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Lennar Annual Report, Year Ended Jan 30, 2005

Filing Date
Filed February 9, 2006
Period End
January 30, 2005
Securities
LENLEN-B
In the record · 2016–202610-K1210-Q338-K129

LEN filed 12 annual reports (10-K), 33 quarterly reports (10-Q) and 129 current reports (8-K) between 2016 and 2026.

  1. FY2016 annual report10-K · Jan ’17Jan ’17
  2. Material agreement8-K · Apr ’19Apr ’19
  3. Leadership change8-K · Mar ’22Mar ’22
  4. Leadership change8-K · Nov ’25Nov ’25

01—Abstract

Summary

Summary of the 10-K filed February 9, 2006. Cited figures are marked; the original filing is the authoritative source.

Lennar Corporation (Miami, Florida; Class A and Class B common stock listed on the NYSE as "LEN" and "LEN.B") reported record revenues, profits and earnings per share from continuing operations for the fiscal year ended November 30, 2005.

Total revenues were $13.87 billiona, up from $10.50 billion in 2004, and net earnings were $1.36 billion, or $8.23 per share diluted, compared with $945.6 million, or $5.70 per share, in 2004. Homebuilding revenues were $13.30 billion, with 42,359 homes delivered, an average sales price of $311,000, and a gross margin on home sales of 26.0%. Financial services revenues were $562.4 million, and the mortgage capture rate fell to 66% from 71%, which the company attributed to a more competitive mortgage environment.

Backlog reached a record $6.88 billionb at November 30, 2005, with 18,565 homes in backlog, and the company stated that substantially all of it was expected to deliver in fiscal 2006. Management noted early signs of a slower sales pace in certain markets and said it expects price appreciation to moderate from the 2005 level. Homebuilding debt rose to $2.59 billion and stockholders' equity to $5.25 billion, with a homebuilding debt-to-total-capital ratio of 33.1%.

Cash at year end was $1.06 billionc, and operating cash flow was $323.0 million, down from $420.2 million. The company also raised its annual dividend rate to $0.64 per share and repurchased 5.1 million Class A shares for $274.9 million during the year. Risk factors highlighted by the filing include a possible overvaluation of land and homes after a strong run in prices, dependence on mortgage financing and secondary-market liquidity, slow-growth initiatives, and rising land and labor costs.

Stuart A. Miller, President and CEO, controls about 47%d of the combined voting power, which the filing says gives him significant influence over stockholder votes.

02—Key points

Key Highlights

  1. Record fiscal 2005 results: total revenues of $13.87 billion (up from $10.50 billion) and net earnings of $1.36 billion, or $8.23 per diluted share (up from $5.70).
  2. Homebuilding gross margin on home sales rose to 26.0% from 23.9%, and the average sales price of homes delivered increased to $311,000 from $272,000.
  3. Record backlog of $6.88 billion (18,565 homes) at November 30, 2005, 36% above the prior year-end, with substantially all expected to deliver in fiscal 2006.
  4. Management warned of early signs of slower sales in certain markets and said price appreciation is unlikely to continue at the 2005 pace.
  5. Homebuilding debt rose to $2.59 billion, with a homebuilding debt-to-total-capital ratio of 33.1%, and the New Facility was expanded to $2.2 billion after year end.
  6. Cash flow from operations fell to $323.0 million from $420.2 million, and cash ended the year at $1.06 billion.
  7. Stuart A. Miller controls about 47% of the combined voting power, giving him significant influence over stockholder votes.

03—Questions

Frequently Asked Questions

  1. How did Lennar perform financially in fiscal 2005?

    Lennar reported total revenues of $13.87 billion and net earnings of $1.36 billion, or $8.23 per diluted share, for the year ended November 30, 2005. Both figures were records and were up from $10.50 billion in revenues and $945.6 million in net earnings in 2004.

  2. What does the backlog indicate about future revenue?

    Backlog of home sales contracts was $6.88 billion (18,565 homes) at November 30, 2005, compared with $5.06 billion (15,546 homes) a year earlier. The company said substantially all homes in backlog are expected to be delivered in fiscal 2006, and it cited a backlog of $6.7 billion as of December 31, 2005.

  3. What risks did management identify for the outlook?

    Management said there were early indications of a slower sales pace in certain markets and that price appreciation is unlikely to continue at the 2005 rate. The risk factors also cite the possibility that land and home prices are overvalued, dependence on mortgage financing and secondary-market liquidity, slow-growth initiatives, and rising land and labor costs.

  4. How is Lennar returning capital to shareholders?

    In September 2005 the board raised the annual dividend rate to $0.64 per share from $0.55. During 2005 the company repurchased 5.1 million Class A shares for $274.9 million, and 12.4 million shares remained available under the repurchase program as of November 30, 2005.

  5. Does ownership concentration affect shareholders?

    Yes. CEO Stuart A. Miller, through personal holdings and family-owned entities, controls about 47% of the votes of the combined Class A and Class B stock. The filing says this gives him significant influence over director elections and most stockholder matters, and it could discourage an acquisition of the company.

04—Continue

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