Key questions from the fourth quarter earnings call conducted by Lennar Corporation on January 24, 2008.

Ivy Zelman (Zelman & Associates): You still have $1 billion of recourse debt in your plan as to continue to reduce that further. How do you give the market assurance that your balance sheet is strong?

Stuart Miller: We are still going to be subject to market conditions, but as we look ahead it was focused on getting each of our divisions and position to have a clear profitability model and that profitability model is focused on every home, it goes under production right now on home sight that should be properly priced. They positioned themselves with the right product and construction costs; it should be able to be profitable as we turn into the second half of the year. The market continues to deteriorate at an accelerated basis; we are not going to get there. I personally have some hopes that there are going to be some actions by the Federal Government that will shore up some of the market condition even as they still have the tendency to fight. As we get to the back half of year, I do not expect to see sales and home prices accelerate but I am hopeful that the slide does not continue at the accelerated rates and I think that we are currently well positioned in each division to be able to start saddling back. One of the strong things that we have in our favor in times like this is that we worked hard on our balance sheet as prove to good times to be able to withstand and absorb some steep shock. even as we have gone through the recalibration that we have gone through now we still been able to maintain a balance sheet in good shape, in good shape and we have been able to generate cash both from operations and more importantly by doing some heads of things in the marketplace. We will fight not only to our balance sheet assets, but also to our joint venture assets today. Nothing is going to isolate us completely from a complete melt down in the marketplace beyond where we are, but to the extent that assets retain any value at all. We have taken the charges to-date that we think are appropriate. For any kind of market conditions with some softening ahead but not with an exaggerated softening ahead, we think, we are well positioned to move forward and to remain stable.

Bruce Gross: Looking at the total joint ventures there is a total of $5.1 billion of debt of which $3.4 million is recourse debt. There is also $2.7 billion of equity and this is after we have gone through the review just like we do with our wholly owned assets of our joint venture investments, investment-by-investment for any potential impairments and there have been impairments for the last few years that bring down the investment to the appropriate stated value, we have taken significant valuation adjustments. There is significant equity and then there are hard assets that are additionally supporting the debt within those joint ventures. Although, it does not mean we can not have a re-margining comeback to as such as we mentioned we had $84 million this year. There are hard assets, there is significant equity and the net recourse exposure has continued to decline to the company as well. In addition to the JV recourse indebtedness coming down to a billion, we have also reduced the net recourse exposure to the company from last year at $ 1 billion to the end of this quarter at $795 million.

Ivy Zelman (Zelman & Associates): Could you talk about the joint venture transparency?

Bruce Gross: We do go through and identified all of the different categories of joint venture indebtedness, and we have again, significant detail disclosure on all of these, on the joint ventures, the various categories, the balance sheet, the debt side. There is significant increase in the transparency from where we have been in the past. That should be filed Tuesday, next week. We have made efforts to get ahead of the curve. It is almost axiomatic that you can not make money on land that is improperly evaluated, it does not matter how good your homebuilding operation is. We are positioning to get ahead and relative to some of the land positions that we have and joint ventures that we have.


Carl Reichardt (Wachovia Securities): Do you expect Lennar to be more active in joint ventures to try to shrink the size of the land position on the balance sheet?

Stuart Miller: As we go forward we will use fewer joint ventures in terms of the numbers of partners that we will have. Having fewer of the smaller type joint ventures would make administratively much more manageable. That would be less inclined to new use joint venture structures at the individual property level. For the next years, the joint venture structure is not going to be needed, there is going to be land available. For many years, we are going to be inclined to take advantage of the market conditions that exist where there will be develop some sites available and we will build our business up about. In terms of the number of joint ventures will be less inclined to use smaller ventures in terms of the need to use ventures it will not be there. It will be a much smaller part of our business. With that said, and using our transaction with Morgan family as a proxy, I classify that more of as a fund. I do think that the opportunities that exist in the open market today to be engaged in the real estate business and to the opportunistic in trouble time, is something that we have a real expertise sense. The joint venture experiences that we have had has given us a great platform for being able to be and an effective fund manager and there will be opportunities for us to put together pools of capital, but stick to engage the risk associated with lands, but buying land at the bottom of the market conditions and we will use those kinds of vehicles to take our expertise and to lever that with land assets that are positioned for recovery. We will use the venture structures in one form or another. It will be more in line with a fund type concept than with an individual venture type contract.

Carl Reichardt (Wachovia Securities): Do you expect, as you see it now, Lennar will deepen its existing market footprint or even shrink and then re-deepen it or do you expect to expand that geographic footprint?

Stuart Miller: We are focused on the footprints that we have in place. If you have to characterize the attitude within our company, it is about looking at what we have got and getting it back to efficiency. We have spent a better part of 2007 focused on being asset managers. We have positioned ourselves now to get back into the primary focus of running operating division the way we know how as profit centers. We are looking at the existing footprint, we are not looking beyond it, we are not looking to materially shrink it either, but we are looking at the platform we have. We have scaled back from a headcount standpoint by almost 15%. We are left with the eight players in all of our markets, and that is what we are going to work with in terms of refining the footprints that we have got.

Ken Zener (Merrill Lynch): With your corporate liquidity rising can you address your expected cash output for land development that you own, and some of the required lot take-downs that you have coming from options or from other joint venture structures that are acquired in 2007?

Bruce Gross: With our option program, they are options and there is not a requirement with respect to those take-downs. Those options that we have remaining continue to remain options. That option ability is to remain in their force. There is virtually no specific performance. There might be no specific performance with respect to any take-down requirements.

Ken Zener (Merrill Lynch): What is your required outflow with respect to home sites that we own?

Bruce Gross: We do not have an exact number there, but our focus has been to manage to the current demand in each local market, with respect to any development that we are taking on and we have aggressively reduced the number of home sites, the number of starts. We are going to manage that tightly with respect to the demand that exists in our markets today.

Ken Zener (Merrill Lynch): How the banks are responding on some of the completion guarantees?

Stuart Miller: Every situation is unique and different in that regard. Each of those completion guarantees is being managed differently and separately. We are going to sit back and wait and see. A lot of it is funded by the underlined venture or debt itself, but each one is going to be looked at specifically. Our properties are well positioned and should be developed for current absorption. The completion not only guarantees, but opportunity is one that is the right thing to do at this point, and we will act accordingly. Additionally there other properties where it is clear to both us and the banks and everybody involved that the strategy is: to not go forward and to not put more money in the ground at this time. One might be talking about an excellent property, but it does not make sense to put the money in the ground. In those instances there are pull back.

Ken Zener (Merrill Lynch): How much of the Morgan Stanley land sale of $1.3 billion as a carried value had been impaired before?

Bruce Gross: That number was about a $150 million in total.

Michael Rehaut (JPMorgan): Could you walk through the rationale on the 109 approach and the tax refund?

Bruce Gross: We have a tax team led by Mike Petrolino, who worked around the clock after year-end to facilitate the quick recoupment of the taxes that were previously paid, and that was hard work effort, planning in order to shepherd that through appropriately in order to get a quick inflow of cash. With respect to FAS 109 which has been a hot topic here lately. From the perspective of the literature as we have looked at it and our auditors have looked at it, you have determine that it is more likely than not, that you will be in a position to realize that tax asset in the future. One strong negative piece of information is, if you have cumulative losses over a certain period of time based on the sick locality of your industry, and based on the cumulative losses so far we are actually positive three years, but based on cyclicality in the business, we are not looking at a three year period, we believe that we can go to a four year period.