What changed in this filing

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Item 1. Business

2024-01-26 compared with 2023-01-26 · 87 added, 80 removed, 253 unchanged (40% of the section changed)

Overview of Lennar Corporation

We are the second largest homebuilder in the United States by deliveries, 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.

We are one of the largest homebuilders in the United States by deliveries, 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 a sponsor and manager of funds and joint ventures engaged in development and ownership of multifamily rental properties and a sponsor and manager of a fund engaged in ownership of single-family rental properties.

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

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

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

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.

Financial information about our Homebuilding, Financial Services, Multifamily and Lennar Other operations is contained in Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations of this Report.

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., 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-family and multifamily homes, including a small number of luxury high-rise tower units, in Florida.

In 2018, we acquired CalAtlantic Group, Inc.

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In addition, we are continuing our transition to a land light operating model by increasing the percentage of land we control through options or agreements but do not own, which reduces our years’ supply of owned homesites.

Subject to market conditions, we intend to spin off our Multifamily and single family home for rent asset management businesses, together with some investment assets, by transferring them to a newly formed subsidiary, Quarterra Group, Inc.

("Quarterra"), and distributing the stock of that subsidiary to our stockholders.

That will make us more of a pure homebuilding and financial services company.

Homebuilding Operations

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Key elements of our strategy include:

• Strong Operating Margins - Our purchasing leverage combined with our focus on reducing selling, general and administrative costs by using technology and innovative strategies and reducing interest expense through paydowns of debt has enabled us to achieve historically high gross profit and operating margins.

• Everything’s Included ® Approach - We are focused on distinguishing our products, including through our Everything’s Included ® approach, which maximizes our purchasing power, enables us to include luxury features as standard items in our homes and simplifies our homebuilding operations.

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• Digital Marketing - We are increasingly advertising homes through digital channels, which is significantly increasing the cost effectiveness of our marketing efforts.

• Dynamic pricing model - We match up unsold production as homes progress toward completion, with pricing information from our dynamic pricing model on a community-by-community and home-by-home basis.

• Technology Focused - We partner with and/or invest in technology companies that are looking to improve the homebuilding and financial services industries to increase efficiencies, reduce customer acquisition costs and create a better customer experience.

• Land light strategy - We are focused on reducing our years' supply of owned homesites and increasing the percentage of land we control through options or agreements, including agreements with strategic land funds and joint ventures, rather than ownership.

• Even flow production - We are focused on maintaining consistent starts and sales paces in order to generate increased market share in all the markets we build in.

Diversified Program of Property Acquisition

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Land purchases are subject to specified underwriting criteria and are made through our diversified program of property acquisition, which may consist of:

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

• Acquiring land directly from individual land owners/developers, or other homebuilders;

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• Acquiring land in conjunction with our Multifamily business.

For the last several years, we have been reducing our reliance on land we own and increasing our access to land through options and joint ventures.

At November 30, 2022, 63% of our total homesites were controlled through options and joint ventures compared to 59% at November 30, 2021.

For the last several years, we have been reducing our reliance on land we own and increasing our access to land through options and joint ventures, most significantly through our use of land banks which is a critical part of our operating strategy.

At November 30, 2023, 76% of our total homesites were controlled through options with land banks, land sellers and joint ventures compared to 69% at November 30, 2022.

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.

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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, 2022, we were actively building and marketing homes in 1,208 c ommunities, including eight communities being constructed by unconsolidated entities.

This was a decrease from the 1,263 communities, including four communities being constructed by unconsolidated entities, in which we were actively building and marketing homes at November 30, 2021.

The number of homes we built in 2022 was limited by shortages of both construction materials and skilled labor.

Also, weaknesses in some markets in the second half of 2022 led us to decrease starts to match sales pace so that we would not have a build up of inventory.

We ended the year with about 900 completed unsold homes.

We use independent subcontractors for most aspects of land development and home construction.

