Filed Pursuant to Rule 424(b)(5)
Registration No. 333-65244
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED OCTOBER 9, 2001)
LENNAR LOGO
$350,000,000
LENNAR CORPORATION
5.950% SENIOR NOTES DUE 2013
----------------
The Notes will bear interest at the rate of 5.950% per year. Interest on
the Notes is payable semi-annually on March 1 and September 1 of each year,
beginning on September 1, 2003. The Notes will mature on March 1, 2013. We may
redeem some or all the Notes at any time. The redemption prices are discussed
under the caption "Description of Notes -- Redemption at Our Option." The Notes
will not have the benefit of any sinking fund.
The Notes will be our senior unsecured obligations and will rank equally
with all of our other senior unsecured indebtedness. Substantially all of our
subsidiaries, other than finance company subsidiaries, will guarantee the Notes.
----------------
INVESTING IN THE NOTES INVOLVES RISKS. SEE "RISK FACTORS," BEGINNING ON
PAGE S-7.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined that
this prospectus supplement or the accompanying prospectus is truthful or
complete. Any representation to the contrary is a criminal offense.
----------------
PER NOTE TOTAL
-------- ------------
Public Offering Price(1) 98.287% $344,004,500
Underwriting Discount 0.650% $ 2,275,000
Proceeds to Us (before expenses) 97.637% $341,729,500
---------------
(1) Plus accrued interest, if any, from February 5, 2003.
----------------
The underwriters expect to deliver the Notes to purchasers on or about
February 5, 2003.
----------------
Joint Book Running Managers
SALOMON SMITH BARNEY BANC ONE CAPITAL MARKETS, INC.
----------------
Joint Lead Managers
BANC OF AMERICA SECURITIES LLC DEUTSCHE BANK SECURITIES WACHOVIA SECURITIES
----------------
COMERICA SECURITIES CREDIT LYONNAIS SECURITIES UBS WARBURG
January 31, 2003
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS. WE HAVE
NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH DIFFERENT INFORMATION. WE ARE NOT
MAKING AN OFFER OF THESE SECURITIES IN ANY STATE WHERE THE OFFER IS NOT
PERMITTED. YOU SHOULD NOT ASSUME THAT THE INFORMATION CONTAINED IN THIS
PROSPECTUS SUPPLEMENT IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON THE
FRONT OF THIS PROSPECTUS SUPPLEMENT.
TABLE OF CONTENTS
PAGE
----
PROSPECTUS SUPPLEMENT
Forward-Looking Information................................. S-1
The Company................................................. S-2
Recent Developments......................................... S-3
The Offering................................................ S-4
Summary Financial Information............................... S-5
Risk Factors................................................ S-7
Use of Proceeds............................................. S-9
Capitalization.............................................. S-10
Description of Notes........................................ S-11
Underwriting................................................ S-21
Legal Matters............................................... S-22
Independent Auditors........................................ S-22
PROSPECTUS
Forward-Looking Information................................. i
Lennar...................................................... 1
Use of Proceeds............................................. 1
Ratio of Earnings to Fixed Charges.......................... 1
Description of Debt Securities.............................. 2
Description of Warrants..................................... 5
Description of Common Stock and Preferred Shares............ 5
Description of Participating Preferred Stock................ 7
Description of Depositary Shares............................ 7
Legal Matters............................................... 8
Experts..................................................... 8
Incorporation of Certain Documents by Reference............. 9
Information We File......................................... 9
FORWARD-LOOKING INFORMATION
We make forward-looking statements in this prospectus supplement, the
related prospectus and our filings with the Securities and Exchange Commission.
By their nature, forward-looking statements involve risks, uncertainties and
other factors that may cause actual results to differ materially from those
which the statements anticipate. Factors which may affect our results include,
but are not limited to, changes in general economic conditions, the market for
homes and prices for homes generally and in areas where we have developments,
the availability and cost of land suitable for residential development,
materials prices, labor costs, interest rates, consumer confidence, competition,
environmental factors and government regulations affecting our operations. See
our reports filed with the Securities and Exchange Commission and "Risk Factors"
beginning on page S-7 for a further discussion of these and other risks and
uncertainties applicable to our business.
S-1
THE COMPANY
We are one of the nation's largest homebuilders and a provider of financial
services. Our homebuilding operations include the sale and construction of
single-family attached and detached homes, as well as the purchase, development
and sale of residential land directly and through unconsolidated partnerships.
Our financial services subsidiaries provide mortgage financing, title insurance,
closing services and insurance brokerage services for both buyers of our homes
and others and sell the loans they originate in the secondary mortgage market.
These subsidiaries also provide high-speed Internet access, cable television and
alarm monitoring services to residents of communities we develop and others.
The following is a summary of our growth history:
1954 -- Founded as a Miami homebuilder.
1972 -- Entered the Arizona homebuilding market.
1986 -- Acquired Development Corporation of America in Florida.
1991 -- Entered the Texas homebuilding market.
1995 -- Entered the California homebuilding market through the acquisition
of Bramalea California, Inc.
1996 -- Expanded in California through our acquisition of Renaissance
Homes, Inc., significantly expanded our operations in Texas with
the acquisition of the assets and operations of Houston-based
Village Builders and Friendswood Development Company and acquired
Regency Title.
1997 -- Continued our expansion in California through homesite acquisitions
and unconsolidated partnership investments. Also acquired Pacific
Greystone Corporation, which further expanded our operations in
California and Arizona and brought us into the Nevada homebuilding
market.
1998 -- Acquired the properties of two California homebuilders, ColRich
Communities and Polygon Communities, acquired a Northern California
homebuilder, Winncrest Homes, and acquired North American Title.
1999 -- Acquired Southwest Land Title and Eagle Home Mortgage.
2000 -- Acquired U.S. Home Corporation, which expanded our operations into
New Jersey, Maryland/Virginia, Minnesota, Ohio and Colorado and
strengthened our position in other states, and acquired Texas
Professional Title.
2002 -- Acquired Patriot Homes, Sunstar Communities, Don Galloway Homes,
Genesee Company, Barry Andrews Homes, Cambridge Homes, Pacific
Century Homes, Concord Homes and Summit Homes, which expanded our
operations into the Carolinas and the Chicago, Baltimore and
Central Valley, California homebuilding markets and strengthened
our position in several of our established markets. We also
acquired Sentinel Title.
Our revenues from homebuilding operations increased to $6.8 billion in
fiscal 2002 from $2.2 billion in fiscal 1998, which represents a compound annual
growth rate of 33%. Over the same period, our net earnings grew to $545 million
from $144 million, a compound annual growth rate of 39%. We delivered 27,393
homes in fiscal 2002 compared with 23,899 homes in fiscal 2001 and 10,777 homes
in fiscal 1998. At November 30, 2002, the dollar value of our backlog of homes
under contract totaled $3.2 billion (12,108 homes), compared with $2.0 billion
(8,339 homes) at November 30, 2001.
S-2
RECENT DEVELOPMENTS
During fiscal 2002, we acquired nine homebuilding companies for a total of
approximately $600 million, including debt of the acquired companies. Among
other things, these acquisitions brought us for the first time into the
Carolinas and into the Chicago, Baltimore and Central Valley, California
homebuilding markets which added to our operations in that state. On January 30,
2003, we completed our acquisition of Seppala Homes, a South Carolina
homebuilder.
During fiscal 2002, Leonard Miller, one of our founders, passed away.
Because of that, voting control of a majority in voting power of our outstanding
stock was transferred to Stuart Miller, who since 1997 has been our President
and Chief Executive Officer.
We are always looking at the possibility of acquiring homebuilding or
similar companies or their assets. We frequently enter into confidentiality
agreements before we begin our exploratory evaluations of possible acquisition
opportunities. At January 31, 2003, we were a party to confidentiality
agreements relating to a number of homebuilding and other companies, including
several publicly held companies. Our exploratory evaluations under these or
future confidentiality agreements may result in acquisition transactions.
However, at the date of this prospectus supplement, we were not engaged in full
scale due diligence, and were not discussing transaction terms, regarding any
company or companies that would materially affect our balance sheet or our
income statement.
Our willingness to use Common Stock in acquisitions, or to sell Common
Stock, could be adversely affected by the fact that if at any time our Class B
Common Stock (which entitles holders to ten votes per share, is essentially
non-transferable other than through conversion into Common Stock and is almost
entirely owned by entities controlled by Stuart Miller, our President and Chief
Executive Officer, and his family) is less than 10% of the outstanding Common
Stock and Class B Common Stock taken together, all the Class B Common Stock will
automatically be converted into Common Stock. We are considering possible ways
of changing our capital structure to facilitate acquisitions and equity
offerings, including possible ways to increase the number of outstanding shares
of Class B Common Stock, in order to increase the number of shares of Common
Stock we could issue.
S-3
THE OFFERING
The summary below describes the principal terms of the Notes. Certain of
the terms and conditions described below are subject to limitations and
exceptions. The "Description of Notes" section of this prospectus supplement
contains a more detailed description of the terms and conditions of the Notes.
Securities Offered............ $350,000,000 aggregate principal amount of
5.950% Senior Notes due 2013.
Maturity Date................. March 1, 2013.
Interest Payment Dates........ Payable semi-annually on March 1 and September
1 of each year, beginning September 1, 2003.
Sinking Fund.................. None.
Ranking....................... The Notes are our senior unsecured obligations.
They have the same priority as all our other
unsecured and unsubordinated indebtedness.
However, the Notes are in effect subordinate to
the obligations of our subsidiaries who are not
guarantors and to our obligations that are
secured to the extent of the security. As of
November 30, 2002, we had $1.015 billion of
secured indebtedness outstanding.
Guarantees.................... Substantially all of our current subsidiaries,
other than our finance company subsidiaries,
will guarantee the Notes. However, the
guarantees by particular subsidiaries will be
suspended during any period when they are not
guaranteeing at least $75 million, in the
aggregate, of parent company debt (other than
the Notes) and debt of other guarantors.
Optional Redemption........... We may redeem any or all of the Notes at any
time at a redemption price equal to the greater
of (a) 100% of the principal amount of the
Notes being redeemed and (b) the sum of the
present values of the remaining scheduled
payments of principal and interest on the Notes
being redeemed, discounted to the redemption
date on a semiannual basis (assuming a 360-day
year consisting of twelve 30-day months) at the
comparable Treasury rate plus 30 basis points,
plus, in each case, accrued and unpaid interest
on the Notes to the redemption date.
Certain Indenture
Provisions.................... The Indenture governing the Notes will contain
covenants limiting our and some of our
subsidiaries' ability to create liens securing
indebtedness or enter into sale and leaseback
transactions. These covenants are subject to
important exceptions and qualifications. See
"Description of Notes -- Certain Covenants."
Use of Proceeds............... We will add the net proceeds from the sale of
the Notes to our general working capital so
that the net proceeds will be available for use
in our operations, for acquisitions and to
purchase or repay outstanding indebtedness.
Until we use the net proceeds for these or
other purposes, we may invest the proceeds in
short-term, interest-bearing investments. See
"Use of Proceeds."
Risk Factors.................. Investing in the Notes involves risks. See
"Risk Factors" for a description of certain
risks you should consider before investing in
the Notes.
