What changed in this filing

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Item 1. Business

2021-01-22 compared with 2020-01-27 · 91 added, 91 removed, 162 unchanged (53% of the section changed)

Overview of Lennar Corporation

We are the largest homebuilder in the United States in terms of consolidated revenues and earnings, an originator of residential and commercial mortgage loans, a provider of title insurance and closing services and a developer of multifamily rental properties.

In addition, we are involved in ventures, and have interests in companies, that are engaged in applying technology to improve the homebuilding industry and real estate related aspects of the financial services industry.

We are the largest homebuilder in the United States by home sale revenues and net earnings, an originator of residential and commercial mortgage loans, a provider of title insurance and closing services and a developer of multifamily rental properties.

In addition, we are involved in a venture that will invest in single family rental homes, and we have interests in companies that are engaged in applying technology to improve the homebuilding industry and real estate related aspects of the financial services industry.

Our homebuilding operations are the most substantial part of our business, generating $21.0 billion in revenues, or approximately 93% of consolidated revenues, in fiscal 2020.

As of November 30, 2020, our reportable homebuilding segments and Homebuilding Other had divisions located in:

Florida, New Jersey, North Carolina , Pennsylvania and South Carolina

Georgia, Illinois, Indiana, Maryland, Minnesota, Tennessee and Virginia

Florida, New Jersey, Pennsylvania and South Carolina

Georgia, Illinois, Indiana, Maryland, Minnesota, North Carolina, Tennessee and Virginia

Arizona, California, Colorado, Nevada, Oregon, Utah and Washington

Urban divisions and other homebuilding related investments primarily in California, including Five Point Holdings, LLC ("FivePoint")

Urban divisions

Our other reportable segments are Financial Services, Multifamily and Lennar Other.

Financial information about our Homebuilding, Financial Services, Multifamily and Lennar Other operations is contained in Management's Discussion and Analysis of Financial Condition and Results of Operations, which is Item 7 of this Report.

Effective for the first quarter of 2019, Lennar Corporation (the “Company”) realigned the composition of its segments due to the sale of its former Rialto Capital Management investment and asset management platform (“Rialto”).

As a result of this realignment, the Company’s Rialto segment was renamed “Lennar Other”.

Additionally, the Company’s Rialto Mortgage Finance (“ RMF ”) business moved from the Lennar Other segment to the Financial Services segment.

The Company also moved its strategic investments from Homebuilding Other to the Lennar Other segment.

Prior period segment financial information has been reclassified to conform to the fiscal year 2019 presentation.

About Our Company

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From 2010 through 2013, we expanded our homebuilding operations into Georgia, Oregon, Washington and Tennessee.

In 2017, we acquired WCI Communities, Inc.

("WCI"), a homebuilder of luxury single and multifamily homes, including a small number of luxury high-rise tower units, in Florida.

In 2017, we acquired WCI Communities, Inc., a homebuilder of luxury single and multifamily homes, including a small number of luxury high-rise tower units, in Florida.

In 2018, we acquired CalAtlantic Group, Inc.

("CalAtlantic"), a major homebuilder which was building homes across the homebuilding spectrum, from entry level to luxury, in 43 metropolitan statistical areas spanning 19 states, and providing mortgage, title and escrow services.

As a result, we became the nation's largest homebuilder in terms of consolidated revenues, with fiscal year 2019 consolidated revenues of $22.3 billion .

We are continuing our pivot to a land light operating model by controlling the timing of land purchases, reducing our years owned supply of homesites and increasing the percentage of land controlled through options or agreements versus owned land.

We are focused on increasing the efficiencies in our building process and reducing selling, general and administrative expenses by using technology and innovative strategies to reduce customer acquisition costs.

We have been focusing on monetizing non-core assets and migrating toward being more of a pure-play homebuilding and financial services company.

At the end of fiscal 2018 and the early part of 2019, we disposed of our Rialto Management Group, the majority of our retail title business, our title insurance underwriting business, our Florida real estate brokerage business and the majority of our business of offering residential mortgages to non-Lennar homebuyers.