At November 30, 2023, we were actively building and marketing homes in 1,260 communities, including five communities being constructed by unconsolidated entities.

This was an increase from the 1,208 communities, including eight communities being constructed by unconsolidated entities, in which we were actively building and marketing homes at November 30, 2022.

At November 30, 2023 and 2022, we had about 1,200 and 900 completed unsold homes, respectively.

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

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

Although we, like homebuilders throughout the country, have encountered shortages of materials and skilled labor during 2022, we believe that because of our size and our builder of choice program, where we work with our trade partners to drive efficiencies for them, we have been less affected by these shortages than many of our competitors.

Although we, like homebuilders throughout the country, encountered shortages of materials and skilled labor during 2022, we believe that because of our size and our builder of choice program, where we work with our trade partners to drive efficiencies for them, we were less affected by these shortages than many of our competitors.

Most shortages were eliminated due to the supply chain environment catching up to homebuilder demand as well as Lennar’s continued effort to work with our suppliers and manufacturers on the volume and specific products needed to build homes.

We generally do not own heavy construction equipment.

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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.

We sell our homes primarily from models that we have designed and constructed.

We sell our homes from models that we have designed and constructed.

We employ new home consultants who are paid salaries, commissions or both to conduct on-site sales of our homes.

We also sell homes through independent realtors.

We have also made it possible for potential homebuyers to take virtual tours of model homes.

We have made it possible for potential homebuyers to take virtual tours of model homes.

During fiscal 2023, even with shifts in macroeconomic factors and adjusting to the recent inflationary environment, we were able to develop, enhance, use, and improve the Lennar machine.

Our sales, marketing, and dynamic pricing machine is quickly becoming an advanced digital engine that has materially benefited from aggressive, focused use and engagement while the market was most difficult.

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.

This has allowed us to attract more qualified and knowledgeable homebuyers and has helped us reduce our selling, general and administrative expenses as a percentage of home sales revenues.

This has allowed us to attract more qualified and knowledgeable homebuyers.

However, we also continue to advertise through more traditional media on a limited basis, including newspapers, other local and regional publications, radio and on billboards where appropriate.

We tailor our marketing strategy and message based on the community being advertised and the customers being targeted, such as advertising our active adult communities in areas where prospective active adult homebuyers live or will potentially want to purchase.

During the second half of fiscal 2022, significant increases in interest rates made our homes less affordable to many prospective buyers and led us to reduce prices or increase sales incentives in a number of our communities.

During fiscal 2023, significant increases in interest rates made our homes less affordable to many prospective buyers and led us to reduce prices or increase sales incentives in a number of our communities to maintain sales pace.

Quality Service

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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.

We centralize at the corporate level decisions related to our overall strategy, acquisitions of land and businesses, risk management, financing, cash management and information systems.

We centralize at the corporate level decisions related to our overall strategy, acquisitions and disposition of land and businesses, risk management, financing, cash management and information systems.

Backlog represents the number of homes under sales contracts.

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In some instances, purchasers are permitted to cancel sales contracts if they fail to qualify for financing or under certain other circumstances.

We experienced a cancellation rate of 17% in 2022 and 10% in 2021, but in the third and fourth quarters of fiscal 2022, our cancellation rate increased to 21% and 26% respectively.

We experienced a cancellation rate of 16% in 2023 and 17% in 2022.

We do not recognize revenue on homes that are the subject of sales contracts until the sales are closed and title passes to the new homeowners.

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We expect that a significant portion of all homes currently in backlog will be delivered in fiscal year 2024.

During fiscal years 2022 and 2021, because of the concern about increasing labor and material costs and shortages, 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, 2022 and 2021, we had equity investments in 48 and 41 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 $9.1 million and $5.3 million, respectively.

As of both November 30, 2023 and 2022, we had equity investments in 48 active homebuilding and land unconsolidated entities, in which we were participating, and our maximum recourse debt exposure related to Homebuilding unconsolidated joint ventures was $42.1 million and $9.1 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 finance our mortgage loan activities with borrowings under our financial services warehouse facilities or funds from our operating activities.