S-4
SUMMARY FINANCIAL INFORMATION
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
The following table contains summary financial and operating information
about us. The financial information at or for the year ended November 30, 2002
has been derived from unaudited financial statements which are in the process of
being audited. In the opinion of our management, the unaudited financial
statements include all adjustments, consisting only of normal recurring
adjustments, necessary for a fair statement of the results for the unaudited
period.
The summary financial and operating information at or for the years ended
November 30, 1998 through 2001 has been derived from our audited consolidated
financial statements. The historical financial information should be read in
conjunction with our annual report on Form 10-K for the fiscal year ended
November 30, 2001 and our quarterly reports on Form 10-Q for fiscal 2002, which
are incorporated by reference into the prospectus which accompanies this
prospectus supplement.
AT OR FOR THE YEARS ENDED NOVEMBER 30,
-----------------------------------------------------------
2002 2001 2000 1999 1998
----------- --------- --------- --------- ---------
(UNAUDITED)
RESULTS OF OPERATIONS:
Revenues:
Homebuilding.................... $6,835,583 5,603,947 4,390,034 2,849,207 2,204,428
Financial services.............. $ 484,219 425,354 316,934 269,307 212,437
Total revenues.................. $7,319,802 6,029,301 4,706,968 3,118,514 2,416,865
Operating earnings:
Homebuilding.................... $ 979,623 785,626 480,796 340,803 283,369
Financial services.............. $ 127,611 89,131 43,595 31,096 33,335
Corporate general and
administrative expenses......... $ 85,958 75,831 50,155 37,563 28,962
Earnings before provision for
income taxes.................... $ 875,709 679,423 375,635 285,477 240,114
Net earnings....................... $ 545,129 417,845 229,137 172,714 144,068
Net earnings per share (diluted)... $ 7.72 6.01 3.64 2.74 2.49
FINANCIAL POSITION:
Inventories........................ $3,237,577 2,416,541 2,301,584 1,274,551 1,198,553
Total assets....................... $5,755,633 4,714,426 3,777,914 2,057,647 1,917,834
Homebuilding debt.................. $1,585,309 1,505,255 1,254,650 523,661 530,630
Financial services debt............ $ 862,618 707,077 448,860 278,634 268,208
Total debt......................... $2,447,927 2,212,332 1,703,510 802,295 798,838
Stockholders' equity............... $2,229,157 1,659,262 1,228,580 881,499 715,665
OTHER DATA:
Depreciation and amortization...... $ 47,031 48,383 44,267 38,956 25,264
Interest incurred(1)............... $ 130,597 127,926 117,444 54,640 50,464
Ratio of earnings to fixed
charges......................... 6.7 5.3 3.5 4.7 4.7
Homebuilding debt as a percentage
of total capitalization(2)...... 42% 48% 51% 37% 43%
Homebuilding net debt as a
percentage of total
capitalization(3)............... 28% 29% 44% 33% 41%
EBITDA(4):
Homebuilding.................... $ 933,444 748,528 464,499 332,745 275,169
Consolidated(5)................. $1,068,307 847,309 518,502 373,292 313,006
Homebuilding EBITDA to interest
incurred(1)..................... 7.1 5.9 4.0 6.1 5.5
Consolidated EBITDA to interest
incurred(1)(5).................. 8.2 6.6 4.4 6.8 6.2
S-5
AT OR FOR THE YEARS ENDED NOVEMBER 30,
-----------------------------------------------------------
2002 2001 2000 1999 1998
----------- --------- --------- --------- ---------
(UNAUDITED)
DELIVERY AND BACKLOG INFORMATION
(INCLUDING UNCONSOLIDATED
PARTNERSHIPS):
Number of homes delivered.......... 27,393 23,899 18,578 12,606 10,777
Backlog of home sales
contracts(6).................... 12,108 8,339 8,363 2,903 4,100
Dollar value of backlog(6)......... $3,200,000 1,982,000 2,072,000 662,000 840,000
---------------
(1) Interest incurred excludes all interest on financial services debt.
(2) Total capitalization for purposes of this ratio represents homebuilding debt
and stockholders' equity. It does not reflect the issuance of the Notes.
(3) Total capitalization for purposes of this ratio represents homebuilding net
debt and stockholders' equity. It does not reflect the issuance of the
Notes. Homebuilding net debt is homebuilding debt net of homebuilding cash.
(4) Earnings before deductions for interest, taxes, depreciation and
amortization, or EBITDA, is provided because it is a measure commonly used
to evaluate a company's ability to service its indebtedness. EBITDA is
presented to enhance the understanding of our operating results and is not
intended to represent cash flows or results of operations in accordance with
accounting principles generally accepted in the United States, or GAAP, for
the periods indicated. EBITDA is not a measurement under GAAP and is not
necessarily comparable with similarly titled measures of other companies.
(5) Consolidated EBITDA includes financial services operating earnings before
financial services depreciation and amortization. We do not add back
interest expense of our financial services subsidiaries to calculate
consolidated EBITDA.
(6) Backlog is the number of homes subject to pending sales contracts, some of
which are subject to contingencies. Although contracts relating to these
homes were executed, there can be no assurance that the sales will be
completed.
S-6
RISK FACTORS
The following factors should be given particular consideration by people
considering an investment in the Notes.
- We are subject to the cyclical nature of the home sales market. The
residential homebuilding industry is cyclical and is highly sensitive to
changes in general economic conditions, such as levels of employment,
consumer confidence and income, availability of financing, interest rate
levels and demand for housing. The resale market for used homes,
including foreclosed homes, also affects the sale of new homes or
cancellation of contracts in backlog.
Although the homebuilding business historically has been cyclical, it has
not undergone a down cycle in a number of years. This has led some people
to assert that the prices of homes and the stocks of homebuilding
companies are overvalued and will decline when the market for new homes
begins to weaken. A decline in prices of stocks of homebuilding companies
could make it more difficult and more expensive for us to raise funds
through stock issuances if we needed funds to meet our obligations or
otherwise wanted to do so.
- We could be affected by prices or shortages of materials or by weather
conditions. The residential homebuilding industry has, from
time-to-time, experienced fluctuating lumber prices and supply, as well
as shortages of other materials and labor, including insulation, drywall,
concrete, carpenters, electricians and plumbers. Delays in construction
of homes due to these factors or due to weather conditions could have an
adverse effect upon our operations.
- We are dependent on the availability of suitable land. Our ability to
build homes depends upon our being able to acquire at acceptable prices
land that is suitable for residential development in the areas in which
we want to build homes. Because of this, we maintain, directly or through
partnerships or similar arrangements, a significant inventory of land,
much of which is undeveloped or only partially developed.
- We could be affected by government regulations. All our businesses are
subject to substantial government regulation. In particular, the
homebuilding business is subject to government regulations relating to
land use, water rights, construction materials, building design and
minimum elevation of properties, as well as a variety of environmental
matters. Changes in government regulations often increase the cost of
building homes in areas in which we have communities and could prevent
entirely the building of new homes in some areas.
- We could be affected by inflation or deflation. Inflation can increase
the cost of building materials, land, labor and other construction
related costs. Conversely, deflation can reduce the value of our land
inventory and make it more difficult to recover the full cost of
previously purchased land in home sale prices.
- Customers may be unwilling or unable to purchase our homes at times when
mortgage financing costs are high. Virtually all of our homebuyers
finance their acquisitions through our financial services subsidiaries or
third-party lenders. In general, housing demand is adversely affected by
increases in interest rates and by decreases in the availability of
mortgage financing. If effective mortgage interest rates increase and the
ability or willingness of prospective buyers to finance home purchases is
adversely affected, our operating results may be negatively affected. Our
homebuilding activities also are dependent upon the availability and cost
of mortgage financing for buyers of homes currently owned by potential
purchasers of our homes who cannot purchase our homes until they sell
their current homes.
- Our operating results vary from quarter to quarter. We have historically
experienced, and expect to continue to experience, variability in
operating results on a quarterly basis. Factors which may contribute to
this variability include, but are not limited to:
-- the timing of home deliveries and land sales;
S-7
-- the timing of receipt of regulatory approvals for the construction of
homes;
-- the condition of the real estate market, prices for homes and general
economic conditions;
-- the cyclical nature of the homebuilding and financial services
industries;
-- prevailing interest rates and availability of mortgage financing;
-- the increase in the number of homes available for sale in the
marketplace;
-- pricing policies of our competitors;
-- the timing of the opening of new residential communities;
-- weather conditions; and
-- the cost and availability of materials and labor.
- We could be hurt by loss of key personnel. Our success depends to a
significant degree on the efforts of our senior management. Our
operations may be adversely affected if key members of senior management
cease to be active in our Company. We have designed our compensation
structure and employee benefit programs to encourage long-term employment
by senior management.
- Because the Notes are structurally subordinated to the obligations of our
subsidiaries that are not guarantors, you may not be fully repaid if we
become insolvent. Substantially all of our operating assets are held
directly by our subsidiaries. Holders of any preferred stock of any of
our subsidiaries that are not guarantors and creditors of any of those
subsidiaries, including trade creditors, have and will have claims
relating to the assets of that subsidiary that are senior to the Notes.
As a result, the Notes are structurally subordinated to the debts,
preferred stock and other obligations of those subsidiaries.
- Because the Notes are unsecured, you may not be fully repaid if we become
insolvent. The Notes will not be secured by any of our assets or our
subsidiaries' assets. Our obligations under our $1.3 billion senior
secured credit facilities, as well as our obligations under our
outstanding 7 5/8% Senior Notes due 2009 and our Zero Coupon Senior
Convertible Debentures due 2018, are secured by a pledge of the stock of
substantially all of our subsidiaries. As of November 30, 2002, we had
$1.015 billion of secured indebtedness outstanding. If we become
insolvent the holders of any secured debt would receive payments from the
assets used as security before you receive payments from sales of the
subsidiaries' stock. However, to the extent the subsidiaries are
guaranteeing the Notes, their assets would be applied to Note payments
before they would be available to the subsidiaries' shareholders.
- There is no public market for the Notes, so you may be unable to sell the
Notes. The Notes are new securities for which there is currently no
market. Consequently, the notes may be relatively illiquid, and you may
be unable to sell your Notes. We do not intend to apply for listing of
the Notes on any securities exchange or for the inclusion of the Notes in
any automated quotation system.
- Our senior secured credit facilities may prohibit us from redeeming the
Notes. Our senior secured credit facilities may not permit us or our
subsidiaries to make payments on any outstanding indebtedness other than
regularly scheduled interest and principal payments as and when due. As a
result, our senior secured credit facilities could prohibit us from
making any payment on the Notes in the event that the Notes are redeemed.
Any failure to pay the redemption price on the Notes would result in an
event of default under the indenture governing the Notes, which in turn
is likely to be a default under the senior secured credit facilities and
other outstanding and future indebtedness.
- Fraudulent conveyance considerations. Under fraudulent conveyance laws,
the guarantees by our subsidiaries might be subordinated to existing or
future indebtedness incurred by those subsidiaries
S-8
who are guarantors, or might not be enforceable, if a court or a
creditors representative, such as a bankruptcy trustee, concluded that
those subsidiaries:
-- Received less than fair consideration for the guarantees;
-- Were rendered insolvent as a result of issuing the guarantees;
-- Were engaged in a business or transaction for which our or our
subsidiaries' remaining assets constituted unreasonably small capital;
-- Intended to incur, or believed that we or they would incur, debts
beyond our or their ability to pay as those debts matured; or
-- Intended to hinder, delay or defraud our or their creditors.
