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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
(AMENDMENT NO. 1)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended November 30, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ________ to ______.
Commission file number 1-11749
LENNAR CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 95-4337490
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
700 NORTHWEST 107TH AVENUE
MIAMI, FLORIDA 33172
(Address of Principal Executive Offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (305) 559-4000
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Title of Each Class Name of Each Exchange on Which Registered
------------------- -----------------------------------------
Common Stock, par value $.10 New York Stock Exchange
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
NONE
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES X NO
----- -----
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
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As of January 31, 2001, registrant had outstanding 53,245,331 shares of
common stock and 9,848,112 shares of Class B common stock (which can be
converted into common stock). Of the total shares outstanding, 52,096,377 shares
of common stock and 29,251 shares of Class B common stock, having a combined
aggregate market value (assuming the Class B shares were converted) on that date
of $1,918,223,110, were held by non-affiliates of the registrant.
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EXPLANATORY NOTE
This Report is being amended to revise the section of Item 1 captioned
"Cautionary Statements" so that section will comply with the requirement of Rule
421(d) under the Securities Act of 1933 regarding the use of plain English
principles.
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ITEM 1. BUSINESS.
GENERAL DEVELOPMENT OF BUSINESS
Lennar Corporation (together with its subsidiaries, the "Company") is
one of the nation's largest homebuilders and is a provider of residential
financial services. The Company's homebuilding operations include the sale and
construction of single-family attached and detached homes, as well as the
purchase, development and sale of residential land directly and through its
partnerships. The financial services operations provide mortgage financing,
title insurance and closing services for Lennar homebuyers and others, package
and resell residential mortgage loans, perform mortgage loan servicing
activities and provide high speed Internet access, cable television and home
monitoring services to residents of Lennar communities and others.
On May 3, 2000, the Company acquired U.S. Home Corporation ("U.S.
Home") in a transaction in which U.S. Home stockholders received a total of
approximately $243 million in cash and 13 million shares of the Company's common
stock amounting to approximately $267 million. U.S. Home is primarily a
homebuilder, with operations in 13 states. U.S. Home had total revenues of $1.8
billion and net income of $72.4 million in 1999, and it delivered 9,246 homes
(including joint ventures) during that year.
FINANCIAL INFORMATION ABOUT OPERATING SEGMENTS
The Company has two operating segments - homebuilding and financial
services. The financial information related to these operating segments is
contained in the financial statements incorporated by reference to pages 44
through 63 of the Company's 2000 Annual Report to Stockholders.
NARRATIVE DESCRIPTION OF BUSINESS
HOMEBUILDING
The Company and its predecessor began building homes in Florida in
1954. The Company believes that since its acquisition of Development Corporation
of America in 1986, it has delivered more homes in Florida each year than any
other homebuilder. The Company has been building homes in Arizona since 1972,
where it currently is one of the leading homebuilders. In 1991, the Company
began building homes in Dallas, Texas. In 1992, it started homebuilding
operations in Houston, Texas. During 1995, the Company entered the California
homebuilding market through the acquisition of Bramalea California, Inc. and
expanded in this market in 1996 through the acquisition of Renaissance Homes,
Inc. and through several partnership investments. During 1996, the Company also
significantly expanded its operations in Texas with the acquisition of the
assets and operations of Houston-based Village Builders (a homebuilder) and
Friendswood Development Company (a developer of master-planned communities).
During 1997, the Company continued its expansion in California through homesite
acquisitions and additional partnership investments. Additionally during 1997,
the Company acquired Pacific Greystone Corporation which further expanded its
operations in California and Arizona and brought it into the Nevada homebuilding
market. During 1998, the Company acquired the properties of two California
homebuilders, ColRich Communities and Polygon Communities, and acquired a
Northern California homebuilder, Winncrest Homes. During 2000, the Company
expanded its operations into New Jersey, Maryland/Virginia, Minnesota, Ohio,
Colorado, North Carolina and Michigan with the acquisition of U.S. Home.