In addition to our core operating platforms, Homebuilding and Financial Services, we have also been focusing on maximizing the value of our Multifamily business and our strategic investments in technology companies that are looking to improve the homebuilding industry and real estate related aspects of the financial services industry.

In fiscal 2020, as the coronavirus ("COVID-19") pandemic caused the shutdown of large portions of our national economy, we accelerated various technology initiatives that made our home sale process safer, including selling homes virtually or through self-guided tours and digital closings.

As a robust housing market took shape, technology initiatives also helped meet strong housing demand.

We are focused on increasing the efficiencies in our building process and reducing selling, general and administrative expenses by using technology, deferring home sale price commitments until construction costs are finalized to protect against anticipated future cost escalations and using innovative strategies to reduce customer acquisition costs.

We also continue to focus on divesting non-core assets, possibly including our Multifamily platform, and migrating toward being more of a pure-play homebuilding and financial services company.

In addition, we are continuing our pivot to a land light operating model by controlling the timing of land purchases, reducing our years owned supply of homesites and increasing the percentage of land controlled through options or agreements versus owned land.

This included entering into arrangements in which third parties or joint ventures will purchase land we designate and give us options to purchase the land in the future.

Shortly after the end of fiscal 2020, we entered into a venture that will invest in single family rental homes.

Homebuilding Operations

Our homebuilding operations include the construction and sale of single-family attached and detached homes as well as the purchase, development and sale of residential land directly and through unconsolidated entities in which we have investments.

New home deliveries, including deliveries from unconsolidated entities, were 52,925 in fiscal 2020, compared to 51,491 in fiscal 2019 and 45,627 in fiscal 2018.

The increases in fiscal 2019 and 2018 resulted in part from the acquisition of CalAtlantic in February 2018.

We primarily sell single-family attached and detached homes in communities targeted to first-time, move-up, active adult, and luxury homebuyers.

We primarily sell homes in communities targeted to first-time, move-up, active adult, and luxury homebuyers.

During 2020, we emphasized communities that targeted first time homebuyers, many of whom were moving out of urban locations in response to the COVID-19 pandemic.

The average sales price of a Lennar home varies depending on product and geographic location.

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• Innovative Homebuilding - We are constantly innovating the homes we build to create products that better meet our customers' needs and desires.

Our Next Gen ® home, or a home within a home, provides a unique new home solution for multi-generational households as homebuyers often need to accommodate children and parents to share the cost of their mortgage and other living expenses.

Our Next Gen ® home provides what can be a home within a home to accommodate children or parents or can be an office from which to work remotely.

• Flexible Operating Structure - Our local operating structure gives us the flexibility to make operating decisions based on local homebuilding conditions and customer preferences, while our centralized management structure provides oversight for our homebuilding operations.

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• Strategic partners and investments - We partner with and/or invest in technology companies that are looking to improve the homebuilding and financial services industries to better serve our customers and increase efficiencies.

Land light strategy - We are focused on controlling the timing of land purchases, reducing our years owned supply of homesites and increasing the percentage of land controlled through options or agreements versus owned land.

• Land light strategy - We are focused on reducing our years owned supply of homesites and increasing the percentage of land controlled through options or agreements versus owned land.

Diversified Program of Property Acquisition

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• Acquiring local or regional homebuilders that own, or have options to purchase, land in strategic markets;

Acquiring land through option contracts, which generally enables us to control portions of properties owned by third parties (including land funds) or unconsolidated entities in which we have investments until we have determined whether to exercise the options;

• Acquiring land through option contracts, which generally enables us to control portions of properties owned by third parties (including land funds) or entities in which we have investments until we have determined whether to exercise the options;

• Acquiring access to land through joint ventures or partnerships, which among other benefits, limits the amount of our capital invested in land while helping to ensure our access to potential future homesites and allowing us to participate in strategic ventures;

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• Acquiring land in conjunction with Multifamily.

At November 30, 2019 , we owned 209,032 homesites and had access through option contracts to an additional 104,210 homesites, of which 81,887 homesites were through option contracts with third parties and 22,323 homesites were through option contracts with unconsolidated entities in which we have investments.

At November 30, 2018 , we owned 201,648 homesites and had access through option contracts to an additional 68,623 homesites, of which 59,289 homesites were through option contracts with third parties and 9,334 homesites were through option contracts with unconsolidated entities in which we had investments.

