of the completion of the transaction. These f
Slide 3: Disclaimer (cont'd)
Disclaimer (cont’d) Non-GAAP Financial Information (Cont’d) For information on how non-GAAP metrics, including Net Homebuilding Debt to Total Capital, and EBITDA, have been calculated in this presentation and for historical reconciliations to the nearest comparable financial measures under GAAP, see
Slide 4: Today's Presenters
Today’s Presenters Stuart Miller Rick Beckwitt Chief Executive Officer President Jon Jaffe Bruce Gross Chief Operating Officer Chief Financial Officer 1
Slide 5: Transaction Overview
Transaction Overview Strategic business combination involving the exchange of 100% of CalAtlantic’s common stock Fixed exchange ratio of 0.885x Lennar Class A common stock for each CalAtlantic share Optional cash election at $48.26 per share for approximately 20% of CalAtlantic shares Transact
Slide 6: Enhanced Platform Drives Significant Shareholder Value
Enhanced Platform Drives Significant Shareholder Value Accretive to Pro Forma FY2018 EPS(1) and Significantly Accretive to FY2019 EPS ‒ Significant SG&A synergies and direct cost savings in the amount of $75mm in FY2018 and $250mm in FY2019 ‒ Accretive to FY2019 EPS by $0.50 ‒ Additional opportuni
Slide 7: Best-in-Class Homebuilding Platform
Best-in-Class Homebuilding Platform A top three homebuilder in 24 of the most attractive and fastest growing MSAs, Lennar is building a scaled, best-in-class homebuilding platform Increased scale driving more efficient operations, with expected direct cost savings and SG&A synergies of $250mm in 2
Slide 8: National and Local Market Scale
National and Local Market Scale Lennar will become the nation’s largest homebuilder with leading market positions(1) and best-in-class gross margins 1,317 active communities serving ~50% of the U.S. population(2) Top 3 positions in 24 of the top 30 MSAs and #1 in 15 MSAs Over 43,000 annual del
Slide 9: Snapshot of Pro Forma Company
Snapshot of Pro Forma Company + = Pro Forma(1) MSAs with Top 3 16 11 24 Market Positon(2) (3) Market Equity Value $13.4bn $5.1bn $18.5bn Home Deliveries 28,989 14,683 43,672 Last twelve months Home Sales Revenue $10.6bn $6.6bn $17.2bn Last twelve months Gross Margin 22.3% 21.2% ~22%+ Last twelve mon
Slide 10: Creates the Nation's Largest Homebuilder
Creates the Nation’s Largest Homebuilder Last Twelve Months Home Sales Revenue – #1 Builder in America ($ in billions) $17.2 $13.3 $10.6 $8.1 $6.6 $6.0 $5.6 $4.1 $3.6 $3.1 $2.5 $2.5 Pro Forma DHI LEN PHM CAA NVR TOL KBH TMHC MTH MDC TPH Lennar Market Equity Value – #1 Builder in America ($ in billio
Slide 11: Enhances Leading Financial Profile
Enhances Leading Financial Profile LTM Gross Margin ~22%+ 22.3% 22.3% 21.2% 21.5% 20.0% 19.3% 18.6% 17.4% 16.2% 15.0% Pro Forma LEN PHM CAA DHI TOL TPH TMHC MTH MDC KBH Lennar(1) LTM Return on Equity(2) ~15%+ 15.3% 14.7% 13.7% 10.8% 10.5% 10.2% 10.1% 9.0% 7.3% 3.3% Pro Forma PHM CAA DHI LEN TOL MTH
Slide 12: Strengthens Geographic Footprint
Strengthens Geographic Footprint (Last twelve months “LTM”) West Central Deliveries 7,726 Deliveries 10,403 Home Sales Revenue ($mm) $4,512 Home Sales Revenue ($mm) $3,591 ASP ($000s) $584 ASP ($000s) $345 Inventory ($mm) $5,216 Inventory ($mm) $2,768 WA MT ND ME MN VT OR NH ID SD NY WI MA WY MI RI
Slide 13: Leading Position in Top MSAs
Leading Position in Top MSAs Transaction doubles Lennar’s #1 market positions and drives Lennar’s “Builder of Choice” strategy with local partners #1 Positions Other Top 3 Positions (Ranked by CY2016 New Home Sales) (Ranked by CY2016 New Home Sales) Phoenix, AZ Dallas, TX Orlando, FL Houston, TX Cha
Slide 14: Compatible Product Mix
Compatible Product Mix Lennar Will have a More Balanced ASP Following the Transaction (ASP, MRQ) $791 $584 $477 $459 $444 $411 $408 $399 $393 $386 $376 $297 TOL TPH TMHC MDC CAA KBH MTH PHM Pro Forma NVR LEN DHI Lennar First-Time Move-Up Active-Adult Lennar CalAtlantic Lennar CalAtlantic Lennar CalA
Slide 15: Compelling Synergy Opportunity with Potential for Meaningful Upside
Compelling Synergy Opportunity with Potential for Meaningful Upside Synergy Estimates Anticipated Synergies in 2019 SG&A Efficiencies – $85mm ‒ Streamlining corporate overhead and removing duplicative public company expenses $75mm $250mm ‒ Overlapping regional and divisional operations Synergies F
Slide 16: Upside from Leveraging Lennar's Technology and Innovation Initiatives
Upside from Leveraging Lennar’s Technology and Innovation Initiatives Lennar’s investment and initiatives in technology will drive additional efficiencies and operating leverage across the combined platform Digital Marketing – migrating towards marketing channels that more efficiently reach potent
Slide 17: Shortened Land Position Accelerates Cash Generation
Shortened Land Position Accelerates Cash Generation Combined Land Position Inventory Value Owned vs. Controlled Homesites (By Geography) Controlled West 21% 30% East 40% Owned Southwest 79% 14% Central 16% Total Owned and Controlled Homesites Implied Years Supply(1) (000s) 252.1 6.9 6.8 243.8 6.1 5.
Slide 18: Strong Credit Profile With a Commitment to Delevering
Strong Credit Profile With a Commitment to Delevering Lennar expects to maintain a strong balance sheet with ample liquidity Current Credit Ratings Lennar intends to assume CalAtlantic’s existing debt, which is expected to be ‒ Moody’s: Ba1 (stable) credit positive for CalAtlantic bond holders ‒
Slide 19: Progress Roadmap
Progress Roadmap Oct-17 Mar-18 Jun-18 Sep-18 Announcement to 1Q 2018 Earnings 2Q 2018 Earnings 3Q 2018 Earnings Closing (Est. March 2018) (Est. June 2018) (Est. September 2018) Preliminary Guidance on Disclose Purchase Progress on Integration Material Updates Synergies and Gross Accounting Guidance