Under the Lennar Family of Builders banner, the Company includes the
following brand names: Lennar Homes, U.S. Home, Greystone, Village Builders,
Renaissance, Orrin Thompson, Lundgren Bros.,
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Winncrest and Rutenberg Homes. The Company's active adult and retiree
communities are primarily marketed under the Heritage and Greenbriar brand
names.
The Company, through its own efforts and partnerships in which it has
interests, is involved in all phases of planning and building in its residential
communities, including land acquisition, site planning, preparation and
improvement of land, and design, construction and marketing of homes. The
Company subcontracts virtually all aspects of development and construction.
The Company primarily sells single-family attached and detached homes.
The homes are targeted primarily at first-time, move-up, active adult and
retiree homebuyers. The average sales price of a Lennar home was $226,000 in
fiscal 2000.
CURRENT HOMEBUILDING ACTIVITIES
The table on the following page summarizes information about the
Company's recent homebuilding activities:
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HOMEBUILDING ACTIVITIES
Homesites at November 30, 2000
--------------------------------------------------------
Lennar Corporation Partnerships
------------------- --------------------
Estimated number of Estimated number of
homes that could be homes that could be
Homes delivered constructed on land constructed on land
in the years ended currently owned or currently controlled
November 30, controlled(1)(2) (1)(2)(3) Total
------------------------------ -------------------- -------------------- owned and
Region 2000 1999 1998 Owned Controlled Controlled controlled
------------------- ------ ------ ------ ------ ---------- -------------------- ----------
Florida 5,361 4,241 3,761 15,557 10,092 18,691 44,340
Maryland/Virginia 466 -- -- 2,442 1,045 242 3,729
New Jersey 328 -- -- 1,161 927 462 2,550
------ ------ ------ ------ ------ ------ -------
East Region 6,155 4,241 3,761 19,160 12,064 19,395 50,619
------ ------ ------ ------ ------ ------ -------
Texas 4,696 3,107 2,484 12,472 1,848 9,332 23,652
Minnesota 472 -- -- 2,229 3,508 -- 5,737
Ohio 35 -- -- 282 -- -- 282
------ ------ ------ ------ ------ ------ -------
Central Region 5,203 3,107 2,484 14,983 5,356 9,332 29,671
------ ------ ------ ------ ------ ------ -------
California 3,805 3,731 3,029 13,090 2,147 16,388 31,625
Colorado 984 -- -- 5,397 1,461 2,113 8,971
Arizona 1,568 1,064 1,090 4,150 -- 1,752 5,902
Nevada 521 446 413 1,037 391 -- 1,428
------ ------ ------ ------ ------ ------ -------
West Region 6,878 5,241 4,532 23,674 3,999 20,253 47,926
------ ------ ------ ------ ------ ------ -------
Joint ventures 342 17 -- -- -- 1,280 1,280
------ ------ ------ ------ ------ ------ -------
Total 18,578 12,606 10,777 57,817 21,419 50,260 129,496
====== ====== ====== ====== ====== ====== =======
Notes:
(1) Based on current management estimates, which are subject to change.
(2) Includes homesites that may be sold to other builders.
(3) Represents partnerships and similar entities in which the Company has less
than a controlling interest and are accounted for by the equity method.
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MANAGEMENT AND OPERATING STRUCTURE
The Company balances a local operating structure with centralized
corporate-level management. The Company's local managers, who have significant
experience in the homebuilding industry generally and in their respective
markets, are responsible for operating decisions regarding land identification,
home design, construction and marketing. Decisions related to overall Company
strategy, acquisitions of land and businesses, financing and cash management are
centralized at the corporate level.
The Company views partnerships and similar entities as a means to both
expand its market opportunities and manage its risk profile. Typically, the
Company acts as the general partner and the day-to-day manager.
