Lennar came clean this morning, detailing off balance sheet JVs and unconsolidated entities. We are running the model on Lennar and will have a detailed opinion by the end of the week. In the mean time, here is the 8k addendum. Below that you can find the Bankruptcy Score chart for Lennar, to keep things in perspective. The chart was created before gaining access to this new info (we were actually more conservative).
Lennar has declared aggressive management of assets and published off balance sheet debt
|Unconslidated Entities (Excluding LandSource, Heritage Fields & Kyle)||LandSource, Heritage Fields & Kye Acquisition||Total Unconsolidated Entities|
|Lennar net recourse exposure||$ 911,324||$ 911,324|
|Reimbursement agreements w/partners||$ 256,250||$ 256,250|
|Partner several recourse||$ 676,912||$ 676,912|
|Non-recourse debt||$ 1,338,575||$ 2,355,332||$ 3,693,907|
|$ 3,183,061||$ 2,355,332||$ 5,538,393|
|Equity of the unconsolidated entities:|
|Lennar||$ 964,362||$ 112,858||$ 1,077,220|
|Others||$ 1,229,306||$ 770,024||$ 1,999,330|
|$ 2,193,668||$ 882,882||$ 3,076,550|
You know what they say, "A picture is worth a thousand words". Five and a half billion dollars is a lot of money to hide off of the balance sheet. Now that they have given us a taste, I want detailed performance numbers and asset values. Click the chart below if you need a larger view.
According to the bankruptcy score, Lennar is in real trouble. This is more pessimistic than the previous Lennar analysis due to greater clarity. I will post a detailed report this weekend.