At November 30, 2022, Financial Services had four warehouse residential facilities maturing at

various dates through fiscal 2023 with a total maximum borrowing capacity of $2.3 billion including an uncommitted amount of $600 million.

At November 30, 2023, Financial Services had five warehouse residential facilities maturing at various dates through fiscal 2024 with a total maximum borrowing capacity of $2.5 billion including an uncommitted amount of $750 million.

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

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We are licensed to provide title insurance, and closing services for residential and/or commercial transactions in 41 states to our homebuyers and others.

During fiscal 2022 and 2021, we closed approximately 68,800 and 67,500 real estate transactions, respectively, in 20 states.

During fiscal 2023 and 2022, we provided closing services with regard to approximately 74,900 and 68,800 real estate transactions, respectively, in 25 and 20 states, respectively.

Commercial Mortgage Origination

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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, 2022, LMF Commercial had four warehouse repurchase financing agreements maturing at various dates through fiscal 2023 with commitments totaling $550 million.

In order to finance LMF Commercial lending activities, as of November 30, 2023, LMF Commercial had three warehouse repurchase financing agreements maturing at various dates from December 2023 through fiscal 2024 with commitments totaling $500 million.

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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Seven of the companies in which we have strategic investments are publicly traded.

• Blend, a company that is a digital lending platform developer simplifying and fast tracking the consumer finance process;

• Blend Labs, Inc.

("Blend"), a digital lending platform developer simplifying and fast tracking the consumer finance process;

• Doma Holdings, Inc.

("Doma"), a company that built a predictive analytics platform for title insurers;

• Hippo Holdings, Inc.

("Hippo"), a company that provides an efficient means of obtaining home insurance;

• Opendoor Technologies, Inc.

("Opendoor"), a company that uses technology to significantly streamline the homebuying and selling process;

• Sonder, a company that manages short-term rentals, such as rental hotels;

• SmartRent, Inc.

("SmartRent"), an enterprise smart home automation company;

• Sonder Holdings, Inc.

("Sonder"), a company that manages short-term rentals, such as rental hotels;

• Sunnova Energy International, Inc.

("Sunnova"), a leading national residential solar company, to which during 2021, we sold our solar power business in return for equity.

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Doma is accounted for using the equity method.

At November 30, 2022, the book value (including those recorded at fair value) of our investment in strategic technology investments was $522.5 million and is included in our Lennar Other segment.

At November 30, 2023, the book value of our investment in strategic technology investments (including those recorded at fair value) was $424.7 million and is included in our Lennar Other segment.

For additional information about our investments in strategic technology investments, see Management's Discussion and Analysis of Financial Condition and Results of Operations in Item 7 of this Report.

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However, the Multifamily business now manages, and owns interests in, longer-duration funds that build multifamily communities with the intention of retaining them as rental income-generating assets.

At November 30, 2022, Multifamily had interests in, and was managing, four funds and 19 joint ventures.

At November 30, 2023, Multifamily had interests in, and was managing, three funds and 22 joint ventures.

From inception through November 30, 2023, the Multifamily business has capitalized and developed 119 multifamily residential communities with approximately 35,900 rental units across 20 states throughout the United States.

The communities

developed by the Multifamily business include a diversified mix of conventional garden, mid-rise and high-rise multifamily properties in urban and suburban locations near major employment centers.

The communities developed by the Multifamily business include a diversified mix of conventional garden, mid-rise and high-rise multifamily properties in urban and suburban locations near major employment centers.

Most communities offer residents a mix of studio, one, two, and three-bedroom homes.

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In addition, it has carried interests in the funds or ventures it manages, and receives distributions with regard to those carried interests.

Multifamily is expected to be one of the businesses included in our proposed spin-off.

Single-Family Home Rentals

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Lennar subsidiaries are the manager and the general partner of Upward America.