The measure of insolvency varies depending upon the law of the relevant
jurisdiction. Generally, however, a company is considered insolvent if its
debts are greater than the fair value of its property, or if the fair
saleable value of its assets is less than the amount that would be needed
to pay its probable liabilities as its existing debts matured and became
absolute.
- We have a controlling stockholder. We have two classes of stock: Common
Stock, which is entitled to one vote per share, and Class B Common Stock,
which is entitled to ten votes per share. Stuart Miller, our President
and Chief Executive Officer, has voting control, through family owned
entities, of Class B Common Stock that entitles the holders to
approximately 64% of the combined votes that can be cast by the holders
of our outstanding Common Stock and Class B Common Stock combined. That
gives Mr. Miller the power to elect all our directors and to approve most
matters that are presented to our stockholders, even if no other
stockholders vote in favor of them. Mr. Miller's voting control might
discourage someone from making a significant equity investment in us,
even if we needed the investment to meet our obligations (including those
on the Notes) and to operate our business.
USE OF PROCEEDS
We expect to receive net proceeds of approximately $341.6 million from the
sale of the Notes after deducting underwriting discounts and our expenses
related to this offering. We will add these net proceeds to our general working
capital so that the proceeds will be available for use in our operations, for
acquisitions and to purchase or repay outstanding indebtedness. Until we use the
net proceeds for these or other purposes, we may invest them in short-term,
interest-bearing investments.
S-9
CAPITALIZATION
(In thousands, except per share amounts)
The table below shows our capitalization at November 30, 2002 on an
unaudited actual basis and as adjusted to give effect to the issuance of the
Notes:
ACTUAL AS ADJUSTED
---------- -----------
(UNAUDITED)
DEBT:
Revolving credit facilities................................. $ -- $ --
Term Loan B................................................. 391,000 391,000
Zero Coupon Senior Convertible Debentures due 2018.......... 266,917 266,917
Zero Coupon Convertible Senior Subordinated Notes due
2021...................................................... 248,138 248,138
7 5/8% Senior Notes due 2009................................ 272,591 272,591
9.95% Senior Notes due 2010................................. 300,175 300,175
5.950% Senior Notes due 2013................................ -- 344,005
Other public debt........................................... 21,941 21,941
Other debt.................................................. 84,547 84,547
---------- ----------
Total homebuilding debt................................... 1,585,309 1,929,314
Financial services debt..................................... 853,416 853,416
Limited-purpose finance subsidiaries debt................... 9,202 9,202
---------- ----------
Total debt................................................ 2,447,927 2,791,932
---------- ----------
STOCKHOLDERS' EQUITY:
Common Stock of $0.10 par value per share, 65,061 shares
issued(1)................................................. 6,506 6,506
Class B Common Stock of $0.10 par value per share, 9,700
shares issued............................................. 970 970
Additional paid-in capital.................................. 873,502 873,502
Retained earnings........................................... 1,538,945 1,538,945
Unearned restricted stock................................... (7,337) (7,337)
Deferred compensation plan, 60 common shares................ (1,103) (1,103)
Deferred compensation liability............................. 1,103 1,103
Treasury stock, at cost, 9,848 common shares................ (158,992) (158,992)
Accumulated other comprehensive loss........................ (24,437) (24,437)
---------- ----------
Total stockholders' equity............................. 2,229,157 2,229,157
---------- ----------
Total capitalization................................. $4,677,084 $5,021,089
========== ==========
---------------
(1) Does not include 6,105 shares of Common Stock issuable upon conversion of
the Zero Coupon Senior Convertible Debentures due 2018, 4,040 shares of
Common Stock issuable upon conversion of the Zero Coupon Convertible Senior
Subordinated Notes due 2021, or 2,414 shares of Common Stock issuable upon
exercise of stock options which were outstanding at November 30, 2002.
S-10
DESCRIPTION OF NOTES
We have summarized certain terms of the Notes and the Indenture in this
section. This summary is not complete. The following description of the
particular terms of the Notes supplements the description in the accompanying
prospectus of the general terms and provisions of the debt securities. To the
extent that the following description of Notes is inconsistent with that general
description in the prospectus, the following description replaces that in the
prospectus.
We will issue the Notes under an Indenture dated as of December 31, 1997
between us and Bank One Trust Company, N.A. (as successor to First National Bank
of Chicago), as trustee (the "Trustee"), as supplemented by a Supplemental
Indenture to be dated as of February 5, 2003 (the "Indenture"). We have filed
the Indenture with the SEC. You should read the Indenture for additional
information before you purchase any Notes. The Indenture is subject to, and
governed by, the Trust Indenture Act of 1939, as amended (the "TIA").
Capitalized terms used but not defined in this section have the meanings
specified in the Indenture. For purposes of this "Description of Notes," "we" or
"us" refers to Lennar Corporation and does not include our subsidiaries except
in references to financial data determined on a consolidated basis.
GENERAL
The Notes will be our direct, unsecured obligations and will rank equal in
right of payment by us with all of our other unsecured and unsubordinated
indebtedness. The Notes will be issued in denominations of $1,000 principal
amount and integral multiples of that amount and will be payable, and may be
presented for registration of transfer and exchange, without service charge, at
our office maintained for such purpose in New York, New York. Initially, that
office will be the office or agency of the Trustee.
The Notes are limited in aggregate principal amount to $350,000,000, but we
may, without consent of the Holders, "reopen" the Notes series and issue
additional Notes at any time on the same terms and conditions and with the same
CUSIP number as the Notes we offer by this prospectus supplement. The Notes will
mature on March 1, 2013 and will bear interest at the rate per annum set forth
on the front cover of this prospectus supplement. Interest on the Notes will be
payable semi-annually on March 1 and September 1 of each year, commencing
September 1, 2003. We will pay interest to the persons in whose names the Notes
are registered at the close of business on the February 15 and August 15
immediately preceding each interest payment date. Interest will be calculated on
the basis of a 360-day year consisting of twelve 30-day months. There is no
sinking fund applicable to the Notes.
In connection with the Notes, we have not agreed to any financial covenants
or any restrictions on the payment of dividends or the issuance or repurchase of
our securities. We have agreed to no covenants or other provisions to protect
Holders of the Notes in the event of a highly leveraged transaction or a change
in control transaction.
REDEMPTION AT OUR OPTION
We may, at our option, redeem the Notes in whole at any time or in part
from time to time, on at least 30 but not more than 60 days' prior notice, at a
redemption price equal to the greater of:
- 100% of their principal amount, and
- the present value of the Remaining Scheduled Payments (as defined below)
on the Notes being redeemed, discounted to the date of redemption, on a
semiannual basis, at the Treasury Rate plus 30 basis points (0.30%).
We will also pay accrued interest on the Notes being redeemed to the date
of redemption. In determining the redemption price and accrued interest,
interest will be calculated on the basis of a 360-day year consisting of twelve
30-day months.
If money sufficient to pay the redemption price of and accrued interest on
the Notes to be redeemed is deposited with the Trustee on or before the
redemption date, on and after the redemption date interest
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will cease to accrue on the Notes (or such portions thereof) called for
redemption and such Notes will cease to be outstanding.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Reference Treasury Dealer as having a maturity comparable to the
remaining term of the Notes to be redeemed that would be utilized, at the time
of selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the remaining term
of the Notes.
"Comparable Treasury Price" means, with respect to any redemption date, (1)
the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
business day preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (2) if such release (or any successor release) is not
published or does not contain such price on such business day, (A) the average
of the Reference Treasury Dealer Quotations for such redemption date, after
excluding the highest and lowest such Reference Treasury Dealer Quotations, or
(B) if the Trustee obtains fewer than four such Reference Treasury Dealer
Quotations, the average of all such quotations.
"Reference Treasury Dealer" means (A) Salomon Smith Barney Inc. and Banc
One Capital Markets, Inc. (or their respective affiliates which are Primary
Treasury Dealers), and their respective successors; provided, however, that if
either of the foregoing shall cease to be a primary U.S. Government securities
dealer in New York City (a "Primary Treasury Dealer"), we will substitute
therefor another Primary Treasury Dealer; and (B) any other Primary Treasury
Dealer(s) selected by us.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
the Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m. on the
third business day preceding such redemption date.
"Remaining Scheduled Payments" means, with respect to any Note, the
remaining scheduled payments of the principal (or of the portion) thereof to be
redeemed and interest thereon that would be due after the related redemption
date but for such redemption; provided, however, that, if such redemption date
is not an interest payment date with respect to such Note, the amount of the
next succeeding scheduled interest payment thereon will be reduced by the amount
of interest accrued thereon to such redemption date.
"Treasury Rate" means, with respect to any redemption date, the rate per
annum equal to the semiannual equivalent yield to maturity of the Comparable
Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as
a percentage of its principal amount) equal to the Comparable Treasury Price for
such redemption date.
THE GUARANTEES
Each of the guarantors will unconditionally guarantee on a joint and
several basis all of our obligations under the Notes, including our obligations
to pay principal, premium, if any, and interest with respect to the Notes. The
guarantees will be general unsecured obligations of the guarantors and will rank
pari passu with all existing and future unsecured indebtedness of the guarantors
that is not, by its terms, expressly subordinated in right of payment to the
guarantees or other senior Indebtedness of the guarantors. The obligations of
each guarantor are limited to the maximum amount which, after giving effect to
all other contingent and fixed liabilities of such guarantor and after giving
effect to any collections from or payments made by or on behalf of any other
guarantor in respect of the obligations of such other guarantor under its
guarantee or pursuant to its contribution obligations under the Indenture, will
result in the obligations of such guarantor under its guarantee not constituting
a fraudulent conveyance or fraudulent transfer under federal or state law. Each
guarantor that makes a payment or distribution under a guarantee
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shall be entitled to a contribution from each other guarantor in an amount pro
rata, based on the net assets of each guarantor, determined in accordance with
GAAP.
The Indenture will require that each of our existing and future
Subsidiaries (other than any foreign Subsidiary and any finance company
Subsidiary) that guarantees any Indebtedness of us or any other Subsidiary
(other than guarantees by Subsidiaries of U.S. Home Corporation (one of our
Subsidiaries) solely of U.S. Home's obligations under the Senior Secured Credit
Facilities) be a guarantor. However, the guarantee of the Notes by a subsidiary
will be suspended, and that subsidiary will not be a guarantor and will not have
any obligations with regard to the Notes, during any period when the principal
amount of our (i.e. Lennar Corporation's) or any Restricted Subsidiary's
obligations other than the Notes that the subsidiary is guaranteeing totals, in
the aggregate, less than $75 million.
The Indenture will provide that if all or substantially all of the assets
of any guarantor or all of the capital stock of any guarantor is sold (including
by consolidation, merger, issuance or otherwise) or disposed of (including by
liquidation, dissolution or otherwise) by Lennar or any of its Subsidiaries,
then such guarantor or the Person acquiring such assets (in the event of a sale
or other disposition of all or substantially all of the assets of such
guarantor) shall be deemed automatically and unconditionally released and
discharged from any of its obligations under the Indenture without any further
action on the part of the Trustee or any Holder of the Notes.
