Lennar reports fourth quarter and fiscal 2021 results

•Deliveries increased 11% to 17,819 homes

•New orders increased 2% to 15,539 homes; new orders dollar value increased 16% to $7.3 billion

•Backlog increased 26% to 23,771 homes; backlog dollar value increased 45% to $11.4 billion

•Homebuilding operating earnings of $1.8 billion, compared to operating earnings of $1.1 billion

◦Gross margin on home sales improved 300 basis points ("bps") to 28.0%

◦S,G&A expenses as a % of revenues from home sales improved 150 bps to 6.0%

◦Net margin on home sales improved 460 bps to 22.0%

•Financial Services operating earnings of $111.4 million, compared to operating earnings of $151.2 million

•Multifamily operating earnings of $9.3 million, compared to operating earnings of $26.7 million

•Lennar Other operating loss of $176.2 million, compared to operating loss of $1.2 million

•Years of supply owned homesites decreased to 3.0 years

•Controlled homesites increased to 59%

•Homebuilding cash and cash equivalents of $2.7 billion

•Retired $850 million of homebuilding senior notes due in fiscal year 2022

•Repurchased 10 million shares of Lennar common stock for $977.4 million

•Homebuilding debt to total capital of 18.3%, the lowest in the Company's history

2021 Fiscal Year Highlights – comparisons to the prior year

•Net earnings, revenues, deliveries, new orders and net margin for 2021 were the highest in the Company's history

◦Net earnings per diluted share increased 82% to $14.27 (increased 66% to $13.00, excluding mark to market gains on strategic technology investments)

◦Net earnings increased 80% to $4.4 billion (increased 64% to $4.0 billion, excluding mark to market gains on strategic technology investments)

◦Revenues increased 21% to $27.1 billion

◦Deliveries increased 13% to 59,825 homes

◦New orders increased 15% to 64,543 homes

◦Net margin on home sales improved 510 bps to 19.7%

•Retired $1.15 billion of homebuilding senior notes due in fiscal year 2022

•Repurchased 14 million shares of Lennar common stock for $1.37 billion

•Return on equity improved 790 bps to 22.6%

Lennar Corporation (NYSE: LEN and LEN.B), one of the nation’s largest homebuilders, today reported results for its fourth quarter and fiscal year ended November 30, 2021. Fourth quarter net earnings attributable to Lennar in 2021 were $1.2 billion, or $3.91 per diluted share, compared to $882.8 million, or $2.82 per diluted share in the fourth quarter of 2020. Net earnings attributable to Lennar for the year ended November 30, 2021 were $4.4 billion, or $14.27 per diluted share, compared to $2.5 billion, or $7.85 per diluted share for the year ended November 30, 2020.

Stuart Miller, Executive Chairman of Lennar, said, “While supply chain challenges continued to dominate both the homebuilding and the broader economic narrative in the fourth quarter, we are pleased to report record fourth quarter earnings of $1.2 billion, or $3.91 per diluted share, compared to $882.8 million or $2.82 per diluted share for the quarter last year. Excluding mark to market losses on our public strategic technology investments, fourth quarter 2021 earnings were $1.3 billion, or $4.36 per diluted share. For the full year, we delivered just under 60,000 homes generating EPS of $14.27 per diluted share ($13.00 per diluted share before mark to market gains) for an 82% increase over the prior year (66% before mark to market gains).”

“Our record fourth quarter results reflect both continued strength in the housing market across the country, and continued housing supply shortage driven by limited entitled land, labor and supply chain constraints, and 10 years of production shortfall. While our new orders grew a controlled 2% compared to last year’s seasonally strong fourth quarter, we achieved a homebuilding gross margin of 28.0% and homebuilding SG&A of 6.0%, leading to a 22.0% net margin, all of which are all-time Company records.”

Rick Beckwitt, Co-Chief Executive Officer and Co-President of Lennar, said, “During the fourth quarter, our community count increased 7% year over year as we continued to make excellent progress on our land light strategy. This was evidenced by our years owned supply of homesites improving to our previously stated goal of 3.0 years at the end of the fourth quarter from 3.5 years last year, and our controlled homesite percentage increasing to 59% from 39% for those same periods.”

“We ended the quarter with $2.7 billion in cash, no borrowings on our $2.5 billion revolver and homebuilding debt to capital of 18.3%, an all-time Company low. Our land lighter model resulted in incremental cash flow generation during the fourth quarter which we used towards the repurchase of 10 million shares of our common stock for just under $1 billion, and debt reduction of $850 million. These transactions, combined with our significant earnings, contributed to a return on equity of over 22%.”

Jon Jaffe, Co-Chief Executive Officer and Co-President of Lennar, said, “During the quarter, our homebuilding machine continued to be laser focused on production, even while our cycle time expanded about two weeks from the third quarter driven by rapidly changing supply chain issues. The impact of supply chain issues and increased cycle times were partially offset by accelerated construction starts throughout the year.”

“In this turbulent environment, we are confident that we are implementing the right playbook with our Builder of Choice position and our simplified Everything’s Included® business model to successfully navigate current supply chain dynamics. Our strong and deep-rooted relationships with our trade partners have helped mitigate the impact of labor and supply shortages. Our quarterly starts and sales pace remained strong and consistent at 4.5 homes and 4.3 homes per community, respectively, in the fourth quarter.”

Mr. Miller concluded, “The housing industry continues to exhibit strong demand, outweighing supply, and we are confident that we will continue to generate solid growth and enhance our current market position. Accordingly, as we look forward to 2022, we expect to deliver approximately 67,000 homes with a 27.0% - 27.5% gross margin for the year, with more or less 12,500 homes at a gross margin of approximately 26.75% in the first quarter. Overall, we are operating from a position of strength with an excellent balance sheet enabling us to continue to execute on our core strategies.”