Lennar Corporation (NYSE:LEN) Q4 2014 Earnings Conference Call - Final Transcript

Jan 15, 2015 • 11:00 am ET


Lennar Corporation (NYSE:LEN) Q4 2014 Earnings Conference Call - Final Transcript


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Welcome to Lennar's Fourth Quarter Earnings Conference Call. At this time, all participants are on a listen-only mode. After the presentation, we will conduct a question-and-answer session. (Operator Instructions). Today's conference is being recorded. If you have any objections, you may disconnect at this time.

I will now turn the call over to Mr. David Collins for the reading of the forward-looking statement.

David Collins

Thank you and good morning everyone.

(Forward Looking Cautionary Statement)

Unidentified Speaker

All right. Well, let me just jump in and begin then. This is

Unidentified Speaker

Stuart Miller. And good morning everyone, thank you for joining us for our fourth quarter and year-end update. This morning, I'm joined by Bruce Gross, our Chief Financial Officer and Dave Collins, who you just heard from; Diane Bessette, our Vice President and Treasurer; Rick Beckwitt, our President; and Jon Jaffe, Chief Operating Officer are here as well and Jeff Krasnoff, Chief Executive Officer of Rialto. They are all going to join in for question and answer.

As it's customary on our conference calls, I'm going to begin with some brief overview remarks on the housing market and our operations and then Bruce is going to jump in with greater detail. As always we will open up to Q&A and we'd like to request that during our Q&A, each person limit themselves to one question and one follow up.

So let me go ahead and begin and let me begin by saying that we're very pleased to report another very solid quarter of performance for Lennar with each of our major segments performing better than expected. Our fourth quarter and year-end results demonstrate that our company is very well positioned to continue to perform extremely well in current market conditions and to continue to execute our carefully crafted and balanced operating strategy.

Generally speaking, we continued to believe that we are still in the early stages of our protracted slow growth housing recovery. The recovery continues to be driven forward by increased pent-up demand derived from now multi-year production deficit and the increasingly high-cost, monthly cost of rentals.

At the same time, volume growth has been constrained by overly conservative lending standards. Our regulatory environment that discourages mortgage lending by banks and the negative bias overhang against home-ownership. Complicating matters the housing recovery has been somewhat erratic, as macroeconomic factors have continued to both positively and negatively affect that recovery.

As I've said before, this market has continued a slow and steady recovery that is markedly different from past downcycle with recoveries. I noted in our last conference call that history would suggest a more vertical recovery, especially given the severity of the economic decline.

This recovery, it's had a decidedly different trajectory as the slope of recovery has been shallow and the recovery has been choppy and volatile. While the reflection of this market -- of the market has been compounding to many, we have had a very clear understanding that has informed our company strategy.

Simply put, we believed and continue to believe