CERTAIN COVENANTS
Limitation on Liens. We will not, nor will we permit any Restricted
Subsidiary to, create, assume, incur or suffer to exist any Lien upon any of our
or its properties, whether owned on the date of original issuance of the Notes
("Issue Date") or thereafter acquired, unless:
- if such Lien secures indebtedness ranking equal in right of payment with
the Notes, then the Notes are secured on an equal and ratable basis with
the obligation so secured until such time as such obligation is no longer
secured by a Lien;
- if such Lien secures Indebtedness which is subordinated to the Notes,
then the Notes are secured and the Lien securing such Indebtedness is
subordinated to the Lien granted to the Holders of the Notes to the same
extent as such Indebtedness is subordinated to the Notes; or
- such Lien is a Permitted Lien (as defined below).
The following Liens are "Permitted Liens":
- Liens on property of a Person existing at the time such Person is merged
into or consolidated with or otherwise acquired by us or any Restricted
Subsidiary, provided that such Liens were in existence prior to, and were
not created in contemplation of, such merger, consolidation or
acquisition and do not extend to any assets other than those of the
Person merged into or consolidated with us or any Restricted Subsidiary;
- Liens on property existing at the time of acquisition thereof by us or
any Restricted Subsidiary; provided that such Liens were in existence
prior to, and were not created in contemplation of, such acquisition and
do not extend to any assets other than the property acquired;
- Liens imposed by law such as carriers', warehouseman's or mechanics'
Liens, and other Liens to secure the performance of statutory
obligations, surety or appeal bonds, performance bonds or other
obligations of a like nature incurred in the ordinary course of business;
- Liens incurred in connection with pollution control, industrial revenue,
water, sewage or any similar bonds;
- Liens securing Indebtedness representing, or incurred to finance, the
cost of acquiring, constructing or improving any assets, provided that
the principal amount of such Indebtedness does not exceed 100% of such
cost, including construction charges;
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- Liens securing Indebtedness (A) between a Restricted Subsidiary and us,
or (B) between Restricted Subsidiaries;
- Liens incurred in the ordinary course of business to secure performance
of obligations with respect to statutory or regulatory requirements,
performance or return-of-money bonds, surety bonds or other obligations
of a like nature, in each case which are not incurred in connection with
the borrowing of money, the obtaining of advances or credit or the
payment of the deferred purchase price of property and which do not in
the aggregate impair in any material respect the use of property in the
operation of our business taken as a whole;
- pledges or deposits under workmen's compensation laws, unemployment
insurance laws or similar legislation, or good faith deposits in
connection with bids, tenders, contracts (other than for the payment of
indebtedness) or leases to which Lennar or any Restricted Subsidiary is a
party, or deposits to secure public or statutory obligations of us or of
any Restricted Subsidiary or deposits for the payment of rent, in each
case incurred in the ordinary course of business;
- Liens granted to any bank or other institution on the payments to be made
to such institution by us or any Subsidiary pursuant to any interest rate
swap or similar agreement or foreign currency hedge, exchange or similar
agreement designed to provide protection against fluctuations in interest
rates and currency exchange rates, respectively, provided that such
agreements are entered into in, or are incidental to, the ordinary course
of business;
- Liens arising solely by virtue of any statutory or common law provision
relating to banker's Liens, rights of set off or similar rights and
remedies;
- Liens arising from the Uniform Commercial Code financing statements
regarding leases;
- Liens securing indebtedness incurred to finance the acquisition,
construction, improvement, development or expansion of a property which
is given within 180 days of the acquisition, construction, improvement,
development or expansion of such property and which is limited to such
property;
- Liens incurred in connection with Non-Recourse Indebtedness;
- Liens existing on the Issue Date;
- Liens for taxes, assessments or governmental charges or claims that are
not yet delinquent or that are being contested in good faith by
appropriate proceedings promptly instituted and diligently concluded;
provided that any reserve or other appropriate provision as shall be
required in conformity with GAAP shall have been made therefor;
- Liens securing refinancing Indebtedness; provided that any such Lien does
not extend to or cover any property or assets other than the property or
assets securing Indebtedness so refunded, refinanced or extended;
- easements, rights-of-way and other similar encumbrances incurred in the
ordinary course of business and encumbrances consisting of zoning
restrictions, licenses, restrictions on the use of property or minor
imperfections in title thereto which, in the aggregate, are not material
in amount, and which do not in any case materially detract from our
properties subject thereto; and
- any extensions, substitutions, modifications, replacements or renewals of
the Permitted Liens described above.
Notwithstanding the foregoing, we may, and any Restricted Subsidiary may,
create, assume, incur or suffer to exist any Lien upon any of our properties or
assets without equally and ratably securing the Notes if the aggregate amount of
all Indebtedness then outstanding secured by such Lien and all other Liens which
are not Permitted Liens, together with the aggregate net sales proceeds from all
Sale-Leaseback Transaction which are not Permitted Sale Leaseback Transactions
(as defined below), does not exceed 20% of Total Consolidated Stockholders'
Equity.
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Sale and Leaseback Transactions. We will not, nor will we permit any
Restricted Subsidiary to, enter into any Sale-Leaseback Transaction, except for
any of the following "Permitted Sale-Leaseback Transactions":
- a Sale-Leaseback Transaction involving the leasing by us or any
Restricted Subsidiary of model homes in our communities;
- a Sale-Leaseback Transaction relating to a property which occurs within
180 days from the date of acquisition of such property by us or a
Restricted Subsidiary or the date of the completion of construction or
commencement of full operations on such property, whichever is later;
- a Sale-Leaseback Transaction where we, within 365 days after such
Sale-Leaseback Transaction, apply or cause to be applied to the
retirement of our or any Restricted Subsidiary's Funded Debt (other than
our Funded Debt which by its terms or the terms of the instrument
pursuant to which it was issued is subordinate in right of payment to the
Notes) proceeds of the sale of such property, but only to the extent of
the amount of proceeds so applied;
- a Sale-Leaseback Transaction where we or our Restricted Subsidiaries
would, on the effective date of the relevant sale or transfer, be
entitled, pursuant to the Indenture, to issue, assume or guarantee
Indebtedness secured by a Lien upon the relevant property at least equal
in amount to the then present value (discounted at the actual rate of
interest of the Sale-Leaseback Transaction) of the obligation for the net
rental payments in respect of such Sale-Leaseback Transaction without
equally and ratably securing the Notes;
- a Sale-Leaseback Transaction between (A) Lennar and a Restricted
Subsidiary or (B) between Restricted Subsidiaries, so long as the lessor
is Lennar or a wholly-owned Restricted Subsidiary; or
- a Sale-Leaseback Transaction which has a lease of no more than three
years in length.
Notwithstanding the foregoing provisions, we may, and may permit any
Restricted Subsidiary to, effect any Sale-Leaseback Transaction involving any
real or tangible personal property which is not a Permitted Sale-Leaseback
Transaction, provided that the aggregate net sales proceeds from all Sale-
Leaseback Transactions which are not Permitted Sale-Leaseback Transactions,
together with all Indebtedness secured by Liens other than Permitted Liens, does
not exceed 20% of Total Consolidated Stockholders' Equity.
COMPLIANCE CERTIFICATE
We must deliver to the Trustee, within 120 days after the end of each
fiscal year, an Officers' Certificate as to the signer's knowledge of our
compliance with all conditions and our covenants in the Indenture. The Officers'
Certificate also must state whether or not the signer knows of any Default or
Event of Default. If the signer knows of such a Default or Event of Default, the
Officers' Certificate must describe the Default or Event of Default and the
efforts to remedy it. For the purposes of this provision of the Indenture,
compliance is determined without regard to any grace period or requirement of
notice under the Indenture.
EVENTS OF DEFAULT AND REMEDIES
The following are Events of Default under the Indenture:
- if we fail to pay any interest on the Notes continuing for 30 days after
it was due;
- if we fail to pay any principal or redemption price due with respect to
the Notes;
- our or any Restricted Subsidiary's failure to fulfill an obligation to
pay Indebtedness for borrowed money (other than Indebtedness which is
non-recourse to us or any Restricted Subsidiary), which such failure
shall have resulted in the acceleration of, or be a failure to pay at
final maturity, Indebtedness aggregating more than $50 million;
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- our failure to perform any other covenant or warranty in the Indenture,
continued for 30 days after written notice as provided in the Indenture;
- final judgments or orders are rendered against us or any Restricted
Subsidiary which require the payment by us or any Restricted Subsidiary
of an amount (to the extent not covered by insurance) in excess of $50
million and such judgments or orders remain unstayed or unsatisfied for
more than 60 days and are not being contested in good faith by
appropriate proceedings; and
- certain events of bankruptcy, insolvency or reorganization with respect
to us or any Restricted Subsidiary.
If an Event of Default has occurred and is continuing, the Trustee or the
Holders of not less than 25% in principal amount of the Notes then outstanding
may declare the principal amount of the Notes then outstanding and interest, if
any, accrued thereon to be due and payable immediately. However, if we cure all
defaults (except the nonpayment of the principal and interest due on any of the
Notes that have become due by acceleration) and certain other conditions in the
Indenture are met, with certain exceptions, such declaration may be annulled and
past defaults may be waived by the Holders of a majority of the principal amount
of the Notes then outstanding. In the case of certain events of bankruptcy or
insolvency, the principal amount of the Notes will automatically become and be
immediately due and payable.
Within 90 days after a Trust Officer (as defined in the Indenture) has
knowledge of the occurrence of a Default or any Event of Default, the Trustee
must mail to all Holders notice of all Defaults or Events of Default known to a
Trust Officer, unless such Default or Event of Default is cured or waived before
the giving of such notice. However, except in the case of a payment default on
any of the Notes, the Trustee will be protected in withholding such notice if
and so long as a trust committee of directors and/or officers of the Trustee in
good faith determines that the withholding of such notice is in the interest of
the Holders.
The Holders of a majority in principal amount of the Notes then outstanding
will have the right to direct the time, method and place of conducting any
proceedings for any remedy available to the Trustee with regard to the Notes,
subject to certain limitations specified in the Indenture.
MODIFICATIONS OF THE INDENTURE
With the consent of the Holders of not less than a majority in principal
amount of the Notes at the time outstanding, we and the Trustee may modify the
Indenture or any supplemental indenture or the rights of the Holders of the
Notes. However, without the consent of each Holder of Notes which is affected,
we cannot:
- extend the fixed maturity of any Note;
- reduce the rate or extend the time for the payment of interest;
- reduce the principal amount of any Note or the redemption price;
- impair the right of a Holder to institute suit for the payment thereof;
or
- change the currency in which the Notes are payable.
In addition, without the consent of the Holders of all of the Notes then
outstanding, we cannot reduce the percentage of Notes the Holders of which are
required to consent to any such supplemental indenture.
GLOBAL SECURITIES
The Notes will be issued in the form of one or more global securities
("Global Securities") that will be deposited with, or on behalf of, The
Depository Trust Company, New York, New York (the "Depositary"). Interests in
the Global Securities will be issued only in denominations of $1,000 principal
amount or integral multiples of that amount. Unless and until it is exchanged in
whole or in part for
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securities in definitive form, a Global Security may not be transferred except
as a whole to a nominee of the Depositary for such Global Security, or by a
nominee of the Depositary to the Depositary or another nominee of the
Depositary, or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary.