We are in the process of reducing our reliance on land we own and increasing our access to land through options and joint ventures.

We are in the process of further reducing our reliance on land we own and increasing our access to land through options and joint ventures.

At November 30, 2020, 39% of our total homesites were controlled through options and joint ventures compared to 33% at November 30, 2019.

For additional information about our investments in and relationships with unconsolidated entities, see Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7 of this Report.

Construction and Development

Through our own efforts and those of unconsolidated entities in which Homebuilding has investments, we are involved in all phases of planning and building in our residential communities, including land acquisition, site planning, preparation and improvement of land and design, construction and marketing of homes.

We are involved in all phases of planning and building in our residential communities, including land acquisition, site planning, preparation and improvement of land and design, construction and marketing of homes.

We use independent subcontractors for most aspects of home construction.

At November 30, 2019 , we were actively building and marketing homes in 1,283 communities, including five communities being constructed by unconsolidated entities.

At November 30, 2020, we were actively building and marketing homes in 1,177 communities, including four communities being constructed by unconsolidated entities.

This was a decrease from the 1,283 communities, including five communities being constructed by unconsolidated entities, in which we were actively building and marketing homes at November 30, 2019.

The decrease was the result of accelerated sales pace and deliveries as well as a result of delayed openings due to the COVID-19 pandemic.

We anticipate the community count will increase by about 10% in fiscal 2021.

We generally supervise and control the development of land and the design and building of our residential communities with a relatively small labor force.

We hire subcontractors for site improvements and virtually all of the work involved in the construction of homes.

Arrangements with our subcontractors generally provide that our subcontractors will complete specified work in accordance with price and time schedules and in compliance with applicable building codes and laws.

The price schedules may be subject to change to meet changes in labor and material costs or for other reasons.

Although homebuilders throughout the country have sometimes encountered shortages of materials and skilled labor, because of our size we have been less affected by these shortages than many of our competitors.

Although homebuilders throughout the country have sometimes encountered shortages of materials and skilled labor, because of our size and our builder of choice program, where we work with our trade partners to drive efficiencies, we have been less affected by these shortages than many of our competitors.

We believe that the current availability of raw materials and labor to our subcontractors are in most locations adequate for our planned levels of operation.

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We finance construction and land development activities primarily with cash generated from operations and corporate debt.

We offer a diversified line of homes for first-time, move-up, active adult, luxury and multi-generational homebuyers in a variety of locations ranging from urban infill communities to suburban golf course communities.

Our Everything’s Included ® marketing program enables us to differentiate our homes from those of our competitors by including luxury items as standard features at competitive pricing, while reducing construction and overhead costs through a simplified construction process, product standardization and volume purchasing.

Our Everything’s Included ® marketing program enables us to differentiate our homes from those of our competitors by including luxury items as standard features at competitive prices, while reducing construction and overhead costs through a simplified construction process, product standardization and volume purchasing.

In addition, we include built in wireless capability, home automation and solar power in many of the homes we sell, which enhances our brand and improves our ability to generate traffic and sales.

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We also sell homes through independent realtors.

In response to COVID-19, we have made it possible for potential homebuyers to take virtual tours of model homes.

Our marketing strategy has increasingly involved advertising through digital channels including real estate listing sites, paid search, display advertising, social media and e-mail marketing, all of which drive traffic to our website, www.lennar.com.

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We balance a local operating structure with centralized corporate level management.

Our local operating structure consists of homebuilding divisions across the country, each of which is usually managed by a division president, a controller

and personnel focused on land acquisition, entitlement and development, sales, construction, customer service and purchasing.

Our local operating structure consists of homebuilding divisions across the country, each of which is usually managed by a division president, a controller and personnel focused on land acquisition, entitlement and development, sales, construction, customer service and purchasing.

This local operating structure gives our division presidents and their teams, who generally have significant experience in the homebuilding industry, and in most instances, in their particular markets, the flexibility to make local operating decisions, including land identification, entitlement and development, the management of inventory levels for our current sales volume, community development, home design, construction and marketing of our homes.