As of November 30, 2022, institutional investors had committed $1.6 billion to Upward America, part of which was used to reduce an initial commitment Lennar had made from $225 million to $125 million.

As of November 30, 2023, institutional investors and Lennar had committed $1.6 billion to Upward America, part of which was used to reduce an initial commitment Lennar had made from $225 million to $125 million.

Proceeds of commitments by other investors may be used to redeem more of Lennar’s ownership, but Lennar has agreed not to reduce its ownership below $50 million.

As owner of the general partner of Upward America, Lennar has the right to receive, in addition to distributions regarding its own commitments, distributions based on the amounts by which returns to limited partners exceed specified amounts (i.e., carried interests).

As the manager of Upward America, we receive management and acquisition fees.

As the manager of Upward America, Lennar receives management and acquisition fees.

Lennar subsidiaries may also receive fees for property management, leasing, construction management and other services that they render through subcontractors.

At November 30, 2023, Upward America had purchased 4,697 homes in 103 communities across 19 metropolitan statistical areas for a total purchase price of $1.2 billion (an average price of $258,000 per home), of which 4,420 of the homes owned by Upward America had been leased to occupants.

The Limited Partnership Agreement of Upward America gives Upward America the right to purchase from Lennar for their appraised value all homes or communities that are purpose built for single family home rental.

Upward America also is free to purchase homes from homebuilders other than Lennar or to purchase previously occupied homes.

Initially all the homes purchased by Upward America were purchased from Lennar, but subsequently, Upward America began purchasing homes from multiple homebuilders.

At November 30, 2022, approximately 6% of the homes owned by Upward America were built by homebuilders other than Lennar.

The single family rental business is expected to be one of the businesses included in our proposed spin-off.

At both November 30, 2023 and 2022, approximately 6% of the homes owned by Upward America were built by homebuilders other than Lennar.

Five Point Holdings, LLC

We own an indirect approximately 40% interest in Five Point Holdings, LLC, which is a publicly traded developer of three large master planned mixed-use developments in California (Newhall Ranch, Great Park Neighborhoods, and San Francisco Shipyard/Candlestick Point).

We own an indirect approximately 40% interest in FivePoint, which is a publicly traded developer of three large master planned mixed-use developments in California (Newhall Ranch, Great Park Neighborhoods, and San Francisco Shipyard/Candlestick Point).

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

We have no active role in the management of FivePoint, except that since August 2021 our Executive Chairman has been the non-employee Executive Chairman of the Board of Directors (but not the chief executive officer) of FivePoint.

We have no active role in the management of FivePoint, except that since August 2021 our Executive Chairman and Co-Chief Executive Officer has been the non-employee Executive Chairman of the Board of Directors (but not the chief executive officer) of FivePoint.

As of November 30, 2023, the carrying amount of our investment in FivePoint was $422.2 million.

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However, a variety of factors can alter seasonal patterns.

For example, 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 in those months, and therefore altered our normal seasonal pattern.

In addition, we are working towards moving to a more even flow production where we start, sell and deliver a similar number of homes each quarter.

The residential homebuilding industry is highly competitive.

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• Size and scale in leading markets;

• Use of digital channels to advertise homes;

• Strategic investments in technology initiatives through our LEN X investments in companies that help us enhance the homebuying and home ownership experience, and help us stay at the forefront of homebuilding innovation.

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We also compete for developable land with other developers of real estate for a variety of uses.

In each region where our funds offer single family homes for rent, there will be competition for residents with other owners of residential real estate (whether for-rent or for-sale).

In each region where our funds offer single-family homes for rent, there is competition for residents with other owners of residential real estate (whether for-rent or for-sale).

In addition, in seeking investors to acquire interests in funds we form, we will be competing with a wide variety of investment opportunities, related both to real estate and to a variety of other investment products.