BOOK-ENTRY SYSTEM
Initially, the Notes will be registered in the name of Cede & Co., the
nominee of the Depositary. Accordingly, beneficial interests in the Notes will
be shown on, and transfers thereof will be effected only through, records
maintained by the Depositary and its participants.
The Depositary has advised us and the Underwriters as follows: the
Depositary is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York Banking
Law, a member of the United States Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code and a
"clearing agency" registered pursuant to the provisions of Section 17A of the
United States Securities Exchange Act of 1934, as amended. The Depositary holds
securities that its participants ("Direct Participants") deposit with the
Depositary. The Depositary also facilitates the settlement among Direct
Participants of securities transactions, such as transfers and pledges, in
deposited securities through electronic computerized book-entry changes in such
Direct Participants' accounts, eliminating the need for physical movement of
securities certificates. Direct Participants include securities brokers and
dealers (including the Underwriters), banks, trust companies, clearing
corporations and certain other organizations. The Depositary is owned by a
number of its Direct Participants and by the New York Stock Exchange, Inc., the
American Stock Exchange, Inc. and the National Association of Securities
Dealers, Inc. Access to the Depositary's book-entry system is also available to
others such as securities brokers and dealers, banks and trust companies that
clear through or maintain a custodial relationship with a Direct Participant,
either directly or indirectly ("Indirect Participants"). The rules applicable to
the Depositary and its Direct and Indirect Participants are on file with the
SEC.
Payments on the Notes registered in the name of the Depositary's nominee
will be made in immediately available funds to the Depositary's nominee as the
registered owner of the Global Securities. We and the Trustee will treat the
Depositary's nominee as the owner of such Notes for all other purposes as well.
Therefore, neither we, the Trustee nor any paying agent has any direct
responsibility or liability for the payment of any amount due on the Notes to
owners of beneficial interests in the Global Securities. It is the Depositary's
current practice, upon receipt of any payment, to credit Direct Participants'
accounts on the payment date according to their respective holdings of
beneficial interests in the Global Securities as shown on the Depositary's
records unless the Depositary has reason to believe that it will not receive
payment. Payments by Direct and Indirect Participants to owners of beneficial
interests in the Global Securities will be governed by standing instructions and
customary practices, as is the case with Securities held for the accounts of
customers in bearer form or registered in "street name." Such payments will be
the responsibility of such Direct and Indirect Participants and not of the
Depositary, the Trustee or us.
Notes represented by a Global Security will be exchangeable for Notes in
definitive form of like tenor in authorized denominations only if:
- the Depositary notifies us that it is unwilling or unable to continue as
Depositary;
- the Depositary ceases to be a clearing agency registered under applicable
law and a successor depositary is not appointed by us within 90 days; or
- we, in our discretion, determine not to require all of the Notes to be
represented by a Global Security and notify the Trustee of our decision.
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SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Notes will be made by the Underwriters in immediately
available funds. So long as the Depositary continues to make its Same-Day Funds
Settlement System available to us, all payments on the Notes will be made by us
in immediately available funds.
Secondary trading in long-term notes and debentures of corporate issues is
generally settled in clearing-house or next-day funds. In contrast, the Notes
will trade in the Depositary's Same-Day Funds Settlement System until maturity,
and secondary market trading in the Notes; therefore, the Depositary will
require that trades be settled in immediately available funds.
CONCERNING THE TRUSTEE
Bank One Trust Company, N.A., the Trustee under the Indenture, will be
appointed by us as the initial paying agent, registrar and custodian with regard
to the Notes. We may maintain deposit accounts and conduct other banking
transactions with the Trustee or its affiliates in the ordinary course of
business. An affiliate of the Trustee is one of the underwriters of this
offering. In addition, an affiliate of the Trustee is a lender under our credit
facilities. The Trustee serves as the trustee for our other outstanding public
debt securities. The Trustee and its affiliates may from time to time in the
future provide banking and other services to us in the ordinary course of their
business.
DISCHARGE OF THE INDENTURE
We may satisfy and discharge our obligations under the Indenture with
respect to the Notes by:
- delivering to the Trustee for cancellation all outstanding Notes; or
- depositing with the Trustee, after all outstanding Notes have become due
and payable (or are by their terms to become due and payable within one
year), whether at stated maturity, or otherwise, cash sufficient to pay
all of the outstanding Notes and paying all other sums payable under the
Indenture by us with respect to the Notes.
Upon the deposit of such funds with the Trustee, the Indenture will, with
certain limited exceptions, cease to be of further effect with respect to the
Notes. The rights that would continue following the deposit of those funds with
the Trustee are:
- the remaining rights of registration of transfer, substitution and
exchange of the Notes;
- the rights of Holders under the Indenture to receive payments due with
respect to the Notes and the other rights, duties and obligations of
Holders, as beneficiaries with respect to the amounts, if any, so
deposited with the Trustee; and
- the rights, obligations and immunities of the Trustee under the
Indenture.
CERTAIN DEFINITIONS
The following are definitions of certain of the terms used in the
Indenture.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday or Friday
which is not a legal holiday in New York, New York.
"Consolidated Net Tangible Assets" means the total amount of assets which
would be included on a consolidated balance sheet of Lennar and the Restricted
Subsidiaries under GAAP (less applicable reserves and other properly deductible
items) after deducting therefrom:
(A) all short-term liabilities, i.e., liabilities payable by their terms
less than one year from the date of determination and not renewable or
extendable at the option of the obligor for a period ending more than one year
after such date, and liabilities in respect of retiree benefits other than
pensions for which the Restricted Subsidiaries are required to accrue pursuant
to Statement of Financial Accounting Standards No. 106;
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(B) investments in subsidiaries that are not Restricted Subsidiaries; and
(C) all assets reflected on our balance sheet as the carrying value of
goodwill, trade names, trademarks, patents, unamortized debt discount,
unamortized expense incurred in the issuance of debt and other intangible
assets.
"Default" means any event which upon the giving of notice or the passage of
time, or both, would be an Event of Default.
"Funded Debt" of any Person means all Indebtedness for borrowed money
created, incurred, assumed or guaranteed in any manner by such person, and all
Indebtedness, contingent or otherwise, incurred or assumed by such person in
connection with the acquisition of any business, property or asset, which in
each case matures more than one year after, or which by its terms is renewable
or extendible or payable out of the proceeds of similar Indebtedness incurred
pursuant to the terms of any revolving credit agreement or any similar agreement
at the option of such person for a period ending more than one year after the
date as of which Funded Debt is being determined. However, Funded Debt shall not
include:
- any Indebtedness for the payment, redemption or satisfaction of which
money (or evidences of indebtedness, if permitted under the instrument
creating or evidencing such indebtedness) in the necessary amount shall
have been irrevocably deposited in trust with a trustee or proper
depository either on or before the maturity or redemption date thereof;
- any Indebtedness of such person to any of its subsidiaries or of any
subsidiary to such person or any other subsidiary; or
- any Indebtedness incurred in connection with the financing of operating,
construction or acquisition projects, provided that the recourse for such
indebtedness is limited to the assets of such projects.
"Holder" means a Person in whose name a Note is registered on the
Registrar's books.
"Indebtedness" means, with respect to us or any Subsidiary, and without
duplication:
(a) the principal of and premium, if any, and interest on, and fees,
costs, enforcement expenses, collateral protection expenses and other
reimbursement or indemnity obligations in respect to all our or any
Subsidiary's indebtedness or obligations to any Person, including but not
limited to banks and other lending institutions, for money borrowed that is
evidenced by a note, bond, debenture, loan agreement, or similar instrument
or agreement (including purchase money obligations with original maturities
in excess of one year and noncontingent reimbursement obligations in
respect of amounts paid under letters of credit);
(b) all our or any Subsidiary's reimbursement obligations and other
liabilities (contingent or otherwise) with respect to letters of credit,
bank guarantees or bankers' acceptances;
(c) all obligations and liabilities (contingent or otherwise) in
respect of our or any Subsidiary's leases required, in conformity with
generally accepted accounting principles, to be accounted for as capital
lease obligations on our balance sheet;
(d) all our or any Subsidiary's obligations (contingent or otherwise)
with respect to an interest rate or other swap, cap or collar agreement or
other similar instrument or agreement or foreign currency hedge, exchange,
purchase or similar instrument or agreement;
(e) all direct or indirect guaranties or similar agreements by us or
any Subsidiary in respect of, and our or such Subsidiary's obligations or
liabilities (contingent or otherwise) to purchase or otherwise acquire, or
otherwise assure a creditor against loss in respect of, indebtedness,
obligations or liabilities of another Person of the kind described in
clauses (a) through (d);
(f) any indebtedness or other obligations, excluding any operating
leases we or any Subsidiary is currently (or may become) a party to
described in clauses (a) through (d) secured by any Lien existing on
property which is owned or held by us or such Subsidiary, regardless of
whether the indebtedness or other obligation secured thereby shall have
been assumed by us or such Subsidiary; and
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(g) any and all deferrals, renewals, extensions and refinancing of, or
amendments, modifications or supplements to, any indebtedness, obligation
or liability of the kind described in clauses (a) through (f).
"Lien" means any mortgage, pledge, lien, encumbrance, charge or security
interest of any kind.
"Non-Recourse Indebtedness" means any Indebtedness of Lennar or any
Restricted Subsidiary for which the holder of such Indebtedness has no recourse,
directly or indirectly, to Lennar or such Restricted Subsidiary for the
principal of, premium, if any, and interest on such Indebtedness, and for which
Lennar or such Restricted Subsidiary is not, directly or indirectly, obligated
or otherwise liable for the principal of, premium, if any, and interest on such
Indebtedness, except pursuant to mortgages, deeds of trust or other security
interests or other recourse, obligations or liabilities, in respect of specific
land or other real property interests of Lennar or such Restricted Subsidiary
securing such indebtedness; provided, however, that recourse, obligations or
liabilities solely for indemnities, covenants or breach of warranty
representations or covenants in respect of Indebtedness will not prevent that
Indebtedness from being classified as Non-Recourse Indebtedness.
"Officers' Certificate" when used with respect to us means a certificate
signed by two of our officers (as specified in the Indenture), each such
certificate will comply with Section 314 of the TIA and include the statements
required under the Indenture.
"Paying Agent" means the office or agency designated by us where the Notes
may be presented for payment.
"Person" means any individual, corporation, partnership, joint venture,
joint-stock company, trust, unincorporated organization or government or any
government agency or political subdivision.
"Restricted Subsidiary" means any guarantor.
"Sale-Leaseback Transaction" means a sale or transfer made by us or a
Restricted Subsidiary of any property which is either (A) a manufacturing
facility, office building or warehouse whose book value equals or exceeds 1% of
Consolidated Net Tangible Assets as of the date of determination, or (B) another
property (not including a model home) which exceeds 5% of Consolidated Net
Tangible Assets as of the date of determination, if such sale or transfer is
made with the agreement, commitment or intention of leasing such property to
Lennar or a Restricted Subsidiary.
"Senior Secured Credit Facilities" means the senior secured credit
facilities dated as of May 3, 2000, as amended and restated as of May 24, 2002,
between Lennar, U.S. Home Corporation, Bank One NA and the other lenders party
thereto.