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We expect that a substantial portion of all homes currently in backlog will be delivered in fiscal year 2021.

During fiscal year 2020, because of the concern about increasing labor and material costs, we, in many instances, deferred entering into contracts to sell homes and committing to the sales price until the costs of the homes were determined, which usually was shortly before construction began.

This had the effect of reducing the number of homes subject to sales contracts at any particular time.

Homebuilding Investments in Unconsolidated Entities

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Through these joint ventures, we reduce the amount we invest in potential future homesites, thereby reducing risks associated with land acquisitions and improving the return on our investments, and, in some instances, we obtain access to land to which we could not otherwise have obtained access or could not have obtained access on as favorable terms.

As of November 30, 2019 and 2018 , we had equity investments in 50 and 51 Homebuilding unconsolidated joint ventures, respectively, in which we were participating, and our maximum recourse debt exposure related to Homebuilding unconsolidated joint ventures was $10.8 million and $65.7 million , respectively.

As of November 30, 2020 and 2019, we had equity investments in 38 and 36 active homebuilding and land unconsolidated entities, respectively, in which we were participating, and our maximum recourse debt exposure related to Homebuilding unconsolidated joint ventures was $4.9 million and $10.8 million, respectively.

This is discussed in greater detail in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7 of this Report.

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We sometimes purchase properties from FivePoint for use in our homebuilding operations.

Three of the eleven directors of FivePoint are officers of Lennar.

Our Executive Chairman is a director of FivePoint.

As of November 30, 2020, the carrying amount of our investment in FivePoint was $392.1 million.

Solar Business

Our solar business is focused on providing homeowners through solar purchases or lease programs, high-efficiency solar power systems that generate much of a home's annual expected energy needs.

In fiscal 2019 , Sunstreet operated in California, Colorado, Florida, Maryland, Nevada, South Carolina, and Texas.

Our solar business is focused on providing homeowners the ability to purchase or lease solar power systems that generate much of a home's annual expected energy needs.

In fiscal 2020, our solar business operated in California, Colorado, Florida, Maryland, Nevada, South Carolina, and Texas.

Financial Services Operations

Residential Mortgage Financing

We offer conforming conventional, FHA-insured and VA-guaranteed residential mortgage loan products and other home mortgage products primarily to buyers of our homes through our financial services subsidiary, Eagle Home Mortgage, LLC, from locations in most of the states in which we have homebuilding operations.

We offer conforming conventional, FHA-insured and VA-guaranteed residential mortgage loan products and other home mortgage products primarily to buyers of our homes through our financial services subsidiary, Lennar Mortgage (formerly Eagle Home Mortgage, LLC), from locations in most of the states in which we have homebuilding operations.

In fiscal year 2020, our financial services subsidiaries provided loans to 80% of our homebuyers who obtained mortgage financing in areas where we offered services.

Because of the availability of mortgage loans from our financial services subsidiaries, as well as from independent mortgage lenders, we believe almost all credit worthy potential purchasers of our homes have access to financing.

Because of the availability of mortgage loans from our financial services subsidiaries, as well as from independent mortgage lenders, we believe almost all creditworthy potential purchasers of our homes have access to financing.

During fiscal year 2020, we originated approximately 40,000 residential mortgage loans totaling $12.9 billion, compared to 34,800 residential mortgage loans totaling $10.9 billion during fiscal year 2019.

Substantially all of the residential mortgage loans we originate are sold within a short period in the secondary mortgage market, a majority of them on a servicing released, non-recourse basis.

After the loans are sold, we retain potential liability for possible claims by purchasers that we breached certain limited industry-standard representations and warranties in the loan sale agreements.

After the loans are sold, we retain potential liability for claims by purchasers that we breached certain limited industry-standard representations and warranties in the loan sale agreements.

Occasional claims of this type are a normal incident of loan securitization activities.

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We finance our mortgage loan activities with borrowings under our financial services warehouse facilities or from our operating funds.

At November 30, 2019 , Financial Services had four warehouse facilities maturing at various dates through fiscal 2020 with a total maximum aggregate commitment of $1.8 billion including an uncommitted amount of $1.2 billion .

