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

Steven King, Barkley’s

Ok that’s great, that’s very helpful thank you for that. I was wondering if you could talk a little bit about of what you are seeing in terms of incentive in behavior either from your competitors in the market place and maybe I assumed that may vary from region to region and I know people is going to be particularly interested in what you seeing in terms of posturing in Houston as well as in California so maybe you can just talk generally about qualitatively what you are seeing in terms of what you seeing in terms of incentive, behavior in terms of the field and also with a little bit of geographic flavor. Thanks

Stuart Miller, Chief Executive Officer

Ok. Let me take that Steve and say pretty much across the board were are seeing intense by competition as builders go out and chase volumes. It’s been what of you say complex market where lot of factors are impacting sales across the board, I must mention of course Houston where there are more question than answers right now from the field Houston of course is impart of an economy depending on the oil complex and the oil complex is going through a reconciliation. We haven’t seen a significant change in that market condition we have seen a little bit at the higher end of the pullback but we have anticipated in our projection, internal projection that there will be further reconciliation in that market place, it’s in part one of the reason for some of the reason the pullback in our anticipated margins and Houston is an important market to us. California we have seen less impact so far we continue to see continue to see pretty strong fine pattern in California, I know there are question about the currency changes what that will mean for some of the foreign buyers there but we haven’t seen much of a pull back there. I know there have been other reports, so across the landscape there are a lot of factors moving market and changing in the landscape and it certainly have intensified the competitive landscape for all builders.

Steven King, Barkley’s

Thanks very much.

Operator

We do have Mr. East back on the line one moment Steven East your line is open.

Steven East, EC ISI

Thank you, I don’t know I got cut off, I just heard Steve’s question but if I could just follow up a little bit, the gross margins if you could sort of break order going from 25 to 24 this year and the things you talked about the moth ball, the entry level etc., if you already answer that I apologies and I was also wanting to understand how important this mixture becomes for you as you go through 2015 and into 2016 as far as focusing on the entry level.

Rick Beckwitt, President

Het Steve its Rick we have articulated for quite a while now as that entry level market comes back there will an increasing participants in that market and we can find that in accordance, most of that activity is really geared toward Texas and parts of Florida for the most part. Also our other markets are heavily participant in that activity. In regards to the margin on that, the margin for us, on our entry level product, our lower entry product and that doesn’t mean from a pre-tax operating basis that the margin are significant difference it just the difference business model. Which regards to the legacy assets, the moth ball asset its 10% of our delivery 2015 will come from this community they carry lower margin but on blends we are pretty positive about our 24% margin for the year. It’s a good healthy margin and it could produce good bottom line profit through the company.

Steven East, EC ISI

Ok thanks. Just a follow up question on the West a big order gain I guess you can give us some clarity on what was really driving that and I heard some of the commentary about the Asian buyer etc. but a significant difference in the on last year performances vs. earlier this week and you can just paint it any color you get and how you explain the sustainability of that?