"Subsidiary," means (1) a corporation or other entity of which a majority
in voting power of the stock or other interests is owned by us, by a Subsidiary
or by us and one or more Subsidiaries or (2) a partnership, of which we or any
Subsidiary is the sole general partner.
"Total Consolidated Stockholders' Equity" means, with respect to any date
of determination, our total consolidated stockholders' equity as shown on the
most recent consolidated balance sheet that is contained or incorporated in the
latest annual report on Form 10-K (or equivalent report) or quarterly report on
Form 10-Q (or equivalent report) filed with the SEC, and is as of a date not
more than 181 days prior to the date of determination, in the case of the
consolidated balance sheet contained or incorporated in an annual report on Form
10-K, or 135 days prior to the date of determination, in the case of the
consolidated condensed balance sheet contained in a quarterly report on Form
10-Q.
S-20
UNDERWRITING
Subject to the terms and conditions stated in the underwriting agreement,
dated the date of this prospectus supplement, each underwriter named below has
agreed to purchase, and we have agreed to sell to that underwriter severally,
the principal amount of Notes set forth opposite the underwriter's name.
PRINCIPAL AMOUNT
UNDERWRITER OF NOTES OF NOTES
-------------------- ----------------
Salomon Smith Barney Inc. .................................. $115,500,000
Banc One Capital Markets, Inc. ............................. $ 98,000,000
Banc of America Securities LLC.............................. $ 52,500,000
Deutsche Bank Securities Inc. .............................. $ 35,000,000
Wachovia Securities, Inc. .................................. $ 28,000,000
Comerica Securities, Inc. .................................. $ 7,000,000
Credit Lyonnais Securities (USA) Inc. ...................... $ 7,000,000
UBS Warburg LLC............................................. $ 7,000,000
------------
Total.................................................. $350,000,000
============
The underwriting agreement provides that the obligations of the
underwriters to purchase the Notes included in this offering are subject to
approval of legal matters by counsel and to other conditions. The underwriters
are obligated to purchase all the Notes if they purchase any of the Notes.
The underwriters propose to offer some of the Notes directly to the public
at the public offering price set forth on the cover page of this prospectus
supplement and some of the Notes to dealers at the public offering price less a
concession not to exceed 0.400% of the principal amount of the Notes. The
underwriters may allow, and dealers may reallow a concession not to exceed
0.250% of the principal amount of the Notes on sales to other dealers. After the
initial offering of the Notes to the public, the representatives may change the
public offering price and concessions.
The following table shows the underwriting discounts and commissions that
we are to pay to the underwriters in connection with this offering (expressed as
a percentage of the principal amount of the Notes).
PAID BY LENNAR
--------------
Per Note.................................................... 0.650%
In connection with the offering, the underwriters may purchase and sell
Notes in the open market. These transactions may include over-allotment,
syndicate covering transactions and stabilizing transactions. Over-allotment
involves syndicate sales of Notes in excess of the principal amount of Notes to
be purchased by the underwriters in the offering, which creates a syndicate
short position. Syndicate covering transactions involve purchases of the Notes
in the open market after the distribution has been completed in order to cover
syndicate short positions. Stabilizing transactions consist of certain bids or
purchases of Notes made for the purpose of preventing or retarding a decline in
the market price of the Notes while the offering is in progress.
The underwriters also may impose a penalty bid. Penalty bids permit the
underwriters to reclaim a selling concession from a syndicate member when an
underwriter, in covering syndicate short positions or making stabilizing
purchases, repurchases Notes originally sold by that syndicate member.
Any of these activities may have the effect of preventing or retarding a
decline in the market price of the Notes. They may also cause the price of the
Notes to be higher than the price that otherwise would exist in the open market
in the absence of these transactions. The underwriters may conduct these
transactions in the over-the-counter market or otherwise. If the underwriters
commence any of these transactions, they may discontinue them at any time.
We estimate that our total expenses for this offering will be $150,000.
S-21
We have agreed that, without the consent of Salomon Smith Barney Inc., we
will not offer to sell or sell any debt securities to the public from the date
of this prospectus supplement through February 5, 2003.
The underwriters or their affiliates have performed investment banking,
commercial banking, dealer and advisory services for us or our affiliates from
time to time, for which they have received customary fees and expenses. The
underwriters or their affiliates may, from time to time, engage in transactions
with and perform services for us or our affiliates in the ordinary course of
their business. Salomon Smith Barney Inc., Banc One Capital Markets, Inc., Banc
of America Securities LLC, Deutsche Bank Securities Inc., Wachovia Securities,
Inc., Comerica Securities, Inc. and Credit Lyonnais Securities (USA) Inc. are
each affiliated with one or more of our lenders. Banc One Capital Markets, Inc.
is an affiliate of Bank One Trust Company, N.A., the Trustee for the Notes. In
addition, Bank One Trust Company, N.A. is trustee under indentures relating to
our other outstanding public debt securities.
We have agreed to indemnify the underwriters against certain liabilities,
including liabilities under the Securities Act of 1933, or to contribute to
payments the underwriters may be required to make because of any of those
liabilities.
LEGAL MATTERS
Clifford Chance US LLP, New York, New York, is passing on the validity of
the Notes for us. Willkie Farr & Gallagher, New York, New York, will pass upon
certain legal matters relating to the offering of the Notes for the
underwriters.
INDEPENDENT AUDITORS
The consolidated financial statements of Lennar Corporation as of November
30, 2001 and 2000 and for the three years in the period ended November 30, 2001
and the related financial statement schedule which are incorporated by reference
into the prospectus and the registration statement of which they are a part from
our Annual Report on Form 10-K for the fiscal year ended November 30, 2001, have
been audited by Deloitte & Touche LLP, independent auditors, as stated in their
reports, which are incorporated by reference in the prospectus which accompanies
this prospectus supplement.
S-22
PROSPECTUS
$970,000,000
LENNAR CORPORATION
COMMON STOCK
PREFERRED STOCK
PARTICIPATING PREFERRED STOCK
DEPOSITARY SHARES
DEBT SECURITIES
AND
WARRANTS
We may from time to time offer our common stock, preferred stock (which we
may issue in one or more series), participating preferred stock, depositary
shares representing shares of preferred stock, debt securities (which we may
issue in one or more series and which may or may not be guaranteed by some or
all of our subsidiaries, other than our subsidiaries which are mortgage or title
reinsurance companies) or warrants entitling the holders to purchase common
stock, preferred stock, participating preferred stock, depositary shares or debt
securities, at an aggregate initial offering price which will not exceed
$970,000,000. We will determine when we sell securities, the amounts of
securities we will sell and the prices and other terms on which we will sell
them. We may sell securities to or through underwriters, through agents or
directly to purchasers.
We will describe in a prospectus supplement, which we will deliver with
this prospectus, the terms of particular securities which we offer in the
future. We may describe the terms of those securities in a term sheet which will
precede the prospectus supplement.
In each prospectus supplement we will include the following information:
- The names of the underwriters or agents, if any, through which we will
sell the securities;
- The proposed amounts of securities, if any, which the underwriters will
purchase;
- The compensation, if any, of those underwriters or agents;
- The major risk factors associated with the securities offered;
- The initial public offering price of the securities;
- Information about securities exchanges or automated quotation systems on
which the securities will be listed or traded; and
- Any other material information about the offering and sale of the
securities.
Our common stock is listed on the New York Stock Exchange under the symbol
"LEN."
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THE SECURITIES WE MAY BE OFFERING OR
DETERMINED THAT THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is October 9, 2001
FORWARD-LOOKING INFORMATION
We make forward-looking statements about our business in our filings with
the Securities and Exchange Commission. Although we believe the expectations
reflected in those forward-looking statements are reasonable, it is possible
they will prove not to have been correct, particularly given the cyclical nature
of the market for new homes. Among the factors which can affect our future
performance are changes in interest rates, changes in demand for homes in areas
in which we are developing communities, the availability and cost of land
suitable for residential development, changes in the costs of labor and
materials, competition, environmental factors and changes in government
regulations.
i
LENNAR
We are one of the nation's largest homebuilders and a provider of
residential financial services. Our homebuilding operations include the sale and
construction of single-family attached and detached homes, as well as the
purchase, development and sale of residential land directly and through
partnerships. Our financial services operations provide mortgage financing,
title insurance and closing services for our homebuyers and others, package and
resell residential mortgage loans, and provide high-speed Internet access, cable
television, alarm installation and home monitoring services to residents of our
communities and others.
On May 3, 2000, we acquired U.S. Home Corporation in a transaction in which
U.S. Home stockholders received a total of approximately $243 million in cash
and 13 million shares of our common stock, which were valued at approximately
$267 million at the time of the transaction. U.S. Home and its subsidiaries
contributed 39.6% of our homebuilding revenues and 40.7% of our homebuilding
expenses during the approximately seven months between the time we acquired them
and the end of our fiscal year on November 30, 2000. U.S. Home and its
subsidiaries contributed 31.2% of our homebuilding revenues and 31.9% of our
homebuilding expenses for the entire fiscal year.
Our strategy has included:
- acquiring land at what we believe to be favorable prices through our own
efforts and in partnerships;
- acquiring companies or their assets as a way of expanding our
homebuilding and financial services activities;
- focusing our homebuilding activities on the fastest growing home markets;
- using our financial services subsidiaries to generate additional
earnings; and
- emphasizing customer care and satisfaction.
We are a Delaware corporation, with our principal executive offices at 700
N.W. 107th Avenue, Miami, Florida 33172. Our main telephone number at those
offices is (305) 559-4000.
USE OF PROCEEDS
Except as may be set forth in a particular prospectus supplement, we will
add the net proceeds from sales of securities to our general corporate funds,
which we may use to repay indebtedness, including indebtedness of our
wholly-owned subsidiaries, for acquisitions, or for other general corporate
purposes. While we are continuously involved in discussions about possible
acquisitions, the only transaction we are discussing which currently appears
probable would involve our payment of approximately $10 million, which would
consist partly of cash and partly of shares of our common stock.
RATIO OF EARNINGS TO FIXED CHARGES
SIX MONTHS ENDED
----------------- YEARS ENDED NOVEMBER 30,
MAY 31, MAY 31, --------------------------------
2001 2000 2000 1999 1998 1997 1996
------- ------- ---- ---- ---- ---- ----
Ratio of earnings to fixed charges(1)............... 4.0x 2.9x 3.5x 4.7x 4.7x 2.2x 2.7x
Ratio of earnings to fixed charges (excluding
limited-purpose finance subsidiaries)(1).......... 4.0x 2.9x 3.6x 4.8x 4.9x 2.3x 2.9x
---------------
(1) For the purpose of calculating the ratio of earnings to fixed charges,
"earnings" consist of income from continuing operations before income taxes
plus "fixed charges" and certain other adjustments. "Fixed charges" consist
of interest incurred on all indebtedness related to continuing operations
(including amortization of original issue discount) and the implied interest
component of our rent
1
obligations. The implied interest component of rent obligations for years
prior to 1998 was not material.
There was no preferred stock outstanding for any of the periods shown
above. Accordingly, the ratio of earnings to combined fixed charges and
preferred stock dividends was identical to the ratio of earnings to fixed
charges.
