Lennar (LEN) 10-K risk factor changes: FY2019 vs FY2018

In [removed: the first half of] fiscal [removed: 2018,] [added: 2019,] we continued to experience an improving housing market, and we saw increases in new sales contracts signed and homes delivered compared with the prior year.

[removed: Inability] [added: Our inability] to pass on [removed: all the] [added: future] increased costs to homebuyers [removed: puts] [added: would put] downward pressure on our operating margins in [removed: the later months of 2018 and could continue to affect our operating margins in 2019.][added: 2020.]

An increase in mortgage interest rates could [removed: decrease] [added: reduce] our buyers’ ability or desire to obtain financing and adversely affect our business or financial results.

When interest rates increase, the cost of owning a new home increases, which usually reduces the number of potential buyers who can [removed: afford] [added: afford, or are willing,] to purchase [removed: a home.][added: homes we build.]

When demand for homes fell during the 2007-2010 recession, we were required to take significant write-downs of the carrying value of our land inventory and we elected not to exercise many options to purchase land, [removed: even though that] [added: which] required us to forfeit deposits and write-off pre-acquisition costs.

If market conditions were to deteriorate significantly in the future, we could again be required to make significant [removed: write downs with regard to our land inventory, which would decrease] [added: write-downs of] the [removed: asset values reflected on our balance sheet and adversely affect] [added: carrying value of] our [removed: earnings] [added: inventory] and [removed: our stockholders' equity.][added: costs relating to land purchase options.]

[removed: Lennar] Financial Services.

Our [removed: Lennar] Financial Services residential and commercial lending businesses compete with other residential and commercial mortgage lenders, including national, regional and local banks and other financial institutions.

[removed: Lennar] Multifamily.

We have, and many of our subcontractors have, general liability, property, [removed: workers] [added: workers'] compensation and other business insurance.

[added: As a result, an increasing number of our subcontractors are unable to obtain insurance, and we have in] many cases had to waive our customary insurance requirements, which increases our and our insurers’ exposure to claims and increases the possibility that our insurance will not be adequate to protect us against all the costs we incur.

During [removed: 2018,] [added: 2019,] we experienced increases in the prices of some building materials and shortages of skilled labor in some areas.

At November 30, [removed: 2018,] [added: 2019,] we had a [removed: $2.6] [added: $2.5] billion revolving credit facility with a group of banks (the "Credit [removed: Facility"), which includes a $315 million accordion feature, subject to additional commitments.][added: Facility").]

[removed: This] [added: If interest rates increase, this] increases the cost of the homes we build, which either makes those homes more expensive for homebuyers, which is likely to reduce demand, or [removed: lowers] [added: lower] our operating margins, or both.

In addition, our [removed: Lennar] Financial Services [removed: segment has] [added: residential mortgage companies have] warehouse facilities to finance [removed: its residential] [added: their mortgage] lending activities and our RMF commercial lending group has warehouse facilities to finance its mortgage origination activities.

In addition, if we default under the Credit Agreement or our warehouse facilities, it could cause the amounts outstanding under our senior notes to become immediately due and payable, which would [removed: have a material adverse] [added: seriously adversely] impact [removed: on] our consolidated financial condition.

As of November 30, [removed: 2018,] [added: 2019,] our consolidated debt, net of debt issuance costs, and excluding amounts outstanding under our credit facilities, was [removed: $8.7] [added: $7.8] billion.

We [removed: substantially] reduced our outstanding indebtedness during [removed: the remainder of 2018,] [added: fiscal 2019,] but we still have a significant amount of indebtedness.

| • | we may be required to dedicate a substantial portion of our cash flow from operations to the payment of principal and interest on our debt, reducing the cash flow available to fund operations and [removed: investments;] [added: investments and reducing the amount we can return to our stockholders;] |

Our inability to obtain performance bonds or post letters of credit could adversely affect our [removed: results of operations and cash flows.][added: operations.]

We often are required to provide surety bonds to secure our performance [removed: or] [added: of] obligations under construction contracts, development agreements and other arrangements.

At November 30, [removed: 2018,] [added: 2019,] we had outstanding surety bonds of [removed: $2.7] [added: $2.9] billion including performance surety bonds related to site improvements at various projects (including certain projects of our joint ventures) and financial surety bonds.

Although significant development and construction activities have been completed related to these site improvements, these bonds are generally not released until all development and construction activities [added: to which they relate] are completed.

If we [removed: are] [added: were] unable to obtain surety bonds when required, our [removed: results of] operations [removed: and cash flows] could be adversely affected.

Our [removed: Lennar] Financial Services segment, [removed: including RMF,] [added: including RMF,] has warehouse facilities that mature in fiscal year [removed: 2019,] [added: 2020,] and if we could not renew or replace these facilities, we probably would have to reduce our mortgage lending and origination activities.

Our [removed: Lennar] Financial Services [removed: segment, excluding RMF, has] [added: segment's residential mortgage origination subsidiaries have] committed and uncommitted amounts under four warehouse repurchase credit facilities that totaled [removed: $1.9] [added: $1.8] billion as of November 30, [removed: 2018,] [added: 2019,] all of which will mature at various dates through fiscal [removed: 2019.][added: 2020.]

Our [removed: Lennar] Financial Services segment uses these facilities to finance its residential mortgage lending activities until the mortgage loans it originates are sold to investors.

In addition, RMF, our commercial mortgage lending [removed: subsidiary] [added: subsidiary,] which [removed: on December 1, 2018, was moved into] [added: is included in] our [removed: Lennar] Financial Services segment, has committed amounts under five warehouse repurchase credit facilities that totaled $900 million as of November 30, [removed: 2018,] [added: 2019,] all of which will mature [removed: between November 2019 and December 2019.][added: within a year after that date.]

If we were unable to renew or replace these facilities on favorable terms or at all when they mature, that could seriously impede the activities of our [removed: Lennar] Financial Services segment, which would have a material adverse impact on our financial results.

In our Homebuilding and [removed: Lennar] Multifamily segments, we participate in joint ventures in order to help us acquire attractive land positions, to manage our risk profile and to leverage our capital base.