At November 30, 2020, Financial Services had four warehouse residential facilities maturing at various dates through fiscal 2021 with a total maximum borrowing capacity of $1.8 billion including an uncommitted amount of $700 million.

We expect the facilities to be renewed or replaced with other facilities when they mature.

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We have been using new technology to automate portions of our mortgage loan origination process.

This has reduced our origination costs from approximately $8,400 per loan in the fourth quarter of 2018 to approximately $5,600 per loan in the fourth quarter of 2019.

This new technology has also made the mortgage financing process easier for homebuyers and improved the customer experience.

This has reduced our origination costs from approximately $8,400 and $5,600 per loan in the fourth quarters of 2018 and 2019, respectively, to approximately $5,500 per loan in the fourth quarter of 2020.

This new technology has also made the mortgage financing

process easier for homebuyers and improved the customer experience.

In response to COVID-19, this new technology has also enabled us to increase the number of digital closings, with digital document signing and where possible digital notarization.

Title, Insurance and Closing Services

During fiscal year 2019, we sold to States Title the majority of our retail title insurance business and underwriting business in return for, among other consideration, an ownership interest in States Title.

We retained our title agency business that provides services to our homebuyers and rebranded it as CalAtlantic Title.

Also during fiscal year 2019, we sold our insurance agency subsidiary, North American Advantage Insurance Services, LLC, which had provided our homebuyers and others with personal lines, property and casualty insurance products.

During 2019 , we provided title insurance and closing services to our homebuyers and others in approximately 59,700 real estate transactions in 32 states, through CalAtlantic Title compared to approximately 118,000 real estate transactions during 2018 .

Before the sales transactions disclosed above, we also provided approximately 19,800 title underwriter policies and 23,700 insurance policies compared to approximately 297,600 title underwriter policies and 69,800 insurance policies during 2018 .

Title and closing services are provided in 32 states.

During 2020, we provided title insurance and closing services to our homebuyers and others in approximately 61,100 real estate transactions in 34 states, through Lennar Title (formerly CalAtlantic Title) compared to approximately 59,700 real estate transactions during 2019.

Commercial Mortgage Origination

Our RMF subsidiary originates and sells into securitizations first mortgage loans, which are secured by income producing commercial properties.

RMF also originates floating rate loans secured by commercial real estate properties, many of which are in transition, undergoing lease-up, sell-out, renovation or repositioning.

In order to finance RMF lending activities, as of November 30, 2019 , RMF had five warehouse repurchase financing agreements maturing between December 2019 and November 2020 with commitments totaling $900 million , which includes $50 million for floating rate loans.

Prior to the sale of our Rialto Management Group on November 30, 2018, RMF was part of the Rialto operations.

RMF is now included as part of Financial Services.

Our LMF Commercial subsidiary originates and sells into securitizations first mortgage loans, which are secured by income producing commercial properties.

LMF Commercial also originates floating rate loans secured by commercial real estate properties, many of which are in transition, undergoing lease-up, sell-out, renovation or repositioning.

In order to finance LMF Commercial lending activities, as of November 30, 2020, LMF Commercial had five warehouse repurchase financing agreements maturing between December 2020 and December 2021 with commitments totaling $800 million, which includes $50 million for floating rate loans.

Multifamily Operations

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Our Multifamily segment is one of the largest developers of apartment communities across the country.

At November 30, 2019 , it had interests in 63 communities with development costs of approximately $7.4 billion , of which 31 communities were completed and operating, six communities were partially completed and leasing, 20 communities were under construction and the remaining communities were owned by the joint ventures.

At November 30, 2020, it had interests in 65 communities with development costs of approximately $7.8 billion, of which 34 communities were completed and operating, seven communities were partially completed and leasing, 21 communities were under construction and the remaining communities were owned by the joint ventures.

As of November 30, 2020, our Multifamily segment also had a pipeline of potential future projects, which were under contract or had letters of intent, totaling approximately $4.7 billion in anticipated development costs across a number of states that will be developed primarily by unconsolidated entities.

Our Multifamily segment had equity investments in 22 and 19 unconsolidated entities (including the Multifamily Ventures, described below) as of November 30, 2020 and 2019, respectively.