PROPERTY ACQUISITION
From time-to-time, the Company acquires land for its development and
sales programs. Such land is utilized in the Company's homebuilding operations
and is also sold to third parties. Land acquisitions are subject to strict
underwriting criteria and may be made directly or through partnerships with
other entities to diversify risk. In some instances, the Company acquires land
through option contracts, enabling it to purchase parcels as they are needed to
build homes on them. Most of the Company's land is not subject to mortgages. The
majority of land acquired by partnerships is subject to purchase money
mortgages. The Company generally does not acquire land for speculation.
CONSTRUCTION AND DEVELOPMENT
The Company supervises and controls the development and building of its
own residential communities. It employs subcontractors for site improvements and
virtually all of the work involved in the construction of homes. In almost all
instances, the arrangements between the Company and the subcontractors commit
the subcontractors to complete specified work in accordance with written price
schedules. These price schedules normally change to meet changes in labor and
material costs. The Company does not own heavy construction equipment and
generally only has a labor force used to supervise development and construction
and perform routine maintenance and minor amounts of other work.
The Company generally finances construction and land activities with
cash generated from operations as well as from borrowings under its unsecured
working capital lines and issuances of public debt.
MARKETING
The Company generally has an inventory of homes under construction. A
majority of these homes are sold (i.e., the Company has received executed sales
contracts and deposits) before the Company starts construction.
The Company employs sales associates who are paid salaries, commissions
or both to make on-site sales of the Company's homes. The Company also sells
through independent brokers. The Company advertises its communities through
local media and through its web site, www.lennar.com. In addition, the Company
advertises its active adult and retiree communities in areas where potential
active adults and retirees live. The Company markets under its "Everything's
Included(SM)" and "Design Studio(SM)" programs. The Company sells primarily from
models that it has designed and constructed.
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MORTGAGE FINANCING
The Company's financial services subsidiaries make conventional,
FHA-insured and VA-guaranteed mortgage loans available to qualified purchasers
of the Company's homes. Because of the availability of mortgage loans from the
Company's financial services subsidiaries, as well as independent mortgage
lenders, the Company believes access to financing has not been, and is not, a
significant problem for most purchasers of the Company's homes.
QUALITY SERVICE
The Company employs a process which is intended to provide a positive
atmosphere for each customer throughout the pre-sale, sale, building, closing
and post-closing periods. The participation of sales representatives, on-site
construction supervisors and post-closing customer care personnel, working in a
team effort, is intended to foster the Company's reputation for quality service
and ultimately lead to enhanced customer retention and referrals.
COMPETITION
The housing industry is highly competitive. In its activities, the
Company competes with numerous developers and builders in and near the areas
where the Company's communities are located, including homebuilders with
nationwide operations. Competition is on the basis of location, design, quality,
amenities and price. Some of the Company's principal competitors include KB
Home, Centex Corporation, D.R. Horton, Inc. and Pulte Corporation. However, in
many instances, the Company's principal competitors are local or regional
homebuilders.
FINANCIAL SERVICES
The Company's financial services subsidiaries provide mortgage
financing, title insurance and closing services for Lennar homebuyers and
others, package and resell residential mortgage loans, perform mortgage loan
servicing activities and provide high speed Internet access, cable television
and home monitoring services to residents of Lennar communities and others.
MORTGAGE ORIGINATION
The Company provides conventional, FHA-insured and VA-guaranteed
mortgage loans to buyers of the Company's homes and others through the Company's
financial services subsidiaries: (1) Universal American Mortgage Company in
Florida, California, Arizona, Texas and Nevada; (2) U.S. Home Mortgage
Corporation in Florida, California, Arizona, Texas, Nevada, Virginia, Maryland,
New Jersey, Colorado, Minnesota and Ohio; (3) Eagle Home Mortgage, Inc. in
Nevada, Oregon, Utah and Washington; and (4) AmeriStar Financial Services, Inc.
in California and Nevada. In 2000, loans to buyers of the Company's homes
represented approximately 61% of the Company's $3.2 billion of loan
originations.