For example, in connection with our [removed: Lennar] Multifamily business, and its joint ventures, we and the other venture participants have guaranteed obligations to complete construction of multifamily residential buildings at agreed upon costs, which could make us and the other venture participants responsible for cost over-runs.

If any of those joint ventures are unable to do this, we could be required to provide at least a portion of the funds the joint ventures need to be able to repay the borrowings and to finance the activities for which they were incurred, which could adversely [removed: affect] [added: impact] our financial position.

Our success depends to a significant extent upon the performance and active participation of our senior management, many of whom have been with us for [removed: a significant number of] [added: 20 or more] years.

A substantial portion of our access to capital is through the issuance of senior notes, of which we have approximately [removed: $8.0] [added: $6.9] billion outstanding, net of debt issuance costs as of November 30, [removed: 2018.][added: 2019.]

We will have to replace or repay a substantial amount of debt in fiscal year [removed: 2019.][added: 2020.]

We have [removed: $1.1 billion] [added: $600 million] of senior notes that mature in fiscal year [removed: 2019] [added: 2020] and we will have to replace or renew a total of [removed: $2.1] [added: $2.7] billion of warehouse lines used by [removed: Lennar] Financial Services, including [removed: RMF] [added: RMF,] as they mature.

In the third [removed: and fourth quarters] [added: quarter] of [removed: 2017,] [added: fiscal year 2019,] our homebuilding operation was disrupted due to impacts from [removed: Hurricanes Harvey and Irma,] [added: hurricanes,] which [removed: caused delays of 550] [added: slowed] home [removed: deliveries that were pushed into fiscal 2018.][added: production and delayed home sales.]

While the majority of our homebuyers obtain their mortgage financing from [removed: Lennar] Financial Services, others obtain mortgage financing from banks and other independent lenders.

Among other things, changes made by Fannie Mae, Freddie [removed: Mac] [added: Mac, Ginnie Mae] and FHA/VA to sponsored mortgage programs, as well as changes made by private mortgage insurance companies, have reduced the ability of [removed: many] potential homebuyers to qualify for mortgages.

In addition, there has been uncertainty regarding the future of Fannie [removed: Mae and] [added: Mae,] Freddie [removed: Mac,] [added: Mac and Ginnie Mae,] including proposals that they reduce or terminate their role as the principal sources of liquidity in the secondary market for mortgage loans.

It also required us to write down the carrying value of our land inventory.

It is likely that if there were another economic downturn, the resulting decline in demand for new homes would negatively impact our business, results of operations and financial condition.

We may not be able to continue to manage our costs.

During fiscal 2019, although we encountered increases in the costs of labor and materials, our direct costs as a percentage of our average sales prices trended downward each quarter.

While we expect this trend to continue in 2020, we may not be able to lower our direct construction cost as a percentage of average sales price.

We continue to operate in a labor constrained market and we cannot predict future inflationary pressures and tariffs on imported building materials.

Mortgage rates are very low as compared to most historical periods.

However, they could increase in the future, particularly if the Federal Reserve Board raises its benchmark rate.

We are constantly purchasing land, or entering into arrangements to purchase land, for use in our homebuilding operations.

The value of land suitable for residential development fluctuates depending on local and national market conditions and other factors that affect demand for new homes.

We may be subject to costs of warranty and liability claims in excess of the insurance coverage we can purchase.

Increases in construction costs sometimes exceed our ability to increase home prices, particularly in areas where there is aggressive pricing competition or weak demand.

This reduces our operating margins and our net income.

It has a $350 million accordion feature, subject to additional commitments, thus the maximum borrowings could be $2.8 billion.

representations and warranties we make in connection with such sales.

Changes in U.S. trade policies and retaliatory responses from other countries may substantially increase the costs or limit supplies of building materials and products used in our homes.

During the past year, the U.S. government has imposed new, or increased existing, tariffs on an array of imported materials and products that are used in the homes we build, including lumber, steel, aluminum, solar panels and washing machines, which increases the costs of those items, and it has threatened additional new or increased tariffs.

The tariffs that have been imposed or increased have impacted our construction costs and caused disruptions in our supply chains, and new or increased tariffs could result in further cost increases.

These cost increases could negatively impact our profit margins.

The new or increased tariffs could also negatively affect U.S. national or regional economies, which could affect the demand for the homes we build.

obtain required approvals and therefore may aggravate the delays we encounter.

We have substantial investments in real estate related businesses in which we are a minority investor.

We have investments in funds and other investment vehicles managed by Rialto Capital Management, a company we sold in November 2018, investments in a number of companies that are applying technology to various aspects of building and marketing homes and real estate related aspects of the financial services industry, and investments in FivePoint, a publicly traded company that has ownership interests in, and is managing the development of, three large multi-use master planned communities in California.

As a minority investor, we have limited influence over decisions made with regard to these funds and businesses.

However, we could suffer significant losses of our investments as a result of decisions that are made by the funds and businesses.

We experience variability in our operating results on a quarterly basis.

We could suffer significant losses with regard to our investments in technology companies.

In connection with our effort to use new technology to reduce selling costs and improve the experience of our homebuyers, we have made substantial investments in companies that are developing new technology that we are using.

In many instances those companies have not yet achieved profitability or their ability to survive market downturns has not yet been tested.

While we think at least most of the investments we have made will prove to be profitable, it is possible that will not be the case, and that we at some time will have to write down significant portions of our investments in technology companies.

During the second half of fiscal 2018, demand for new homes slowed as a result of higher prices and higher interest rates.

We believe the reduced demand is temporary, but that may not be the case.

A continuation of the recent reduced demand for new homes could have a similar effect on us.

We and other homebuilders have been experiencing significant cost increases.

During fiscal 2018, we encountered significant increases in the costs of labor and materials.

The increased labor costs were primarily the result of shortages of skilled labor in many parts of the country.

The increase in material costs were due to inflationary pressures and, during the middle part of the year, to tariffs on Canadian lumber and other imported building materials.

Mortgage rates are currently low as compared to most historical periods; however, they increased during the past year as the Federal Reserve Board raised its benchmark rate several times, and they appear likely to increase further in 2019.

The cost of mortgage financing could result in a decline in the demand for our homes.

Inventory risks are substantial for our homebuilding business.

