Portable Planet

Lennar Corporation, one of the nation’s largest homebuilders, today reported results for its first quarter ended February 28, 2007. First quarter net earnings in 2007 were $68.6 million, or $0.43 per diluted share, compared to first quarter net earnings of $258.1 million, or $1.58 per diluted share, in 2006.

Stuart Miller, President and Chief Executive Officer of Lennar Corporation, said, “The housing market continues to demonstrate overall weakness. While some markets are performing better than others, the typically stronger spring selling season has not yet materialized. These soft market conditions have been exacerbated by the well-publicized problems in the subprime lending market.”

Mr. Miller continued, “As weak market conditions have persisted, we have continued to focus on our ‘balance sheet first’ strategy. Since early 2006, we have focused on fortifying our balance sheet by carefully managing inventory levels (converting both land and home inventory to cash) and significantly reducing land purchases and starts. Concurrently, we have adjusted our land assets where appropriate while we have written-off option deposits and pre-acquisition costs on land we no longer desire to close.”

“Additionally, we completed the LandSource transaction this quarter, further strengthening our balance sheet with the receipt of approximately $700 million of cash during the quarter. The strong sponsorship of LandSource, coupled with the land availability primarily created by builders walking away from option deposits, positions us for new opportunities to purchase favorably-priced, larger land parcels within LandSource.”

“While we are primarily focused on fortifying our balance sheet, we are concurrently focused on rebuilding our profit margins. Given current market conditions, we are continuing to pursue cost reductions, SG&A savings, product redesign and proper land pricing in order to see margin improvement starting in the second half of 2007. Until we see prices stabilize, however, we will not be able to project the timing or the scope of margin recovery, or set earnings goals for the company.”

“We are very pleased that we ended our first quarter with our net homebuilding debt to total capital at 28.6%. Our strong balance sheet will position us well for success as market conditions recover. In the interim, we will continue to manage our business with day-by-day focus on maintaining a very low inventory balance and a consistent pressure on reducing costs as we rebuild our margins.”

Mr. Miller concluded, “Given the state of the market, we do not expect to achieve our previously stated 2007 earnings goal, and we are not comfortable providing a new earnings goal at this time. Our company remains focused on managing through this downturn with a balance sheet first strategy, maintaining ample liquidity to position us well for future opportunities.”

Source: Lennar