Core Points - Lennar Corporation is offering to exchange its approximately 20% ownership in Millrose Properties, Inc. for shares of its own Class A common stock, with the Exchange Offer starting immediately and expiring on November 7, 2025, unless extended or terminated [1][2][5] - The Exchange Offer allows Lennar stockholders to exchange shares at a 6% discount, with a limit of 4.1367 shares of Millrose Class A common stock for each share of Lennar Class A common stock tendered [2][3] - The final exchange ratio will be determined based on the average daily volume-weighted average prices of both companies' Class A common stocks on the NYSE during the three trading days prior to the expiration date [3] Exchange Offer Details - The Exchange Offer is registered under the Securities Act of 1933, with a registration statement filed by Millrose with the SEC [4] - The completion of the Exchange Offer is contingent upon the effectiveness of the Registration Statement, which may be delayed due to the current U.S. federal government shutdown [5][6] - Lennar currently holds 33,298,764 shares of Millrose Class A common stock, representing about 20% of the total outstanding shares, and plans to dispose of any unexchanged shares through various methods if the Exchange Offer is not fully subscribed [7] Participation and Advisors - The Exchange Offer is voluntary for Lennar Class A stockholders, and no action is required for those who choose not to participate [8] - Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC are acting as dealer managers for the Exchange Offer, while Vestra Advisors, LLC serves as the exclusive financial advisor to Millrose [8]

Core Viewpoint - Lennar Corporation will release its third-quarter earnings on September 18, 2025, and will host a conference call the following day [1][2]. Company Overview - Lennar Corporation, established in 1954, is a leading homebuilder in the United States, focusing on quality homes for various generations [3]. - The company builds affordable, move-up, and active adult homes primarily under the Lennar brand [3]. - Lennar's Financial Services segment offers mortgage financing, title, and closing services mainly for its homebuyers, and also originates commercial real estate mortgage loans through LMF Commercial [3]. - The Multifamily segment is dedicated to developing high-quality multifamily rental properties across the nation [3]. - LENX is responsible for driving technology, innovation, and strategic investments within the company [3].

Financial Data and Key Metrics Changes - The company reported a solid second quarter with core FFO per share exceeding the midpoint of guidance by $0.07, driven by better same property operations and lower operating expenses [11][12] - The full year core FFO per share guidance was increased by $0.10 to $15.91, reflecting a 3.15% same property revenue growth and a 3.25% same property expense growth [12][14] - Year-to-date, the company has received approximately $30 million in preferred equity redemptions, with an additional $175 million expected before year-end [14][16] Business Line Data and Key Metrics Changes - The second quarter saw a 3% blended rate growth for the same store portfolio, with Northern California and Seattle leading at 3.8% and 3.7% respectively, while Southern California lagged at 2% [4][5] - Los Angeles experienced a challenging environment with only 1.3% blended rent growth due to elevated supply deliveries and legacy delinquency issues [5][20] - The suburban markets of San Mateo and San Jose outperformed with blended rate growth of 5.6% and 4.4% respectively, attributed to limited housing supply and better job growth [4][5] Market Data and Key Metrics Changes - The investor appetite for West Coast multifamily properties remains healthy, with deal volumes slightly higher in the second quarter compared to the previous year [8] - Average cap rates for institutional quality assets have remained in the mid-4% range, with some transactions in Northern California occurring in the low 4% range [8][72] - The company has been able to generate average yields in the mid to high 4% from approximately $1 billion of acquisitions in Northern California over the last twelve months [9] Company Strategy and Development Direction - The company plans to maintain disciplined capital allocation by funding acquisitions with select dispositions, aiming to optimize risk-adjusted returns and drive NAV and core FFO per share accretion [10] - The focus is shifting towards fee simple acquisitions and stabilized multifamily assets, with a reduced emphasis on the mezzanine finance book due to its volatility [40][82] - The company is tracking several large infrastructure investments related to the World Cup and Olympics in Los Angeles, which are expected to improve economic activities in the market [5][36] Management's Comments on Operating Environment and Future Outlook - Management expects modest U.S. GDP and job growth, with a stable job environment on the West Coast [6] - The outlook for the second half of the year assumes market rents will moderate consistent with normal seasonality, with a potential for higher outcomes driven by increased hiring and a favorable operating environment [7][8] - Management noted that the softness in the macro economy is impacting demand, particularly in Southern California, which mirrors the broader U.S. economy [20][21] Other Important Information - The company has executed several transactions to enhance balance sheet flexibility, including a $300 million delayed draw term loan and an expanded line of credit [15][16] - The structured finance book is expected to decline significantly, with projections of being less than 4% of core FFO by year-end [14][98] Q&A Session Summary Question: What drove the weaker blended pricing in Los Angeles? - Management indicated that the underperformance in Los Angeles was due to heavier supply in the first half, slow delinquency recovery, and a soft demand environment [18][19] Question: Is there strength in Northern California that is not being fully appreciated? - Management confirmed strength in Northern California, with job postings gradually increasing and performance slightly better than expected [24][25] Question: What are the expectations for concessions in LA? - Concessions in LA remain elevated compared to the rest of the portfolio, slightly higher than the previous year but not dramatically worse [46][47] Question: How does the company view the impact of CEQA reform? - Management views CEQA reform as net positive, although it expects limited near-term impact due to existing economic challenges [102][104] Question: What is the expected cadence of earnings from the structured investment book? - The structured finance investments are expected to decline significantly over the next few quarters, with repayments anticipated to reduce the book size substantially [98][99]

Company Overview - Lennar Corporation is one of the nation's largest homebuilders, founded in 1954, focusing on building quality homes for all generations [3] - The company offers affordable, move-up, and active adult homes primarily under the Lennar brand name [3] - Lennar's Financial Services segment provides mortgage financing, title, and closing services mainly for buyers of Lennar's homes, and also originates mortgage loans secured by commercial real estate properties through LMF Commercial [3] - The Multifamily segment is a nationwide developer of high-quality multifamily rental properties [3] - LENX drives Lennar's technology, innovation, and strategic investments [3] Upcoming Earnings Release - Lennar Corporation will release its earnings for the second quarter ended May 31, 2025, after the market closes on June 16, 2025 [1] - A conference call will be hosted on June 17, 2025, at 11:00 a.m. Eastern Time [1] Access to Conference Call - The conference call will be broadcast live and can be accessed through Lennar's website at investors.lennar.com [2] - If unable to participate live, the call will be archived at the same website for 90 days [2]