During the year ended November 30, 2019 , our Multifamily segment sold, through its unconsolidated entities, two operating properties and an investment in an operating property resulting in the segment's $28.1 million share of gains.

During the year ended November 30, 2018 , our Multifamily segment sold, through its unconsolidated entities, six operating properties and an investment in an operating property resulting in the segment's $61.2 million share of gains.

Originally, our Multifamily segment focused on building multifamily properties and selling them shortly after they were completed.

However, more recently we have focused on creating and participating in ventures that build multifamily properties with the intention of retaining them after they are completed.

The Lennar Multifamily Venture Fund I LP ("LMV I") is a long-term multifamily development investment vehicle involved in the development, construction and property management of class-A multifamily assets with $2.2 billion in equity commitments, including a $504 million co-investment commitment by us comprised of cash, undeveloped land and preacquisition costs.

As of November 30, 2019 , $2.1 billion of the

$2.2 billion in equity commitments had been called, of which we had contributed our share of $485.5 million , resulting in a remaining equity commitment by us of $18.5 million .

In June 2019, the Multifamily segment completed the final closing of Lennar Multifamily Venture Fund II LP ("LMV II") which has approximately $1.3 billion of equity commitments, including a $381 million co-investment commitment by us comprised of cash, undeveloped land and preacquisition costs.

As of November 30, 2019 , $582.3 million of the $1.3 billion in equity commitments had been called.

As of November 30, 2019 , LMV II included 16 undeveloped multifamily assets totaling approximately 5,600 apartments with projected project costs of approximately $2.4 billion .

However, more recently we have focused on creating, participating in and managing ventures that build multifamily properties with the intention of retaining them after they are completed.

Our current ventures, Lennar Multifamily Venture Fund I LP ("LMV I") and Lennar Multifamily Venture Fund II LP ("LMV II"), are both long-term multifamily development investment vehicles involved in the development, construction and property management of class-A multifamily assets.

Rialto Fund Investments

Until November 30, 2018, we had a group of subsidiaries, including Rialto Capital Management, LLC, that primarily managed real estate related investment funds and other real estate related investment vehicles.

We sold the Rialto Management Group on November 30, 2018, however, we retained the right to receive carried interest distributions from some of the funds and other investment vehicles it manages.

We also retained limited partner investments in Rialto funds and investment vehicles that totaled $236.7 million as of November 30, 2019 , and are committed to invest as much as an additional $13.1 million in Rialto funds.

The limited partner investments we retained are now included in our Lennar Other segment (see Note 10 of the notes to our consolidated financial statements).

Strategic Technology Investments

We strategically invest in technology initiatives that, among other things, help us enhance the homebuying experience, reduce our SG&A expenses and stay at the forefront of homebuilding innovation.

Our strategic investments include Opendoor, a company that uses technology to streamline the home buying and selling process;

Our strategic investments include, among others, Opendoor, a company that uses technology to streamline the home buying and selling process;

Blend, a company that provides a digital mortgage application platform;

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At November 30, 2020, our investment in strategic technology ventures was $324.0 million, which was included in our Lennar Other and Financial Services segments.

In December 2020, one of our strategic investments, Opendoor, began trading on the Nasdaq stock market for which we expect to record a significant unrealized gain in the first quarter of fiscal 2021.

Rialto Fund Investments

We sold the Rialto Management Group on November 30, 2018, however, we retained the right to receive carried interest distributions from some of the funds and other investment vehicles it manages.

We also retained limited partner investments in Rialto funds and investment vehicles

that totaled $190.4 million as of November 30, 2020, and are committed to invest as much as an additional $3.3 million in Rialto funds.

We historically have experienced, and expect to continue to experience, variability in quarterly results.

Our homebuilding business is seasonal in nature and generally reflects higher levels of new home order activity in our second fiscal quarter and increased deliveries in the second half of our fiscal year.

However, periods of economic downturn in the industry can alter seasonal patterns.

Our homebuilding business is seasonal in nature and generally reflects higher levels of new home order activity in our second and third fiscal quarters and increased deliveries in the second half of our fiscal year.

However, a variety of factors can alter seasonal patterns.