There are risks inherent in controlling, owning and developing land and if housing demand declines, we may own land or homesites we acquired at costs we will not be able to recover fully, or on which we cannot build and sell homes profitably.

This is particularly true when entitled land becomes scarce, as it has recently, and the cost of purchasing such land is relatively high.

Also, there can be significant fluctuations in the value of our owned undeveloped land, building lots and housing inventories related to changes in market conditions.

As a result, our deposits for building lots controlled under option or similar contracts may be put at risk, we may have to sell homes or land for lower than anticipated profit margins or we may have to record inventory impairment charges with regard to our developed and undeveloped land and lots.

We may be subject to significant potential liabilities as a result of warranty and liability claims made against us.

As a result, an increasing number of our subcontractors are unable to obtain insurance, and we have in

Increases in construction costs that exceeded our increase in home pricing eroded our operating margins in the latter part of fiscal 2018 and may continue to reduce our operating margins, particularly if pricing competition or weak demand restricts our ability to pass additional costs of materials and labor on to homebuyers.

Due in part to Federal Reserve Bank actions, short term interest rates increased during fiscal 2018 and are likely to increase during fiscal 2019.

Among other things, we incurred a substantial amount of debt in connection with our acquisition of CalAtlantic during

2018.

Subsequent to November 30, 2018, the warehouse repurchase credit facility due in December 2018 was extended to February 2019.

We have a substantial amount of debt that matures in fiscal year 2019.

In the third quarter of fiscal 2018, our homebuilding operations in the Houston area were affected by heavy rain that caused flooding.

In addition, the revenues of our Lennar Financial Services segment would be adversely affected by a continued decrease in refinance transactions, if mortgage interest rates continue to rise.

We have a substantial investment in funds managed by Rialto Capital Management.

In November 2018, we sold Rialto Capital Management and other subsidiaries that are involved in advising funds and investment vehicles that invest in real estate related assets.

However, we retained investments in those funds and other investment vehicles totaling almost $297.4 million, and we have commitments to invest another $71.6 million.

When we made those investments and commitments, Rialto Capital Management was a wholly owned subsidiary, which, among other things, enabled us to participate in decisions regarding senior management personnel.

Subsequent to the sale, we no longer have any more influence than other large investors over decisions regarding senior management of Rialto Capital Management.

We may be adversely impacted by laws and regulations directed at the financial industry.

New or modified regulations and related regulatory guidance focused on the financial industry may have adverse effects on aspects of our businesses.

For example, in October 2014, final rules were promulgated under the Dodd-Frank Wall Street Reform Act that require mortgage lenders or third-party B-piece buyers to retain a portion of the credit risk related to securitized loans.

We have determined that the rules do not affect our residential mortgage lending operations at this time; however, the rules may adversely impact our RMF subsidiary’s commercial mortgage lending operations.

The rules have been in effect for several years; however, their long term impact is still undetermined.

If, in the future, the rules cause a decrease in the price of CMBS and/or a decrease in the overall volume of CMBS related loan purchases in the industry, this could negatively impact the financial results of our RMF business.

In addition, if our residential mortgage lending operations became subject to these rules in the future, that would substantially increase the amount we would have to invest in our mortgage lending operations and increase our risks with regard to loans we originate and sell in the secondary mortgage market.

We could be hurt by efforts to impose liabilities or obligations on persons with regard to labor law violations by other persons whose employees perform contracted services.

We do not have the ability to

In 2015 the National Labor Relations Board ("NLRB") issued a decision that made it possible that someone like us, who uses subcontractors, could be viewed as a joint employer of the subcontractors’ employees.

A subsequent NLRB decision (which was withdrawn for procedural reasons) and an appellate court decision questioned aspects of the 2015 decision and the NLRB has issued a proposed rule that, if adopted, would make it much less likely that we could be deemed to be a joint employer of our subcontractors’ employees.

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: [removed: an extended slowdown] [added: slowdowns] in the real estate markets across the nation, including a slowdown in [removed: the market for single family homes] [added: real estate markets in regions where we have significant homebuilding] or [removed: the] multifamily [removed: rental market;] [added: development activities;] increases in operating costs, including costs related to [removed: real estate taxes,] [added: labor,] construction materials, [removed: labor] [added: real estate taxes] and insurance, [removed: and] [added: which exceed] our [removed: inability] [added: ability] to [removed: manage our cost structure, both] [added: increase prices, either] in our [removed: Lennar] Homebuilding [removed: and Lennar] [added: or our] Multifamily businesses; our inability to [removed: realize all of the anticipated synergy benefits from the CalAtlantic acquisition or to realize them in the anticipated timeline; our inability to] successfully execute our [removed: strategies;] [added: strategies, including our land lighter and our even flow production strategy;] 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; our inability to acquire land at anticipated prices; the possibility that we will incur nonrecurring costs that affect earnings in one or more reporting periods; decreased demand for our homes or [removed: Lennar Multifamily] [added: multifamily] rental properties; the possibility that [removed: the Tax Cuts and Jobs Act will have more negative than positive impact on us; the possibility that the benefit from] our increasing use of technology will not [added: result in improvement to our SG&A expenses and bottom line, and will not] justify its cost; [added: inability of the technology companies in which we have investments to operate profitably;] increased competition for home sales from other sellers of new and resale homes; [removed: negative effects of increasing] [added: increases in] mortgage interest rates; [removed: our inability to reduce the ratio of our homebuilding debt to our total capital net of cash;] a decline in the value of our [removed: land] inventories and resulting write-downs of the carrying value of our real estate assets; the failure of the participants in various joint ventures to honor their commitments; difficulty obtaining land-use entitlements or construction financing; natural disasters and other unforeseen events for which our insurance does not provide adequate coverage; new laws or regulatory changes that adversely affect the profitability of our businesses; our inability to refinance our debt [added: as it matures] on terms that are acceptable to us; and changes in accounting [removed: conventions] [added: standards] that adversely affect our reported [removed: earnings.][added: earnings or financial condition.]

Our net earnings attributable to Lennar were [removed: $1.7] [added: $1.8] billion, or [removed: $5.44 per diluted share ($5.46 per basic share) in 2018, $810.5 million, or $3.38] [added: $5.74] per diluted share [removed: ($3.38] [added: ($5.76] per basic share) in [removed: 2017,] [added: 2019] and [removed: $911.8 million,] [added: $1.7 billion,] or [removed: $3.86] [added: $5.44] per diluted share [removed: ($4.05] [added: ($5.46] per basic share) in [removed: 2016.][added: 2018.]

