-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GLq7Bj95DaVOa2dR0CjF6xpVdqansbX/+CaXjKF4FS20TcQ/H40rOX1nYpTNzT2H dC3A4qudCTyYXmxlwjlJqQ== 0000950123-00-001414.txt : 20000221 0000950123-00-001414.hdr.sgml : 20000221 ACCESSION NUMBER: 0000950123-00-001414 CONFORMED SUBMISSION TYPE: 425 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20000218 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: U S HOME CORP /DE/ CENTRAL INDEX KEY: 0000101640 STANDARD INDUSTRIAL CLASSIFICATION: OPERATIVE BUILDERS [1531] IRS NUMBER: 210718930 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 425 SEC ACT: SEC FILE NUMBER: 001-05899 FILM NUMBER: 548859 BUSINESS ADDRESS: STREET 1: 10707 CLAY ROAD STREET 2: P O BOX 2863 CITY: HOUSTON STATE: TX ZIP: 77252-2863 BUSINESS PHONE: (713) 877-2311 MAIL ADDRESS: STREET 1: PO BOX 2863 CITY: HOUSTON STATE: TX ZIP: 77252 FORMER COMPANY: FORMER CONFORMED NAME: UNITED STATES HOME & DEVELOPMENT CORP DATE OF NAME CHANGE: 19710713 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: U S HOME CORP /DE/ CENTRAL INDEX KEY: 0000101640 STANDARD INDUSTRIAL CLASSIFICATION: OPERATIVE BUILDERS [1531] IRS NUMBER: 210718930 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 425 BUSINESS ADDRESS: STREET 1: 10707 CLAY ROAD STREET 2: P O BOX 2863 CITY: HOUSTON STATE: TX ZIP: 77252-2863 BUSINESS PHONE: (713) 877-2311 MAIL ADDRESS: STREET 1: PO BOX 2863 CITY: HOUSTON STATE: TX ZIP: 77252 FORMER COMPANY: FORMER CONFORMED NAME: UNITED STATES HOME & DEVELOPMENT CORP DATE OF NAME CHANGE: 19710713 425 1 U.S. HOME CORPORATION 1 Filed by U.S. Home Corporation Pursuant to Rule 425 under the Securities Act of 1933 and deemed filed pursuant to Rule 14a-12 of the Securities Exchange Act of 1934 Subject Company: U.S. Home Corporation Commission File No: 001-05899 U.S. HOME CORPORATION AND LENNAR CORPORATION DISTRIBUTED THIS PRESENTATION TO MEMBERS OF THE INVESTMENT COMMUNITY BEGINNING ON FEBRUARY 17, 2000. 2 [LENNAR CORPORATION LOGO] [U.S. HOME LOGO] Investment Community Presentation February 17, 2000 3 Page 2 Transaction Overview - - Lennar Corporation will acquire U.S. Home for $36.00 per share - - Total equity purchase price of approximately $476 million to consist of 50% cash / 50% Lennar stock - - Lennar will also be assuming approximately $650 million of U.S. Home outstanding debt - - The acquisition is subject to approval by both companies' shareholders at a special shareholders' meeting to be called and is expected to be completed in mid-May - - The transaction is structured to be tax-free to those U.S. Home shareholders electing to receive Lennar stock - - We have agreed on a collar arrangement on the stock portion of the transaction - - Post-transaction, Lennar's Board of Directors will add 4 representatives from U.S. Home 4 Page 3 Financial Rationale - - The transaction is expected to be accretive to Lennar's EPS in 2000 without synergies - - Lennar's balance sheet post-transaction will continue to be one of the strongest in the homebuilding industry - homebuilding debt/EBITDA: 2.8x - homebuilding debt/total capitalization: 61.2% - - Purchase price to book value of U.S. Home of 0.8x - - Operational savings from combining administrative systems; elimination of duplicative public company costs - - Capture of higher financial services revenues and other ancillary revenues - - Increased size in terms of revenue, EBITDA and pro-forma market capitalization enhance the Company's competitive positions and economies of scale 5 Page 4 Strategic Rationale - - Creates most profitable homebuilder in the United States - - Further strengthens our leading market positions in the nation's fastest growing homebuilding markets - Florida - California - Texas - Arizona - Nevada - - Broadens geographic diversity into a number of new markets - Colorado - New Jersey - Maryland/Virginia - Ohio - Minnesota - - Enhances overall land position - - Expands product offering and expertise - - Increases focus on fast-growing retirement/active adult segment - - Very compatible operating strategies, systems and cultures - - Strengthens management at both corporate and operational levels 6 Page 5 Cultural Compatibility - - Shared values vis-a-vis associates, as well as with operating practices and principles - - U.S. Home's management to become active participants in the new enterprise - - U.S. Home expertise in housing for seniors will be invaluable in enhancing Lennar's product line and expertise in the area 7 Page 6 Lennar - Long History of Successful Expansion - -------------------------------------------------------------------------------- 1954 - Founded as a South Florida homebuilder 1972 - Entered the Arizona market 1982 - Established mortgage banking operations 1987 - Acquired Development Corporation of America, the Company's largest Florida competitor 1990 - Established operations in Texas 1996 - Expanded Texas operations via acquisition of Village Builders and Friendswood Development Company from Exxon 1996 - Established operations in California 1997 - Spin-off of commercial real estate investment and management business 1997 - Merged with Pacific Greystone 1998 - Acquired North American Title, Winncrest Homes, ColRich and Polygon Communities 2000 - Acquisition of U.S. Home 8 Page 7 Largest Homebuilders in US- Homebuilding Revenue and Total EBITDA - -------------------------------------------------------------------------------- ($ in millions)
Based on LTM Based on LTM Homebuilding Revenue(1) Total EBITDA(2) Pro-forma Lennar $4,635 Pro-forma Lennar $551 Pulte $3,841 Centex (3) $518 Kaufman and Broad $3,772 Kaufman and Broad $377 Centex $3,593 Lennar $373 D.R. Horton $3,264 D.R. Horton $370 Lennar $2,849 Pulte $337
(1) Includes revenue from sales of land and other homebuilding revenue (2) Includes financial services (3) Includes construction products 9 Page 8 Largest Homebuilders in US-Deliveries - ------------------------------------- 1999 US Ranking - Domestic Deliveries (including detached and attached homes) Pro-forma Lennar (1) 21,658 Kaufman and Broad (1) 19,933 Pulte 19,848 D.R. Horton 19,041 Centex 17,596 Lennar 12,589 Ryland 10,193 NVR 9,316 U.S. Home (1) 9,069 Beazer Homes 7,804 Del Webb 7,737 (1) Excludes joint venture activities 10 Page 9 Leading Market Positions in Fastest Growing Markets Pro-forma lots owned & controlled and LTM deliveries (1) Colorado - -------- Owned 5,759 (61%) Controlled 3,732 (39%) Total lots 9,491 Deliveries 1,178 Years supply 8.1 Minnesota - --------- Owned 1,605 (36%) Controlled 2,842 (64%) Total lots 4,447 Deliveries 753 Years supply 5.9 Ohio - ---- Owned 350 (81%) Controlled 82 (19%) Total lots 432 Deliveries 77 Years supply 5.6 Nevada - ------ Owned 1,212 (88%) Controlled 169 (12%) Total lots 1,381 Deliveries 724 Years supply 1.9 New Jersey - ---------- Owned 820 (29%) Controlled 2,007 (71%) Total lots 2,827 Deliveries 304 Years supply 9.3 California Owned 15,277 (42%) Controlled 21,353 (58%) Total lots 36,630 Deliveries 4,508 Years supply 8.1 Maryland/Virginia Owned 2,504 (73%) Controlled 915 (27%) Total lots 3,419 Deliveries 589 Years supply 5.8 Arizona Owned 4,397 (77%) Controlled 1,309 (23%) Total lots 5,706 Deliveries 2,429 Years supply 2.3 Texas Owned 10,356 (57%) Controlled 7,923 (43%) Total lots 18,279 Deliveries 4,381 Years supply 4.2 Florida Owned 16,036 (32%) Controlled 33,716 (68%) Total lots 49,752 Deliveries 6,715 Years supply 7.4 Total - ----- Owned 58,316 (44%) Controlled 74,048 (56%) Total lots 132,364 Deliveries 21,658 Years supply 6.1 (1) Lennar lot positions and deliveries as of FYE 11/30/99; U.S. Home lot positions and deliveries as of FYE 12/31/99. Note: U.S. Home deliveries exclude joint venture activities. Lennar owned lots reflect direct ownership only (lots owned by partnerships are included in controlled lots). 11 Page 10 Homebuilding Operations Highlights 12 FISCAL 1999 REVENUE FROM THE SALES OF HOMES LENNAR NV ................ 2% TX ................ 21% AZ ................ 6% CA ................ 45% FL ................ 26% Revenue = ......... $2,671.7M
U.S. HOME NV ................ 3% NJ ................ 4% OH ................ 1% TX ................ 11% AZ ................ 13% CA ................ 12% CO ................ 15% FL ................ 24% MD/VA ............. 7% MN ................ 10% Revenue = ......... $1,752.8M
PRO-FORMA COMBINED NV ................ 2% NJ ................ 2% OH ................ 0.4% TX ................ 17% AZ ................ 9% CA ................ 32% CO ................ 6% FL ................ 25% MD/VA ............. 3% MN ................ 4% Revenue = ......... $4,424.5M