The Company sells the loans it originates into the secondary mortgage
market, generally on a non-recourse basis. The Company either retains the
servicing on the loans it sells or sells the servicing rights on the loans it
originates. The Company has a corporate risk management policy under which it
hedges its interest rate locked loan commitments and loans held for sale against
exposure to interest rate fluctuations. The Company finances its mortgage loan
and servicing activities with borrowings under the financial services
subsidiaries' warehouse lines of credit. At November 30, 2000, the Company had
two lines of credit totaling $360 million which were collateralized by mortgage
loans and servicing rights.
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MORTGAGE SERVICING
The Company generates earnings from servicing loans originated or
acquired by its financial services subsidiaries. It services loans for the
Government National Mortgage Association (Ginnie Mae), the Federal National
Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation
(Freddie Mac) and other mortgage investors. At November 30, 2000, it had a
servicing portfolio of approximately 29,000 loans with an unpaid principal
balance of approximately $2.3 billion.
TITLE INSURANCE AND CLOSING SERVICES
The Company arranges title insurance for, and provides closing services
to, buyers of the Company's homes and others. It provided these services in
connection with approximately 120,000 real estate transactions during 2000. The
Company provides these services through Universal Title Insurors in Florida,
Regency Title, Southwest Land Title and Texas Professional Title in Texas,
TitleAmerica Insurance in Florida and Texas and North American Title in
California, Arizona and Colorado.
STRATEGIC TECHNOLOGIES
The Company's subsidiary, Strategic Technologies, Inc., provides high
speed Internet access, cable television and home monitoring services to
residents of the Company's communities and others. At November 30, 2000, the
Company had approximately 3,300 cable television subscribers in California and
approximately 8,800 alarm monitoring customers in Florida and California.
RELATIONSHIP WITH LNR
In connection with the 1997 transfer of the Company's commercial real
estate investment and management business to LNR, and the spin-off of LNR to the
Company's stockholders, the Company entered into an agreement which, among other
things, prevents the Company from engaging at least until 2002 in any of the
businesses in which LNR was engaged, or anticipated becoming engaged, at the
time of the spin-off, and prohibited LNR from engaging, at least until 2002, in
any of the businesses in which the Company was engaged, or anticipated becoming
engaged, at the time of the spin-off (except in limited instances in which the
activities or anticipated activities of the Company and LNR overlapped).
Specifically, the Company is precluded, at least until 2002, from
engaging in the business of (i) acquiring and actively managing commercial or
residential multi-family rental real estate, other than as an incident to, or
otherwise in connection with, their homebuilding business, (ii) acquiring
portfolios of commercial mortgage loans or real estate assets acquired through
foreclosures of mortgage loans, other than real estate acquired as sites of
homes to be built or sold as part of its homebuilding business, (iii) making or
acquiring mortgage loans, other than mortgage loans secured by detached or
attached homes or residential condominium units, (iv) constructing office
buildings or other commercial or industrial buildings, other than small shopping
centers, professional office buildings and similar facilities which will be
adjuncts to its residential developments, (v) purchasing commercial
mortgage-backed securities or real estate asset-backed securities or (vi) acting
as a servicer or special servicer with regard to securitized commercial mortgage
pools. The Company is not, however, prevented from owning or leasing office
buildings in which it occupies a majority of the space; acquiring securities
backed by pools of residential mortgages; acquiring an entity which, when it is
acquired, is engaged in one of the prohibited activities as an incidental part
of its activities; owning as a passive investor an interest of less than 10% of
a publicly traded company which is engaged in a prohibited business; acquiring
commercial paper or short-term debt instruments of entities engaged in one or
more of the prohibited businesses; or owning an interest in, and managing,
Lennar Land Partners.