The following table sets forth financial and operational information for the years indicated related to our [removed: operations.][added: operations:]

| | Years Ended November 30, | | | | | | [removed: | | |]

| (Dollars in thousands) | [removed: 2018 | |] [added: 2019] | | [removed: 2017] | | [added: 2018 (1)] | [removed: 2016] | |

| [removed: Lennar Homebuilding] [added: Homebuilding] revenues: | | | | | | | [removed: | | |]

| Sales of homes | $ | [removed: 18,810,552 | | | 11,035,299] [added: 20,560,147] | | | [removed: 9,558,517] [added: 18,810,552] | |

| Total [removed: Lennar] Homebuilding revenues | [removed: 19,077,597 | | |] [added: 20,793,216] | [removed: 11,200,242] | | | [removed: 9,741,337] [added: 19,077,597] | |

| [removed: Lennar Homebuilding] [added: Homebuilding] costs and expenses: | | | | | | | [removed: | | |]

| Costs of homes sold | [removed: 15,121,738 | | |] [added: 16,323,989] | [removed: 8,601,346] | | | [removed: 7,362,853] [added: 15,121,738] | |

| Total [removed: Lennar] Homebuilding costs and expenses | [removed: 16,936,873 | | |] [added: 18,245,700] | [removed: 9,752,269] | | | [removed: 8,399,881] [added: 16,936,803] | |

| [removed: Lennar] Homebuilding equity in loss from unconsolidated entities | [removed: (91,915] [added: (13,273] | | ) | | [removed: (61,708 | ) | | (49,275] [added: (90,209] | ) |

| [removed: Lennar] Multifamily costs and expenses | [removed: 429,759 | | |] [added: 599,604] | [removed: 407,078] | | | [removed: 301,786] [added: 429,759] | |

| [removed: Lennar] Multifamily equity in earnings from unconsolidated entities and other gain | [removed: 51,322 | | |] [added: 11,294] | [removed: 85,739] | | | [removed: 85,519] [added: 51,322] | |

| [removed: Lennar Multifamily] [added: Multifamily] operating earnings | $ | [removed: 42,695 | | | 73,432] [added: 16,390] | | | [removed: 71,174] [added: 42,695] | |

| [removed: Rialto equity] [added: Equity] in earnings from unconsolidated entities | [removed: 25,816 | | |] [added: 178] | [removed: 25,447] | | | [removed: 18,961] [added: 691] | |

| Total operating earnings | $ | [removed: 2,463,191 | | | 1,475,500] [added: 2,775,406] | | | [removed: 1,563,031] [added: 2,463,191] | |

| Gain on sale of Rialto investment and asset management platform | [removed: 296,407 | | |] [added: —] | [removed: —] | | | [removed: —] [added: 296,407] | |

| Acquisition and integration costs related to CalAtlantic | [removed: 152,980 | | |] [added: —] | [removed: —] | | | [removed: —] [added: 152,980] | |

| Corporate general and administrative expenses | [removed: 343,934 | | |] [added: 341,114] | [removed: 285,889] | | | [removed: 232,562] [added: 343,934] | |

| Earnings before income taxes | $ | [removed: 2,262,684 | | | 1,189,611] [added: 2,434,292] | | | [removed: 1,330,469] [added: 2,262,684] | |

| Net earnings attributable to Lennar | $ | [removed: 1,695,831 | | | 810,480] [added: 1,849,052] | | | [removed: 911,844] [added: 1,695,831] | |

| Gross margin as a % of [removed: revenue] [added: revenues] from home sales [removed: (1)] | [removed: 19.6] [added: 20.6] | | % | | [removed: 22.1 | % | | 23.0] [added: 19.6] | % |

| S,G&A expenses as a % of revenues from home sales | [removed: 8.5] [added: 8.3] | | % | | [removed: 9.2 | % | | 9.4] [added: 8.5] | % |

| Operating margin as a % of revenues from home sales | [removed: 11.1] [added: 12.3] | | % | | [removed: 12.9 | % | | 13.6] [added: 11.1] | % |

| Average sales price | $ | [removed: 413,000 | | | 376,000] [added: 400,000] | | | [removed: 361,000] [added: 413,000] | |

(1) [removed: Excluding] [added: During] the [added: year ended November 30, 2018, gross margins on home sales included] backlog/construction in progress write-up of $414.6 million related to purchase accounting on CalAtlantic homes that were delivered in [removed: the] [added: fiscal] year [removed: ended November 30, 2018, gross margins on homes sales were $4.1 billion or 21.8%.][added: 2018.]

[removed: 2018] [added: 2019] versus [removed: 2017][added: 2018]

Revenues from home sales increased [removed: 70%] [added: 9%] in the year ended November 30, [removed: 2018] [added: 2019] to [removed: $18.8] [added: $20.6] billion from [removed: $11.0] [added: $18.8] billion in the year ended November 30, [removed: 2017.][added: 2018.]

Revenues were higher primarily due to a [removed: 55%] [added: 13%] increase in the number of home deliveries, excluding unconsolidated entities, [removed: and] [added: partially offset by] a [removed: 10% increase] [added: 3% decrease] in the average sales price of homes delivered.

New home deliveries, excluding unconsolidated entities, increased to [removed: 45,563] [added: 51,412] homes in the year ended November 30, [removed: 2018] [added: 2019] from [removed: 29,322] [added: 45,563] homes in the year ended November 30, [removed: 2017,] [added: 2018,] primarily [removed: due to the significant] [added: as a result of an] increase in [removed: volume resulting from the CalAtlantic acquisition.][added: home deliveries in all of Homebuilding's segments except Homebuilding Other.]

The average sales price of homes delivered, excluding unconsolidated entities, [removed: increased] [added: decreased] to [removed: $413,000] [added: $400,000] in the year ended November 30, [removed: 2018] [added: 2019] from [removed: $376,000] [added: $413,000] in the year ended November 30, [removed: 2017.][added: 2018 reflecting our continued focus on the entry-level market and, in general, moving down the price curve.]