DESCRIPTION OF DEBT SECURITIES
We will issue the debt securities under an indenture dated as of December
31, 1997 with Bank One Trust Company, N.A. (as successor in interest to The
First National Bank of Chicago), as trustee, which we may supplement from time
to time. The following paragraphs describe the provisions of the indenture. We
have filed the indenture as an exhibit to our Registration Statement, File No.
333-73311, and you may inspect it as described under "Information We File" on
page 10 or at the office of the trustee.
GENERAL
The debt securities will be direct obligations of our company and may be
either senior debt securities or subordinated debt securities. Some or all of
the co-registrants under the registration statement which includes this
prospectus (each our direct or indirect subsidiary) may guaranty our payment of
debt securities issued under this prospectus. In addition, the debt securities
may be secured by some or all of our subsidiaries. The indenture does not limit
the principal amount of debt securities that we may issue. We may issue debt
securities in one or more series. A supplemental indenture will set forth
specific terms of each series of debt securities. There will be prospectus
supplements relating to particular series of debt securities. Each prospectus
supplement will describe:
- the title of the debt securities and whether the debt securities are
senior or subordinated debt securities;
- any limit upon the aggregate principal amount of a series of debt
securities which we may issue;
- the date or dates on which principal of the debt securities will be
payable and the amount of principal which will be payable;
- the rate or rates (which may be fixed or variable) at which the debt
securities will bear interest, if any, or contingent interest, if any, as
well as the dates from which interest will accrue, the dates on which
interest will be payable, the persons to whom interest will be payable,
if other than the registered holders on the record date, and the record
date for the interest payable on any payment date;
- the currency or currencies in which principal, premium, if any, and
interest, if any, will be paid;
- whether our obligations with regard to the debt securities are guaranteed
by some or all of our subsidiaries;
- whether our obligations with regard to the debt securities are secured by
shares of some or all of our subsidiaries;
- the place or places where principal, premium, if any, and interest, if
any, on the debt securities will be payable and where debt securities
which are in registered form can be presented for registration of
transfer or exchange;
- any provisions regarding our right to prepay debt securities or of
holders to require us to prepay debt securities;
- the right, if any, of holders of the debt securities to convert them into
common stock or other securities, including any contingent conversion
provisions;
2
- any provisions requiring or permitting us to make payments to a sinking
fund which will be used to redeem debt securities or a purchase fund
which will be used to purchase debt securities;
- any index or formula used to determine the required payments of
principal, premium, if any, or interest, if any;
- the percentage of the principal amount of the debt securities which is
payable if maturity of the debt securities is accelerated because of a
default;
- any special or modified events of default or covenants with respect to
the debt securities; and
- any other material terms of the debt securities.
The indenture does not contain any restrictions on the payment of dividends
or the repurchase of our securities or any financial covenants. However,
supplemental indentures relating to particular series of debt securities may
contain provisions of that type.
We may issue debt securities at a discount from, or at a premium to, their
stated principal amount. A prospectus supplement may describe federal income tax
considerations and other special considerations applicable to a debt security
issued with original issue discount or a premium.
If the principal of, premium, if any, or interest, if any, with regard to
any series of debt securities is payable in a foreign currency, then in the
prospectus supplement relating to those debt securities, we will describe any
restrictions on currency conversions, tax considerations or other material
restrictions with respect to that issue of debt securities.
FORM OF DEBT SECURITIES
We may issue debt securities in certificated or uncertificated form, in
registered form with or without coupons or in bearer form with coupons, if
applicable.
We may issue debt securities of a series in the form of one or more global
certificates evidencing all or a portion of the aggregate principal amount of
the debt securities of that series. We may deposit the global certificates with
depositaries, and the certificates may be subject to restrictions upon transfer
or upon exchange for debt securities in individually certificated form.
EVENTS OF DEFAULT AND REMEDIES
An event of default with respect to each series of debt securities will
include:
- our default in payment of the principal of or premium, if any, on any
debt securities of any series beyond any applicable grace period;
- our default for 30 days or a period specified in a supplemental
indenture, which may be no period, in payment of any installment of
interest due with regard to debt securities of any series;
- our default for 60 days after notice in the observance or performance of
any other covenants in the indenture; and
- certain events involving our bankruptcy, insolvency or reorganization.
Supplemental indentures relating to particular series of debt securities
may include other events of default.
The indenture provides that the trustee may withhold notice to the holders
of any series of debt securities of any default (except a default in payment of
principal, premium, if any, or interest, if any) if the trustee considers it in
the interest of the holders of the series to do so.
The indenture provides that if any event of default has occurred and is
continuing, the trustee or the holders of not less than 25% in principal amount
of the series of debt securities then outstanding may declare the principal of
and accrued interest, if any, on all the debt securities of that series to be
due and
3
payable immediately. However, if we cure all defaults (except the failure to pay
principal, premium or interest which became due solely because of the
acceleration) and certain other conditions are met, that declaration may be
annulled and past defaults may be waived by the holders of a majority in
principal amount of the series of debt securities then outstanding.
The holders of a majority of the outstanding principal amount of a series
of debt securities will have the right to direct the time, method and place of
conducting proceedings for any remedy available to the trustee, subject to
certain limitations specified in the indenture.
A prospectus supplement will describe any additional or different events of
default which apply to any series of debt securities.
MODIFICATION OF THE INDENTURE
We and the trustee may:
- without the consent of holders of debt securities, modify the indenture
to cure errors or clarify ambiguities;
- with the consent of the holders of not less than a majority in principal
amount of the debt securities which are outstanding under the indenture,
modify the indenture or the rights of the holders of the debt securities
generally; and
- with the consent of the holders of not less than a majority in
outstanding principal amount of any series of debt securities, modify any
supplemental indenture relating solely to that series of debt securities
or the rights of the holders of that series of debt securities.
However, we may not:
- extend the fixed maturity of any debt securities, reduce the rate or
extend the time for payment of interest, if any, on any debt securities,
reduce the principal amount of any debt securities or the premium, if
any, on any debt securities, impair or affect the right of a holder to
institute suit for the payment of principal, premium, if any, or
interest, if any, with regard to any debt securities, change the currency
in which any debt securities are payable or impair the right, if any, to
convert any debt securities into common stock or any of our other
securities, without the consent of each holder of debt securities who
will be affected; or
- reduce the percentage of holders of debt securities required to consent
to an amendment, supplement or waiver, without the consent of the holders
of all the then outstanding debt securities or outstanding debt
securities of the series which will be affected.
MERGERS AND OTHER TRANSACTIONS
We may not consolidate with or merge into any other entity, or transfer or
lease our properties and assets substantially as an entirety to another person,
unless (1) the entity formed by the consolidation or into which we are merged,
or which acquires or leases our properties and assets substantially as an
entirety, assumes by a supplemental indenture all our obligations with regard to
outstanding debt securities and our other covenants under the indenture, and (2)
with regard to each series of debt securities, immediately after giving effect
to the transaction, no event of default, with respect to that series of debt
securities, and no event which would become an event of default, will have
occurred and be continuing.
CONCERNING THE TRUSTEE
Bank One Trust Company, N.A., the trustee under the indenture, provides,
and may continue to provide, loans and banking services to us in the ordinary
course of its business.
4
GOVERNING LAW
The indenture, each supplemental indenture, and the debt securities issued
under them will be governed by, and construed in accordance with, the laws of
New York State.
DESCRIPTION OF WARRANTS
Each issue of warrants will be the subject of a warrant agreement which
will contain the terms of the warrants. We will distribute a prospectus
supplement with regard to each issue of warrants. Each prospectus supplement
will describe, as to the warrants to which it relates:
- the securities which may be purchased by exercising the warrants (which
may be common stock, preferred shares, participating preferred shares,
debt securities, depositary shares or units consisting of two or more of
those types of securities);
- the exercise price of the warrants (which may be wholly or partly payable
in cash or wholly or partly payable with other types of consideration);
- the period during which the warrants may be exercised;
- any provision adjusting the securities which may be purchased on exercise
of the warrants and the exercise price of the warrants in order to
prevent dilution or otherwise;
- the place or places where warrants can be presented for exercise or for
registration of transfer or exchange; and
- any other material terms of the warrants.
DESCRIPTION OF COMMON STOCK AND PREFERRED SHARES
Our authorized capital stock consists of 100,000,000 shares of common
stock, $0.10 par value, 30,000,000 shares of class B common stock, $0.10 par
value, 100,000,000 shares of participating preferred stock, $0.10 par value, and
500,000 shares of preferred stock, $10.00 par value. At May 31, 2001, 54,018,069
shares of our common stock, 9,772,812 shares of our class B common stock and no
shares of participating preferred stock or preferred stock were outstanding.
PREFERRED STOCK
We may issue preferred stock in series with any rights and preferences
which may be authorized by our board of directors. We will distribute a
prospectus supplement with regard to each series of preferred stock. Each
prospectus supplement will describe, as to the preferred stock to which it
relates:
- the title of the series;
- any limit upon the number of shares of the series which may be issued;
- the preference, if any, to which holders of the series will be entitled
upon our liquidation;
- the date or dates on which we will be required or permitted to redeem
shares of the series;
- the terms, if any, on which we or holders of the series will have the
option to cause shares of the series to be redeemed;
- the voting rights of the holders of the preferred stock;
- the dividends, if any, which will be payable with regard to the series
(which may be fixed dividends or participating dividends and may be
cumulative or non-cumulative);
- the right, if any, of holders of the series to convert them into another
class of our stock or securities, including provisions intended to
prevent dilution of those conversion rights;
5
- any provisions by which we will be required or permitted to make payments
to a sinking fund which will be used to redeem shares of the series or a
purchase fund which will be used to purchase shares of the series; and
- any other material terms of the series.
Holders of shares of preferred stock will not have preemptive rights.
COMMON STOCK
All the outstanding shares of our common stock are fully paid and
nonassessable and are entitled to participate equally and ratably in dividends
and in distributions available for the common stock on liquidation. Each share
is entitled to one vote for the election of directors and upon all other matters
on which the common stockholders vote. Holders of common stock are not entitled
to cumulative votes in the election of our directors.
The transfer agent and registrar for the common stock is EquiServe Trust
Company, a wholly-owned subsidiary of EquiServe Limited Partnership of Canton,
Massachusetts.
CLASS B COMMON STOCK
Our class B common stock is identical in every respect with our common
stock, except that (a) each share of class B common stock is entitled to ten
votes on each matter submitted to the vote of the common stockholders, while
each share of common stock is entitled to only one vote, (b) the cash dividends,
if any, paid with regard to a share of the class B common stock in a year cannot
be more than 90% of the cash dividends, if any, paid with regard to a share of
the common stock in that year, (c) a holder cannot transfer class B common
stock, except to a limited group of Permitted Transferees (primarily close
relatives of the class B stockholder, fiduciaries for the class B stockholder or
for close relatives, and entities of which the class B stockholder or close
relatives are majority owners), (d) each share of class B common stock may at
any time be converted into one share of common stock, but common stock may not
be converted into class B common stock, (e) amendments to provisions of our
Certificate of Incorporation relating to the common stock or the class B common
stock require the approval of a majority of the shares of common stock which are
voted with regard to them (as well as approval of a majority in voting power of
all the outstanding common stock and class B common stock combined), and (f)
under Delaware law, certain matters affecting the rights of holders of class B
common stock may require approval of the holders of the class B common stock
voting as a separate class.
