Lennar Corporation (LEN)
Q2 2009 Earnings Call Transcript
June 25, 2009 11:00 a.m. ET

Executives

Scott Shipley - Director of Investor Relations
Stuart A. Miller – President, Chief Executive Officer & Director
Bruce E. Gross – Executive Vice President & Chief Financial Officer

Analysts

Stephen East - Pali Research
Adam Ruter - Wachovia Securities
Ivy Zelman – Zelman & Associates
Josh Levin - Citigroup
Michael Rehaut – JPMorgan
David Goldberg - UBS
Nishu Sood – Deutsche Bank
Daniel Oppenheim - Credit Suisse
Timothy Jones – Wasserman & Associates
Megan Talbott McGrath – Barclays Capital
Jay McCanless – FTN Equity Capital Markets
Joshua Pollard – Goldman Sachs
Eric Landry – Morningstar

Presentation

Operator

Good morning and welcome to Lennar’s second quarter earnings conference call. At this time, all participants will be in a listen-only mode. After the presentation, we will conduct a question-and-answer session. Today''s conference call is being recorded. If you have any objections, please disconnect. I will now turn the call over to Mr. Scott Shipley, Director of Investor Relations for the reading of the forward-looking statement.

Scott Shipley

Good morning. Today''s conference call may include forward-looking statements that are subject to risks and uncertainties related to Lennar''s future business and financial performance. These forward-looking statements may include statements regarding Lennar’s business, financial condition, results of operations, cash flow, strategies and prospects. Forward-looking statements represent only Lennar''s estimates on the date of this conference call and are not intended to give any assurance as to actual future results.

Because forward-looking statements relate to matters that have not yet occurred these statements are inherently subject to risks and uncertainties. Many factors could cause Lennar''s actual activities or results to differ materially from the activities and results anticipated in forward-looking statements. These factors include those described under the caption “Risk Factors” contained in Lennar''s Annual Report on Form 10-K most recently filed with the SEC. Please note that Lennar assumes no obligation to update any forward-looking statements.

Operator

I would like to introduce your speaker for today''s call, Mr. Stuart Miller, President and CEO. Mr. Miller, you may begin.

Stuart A. Miller

Thank you, and good morning, everyone. Thank you for joining us for our second quarter 2009 update. I''m joined this morning as usual by Bruce Gross, our Chief Financial Officer, Diane Bessette, our Vice President and Treasurer, and David Collins, our Controller.

I am going to begin with some opening remarks about the current housing market in general, then comment on our homebuilding operations, and finally focus on the progress we have made on managing our balance sheet and asset base. After my remarks, Bruce will provide additional detail on our numbers and then we will open the phone to your questions. And of course I would like to request that during our question-and-answer period everyone please limit to just one question and one follow up so that we can be as fair as possible to all participants.

Now, as you can see from our press release this morning we got a very productive second quarter. In the second quarter we saw a discernible uptick in our sales volume which has convinced me that while there continue to be significant headwinds that limits stabilization and recovery both for the economy in general and for housing as well there are some significant positive influences out there that are beginning to shape a more positive future.

The abject pessimism that has defined the overall market sentiments for the past year or more seems to have given way to a sense that opportunities are available for those who can qualify. When low price points are offered in the marketplace we are seeing that there are more anxious buyers interested in making the purchase and home affordability is at record highs as well.

Additionally, pent-up demand is beginning to reveal itself. In the foreclosure arena, we are beginning to feel a greater number of primary buyers looking to purchase bargain homes as primary residences as opposed to investors looking just to make money. While there might be a temporary oversupply of homes defined by the foreclosures they continue to add to the available inventory.

Real purchasers are starting to take advantage of interest rates and tax incentives to satisfy real needs. The academics and demographers have long said that stabilized demand for new homes in the United States is in the 1.6 to 1.8 million homes per year range and current market conditions have driven production to record lows reported yesterday at an annualized rate of some 340,000 homes.

LEN	$43.82	2.05%

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