Gross margins on home sales were [removed: $3.7] [added: $4.2] billion, or [removed: 19.6%,] [added: 20.6%,] in the year ended November 30, [removed: 2018,] [added: 2019] compared to [removed: $2.4] [added: $3.7] billion, or [removed: 22.1%,] [added: 19.6% (21.8% excluding purchase accounting),] in the year ended November 30, [removed: 2017.][added: 2018.]

The gross margin percentage on home sales [removed: decreased compared to] [added: increased because] the year ended November 30, [removed: 2017 primarily due to the] [added: 2018 included $414.6 million or 220 basis points of] backlog/construction in progress write-up [removed: of $414.6 million] related to purchase accounting adjustments on CalAtlantic homes that were delivered in [removed: the year ended November 30, 2018, which impacted gross margins on home sales by 220 basis points.][added: that period.]

Selling, general and administrative expenses were [removed: $1.6] [added: $1.7] billion in the year ended November 30, [removed: 2018,] [added: 2019,] compared to [removed: $1.0] [added: $1.6] billion in the year ended November 30, [removed: 2017.][added: 2018.]

As a percentage of revenues from home sales, selling, general and administrative expenses improved to [removed: 8.5%] [added: 8.3%] in the year ended November 30, [removed: 2018,] [added: 2019,] from [removed: 9.2%] [added: 8.5%] in the year ended November 30, [removed: 2017, primarily] [added: 2018,] due to [removed: a reduction in personnel and related expenses, brokers commissions, and model and selling expenses] [added: improved operating leverage] as a [removed: percentage] [added: result] of [added: an increase in] home [removed: sales revenue.][added: deliveries.]

Gross [removed: profits] [added: margin] on land sales [removed: were $60.1] [added: and other homebuilding revenue was $26.5] million in the year ended November 30, [removed: 2018,] [added: 2019,] compared to [removed: $29.9] [added: $60.1] million in the year ended November 30, [removed: 2017.][added: 2018.]

[removed: In] [added: For] the [removed: years] [added: year] ended November 30, [removed: 2018 and 2017, Lennar] [added: 2018,] Homebuilding equity in loss from unconsolidated entities was [added: primarily] attributable to our share of net operating losses from our unconsolidated entities which were primarily driven by valuation adjustments related to assets of [removed: Lennar] Homebuilding's unconsolidated entities and general and administrative expenses, partially offset by profits from land sales.

[removed: Lennar] Homebuilding other [removed: income,] [added: income (expense),] net, totaled [removed: $205.8] [added: ($31.3)] million in the year ended November 30, [removed: 2018,] [added: 2019,] compared to [removed: $22.8] [added: $203.9] million in the year ended November 30, [removed: 2017.][added: 2018.]

In the year ended November 30, 2018, other income, [removed: net] [added: net,] was primarily related to a $164.9 million gain on the sale of an 80% interest in one of [removed: our] [added: Homebuilding's] strategic joint ventures, Treasure Island Holdings.

During the fourth quarter, the housing market continued to strengthen.

We saw traffic and sales continue to improve from last year's market pause as lower interest rates and slower price appreciation positively impacted affordability.

That, together with low unemployment, wage growth, consumer confidence and economic growth, drove home purchasers, especially at the entry level, to return to the housing market.

We have remained focused on our pivot to a land lighter strategy.

From controlling the timing of land purchases, to reducing our years-owned supply of homesites, to increasing the percentage of land controlled through options or agreements versus owned land, we are migrating towards a significantly smaller owned land inventory.

At the beginning of 2019, we set a two-year goal of increasing the homesites we control but do not own from 25% to 40% of our land needs.

We made great progress on this front, and finished the year at 33%.

Based on our progress, our new goal is to have 50% of our land needs controlled versus owned by the end of fiscal 2021.

We also believe that, based on our progress on reducing our years-owned supply of homesites from 4.4 years at the end of the third quarter to 4.1 years at the end of the fourth quarter, we can reduce our years-owned supply of homesites to 3 years by the end of fiscal 2021.

While our most immediately impactful focus remains on our land spend and our inventory, we are also driving our asset-base lower as we continue to focus on monetizing non-core assets and business segments.

Our size and scale in each of our strategic markets continues to facilitate our management of costs even in labor constrained markets.

Our continued focus on technology and leveraging our size and scale is driving efficiencies that are reflected in our consistent improvement in SG&A and our bottom line.

In the fourth quarter, our SG&A expense as a percentage of home sale revenues continued its downward trend with our lowest fourth quarter level ever at 7.6%.

In addition, through contributions from our technology initiatives in our financial services platform, we decreased loan origination costs and simplified our business process to improve customer experience, which in part drove the financial services segment's record profit in the fourth quarter.

Technology, together with management focus, has enabled efficiency, a better customer experience and a much better bottom line.

Over the next two years we expect to see some of the same technology-based improvements that we used in our financial services platform affecting our core homebuilding operations, specifically in areas of customer acquisition costs, even flow production and inventory management.

Our backlog, combined with our current housing inventory, leads us to expect to close between 54,000 and 55,000 homes in fiscal 2020.

Although the price per home may decrease as we focus more on the entry level market, we expect our fiscal 2020 gross margins to remain consistent with fiscal 2019 as we increase our home sales pace while continuing to focus on reducing construction spend by keeping cost per square foot flat while average square footage is declining, leveraging field expenses over a greater number of deliveries and reducing interest expense.

Accordingly, we expect to generate strong cash flow in 2020, that we can use to pay down debt and return capital to shareholders through our increased dividend and strategic share repurchases.