In 2020, the shutdown of large portions of our national economy in March and April due to the COVID-19 pandemic temporarily reduced our home sales, and therefore altered our normal seasonal pattern.

The residential homebuilding industry is highly competitive.

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We believe we are competitive in the market regions where we operate primarily due to our:

Everything’s Included ® marketing program, which simplifies the home buying experience by including most desirable features as standard items;

Innovative home designs, such as our Next Gen ® homes that provide both privacy and togetherness for multi-generational families;

• Everything’s Included ® marketing program, which simplifies the home buying experience by including the most desirable features as standard items;

• Innovative home designs, such as our Next Gen ® homes that provide both privacy and togetherness for multi-generational families or a home office to accommodate working from home;

• Inclusion of built-in Wi-Fi, solar power systems and advanced technology in many of our homes;

Financial position, where we continue to focus on a land light strategy and using excess cash flow to pay down debt, repurchase shares and return capital to shareholders;

• Financial position as a result of our ability to finance land purchases and development activities with operating revenues and corporate level borrowing;

• Access to land, particularly in land-constrained markets;

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• Size and scale in leading markets.

Our residential financial services operations compete with other mortgage lenders, including national, regional and local mortgage bankers and brokers, banks, savings and loan associations and other financial institutions, in the origination and sale of residential mortgage loans.

Our residential financial services operations compete with other mortgage lenders, including national, regional and local mortgage bankers and brokers, banks, savings and loan associations, non-bank mortgage lenders and other financial institutions, in the origination and sale of residential mortgage loans.

Principal competitive factors include interest rates and other features of mortgage loan products available to the consumer.

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Principal competitive factors include service and price.

Our RMF commercial mortgage origination and sale business competes with a wide variety of banks and other lenders that offer small and mid-sized mortgage loans to commercial enterprises.

Our LMF Commercial subsidiary's commercial mortgage origination and sale business competes with a wide variety of banks and other lenders that offer small and mid-sized mortgage loans to commercial enterprises.

Competition is based primarily on service, price and relationships with mortgage brokers and other referral sources.

RMF is run by highly seasoned managers who have been originating and securitizing loans for over 28 years and can benefit from long-standing relationships with referral sources, as well as being able to leverage Lennar's infrastructure facilities for rapid market entrances and analysis.

We believe these factors give RMF an advantage over many of the lenders with which it competes.

Additionally, we believe access to Lennar's local homebuilding teams provides RMF with a distinct advantage in its evaluation of real estate assets.

LMF Commercial is run by highly seasoned managers who have been originating and securitizing loans for over 28 years and can benefit from long-standing relationships with referral sources, as well as being able to leverage Lennar's infrastructure facilities for rapid market entrances and analysis.

We believe these factors give LMF Commercial an advantage over many of the lenders with which it competes.

Additionally, we believe access to Lennar's local homebuilding teams provides LMF Commercial with a distinct advantage in its evaluation of real estate assets.

Our multifamily operations compete with other multifamily apartment developers and operators, including REITs, across the United States.

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These laws and regulations are subject to frequent change and often increase construction costs.

For example, the California Energy Commission recently adopted a requirement that beginning in 2020, most newly built homes in California must have rooftop solar panels.

For example, the

California Energy Commission adopted a requirement that most newly built homes in California must have rooftop solar panels.

In some instances, we must comply with laws that require commitments from us to provide roads and other offsite infrastructure, and may require them to be in place prior to the commencement of new construction.

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These environmental laws include such subjects as storm water and surface water management, soil, groundwater and wetlands protection, subsurface conditions and air quality protection and enhancement.

Environmental laws and existing conditions may result in delays, may cause us to incur substantial compliance and other costs and may prohibit or severely restrict homebuilding activity in environmentally sensitive regions or areas.

For example, a 2015 decision of the California Supreme Court significantly delayed the start, and increased the cost of a California master planned mixed-use development by a company in which we have a significant investment.

Environmental laws may result in delays, may cause us to incur substantial compliance and other costs and may prohibit or severely restrict homebuilding activity in environmentally sensitive regions or areas.

Over the years, several cities and counties in which we have developments have submitted to voters "slow growth" initiatives and other ballot measures that could impact the affordability and availability of land suitable for residential development within those localities.