At May 31, 2001, Leonard Miller, our Chairman, owned, through a family
partnership, class B common stock which would be entitled to approximately 64%
of the combined votes which could be cast by the holders of the common stock and
the class B common stock. That gives Mr. Miller the power to elect all our
directors and to approve most matters that are presented to our stockholders,
even if no other stockholders vote in favor of them. Mr. Miller has no current
intention to convert a significant number of shares of class B common stock into
common stock, or to sell any common stock, although, unless otherwise stated in
a particular prospectus supplement, he would be free to do so at any time.
The existence of class B common stock, which has substantially greater
voting rights than the common stock, probably would discourage non-negotiated
tender offers and other types of non-negotiated takeovers, if any were
contemplated. Mr. Miller's ownership might discourage someone from making a
significant equity investment in us, even if we needed the investment to meet
our obligations and to operate our business. Mr. Miller's ownership of class B
common stock would make it impossible for anyone to acquire voting control of us
as long as the total outstanding class B common stock is at least 10% of the
combined common stock of both classes and we have no other class of stock which
votes in the election of directors (if at any time the outstanding shares of
class B common stock are less than 10% of the outstanding shares of both classes
of common stock taken together, the class B common stock will automatically be
converted into common stock).
6
DESCRIPTION OF PARTICIPATING PREFERRED STOCK
Our participating preferred stock is identical with the common stock in
every way, except that (a) no dividends may be paid with regard to the common
stock in a calendar year until the holders of the participating preferred stock
have received a total of $.0125 per share, then no dividends may be paid in that
year with regard to the participating preferred stock until the holders of the
common stock have received dividends totaling $.0125 per share, and then any
additional dividends in the year will be paid on an equal per share basis to the
holders of the participating preferred stock and of the common stock, (b) if we
are liquidated, none of our assets may be distributed to the holders of the
common stock until the holders of the participating preferred stock have
received assets totaling $10 per share, then no assets may be distributed to the
holders of the participating preferred stock until the holders of the common
stock have received assets totaling $10 per share, and then any further
liquidating distributions will be made on an equal per share basis to the
holders of the participating preferred stock and of the common stock, and (c)
holders of participating preferred stock will vote separately on corporate
actions which would change the participating preferred stock or would cause the
holders of the participating preferred stock to receive consideration in a
merger or similar transaction which is different from the consideration received
by the holders of the common stock.
DESCRIPTION OF DEPOSITARY SHARES
We may issue depositary receipts representing interests in shares of
particular series of preferred stock which are called depositary shares. We will
deposit the preferred stock of a series which is the subject of depositary
shares with a depositary, which will hold that preferred stock for the benefit
of the holders of the depositary shares, in accordance with a deposit agreement
between the depositary and us. The holders of depositary shares will be entitled
to all the rights and preferences of the preferred stock to which the depositary
shares relate, including dividend, voting, conversion, redemption and
liquidation rights, to the extent of their interests in that preferred stock.
While the deposit agreement relating to a particular series of preferred
stock may have provisions applicable solely to that series of preferred stock,
all deposit agreements relating to preferred stock we issue will include the
following provisions:
Dividends and Other Distributions. Each time we pay a cash dividend or
make any other type of cash distribution with regard to preferred stock of a
series, the depositary will distribute to the holder of record of each
depositary share relating to that series of preferred stock an amount equal to
the dividend or other distribution per depositary share the depositary receives.
If there is a distribution of property other than cash, the depositary either
will distribute the property to the holders of depositary shares in proportion
to the depositary shares held by each of them, or the depositary will, if we
approve, sell the property and distribute the net proceeds to the holders of the
depositary shares in proportion to the depositary shares held by them.
Withdrawal of Preferred Stock. A holder of depositary shares will be
entitled to receive, upon surrender of depositary receipts representing
depositary shares, the number of shares of the applicable series of preferred
stock, and any money or other property, to which the depositary shares relate.
Redemption of Depositary Shares. Whenever we redeem shares of preferred
stock held by a depositary, the depositary will be required to redeem, on the
same redemption date, depositary shares constituting, in total, the number of
shares of preferred stock held by the depositary which we redeem, subject to the
depositary's receiving the redemption price of those shares of preferred stock.
If fewer than all the depositary shares relating to a series are to be redeemed,
the depositary shares to be redeemed will be selected by lot or by another
method we determine to be equitable.
Voting. Any time we send a notice of meeting or other materials relating
to a meeting to the holders of a series of preferred stock to which depositary
shares relate, we will provide the depositary with sufficient copies of those
materials so they can be sent to all holders of record of the applicable
depositary shares, and the depositary will send those materials to the holders
of record of the depositary shares on the
7
record date for the meeting. The depositary will solicit voting instructions
from holders of depositary shares and will vote or not vote the preferred stock
to which the depositary shares relate in accordance with those instructions.
Liquidation Preference. Upon our liquidation, dissolution or winding up,
the holder of each depositary share will be entitled to what the holder of the
depositary share would have received if the holder had owned the number of
shares of preferred stock which is represented by the depositary share.
Conversion. If shares of a series of preferred stock are convertible into
common stock or other of our securities or property, holders of depositary
shares relating to that series of preferred stock will, if they surrender
depositary receipts representing depositary shares and appropriate instructions
to convert them, receive the shares of common stock or other securities or
property into which the number of shares of preferred stock to which the
depositary shares relate could at the time be converted.
Amendment and Termination of a Deposit Agreement. We and the depositary
may amend a deposit agreement, except that an amendment which materially and
adversely affects the rights of holders of depositary shares, or would be
materially and adversely inconsistent with the rights granted to the holders of
the preferred stock to which they relate, must be approved by holders of at
least two-thirds of the outstanding depositary shares. No amendment will impair
the right of a holder of depositary shares to surrender the depositary receipts
evidencing those depositary shares and receive the preferred stock to which they
relate, except as required to comply with law. We may terminate a deposit
agreement with the consent of holders of a majority of the depositary shares to
which it relates. Upon termination of a deposit agreement, the depositary will
make the shares of preferred stock to which the depositary shares issued under
the deposit agreement relate available to the holders of those depositary
shares. A deposit agreement will automatically terminate if:
- all outstanding depositary shares to which it relates have been
withdrawn, redeemed or converted or
- the depositary has made a final distribution to the holders of the
depositary shares issued under the deposit agreement upon our
liquidation, dissolution or winding up.
Miscellaneous. There will be provisions (i) requiring the depositary to
forward to holders of record of depositary shares any reports or communications
from us which the depositary receives with respect to the preferred stock to
which the depositary shares relate, (ii) regarding compensation of the
depositary, (iii) regarding resignation of the depositary, (iv) limiting our
liability and the liability of the depositary under the deposit agreement
(usually to failure to act in good faith, gross negligence or willful
misconduct) and (v) indemnifying the depositary against certain possible
liabilities.
LEGAL MATTERS
Clifford Chance Rogers & Wells LLP, 200 Park Avenue, New York, New York
10166, will pass upon the validity of any securities we offer by this
prospectus. If the validity of any securities is also passed upon by counsel for
the underwriters of an offering of those securities, that counsel will be named
in the prospectus supplement relating to that offering.
EXPERTS
The financial statements as of November 30, 2000 and 1999, and for each of
the three years in the period ended November 30, 2000, and the related financial
statement schedule incorporated by reference into this prospectus and the
registration statement of which it is a part have been audited by Deloitte &
Touche LLP, independent auditors, as stated in their reports appearing in and
incorporated by reference in our Annual Report on Form 10-K for the year ended
November 30, 2000, and have been so included in reliance upon the reports of
such firm given upon their authority as experts in accounting and auditing.
The consolidated financial statements and schedules of U.S. Home
Corporation incorporated by reference in this prospectus and the registration
statement of which it is a part from U.S. Home's Annual
8
Report on Form 10-K for the fiscal year ended December 31, 1999, have been
audited by Arthur Andersen LLP, independent public accountants, as indicated in
their reports with respect thereto, and are included in reliance upon the
authority of said firm as experts in giving said reports.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
We are incorporating by reference in this prospectus the following
documents which we have previously filed with the Securities and Exchange
Commission under the File Number 1-11749 or U.S. Home Corporation has previously
filed with the Securities and Exchange Commission under the File Number 1-05899:
(a) our Annual Reports on Form 10-K and form 10-K/A for the fiscal year
ended November 30, 2000;
(b) our Quarterly Report on Form 10-Q for the fiscal quarter ended February
28, 2001;
(c) our Quarterly Report on Form 10-Q for the fiscal quarter ended May 31,
2001;
(d) our Current Report on Form 8-K dated May 2, 2000;
(e) our Current Report on Form 8-K/A dated June 30, 2000;
(f) our Current Report on Form 8-K dated April 3, 2001;
(g) our Current Report on Form 8-K dated April 4, 2001;
(h) our Current Report on Form 8-K dated October 5, 2001;
(i) our Definitive Proxy Statement dated March 9, 2001;
(j) the description of our common stock contained in our registration
statement under Section 12 of the Securities Exchange Act of 1934, as
amended, as that description has been altered by amendment or reports
filed for the purpose of updating that description; and
(k) U.S. Home Corporation's Annual Report on Form 10-K for the fiscal year
ended December 31, 1999.
Whenever after the date of this prospectus we file reports or documents
under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934,
as amended, those reports and documents will be deemed to be part of this
prospectus from the time they are filed. If anything in a report or document we
file after the date of this prospectus changes anything in it, this prospectus
will be deemed to be changed by that subsequently filed report or document
beginning on the date the report or document is filed.
We will provide to each person, including any beneficial owner, to whom a
copy of this prospectus is delivered a copy of any or all of the information
that has been incorporated by reference in this prospectus, but not delivered
with this prospectus. We will provide this information at no cost to the
requestor upon written or oral request addressed to Lennar Corporation, 700
Northwest 107th Avenue, Miami, Florida 33172, attention: Director of Investor
Relations (telephone: 305-559-4000).
INFORMATION WE FILE
We file annual, quarterly and current reports, proxy statements and other
materials with the SEC. The public may read and copy any materials we file with
the SEC at the SEC's Public Reference Room at 450 Fifth Street, N.W.,
Washington, D.C. 20549. The public may obtain information on the operation of
the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC
maintains an Internet site that contains reports, proxy and information
statements and other information regarding issuers (including us) that file
electronically with the SEC. The address of that site is http://www.sec.gov.
Reports, proxy statements and other information we file also can be inspected at
the offices of the New York Stock Exchange, 20 Broad Street, New York, New York
10005.
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$350,000,000
LENNAR CORPORATION
5.950% SENIOR NOTES DUE 2013
LENNAR LOGO
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PROSPECTUS SUPPLEMENT
JANUARY 31, 2003
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Joint Book Running Managers
SALOMON SMITH BARNEY BANC ONE CAPITAL MARKETS, INC.
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Joint Lead Managers
BANC OF AMERICA SECURITIES LLC DEUTSCHE BANK SECURITIES WACHOVIA SECURITIES
---------------------------
COMERICA SECURITIES CREDIT LYONNAIS SECURITIES UBS WARBURG
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