With a solid balance sheet, leading market positions and continued execution of our core operating strategies, we believe we are well positioned for strong profitability and cash flow in 2020.

| (Dollars in thousands, except average sales price) | 2019 | | | | 2018 | |

| Sales of land and other homebuilding revenue | 233,069 | | | | 267,045 | |

| Costs of land sold | 206,526 | | | | 206,956 | |

| Selling, general and administrative | 1,715,185 | | | | 1,608,109 | |

| Homebuilding operating margins | 2,547,516 | | | | 2,140,794 | |

| Homebuilding other income (expenses), net | (31,338 | | ) | | 203,902 | |

| Homebuilding operating earnings | $ | 2,502,905 | | | 2,254,487 | |

| Financial Services revenues | $ | 824,810 | | | 954,631 | |

| Financial Services costs and expenses | 600,168 | | | | 754,915 | |

| Financial Services operating earnings | $ | 224,642 | | | 199,716 | |

| Multifamily revenues | $ | 604,700 | | | 421,132 | |

| Lennar Other revenues | $ | 36,835 | | | 118,271 | |

| Lennar Other costs and expenses | 11,794 | | | | 115,969 | |

| Lennar Other equity in earnings from unconsolidated entities | 15,372 | | | | 24,110 | |

| Lennar Other expense, net | (8,944 | | ) | | (60,119 | ) |

| Lennar Other operating earnings (loss) | $ | 31,469 | | | (33,707 | ) |

*Effects of CalAtlantic Acquisition*

For the year ended November 30, 2018, Homebuilding revenue included $7.0 billion of revenues, and earnings before income taxes included $491.3 million of pre-tax earnings from CalAtlantic since the date of acquisition, which included acquisition and integration costs of $153.0 million.

These acquisition and integration costs were comprised mainly of severance

In July 2019, the FASB issued *Accounting Standards Update 2019-07, “Codification Updates to SEC Sections-Amendments to SEC Paragraphs Pursuant to SEC Final Rule Releases No. 33-10532, Disclosure Update and Simplification"*, which makes a number of changes meant to simplify certain disclosures in financial condition and results of operations, particularly by eliminating year-to-year comparisons between prior periods previously disclosed.

At the end of our fiscal 2018, we believe the market has taken a natural pause as higher home prices and rapid interest rate increases have combined to create a mismatch between prices and homebuyer expectations.

While we saw traffic moderate and sales slow toward the end of 2018, with inventories low, we believe this is a temporary adjustment as strong employment, wage growth, consumer confidence and general economic growth drive the consumer to the market.

We still believe that the housing market is primarily driven by the deficit in housing production that has persisted for over a decade.

As interest rates have started to ease at the end of 2018 and beginning of 2019, we have seen traffic pick up.

Additionally, if the market continues to remain soft, we believe our production-oriented focus should allow us to move quickly to realize reduced costs in an accelerated production pace.

Alternatively, if the market returns to normalized levels, we believe we will have a superior position with more homes started and available to sell and the critically needed trade base to deliver them.

In spite of softer market conditions towards the back end of the year, fiscal 2018 was another strong year for Lennar, enhanced by the successful integration of CalAtlantic.

Revenues totaled $20.6 billion, representing a 63% increase from 2017.

This increase was largely driven by our homebuilding business which saw a 55% increase in deliveries to 45,627 homes primarily as a result of the CalAtlantic acquisition.

Gross margins and operating margins, excluding backlog and construction in process write-up, were 21.8%, and 13.3%, respectively, which is an improvement in operating margins of 40 basis points from 2017.

This improvement was driven by a reduction in S,G&A as a percentage of home sales revenue to 8.5%, which is an all-time fiscal year low, from 9.2% in 2017.

Our new orders increased to 45,826, up 51% compared to fiscal 2017, primarily as a

result of the CalAtlantic acquisition.

In addition, we ended the year with a strong sales backlog of 15,616 homes or $6.6 billion, up 75% in homes and 85% in dollar value.

Consistent with our focus to revert to our core homebuilding platform, we sold our Rialto investment and asset management platform for $340 million in the fourth quarter of 2018.

While we continue to hold valuable investment assets of Rialto, we will no longer oversee nor be engaged in the active management of Rialto.

Subsequent to fiscal year end, we also sold the majority of our retail title agency business and our wholly owned title insurance carrier.

In addition, we sold our real estate brokerage business in the first quarter of 2019.

In 2018, our Financial Services segment produced $187.4 million of pre-tax earnings, compared to $155.5 million in 2017.

The increase was largely due to an increase in the segment's title and mortgage operations due to the acquisition of CalAtlantic's Financial Services operations.

Our rental apartment business has seen significant pickup in both rents and lease-ups.

The Multifamily segment generated $42.7 million in operating earnings in fiscal 2018, which was down from 2017 due to a strategic shift from a merchant build-to-sell model to a build-to-hold model.

While we still have a pipeline of 30 merchant-build communities with over 9,000 homes and a total development cost of $3.6 billion, our real focus is to create long-term cash flow and value through the build-out of our Lennar Multifamily Venture I and II.

In fiscal 2019, we are very focused on cash flow generation to reduce debt and to opportunistically repurchase shares.

To further enhance our cash flow generation, we are continuing our pivot to a land-lighter operating model with an emphasis on controlling more land through options versus a more cash-intensive land acquisition and development program.

We ended the year with approximately 25% of our homesites controlled via option contracts and similar arrangements.

Our goal is to increase this to over 40% in the next several years.

We expect that this shift in land strategy should increase our returns on inventory and generate additional cash flow.

We are excited about our position and business strategy today.

We expect that our Company’s main driver of earnings will continue to be our homebuilding and financial services operations as we expect to deliver over 50,000 homes in fiscal 2019.

We benefit from the size and scale we have amassed in each of our strategic markets.

We have shed non-core assets to generate cash and have continued to partner with technology companies that can help enhance our customers experience while reducing our overhead.

Our reversion to core and technology investment strategies have combined to enable us to rationalize our overall business, recognize significant cash flow and profits, and improve our customers’ experience, while reducing headcount by approximately 1,600 associates from fiscal year end through January 2019.

This strategy will continue to reduce company overhead and increase efficiency in our core operations.

Overall, we believe we are on track to achieve another year of strong profitability in fiscal 2019.

| | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Sales of land | 267,045 | | | | 164,943 | | | 182,820 | |

| Costs of land sold | 206,971 | | | | 135,075 | | | 138,111 | |

| Selling, general and administrative | 1,608,164 | | | | 1,015,848 | | | 898,917 | |

For variable rate debt such as our unsecured revolving credit facility and [removed: Lennar] Financial Services’ and RMF’s warehouse repurchase facilities, changes in interest rates generally do not affect the fair value of the outstanding borrowings on the debt facilities, but do affect our earnings and cash flows.