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These disclosure requirements vary widely from state-to-state.

In addition, some states require that each new home be registered with the state at or before the time title is transferred to a buyer (e.g., the Texas Residential Construction Commission Act).

In some states, we are required to be registered as a licensed contractor and comply with applicable rules and regulations.

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The Dodd-Frank Wall Street Reform and Consumer Protection Act contains a number of requirements relating to mortgage lending and securitizations.

These include, among others, minimum

standards for lender practices, limitations on certain fees and a requirement that the originator of loans that are securitized retain a portion of the risk, either directly or by holding interests in the securitizations.

These include, among others, minimum standards for lender practices, limitations on certain fees and a requirement that the originator of loans that are securitized retain a portion of the risk, either directly or by holding interests in the securitizations.

Several federal, state and local laws, rules, regulations and ordinances, including, but not limited to, the Federal Fair Debt Collection Practices Act ("FDCPA") and the Federal Trade Commission Act and comparable state statutes, regulate consumer debt collection activity.

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We are also subject to regulations promulgated by the Federal Consumer Financial Protection Bureau regarding residential mortgage loans.

At November 30, 2019 , we employed 10,106 individuals of whom 7,931 were involved in the Homebuilding operations, 1,556 were involved in the Financial Services operations and 619 were involved in the Multifamily operations, compared to November 30, 2018 , when we employed 11,626 individuals (excluding persons employed by Rialto Management Group which was sold on that day) of whom 7,844 were involved in the Homebuilding operations, 3,264 were involved in the Financial Services operations and 518 were involved in the Multifamily operations.

The sale of the majority of our retail title business, retail mortgage business, title insurance underwriter and Berkshire Hathaway real estate brokerage business in the first quarter of fiscal 2019 resulted in a reduction in our associates of approximately 1,600 individuals who were involved in these businesses.

Human Capital

Our associates are our most valuable asset, and we are committed to building a workforce that supports each associate’s unique professional journey.

We believe having an inclusive work environment, where everyone has a sense of belonging, not only drives engagement but fosters innovation, which is critical to driving growth.

Our success starts and ends with having the best talent, and, as a result, we are focused on attracting, developing, engaging and retaining our associates.

We understand the importance of balance, and offer associates a competitive and comprehensive benefits package, including paid parental leave and resources for whole-self well-being (physical, social, and financial).

We are committed to the health and safety of our associates and trade partners.

During fiscal 2020, as a result of the COVID-19 pandemic, we implemented additional safety protocols to protect our associates, trade partners and homebuyers, including protocols regarding social distancing, daily health checks and working remotely.

Our experienced teams adapted quickly to the changes and have managed our business successfully during this challenging time.

We are also committed to worker safety and regulatory compliance.

Our worker safety metrics are measured and reviewed by our Board of Directors so we can ensure that we are successfully managing and improving our safety program.

Although we subcontract the land development and construction aspects of our homebuilding activities, we are highly dependent on our skilled employees for critical aspects of what we do.

That includes senior executives who are responsible for our operational strategies and for approving significant land acquisitions and other major investments we make.

It also includes the people who head our homebuilding divisions and non-homebuilding segments.

And it includes the many people who are

involved in design, construction oversight, marketing and other aspects of our homebuilding business and in carrying out our other activities.

At November 30, 2020, we employed 9,495 individuals of whom 7,309 were involved in the Homebuilding operations, 1,545 were involved in the Financial Services operations and 641 were involved in the Multifamily operations, compared to November 30, 2019, when we employed 10,106 individuals of whom 7,931 were involved in the Homebuilding operations, 1,556 were involved in the Financial Services operations and 619 were involved in the Multifamily operations.

We do not have collective bargaining agreements relating to any of our associates.

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NYSE Certification

On March 20, 2019, we submitted our Annual CEO Certification to the New York Stock Exchange ("NYSE") in accordance with NYSE's listing standards.

On April 8, 2020, we submitted our Annual CEO Certification to the New York Stock Exchange ("NYSE") in accordance with NYSE's listing standards.

The certification was not qualified in any respect.

4 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business