Lennar Corporation (LEN)’s 4th Quarter 2014 Financial Results Conference Call Transcript

Eli Ekel, GMS

Great, thanks very much.

Operator

Our next question comes from Allan Rattingner with Selmon your line is open

Allan Rattingner, Selmon

Hey good morning first a house keeping question the hunters points delivery is that going to flow through the JB are the consolidated funds.

Bruce Gross, Vice President and Chief Financial Officer

The Hunters points delivery will flow through the joint central line.

Allan Rattingner, Selmon

Ok. When you gave the guidance from the break even into the back half of the year IN JB, there was some delivery flunk through there, anything corporates in that guidance.

Bruce Gross, Vice President and Chief Financial Officer

It is and we are very well with sales at hunters points but remember we have a lot of front end development cost that are also running through that line in addition to the closings of the first deliveries at Hunters point, so you will see more contribution as we enter into 2016.

Allan Rattingner, Selmon

Got it thanks. Just on the slow pivot ROIC focus how should we think about longer term, how Lennar Corporation [NYSE:LEN]looks under that type of model because I think investors clearly have gotten use to you guys certainly outperforming on the gross margin line and probably the volume gross line as well, as you benefited from that long land pipeline you had. So should we ultimately expect margins to kind of revert more to that lower 20% range which I think that is indicative of a asset line shorter loan model or should we stop short of going all the way because your are going to settle out somewhere and I guess just kind of the cadence to get there. We are talking a multi-year process or something by 2016 or 2017 are you pretty much where you ultimate envision the company being.

Bruce Gross, Vice President and Chief Financial Officer

Look I still think we have an advantage in lands in that we have land position that carry forward that best enable us to kind of fish in a different pond and use our land expertise to continue to build price advantage land position that hold us in good stead. We think that has historically we will continue to outperform relative to gross margin, gross margin were bound to moderate at some point and shouldn’t catch anyone off guard but will and should be some moderation on gross margin as we become more of a retail purchaser of land but I think a normalize operating program of buying lands and becoming more of a manufacturing model as market matures there is less stressed out opportunities out there that is exactly what Lennar Corporations [NYSE:LEN] is focused on making sure we balancing buying good lands positioning, in the right location, operating a excellent manufacturing model on the home building side and really focusing on our balance sheet and generating the focus on cash and the turn on investment capital.

Stuart Miller. Chief Executive Officer

Might I add one thing on this, you know part of the pivot is managing the length of the deal and how long we are in an individual community and as we have bought various communities over the past in the down turn some of these communities were very sizeable that had multi, multi-year runs in order for us to build through them. As we are managing the cycle in this pivot changing focus on the length of how long we want to be in some of these communities given the fact that the market might change and we want to have a shorter term of exposure. Next question.