In our [removed: Lennar] Financial Services operations, we utilize mortgage backed securities forward commitments, option contracts and investor commitments to protect the value of rate-locked commitments and loans held-for-sale from fluctuations in mortgage-related interest rates.

The table below provides information at November 30, [removed: 2018] [added: 2019] about our significant instruments that are sensitive to changes in interest rates.

For loans held-for-investment, net and investments held-to-maturity, senior notes and other debts payable and notes and other debts payable, the table presents principal cash flows and related weighted average effective interest rates by expected maturity dates and estimated fair values at November 30, [removed: 2018.][added: 2019.]

Weighted average variable interest rates are based on the variable interest rates at November 30, [removed: 2018.][added: 2019.]

| (Dollars in millions) | [removed: 2019 | | | |] 2020 | | | [added: |] 2021 | | | 2022 | | | 2023 | | | [added: 2024 | | |] Thereafter | | | Total | | | [removed: 2018] [added: 2019] | |

| Average interest rate | [removed: —] [added: 4.0] | | [added: %] | | [removed: 4.0] [added: —] | [removed: %] | | — | | | — | | | — | | | [removed: 2.7] [added: —] | [removed: %] | | [removed: 3.3] [added: 4.0] | % | | — | |

| [removed: Lennar Financial] [added: Financial] Services: | | | | | | | | | | | | | | | | | | | | | | | | |

| Average interest rate | [removed: 2.8] [added: —] | | [removed: %] | | [removed: 3.1] [added: —] | [removed: %] | | [removed: 4.3] [added: —] | [removed: %] | | [removed: 4.7] [added: —] | [removed: %] | | [removed: 4.3] [added: —] | [removed: %] | | [removed: 4.1] [added: 2.8] | % | | [removed: 3.5] [added: 2.8] | % | | — | |

| Average interest rate | [removed: 3.4] [added: 5.5] | | % | | [removed: 3.4] [added: —] | [removed: %] | | [removed: 3.4] [added: —] | [removed: %] | | [removed: 3.4] [added: —] | [removed: %] | | [removed: 3.4] [added: —] | [removed: %] | | 3.4 | % | | [removed: 3.4] [added: 3.5] | % | | — | |

| [removed: Lennar Homebuilding:] [added: Homebuilding:] | | | | | | | | | | | | | | | | | | | | | | | | |

| Average interest rate | [removed: 4.3] [added: 4.0] | | % | | [removed: 4.2] [added: 5.9] | % | | [removed: 6.2] [added: 4.8] | % | | [removed: 4.9] [added: 4.2] | % | | [removed: 5.2] [added: 5.0] | % | | 4.9 | % | | 4.9 | % | | — | |

| Average interest rate | [removed: —] [added: 2.9] | | [added: %] | | [removed: 5.3] [added: —] | [removed: %] | | [removed: 4.4] [added: —] | [removed: %] | | — | | | — | | | — | | | [removed: 5.0] [added: 2.9] | % | | — | |

| Average interest rate | [removed: 3.2] [added: 4.5] | | % | | [removed: —] [added: 2.0] | [added: %] | | [removed: 3.3] [added: —] | [removed: %] | | [removed: 3.3] [added: —] | [removed: %] | | — | | | [removed: 3.3] [added: —] | [removed: %] | | 3.3 | % | | — | |

| Variable rate | $ | [removed: 191.4] [added: 13.3] | | | — | | | — | | | — | | | — | | | — | | | [removed: 191.4] [added: 13.3] | | | [removed: 191.4] [added: 13.3] | |

| Average interest rate | [removed: 4.6] [added: 3.9] | | % | | — | | | — | | | — | | | — | | | — | | | [removed: 4.6] [added: 3.9] | % | | — | |

| Average interest rate | [removed: 4.5] [added: 3.5] | | % | | [removed: —] [added: 3.6] | [added: %] | | — | | | — | | | — | | | — | | | [removed: 4.5] [added: 3.5] | % | | — | |

November 30, 2019

| Lennar Other: | | | | | | | | | | | | | | | | | | | | | | | | |

| Fixed rate | $ | — | | | — | | | — | | | — | | | — | | | 54.1 | | | 54.1 | | | 56.4 | |

| Fixed rate | $ | 19.9 | | | 9.9 | | | 3.1 | | | 1.7 | | | 1.7 | | | 45.1 | | | 81.4 | | | 77.1 | |

| Average interest rate | 3.2 | | % | | 2.8 | % | | 4.5 | % | | 4.4 | % | | 4.4 | % | | 4.3 | % | | 3.8 | % | | — | |

| Variable rate | $ | — | | | 0.1 | | | 15.2 | | | 0.1 | | | 0.1 | | | 1.3 | | | 16.8 | | | 16.9 | |

| Average interest rate | — | | % | | 3.1 | % | | 6.5 | % | | 3.1 | % | | 3.1 | % | | 3.1 | % | | 6.2 | % | | — | |

| Fixed rate | $ | 1,003.6 | | | 1,080.6 | | | 1,759.8 | | | 72.4 | | | 1,523.1 | | | 2,187.1 | | | 7,626.6 | | | 8,041.3 | |

| Variable rate | $ | 51.5 | | | 50.7 | | | — | | | — | | | — | | | — | | | 102.2 | | | 103.3 | |

| Financial Services: | | | | | | | | | | | | | | | | | | | | | | | | |

| Fixed rate | $ | 0.1 | | | — | | | — | | | — | | | — | | | 154.7 | | | 154.8 | | | 154.8 | |

| Variable rate | $ | 1,452.8 | | | 138.1 | | | — | | | — | | | — | | | — | | | 1,590.9 | | | 1,590.9 | |

| Multifamily: | | | | | | | | | | | | | | | | | | | | | | | | |

| Note payable: | | | | | | | | | | | | | | | | | | | | | | | | |

| Fixed rate | $ | 36.1 | | | — | | | — | | | — | | | — | | | — | | | 36.1 | | | 36.1 | |

| Lennar Other: | | | | | | | | | | | | | | | | | | | | | | | | |

| Fixed rate | $ | 1.9 | | | — | | | — | | | — | | | — | | | — | | | 1.9 | | | 1.9 | |