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The Company and LNR are separate publicly-traded companies and neither
company has any financial interest in the other. The Company and LNR each have
50% interests in a number of partnerships. Stuart Miller, the Company's
President and Chief Executive Officer, is the Chairman of the Board of Directors
of LNR, and Steven Saiontz, one of the Company's Directors, is the Chief
Executive Officer and a Director of LNR. In addition, Leonard Miller, the
Chairman of the Board of Directors of the Company, owns stock which gives him
voting control of both companies. There are provisions both in the by-laws of
Lennar and in those of LNR requiring approval by an Independent Directors
Committee of any significant transactions between the Company and LNR or any of
its subsidiaries. The Company leases some office space, including its principal
offices, from LNR.
REGULATIONS
Homes and residential communities built by the Company must comply with
state and local laws and regulations relating to, among other things, zoning,
treatment of waste, construction materials which must be used, density
requirements, building design and minimum elevation of properties. These include
laws requiring use of construction materials which reduce the need for
energy-consuming heating and cooling systems. These laws and regulations are
subject to frequent change and often increase construction costs. In some cases,
there are laws which require that commitments to provide roads and other offsite
infrastructure be in place prior to the commencement of new construction. These
laws and regulations are usually administered by individual counties and
municipalities and may result in fees and assessments or building moratoriums.
In addition, certain new development projects are subject to assessments for
schools, parks, streets and highways and other public improvements, the costs of
which can be substantial.
The residential homebuilding industry also is subject to a variety of
local, state and federal statutes, ordinances, rules and regulations concerning
the protection of health and the environment. Environmental laws and conditions
may result in delays, may cause the Company to incur substantial compliance and
other costs, and can prohibit or severely restrict homebuilding activity in
environmentally sensitive regions or areas.
In recent years, several cities and counties in which the Company has
developments have submitted to voters "slow growth" initiatives and other ballot
measures which could impact the affordability and availability of homes and land
within those localities. Although many of these initiatives have been defeated,
the Company believes that if similar initiatives were approved, residential
construction by the Company and others within certain cities or counties could
be seriously impacted.
In order to make it possible for purchasers of some of the Company's
homes to obtain FHA-insured or VA-guaranteed mortgages, the Company must
construct those homes in compliance with regulations promulgated by those
agencies.
The Company has registered condominium communities with the appropriate
authorities in Florida and California. Sales in other states would require
compliance with laws in those states regarding sales of condominium homes.
The Company's title insurance agency subsidiaries must comply with
applicable insurance laws and regulations. The Company's mortgage financing
subsidiaries must comply with applicable real estate lending laws and
regulations.
The Company's subsidiaries which underwrite title insurance are
licensed in the states in which they do business and must comply with laws and
regulations in those states regarding title insurance companies. These laws and
regulations include provisions regarding capitalization, investments, forms of
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policies and premiums.
MARKET RISK
The tables on the following pages provide information at November 30,
2000 and 1999 about the Company's significant derivative financial instruments
and other financial instruments used for purposes other than trading that are
sensitive to changes in interest rates. For mortgage loans held for sale or
disposition, mortgage loans, investments and mortgage notes and other debts
payable, the tables present principal cash flows and related weighted average
effective interest rates by expected maturity dates and estimated fair market
values at November 30, 2000 and 1999. Weighted average variable interest rates
are based on the variable interest rates at November 30, 2000 and 1999. For
interest rate swaps, the tables present notional amounts and weighted average
interest rates by contractual maturity dates and estimated fair market values at
November 30, 2000 and 1999. Notional amounts are used to calculate the
contractual cash flows to be exchanged under the contracts.
See Management's Discussion and Analysis of Financial Condition and
Results of Operations in Item 7 and Notes 1 and 12 of Notes to Consolidated
Financial Statements in Item 14 for a further discussion of these items and the
Company's strategy of mitigating its interest rate risk.
