01—Abstract
Summary
Summary of the 10-K filed January 28, 2022. Cited figures are marked; the original filing is the authoritative source.
Lennar Corporation reported fiscal 2021 (year ended November 30, 2021) as the largest homebuilder in the United States by net earnings, with homebuilding revenues of $25.5 billiona, or approximately 94% of consolidated revenues.
Total revenues were $27.13 billionb, and net earnings attributable to Lennar were $4.4 billion, or $14.27 per diluted share, compared with $2.5 billion, or $7.85 per diluted share, in 2020. Homebuilding deliveries rose to 59,825 homes from 52,925, and the average sales price increased to $424,000 from $395,000. Gross margin on home sales was 26.8%, up from 22.8% in 2020, and the company cited price appreciation as the main driver.
The balance sheet strengthened over the year. Homebuilding debt to total capital improved to 18.3% from 24.9%, and the company retired $1.15 billionc of senior notes. It repurchased $1.4 billion of stock and raised its annual dividend rate to $1.50 per share in January 2022.
The company had $2.7 billiond of Homebuilding cash and no borrowings under its $2.5 billion revolving credit facility. Management also disclosed a planned tax-free spin-off to stockholders of its Multifamily and single-family rental platforms and some investment assets, expected by the second or third quarter of 2022. Management flagged continuing risks, including supply shortages of labor and materials, rising construction costs, mortgage rate increases, and the COVID-19 pandemic.
Management expects the first-quarter 2022 community count to be about 5% lower than year-end 2021, with deliveries of about 12,500 homes and a gross margin of about 26.75%. The company also reported a 3.0 years supply of owned land and a 59% share of homesites controlled through options and joint ventures.
02—Key points
Key Highlights
- Homebuilding revenues of $25.5 billion, about 94% of consolidated revenues, in fiscal 2021
- Net earnings attributable to Lennar of $4.4 billion, or $14.27 per diluted share, versus $7.85 per diluted share in 2020
- Home deliveries rose to 59,825 from 52,925, and the average sales price rose to $424,000 from $395,000
- Gross margin on home sales of 26.8%, up from 22.8% in 2020, driven primarily by price appreciation
- Homebuilding debt to total capital fell to 18.3% from 24.9%; $1.15 billion of senior notes were retired
- Repurchased $1.4 billion of common stock and raised the annual dividend rate to $1.50 per share in January 2022
- Homesites controlled through options and joint ventures reached 59%, up from 39%, with a 3.0 years supply of owned land
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2021filed January 28, 2022Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $27.13B$22.49B | +20.6% |
| Operating Expenses | $22.05B$19.37B | +13.8% |
| Net Income | $4.43B$2.47B | +79.7% |
| EPS (Basic) | $14.28$7.88 | +81.2% |
| EPS (Diluted) | $14.27$7.85 | +81.8% |
| Shares Outstanding (Basic) | 306.61M309.41M | −0.9% |
| Shares Outstanding (Diluted) | 306.61M309.41M | −0.9% |
05—Questions
Frequently Asked Questions
What did Lennar guide for the first quarter of 2022?
The filing expects first-quarter 2022 community count to be about 5% lower than year-end 2021, deliveries of approximately 12,500 homes, and a gross margin of about 26.75%. It expects community count to start increasing in the second quarter and to end 2022 with a low double-digit year-over-year increase.
What is the planned spin-off and when is it expected?
Lennar plans a tax-free spin-off to its stockholders of its Multifamily and single-family rental asset management businesses and some investment assets. It formally requested a private letter ruling from the IRS in November 2021 and expects completion by the second or third quarter of 2022.
How strong is Lennar's balance sheet?
At November 30, 2021, Homebuilding debt was $4.65 billion and Homebuilding debt to total capital was 18.3%, down from 24.9%. Homebuilding cash and cash equivalents were $2.7 billion, and the $2.5 billion Credit Facility had no outstanding borrowings.
What are the main risks flagged in the filing?
The filing highlights continued supply shortages and cost increases for labor and materials, expected to persist into fiscal 2022. Other risks include higher mortgage interest rates, tariffs on imported building materials, the COVID-19 pandemic, and mark-to-market swings in its publicly traded technology investments.
06—Continue