Note: Totals may not add to 100% due to rounding. Excludes joint venture activities. 11 13 FISCAL 1999 HOMES DELIVERED LENNAR NV ................ 3% TX ................ 25% AZ ................ 8% CA ................ 30% FL ................ 34% Homes delivered = . 12,589
U.S. HOME NV ................ 3% NJ ................ 3% OH ................ 1% TX ................ 14% AZ ................ 15% CA ................ 9% CO ................ 13% FL ................ 27% MD/VA ............. 7% MN ................ 8% Homes delivered = . 9,069
PRO-FORMA COMBINED NV ................ 4% NJ ................ 1% OH ................ 0.4% TX ................ 20% AZ ................ 11% CA ................ 21% CO ................ 5% FL ................ 31% MD/VA ............. 3% MN ................ 4% Homes delivered = . 21,658
Note: Totals may not add to 100% due to rounding. Excludes joint venture activities. 12 14 BACKLOG AT FISCAL YEAR END 1999 LENNAR TX .................. 22% AZ/NV ............... 13% CA .................. 27% FL .................. 38% Backlog = ........... 2,891
U.S. HOME NJ ................ 7% OH ................ 1% TX ................ 14% AZ/NV ............. 12% CA ................ 6% CO ................ 19% FL ................ 29% MD/VA ............. 6% MN ................ 6% Backlog = ......... 4,343
PRO-FORMA COMBINED NJ ................ 4% OH ................ 0.4% TX ................ 17% AZ/NV ............. 12% CA ................ 15% CO ................ 11% FL ................ 33% MD/VA ............. 4% MN ................ 4% Backlog = ......... 7,234
Note: Totals may not add to 100% due to rounding. Excludes joint venture activities. 13 15 PRODUCT MIX - LTM DELIVERIES LENNAR ENTRY LEVEL/AFFORDABLE .......... 30% RETIREMENT/ACTIVE ADULT ......... 5% MOVE-UP ......................... 65%
U.S. HOME ENTRY LEVEL/AFFORDABLE .......... 35% RETIREMENT/ACTIVE ADULT ......... 25% MOVE-UP ......................... 40%
PRO-FORMA COMBINED ENTRY LEVEL/AFFORDABLE .......... 32% RETIREMENT/ACTIVE ADULT ......... 13% MOVE-UP ......................... 55%
14 16 FINANCIAL HIGHLIGHTS 17 1999 INCOME STATEMENT DATA ($ in millions, except for home sales price)
U.S. Pro-forma Lennar Home Combined ------------ ------------ ------------ Homebuilding revenue $ 2,849.2 $ 1,786.0 $ 4,635.2 Financial services revenue 269.3 38.5 307.8 ------------ ------------ ------------ LTM total revenue $ 3,118.5 $ 1,824.5 $ 4,943.0 LTM EBITDA $ 373.3 $ 177.3 $ 550.6 % margin 12.0% 9.7% 11.1% Homebuilding operating income $ 340.8 $ 113.9 $ 454.7 Financial services operating income 31.1 16.2 47.3 Average home sales price $ 212,200 $ 193,300 $ 204,300 Homebuilding gross margin 21.2% 18.5% 20.1% Homebuilding SG&A % of total homebuilding revenue 9.6% 9.8% 9.6%
16 18 PRO-FORMA BALANCE SHEET AND CREDIT STATISTICS - FYE 1999 - - Post-combination, Lennar will continue to have one of the strongest balance sheets in the industry ($ in millions)
Transaction Pro-forma Lennar U.S. Home Adjustments Combined ---------- ---------- ----------- ---------- Homebuilding debt $ 590.2 $ 650.1 $ 291.1 $ 1,531.4 Shareholders' equity 731.7 578.6 (340.4) 969.9 ---------- ---------- -------- ---------- Total capitalization $ 1,321.9 $ 1,228.7 $ (49.3) $ 2,501.3 ---------- ---------- -------- ---------- Credit statistics Homebuilding debt / EBITDA 1.6x 3.7x 2.8x EBITDA / interest incurred 6.8x 2.9x 4.2x EBITDA / cash interest incurred 8.1x 2.9x 5.1x Homebuilding debt / total capitalization 44.6% 52.9% 61.2%
Note: Lennar debt and shareholders' equity adjusted for stock repurchases since 11/30/99 17 19 PRO-FORMA DEBT COMPOSITION ($ in millions)
$ % Debt/EBITDA ---------- ---------- ----------- Bank debt $ 1,007.8 65.8% 1.9x 7 5/8% senior notes due 2009 269.5 17.6% 0.5x 3 7/8% zero coupon senior convertible debentures due 2018 237.9 15.5% 0.4x Mortgage notes 16.2 1.1% NM ---------- ---------- ----------- Total $ 1,531.4 100.0% 2.8x