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Information Regarding Interest Rate Sensitivity
Principal (Notional) Amount by Expected Maturity
Average Interest Rate
Fair Market
Years Ending November 30, Value at
---------------------------------------------- There- November 30,
(Dollars in millions) 2001 2002 2003 2004 2005 after Total 2000
-------------------------------------- ------ ------ ------ ------ ------ ------- ------- ------------
ASSETS
Financial Services:
Mortgage loans held for sale or
disposition, net:
Fixed rate $ -- -- -- -- -- 374.5 374.5 377.5
Average interest rate -- -- -- -- -- 7.8% -- --
Variable rate $ -- -- -- -- -- 2.0 2.0 2.0
Average interest rate -- -- -- -- -- 7.9% -- --
Mortgage loans and investments:
Fixed rate $ 23.6 1.1 3.3 1.3 0.3 25.4 55.0 54.5
Average interest rate 6.4% 9.6% 8.3% 7.2% 9.4% 9.2% -- --
LIABILITIES
Homebuilding:
Mortgage notes and other debts
payable:
Fixed rate $ 14.8 19.4 5.4 5.3 6.5 1,203.3 1,254.7 1,287.9
Average interest rate 9.0% 8.3% 8.2% 9.0% 8.7% 7.9% -- --
Financial Services:
Notes and other debts payable:
Fixed rate $ 0.7 0.1 0.1 -- -- -- 0.9 0.9
Average interest rate 4.9% 9.8% 9.8% -- -- -- -- --
Variable rate $428.1 -- -- -- -- -- 428.1 428.1
Average interest rate 6.7% -- -- -- -- -- -- --
OFF-BALANCE SHEET
FINANCIAL INSTRUMENTS
Homebuilding:
Interest rate swaps:
Variable to fixed-
notional amount $ -- -- -- -- 100.0 300.0 400.0 (5.7)
Average pay rate -- -- -- -- 6.7% 6.6% -- --
Average receive rate LIBOR LIBOR
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Information Regarding Interest Rate Sensitivity
Principal (Notional) Amount by Expected Maturity
Average Interest Rate
Fair Market
Years Ending November 30, Value at
---------------------------------------------- There- November 30,
(Dollars in millions) 2000 2001 2002 2003 2004 after Total 1999
-------------------------------------- ------ ------ ------ ------ ------ ------- ------- ------------
ASSETS
Financial Services:
Mortgage loans held for sale or
disposition, net:
Fixed rate $ -- -- -- -- -- 191.8 191.8 193.9
Average interest rate -- -- -- -- -- 7.8% -- --
Variable rate $ -- -- -- -- -- 37.2 37.2 37.2
Average interest rate -- -- -- -- -- 7.2% -- --
Mortgage loans and investments:
Fixed rate $ 8.4 1.3 0.3 1.5 1.4 18.6 31.5 31.0
Average interest rate 5.3% 7.3% 9.4% 7.0% 7.3% 9.4% -- --
LIABILITIES
Homebuilding:
Mortgage notes and other debts
payable:
Fixed rate $ 11.3 4.9 -- -- -- 507.5 523.7 466.3
Average interest rate 7.4% 9.3% -- -- -- 6.2% -- --
Financial Services:
Notes and other debts payable:
Fixed rate $ 0.7 0.7 0.1 0.2 -- -- 1.7 1.6
Average interest rate 7.2% 4.9% 11.0% 9.0% -- -- -- --
Variable rate $248.8 1.4 1.1 -- -- -- 251.3 251.3
Average interest rate 5.1% 8.3% 8.3% -- -- -- -- --
OFF-BALANCE SHEET
FINANCIAL INSTRUMENTS
Homebuilding:
Interest rate swaps:
Variable to fixed-
notional amount $ -- -- 200.0 -- -- -- 200.0 1.7
Average pay rate -- -- 6.1% -- -- -- -- --
Average receive rate 30-day
LIBOR
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CAUTIONARY STATEMENTS
Some of the statements in this Report are "forward-looking statements,"
as that term is defined in the Private Securities Litigation Reform Act of 1995.