Also, in seeking to acquire single-family homes that our funds can hold as rental properties, our funds will be competing with other persons who plan to hold them as rental properties as well as persons who might want to purchase those homes to live in them.

The residential communities and multifamily apartment developments that we build are subject to a large variety of local, state and federal statutes, ordinances, rules and regulations relating to, among other things, zoning, construction permits or entitlements, construction materials, density, building design and property elevation, building codes and handling of waste.

or entitlements, construction materials, density, building design and property elevation, building codes and handling of waste.

These include laws requiring the use of construction materials that reduce the need for energy-consuming heating and cooling systems.

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In addition, many new development projects are subject to assessments for schools, parks, streets and highways and other public improvements, the costs of which can be substantial.

Also, some states are attempting to make homebuilders responsible for violations of wage and other labor laws by their subcontractors.

In 2020 and 2021, the COVID-19 pandemic slowed down the approval process in many government offices, which in many instances delayed our being able to begin constructing homes in particular communities.

Also, some governmental agencies are attempting to make homebuilders responsible for violations of wage and other labor laws by their subcontractors.

Residential homebuilding and apartment development are also subject to a variety of local, state and federal statutes, ordinances, rules and regulations concerning the protection of health and the environment.

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 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.

Environmental laws may result in delays in developing properties, 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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• Energy Star® appliances that reduce energy consumption.

In addition, our home design and engineering work optimizes efficiency of building materials and reduces construction waste.

In addition, our home design and engineering work optimizes efficient use of building materials and reduces construction waste.

We also believe in the value of clean energy from solar power, which is why we formed our own captive solar power company in 2013.

In 2021, we sold our SunStreet solar operations to Sunnova Energy International, a leading national residential solar company, in exchange for stock in the company.

We believe Sunnova will be better able than us at maximizing

the potential of the SunStreet solar operations.

We are also partnering with Sunnova for it to be our exclusive solar and battery storage provider, and we are working with Sunnova on the development of community solar microgrids.

Human Capital

Our associates are our most valuable asset, and we are committed to supporting each associate’s (i.e., employee's) unique career 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 “Everyone’s Included” mantra anchors our unique culture.

In 2021, we sold our SunStreet solar operations to Sunnova, a leading national residential solar company, in exchange for stock in the company.

We believe Sunnova will be better able than us at maximizing the potential of the SunStreet solar operations.

We are also partnering with Sunnova for it to be our exclusive residential home solar and battery storage provider, and we are working with Sunnova on the development of community solar microgrids.

Human Capital Management

Diversity, Equity and Inclusion;

Talent and Development

Our associates (i.e., employees) are our most valuable asset, and we are committed to supporting each associate’s unique career journey.

We were built on a culture of inclusivity and a conscious focus on the associate experience, bringing together the best talent to drive success as part of our “Lennar family.” 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 “Everyone’s Included” mantra relative to inclusion and diversity within our company anchors our unique culture.

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).

Health and Safety

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

During fiscal 2020 and continuing through fiscal 2021, 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 Board of Directors and its Audit Committee reviews the results of OSHA visits and other safety related information.

We hired a full-time Chief Medical Officer in early 2020 at the beginning of the COVID-19 pandemic.

Our experienced teams adapted quickly to changes in safety protocols to protect our associates, trade partners and homebuyers, and we have continued these protocols even after the COVID-19 pandemic receded.

We are also committed to worker safety and regulatory compliance, and among other things, require that office associates with oversight of construction and associates who work in the field take additional safety courses.

Our Board of Directors and its Audit Committee regularly review the results of OSHA visits and other safety-related information to ensure that we are successfully managing and improving our safety program.

Employees and Labor Relations

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.

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However, we subcontract many phases of our homebuilding operations and some of the subcontractors we use have employees who are represented by labor unions.

We have policies that prohibit us from discriminating in employment opportunities on the basis of race or gender, and we take active steps to offer employment opportunities to under-represented ethnic groups.

NYSE Certification

On April 26, 2022, 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.