- - Bank debt to be opportunistically refinanced with fixed-rate / long-term bond offerings 18 20 HOMEBUILDING DEBT TO TOTAL CAPITALIZATION Homebuilding Debt to Total Capitalization Note: Represents historical Lennar homebuilding debt to total capitalization Debt to Total Capitalization Year Percentage ---- --------------- 1984 53.2% 1985 40.5% 1986 32.7% 1987 45.9% 1988 36.4% 1989 37.5% 1990 33.2% 1991 30.8% 1992 35.7% 1993 34.1% 1994 38.1% 1995 35.6% 1996 34.2% 1997 54.6% 1998 42.6% 1999 37.3% * Reflects spin-off of LNR Property Corporation. 19 21 SUMMARY - - Creates most profitable homebuilder in the United States - - Strengthens leading market positions in fastest growing markets - - Broadens geographic diversity into a number of attractive new markets - - Enhances overall land position - - Expands product offering - - Increases focus on fast-growing retirement/active adult segment - - Very compatible culture, operating strategies/systems - - Strengthens depth of management/board - - Significant synergies to be realized - - Accretive to earnings - - Strong post-transaction balance sheet 20 22 These communications include certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectation and are naturally subject to uncertainty and changes in circumstances. Actual results may vary materially from the expectations contained herein. The forward-looking statements in this document include statements about future financial and operating results and the proposed U.S. Home Corporation/Lennar Corporation transaction. The following factors, among others, could cause actual results to differ materially from those described herein: inability to obtain, or meet conditions imposed for, governmental approvals for the merger with Lennar Corporation; failure of the U.S. Home or Lennar stockholders to approve the merger; the risk that the U.S. Home and Lennar businesses will not be integrated successfully; the costs related to the merger; and other economic, business, competitive and/or regulatory factors affecting U.S. Home's and Lennar's businesses generally. More detailed information about those factors is set forth in U.S. Home's filings with the Securities and Exchange Commission, including its Annual Report filed on Form 10-K for the fiscal year ended December 31, 1998, especially in the Management's Discussion and Analysis section, its most recent quarterly reports on Form 10-Q, and its Current Reports on Form 8-K. U.S. Home is under no obligation to (and expressly disclaims any such obligation to) update or alter its forward-looking statements whether as a result of new information, future events or otherwise. **** U.S. Home and Lennar will be jointly preparing a joint proxy statement/prospectus and will be filing such joint proxy statement/prospectus with the Securities and Exchange Commission as soon as practicable. WE URGE INVESTORS TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS TO BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, BECAUSE THEY CONTAIN IMPORTANT INFORMATION. Investors and security holders may obtain a free copy of the joint proxy statement/prospectus and other documents filed by U.S. Home Corporation and Lennar Corporation with the Securities and Exchange Commission at the Securities and Exchange Commission's web site at www.sec.gov. In addition, the joint proxy statement/prospectus and other documents filed with the Securities and Exchange Commission by U.S. Home Corporation may be obtained for free from U.S. Home Corporation by directing a request to U.S. Home Corporation, 10707 Clay Road, Houston, Texas 77041, Attention: Investor Relations, telephone (713) 877-2311. The joint proxy statement/prospectus and other documents filed with the Securities and Exchange Commission by Lennar Corporation may be obtained for free from Lennar Corporation by directing a request to Lennar Corporation, 700 Northwest 107th Avenue, 4th Floor; Miami, Florida 33172, Attention: Investor Relations, telephone (305) 559-4000. READ THE DEFINITIVE JOINT PROXY STATEMENT/PROSPECTUS CAREFULLY BEFORE MAKING A DECISION CONCERNING THE MERGER. U.S. HOME Corporation, its directors, executive officers and certain other members of U.S. Home Corporation management and employees may be soliciting proxies from U.S. Home Corporation stockholders in favor of the merger. Information concerning the participants will be set forth on a Schedule 14A filed as soon as practicable. 21 -----END PRIVACY-ENHANCED MESSAGE-----