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

Carl Garraffo, Chief Human Resource Officer

We saw a healthy in the first quarter above the company average, we have built an empire which there are questions about, we saw paces up for sales per community per month, I think we have some located community due to our land position that we acquired earlier and we have some very strong master performing communities, in Bay area they are very well position we saw good activity through the central valleys, we really didn’t see must movement in incentives to drive that sales pace a little bit but I think because of the product and the location of our communities the performance remaining strong.

Next question

Operator

Our next question comes from Michael Rehall from JP Morgan, your line is open

Micheal Rehall, JP Morgan

Thanks good morning everyone, first question I just had if possible is reference to some of the expected key of the gross margin, throughout 2015, maybe starting a little bit lower than increasing throughout the year as typically occurs but maybe not to a wide variant of range. You know coming off falsie results was just wondering if it was possible to give a little better granularity being in terms of you coming off a 25.6 and I guess excluding the gains from Chinese try walls closer to 25.3. Here you would be looking at something around the 24% range that you looking for the full range for the full year are looking a little but below that and then I just have a follow up.

Bruce Gross, Vice President and Chief Financial Officer

Mike this is Bruce around 24% as the average for the whole year, the first quarters tends to be lower because we have less volume and we have more field cost which runs through margin which brings the number down. The first quarter is to be below the 24% for the average of the year and for the rest of the year the number should be closer to that the average than a little bit higher at the very end of the year.

Micheal Rehall, JP Morgan

Ok. I guess the second question you had mentioned that you would incorporate some caution, some change in the Houston market into your full year guidance, I was wondering if you could be more granular there as well. How much margin contraction you expect in Houston, if you can give us a sense of Houston in terms of revenue impact you had and if it’s operating right now above or below average of corporate margins.

Bruce Gross, Vice President and Chief Financial Officer

Mike you it have always been our objective to call them as it been to be straight and give the best estimate of what we are seeing and out ahead of ourselves and so as it relates to Houston it is not an exact science the market have not yet quite reveal itself but there are other cross current that are defining a lot of questions that exist in the market place and of course we have injected appropriate conservative in our thinking. So to get down and to get too granular I think that we are making educated guesses in each of our market amount where the market in potential trending. We can think across a broad landscape we think about the California market and some of the foreign purchases that have come into those markets as potentially something that have to be potential considered and factored into our equation likewise in South Florida

We have a pretty robust foreign investment group and those market all have more questions than answers right now and the estimates are somewhat imperfect. What we have done with each of our division and gone through and have them at a very local level and think about the impact not just the day to day the traffic coming in but the potential impact of macroeconomics factor that I noted in my opening are choppy and sometimes confusing evaluating the market. So I’m not sure we can get particular granular its really is a market by market and community by community assessment that have kind of rolled up but what we try to do is inject the appropriate  conservatism  and thinking about 2015 and the competitive pressure in the market place as we put together our planning for the year ahead .