We believe our overall relations with our workforce are healthy.

We have policies that prohibit us from discriminating in employment opportunities on the basis of race or gender, and we take active steps to offer employment opportunities to members of under-represented ethnic groups.

Available Information

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Our website is www.lennar.com.

We caution you that the information on our website is not part of this or any other report we file with, or furnish to, the SEC.

We caution you that the information on our website is not incorporated herein and is not a part of this or any other report we file with, or furnish to, the SEC.

In addition, the SEC maintains a website that contains reports, proxy and information statements, and other information regarding issuers, where you may obtain a copy of all of the materials we file publicly with the SEC.

The SEC website address is www.sec.gov.

Special Note Regarding Forward-Looking Statements

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These statements concern expectations, beliefs, projections, plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts.

These forward-looking statements typically include the words “anticipate,” “believe,” “consider,” “estimate,” “expect,” “forecast,” “intend,” “objective,” “plan,” “predict,” “projection,” “seek,” “strategy,” “target,” “will” or other words of similar meaning.

Some of them are opinions formed based upon general observations, anecdotal evidence and industry experience, but that are not supported by specific investigation or analysis.

These forward-looking statements reflect our current views about future events and are subject to risks, uncertainties and assumptions.

We wish to caution readers that certain important factors may have affected and could in the future affect our actual results and could cause actual results to differ significantly from what is anticipated by our forward-looking statements.

We wish to caution readers that certain important factors may have affected and could in the future affect our

actual results and could cause actual results to differ significantly from what is anticipated by our forward-looking statements.

The most important factors that could cause actual results to differ materially from those anticipated by our forward-looking statements include, but are not limited to:

slowdowns in real estate markets in regions where we have significant Homebuilding or Multifamily development activities;

slowdowns in real estate markets in regions where we have significant Homebuilding or Multifamily development activities or own a substantial number of single-family homes for rent;

decreased demand for our homes, either for sale or for rent, or Multifamily rental apartments;

the potential impact of inflation;

the impact of increased cost of mortgage financing for homebuyers, increased

interest rates or increased competition in the mortgage industry;

the impact of increased cost of mortgage financing for homebuyers, increased interest rates or increased competition in the mortgage industry;

supply shortages and increased costs related to construction materials and labor;

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our inability to successfully execute our strategies, including our land lighter strategy and our planned spin-off of certain businesses;

a decline in the value of the land and home inventories we maintain and resulting possible future writedowns of the carrying value of our real estate assets;

a decline in the value of the land and home inventories we maintain and resulting possible future write downs of the carrying value of our real estate assets;

the forfeiture of deposits related to land purchase options we decide not to exercise;

the potential negative impact to our business of the coronavirus (COVID-19) pandemic;

possible unfavorable losses in legal proceedings;

the potential negative impact to our business of public health issues, including the coronavirus (COVID-19) pandemic;

possible unfavorable outcomes in legal proceedings;

changes in general economic and financial conditions that reduce demand for our products and services, lower our profit margins or reduce our access to credit;

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difficulty obtaining land-use entitlements or construction financing;

new laws or regulatory changes that adversely affect the profitability of our businesses;

new laws or regulatory changes that adversely affect the profitability of our businesses (including changes in tax laws or liabilities);

our inability to refinance our debt on terms that are as favorable as our current arrangements;

and changes in accounting conventions that adversely affect our reported earnings.

Please see "Item 1A-Risk Factors" of this Annual Report for a further discussion of these and other risks and uncertainties which could affect our future results.

Please see Item 1A-Risk Factors and Item 7.

Management's Discussion and Analysis of Financial Condition and results of Operations of this Report for a further discussion of these and other risks and uncertainties which could affect our future results.

We undertake no obligation to revise any forward-looking statements to reflect events or circumstances after the date of those statements or to reflect the occurrence of anticipated or unanticipated events, except to the extent we are legally required to disclose certain matters in SEC filings or otherwise.

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