By their nature, forward-looking statements involve risks, uncertainties and
other factors that may cause actual results to differ materially from those
which the statements anticipated. Factors which may affect our results include,
but are not limited to, changes in: general economic conditions, the market for
homes generally and in areas where we have developments, the availability and
cost of land suitable for residential development, materials prices, labor
costs, interest rates, consumer confidence, competition, environmental factors
and government regulations affecting our operations.
The following factors could particularly significantly affect our
operations and financial results and cause our results to differ from those
anticipated by forward-looking statements in this Report.
THE RESIDENTIAL HOMEBUILDING INDUSTRY IS CYCLICAL AND IS HIGHLY SENSITIVE TO
CHANGES IN ECONOMIC CONDITIONS.
The residential homebuilding industry is cyclical and is highly
sensitive to changes in general economic conditions, such as levels of
employment, consumer confidence and income, availability of financing, interest
rate levels and demand for housing. The resale market for used homes, including
foreclosed homes, also affects the sale of new homes.
The residential homebuilding industry has, from time-to-time,
experienced fluctuating lumber prices and supply, as well as shortages of other
materials and labor, including insulation, drywall, concrete, carpenters,
electricians and plumbers. Delays in construction of homes due to these factors
or due to weather conditions could have an adverse effect upon our operations.
Inflation can increase the cost of building materials and labor and
other construction related costs. Conversely, deflation can reduce the value of
our land inventory and make it more difficult for us to include the full cost of
previously purchased land in home sale prices.
CUSTOMERS MAY BE UNWILLING OR UNABLE TO PURCHASE OUR HOMES AT TIMES WHEN
MORTGAGE FINANCING COSTS ARE HIGH.
Virtually all the purchasers of our homes finance their acquisitions,
either through our financial services subsidiaries or through third-party
lenders. In general, housing demand is adversely affected by increases in
interest rates and by decreases in the availability of mortgage financing. If
effective mortgage costs increase and that adversely affects the ability or
willingness of prospective buyers to finance home purchases, our operating
results may be negatively affected. Our homebuilding activities also are
dependent upon the availability and cost of mortgage financing for buyers of
homes currently owned by potential purchasers of our homes who cannot purchase
our homes until they sell their current homes.
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OUR OPERATING RESULTS MAY VARY.
We have historically experienced, and expect to continue to experience,
variability in operating results on a quarterly basis. Factors that may
contribute to this variability include, but are not limited to:
- the timing of home closings;
- the timing of land sales;
- the timing of receipt of regulatory approvals for the
construction of homes;
- the condition of the real estate market and general economic
conditions;
- the cyclical nature of the homebuilding industry;
- prevailing interest rates and availability of mortgage
financing;
- pricing policies of our competitors;
- the timing of the opening of new residential communities;
- weather conditions; and
- the cost and availability of materials and labor.
Our historical financial performance is not necessarily a meaningful
indicator of future results. We expect our financial results to continue to vary
from quarter to quarter.
WE DEPEND ON KEY PERSONNEL.
Our success depends to a significant degree on the efforts of our
senior management. Our operations may be adversely affected if one or more
members of senior management cease to be active in our business. We have
designed our compensation structure and employee benefit programs to encourage
long-term employment by executive officers.
EMPLOYEES
At November 30, 2000, the Company employed 7,140 individuals of whom
4,460 were involved in homebuilding operations and 2,680 were involved in
financial services operations. The Company does not have collective bargaining
agreements relating to any of its employees. However, some of the subcontractors
the Company uses have employees who are represented by labor unions.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this Amendment to be signed
on its behalf by the undersigned, thereunto duly authorized.
LENNAR CORPORATION
By: /s/ Bruce Gross
----------------------------------
Bruce Gross,Vice President and
Chief Financial Officer
Date: September 28, 2001
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