November 30, 2018

| Rialto: | | | | | | | | | | | | | | | | | | | | | | | | |

| Fixed rate | $ | — | | | 18.5 | | | — | | | — | | | — | | | 178.5 | | | 197.0 | | | 222.8 | |

| Fixed rate | $ | 45.0 | | | 13.0 | | | 5.5 | | | 2.4 | | | 1.8 | | | 49.8 | | | 117.5 | | | 111.5 | |

| Variable rate | $ | 0.1 | | | 0.2 | | | 0.2 | | | 0.2 | | | 0.2 | | | 4.3 | | | 5.2 | | | 4.6 | |

| Fixed rate | $ | 1,270.5 | | | 714.1 | | | 962.7 | | | 1,745.1 | | | 64.4 | | | 3,674.8 | | | 8,431.6 | | | 8,299.1 | |

| Variable rate | $ | — | | | 24.9 | | | 10.7 | | | — | | | — | | | — | | | 35.6 | | | 37.1 | |

| Fixed rate | $ | 1.9 | | | — | | | 1.1 | | | 15.6 | | | — | | | 115.7 | | | 134.3 | | | 135.0 | |

| Variable rate | $ | 1,256.2 | | | — | | | — | | | — | | | — | | | — | | | 1,256.2 | | | 1,256.2 | |

We are the largest homebuilder in the United States in terms of consolidated [removed: revenue,] [added: revenues and earnings,] an originator of residential and commercial mortgage loans, [added: a provider of title insurance] and [added: closing services and] a developer of multifamily rental [removed: properties in various U.S. markets primarily through unconsolidated entities.][added: properties.]

In addition, we are involved in ventures, and have interests in companies, that are engaged in applying technology to [removed: purchasing, residing in] [added: improve the homebuilding industry] and [removed: selling homes.][added: real estate related aspects of the financial services industry.]

Our homebuilding operations are the most substantial part of our business, [removed: comprising $19.1] [added: generating $20.8] billion in revenues, or approximately 93% of consolidated revenues, in fiscal [removed: 2018.][added: 2019.]

As of November 30, [removed: 2018,] [added: 2019,] our reportable homebuilding segments and Homebuilding Other had divisions located in:

East: Florida, New Jersey, North Carolina, [added: Pennsylvania] and South Carolina

Other: Urban divisions and other homebuilding related [removed: investments,] [added: investments primarily in California,] including [removed: FivePoint][added: Five Point Holdings, LLC ("FivePoint")]

Our other reportable segments are [removed: Lennar] Financial Services, [removed: Lennar] Multifamily and [removed: Rialto.][added: Lennar Other.]

Financial information about our Homebuilding, [removed: Lennar] Financial Services, [removed: Lennar] Multifamily and [removed: Rialto operations, including our former Rialto Capital Management investment and asset management platform ("Rialto Management Group"), which we sold on November 30, 2018,] [added: Lennar Other operations] is contained in [removed: Management’s] [added: Management's] Discussion and Analysis of Financial Condition and Results of Operations, which is Item 7 of this [removed: Report, and our consolidated financial statements and the notes to our consolidated financial statements, which are included in Item 8 of this] Report.

[removed: A Brief History of] [added: About] Our Company

In [removed: February] 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 [removed: 2018] [added: 2019 consolidated] revenues of [removed: $20.6] [added: $22.3] billion.

We are [removed: currently] focused on [removed: maintaining moderate growth in community count and homes sales, reducing homebuilding costs through volume purchasing,] 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.

[removed: In addition we are focused on our strategic investments] [added: | • | *Strategic partners and investments* \- We partner with and/or invest] in technology companies that are looking to improve the homebuilding and financial services [removed: industry] [added: industries] to better serve our customers and increase efficiencies. [added: |]

[removed: During] [added: 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 [removed: business and] [added: business,] our [added: Florida] real estate brokerage business and [removed: contracted to sell] [added: the majority of] our business of offering residential mortgages to non-Lennar homebuyers.

In addition to [removed: focusing on growing] our core operating platforms, [removed: Lennar] Homebuilding and [removed: Lennar] Financial Services, we have also been focusing on maximizing the value of our [removed: other businesses, including Lennar Multifamily, our approximately 40% interest in FivePoint Holdings, LLC ("FivePoint"), a publicly traded company that is developing three large multi-use planned developments in California,] [added: Multifamily business] and our strategic investments in technology companies that are looking to improve the homebuilding [added: industry] and [added: real estate related aspects of the] financial services [removed: industry to better serve our customers and increase efficiencies.][added: industry.]

New home deliveries, including deliveries from unconsolidated entities, were [removed: 45,627] [added: 51,491] in fiscal [removed: 2018,] [added: 2019,] compared to [removed: 29,394] [added: 45,627] in fiscal [removed: 2017] [added: 2018] and [removed: 26,563] [added: 29,394] in fiscal [removed: 2016.][added: 2017.]

The [removed: increase] [added: increases] in fiscal [added: 2019 and] 2018 resulted [removed: primarily] [added: in part] from the acquisition of CalAtlantic in February 2018.

For fiscal [removed: 2018,] [added: 2019,] the average sales price, excluding deliveries from unconsolidated entities, was [removed: $413,000,] [added: $400,000,] compared to [removed: $376,000] [added: $413,000] in fiscal [removed: 2017] [added: 2018] and [removed: $361,000] [added: $376,000] in fiscal [removed: 2016.][added: 2017.]

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

| • | Acquiring [removed: parcels of] [added: 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; |

| • | Acquiring land in conjunction with [removed: Lennar] Multifamily. |

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 [added: option contracts with unconsolidated entities in which we had investments.]

At November 30, [removed: 2017,] [added: 2019,] we owned [removed: 141,126] [added: 209,032] homesites and had access through option contracts to an additional [removed: 37,527] [added: 104,210] homesites, of which [removed: 32,082] [added: 81,887] homesites were through option contracts with third parties and [removed: 5,445] [added: 22,323] homesites were through option contracts with unconsolidated entities in which we [removed: had] [added: have] investments.

Through our own efforts and those of unconsolidated entities in which [removed: Lennar] 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.

At November 30, [removed: 2018,] [added: 2019,] we were actively building and marketing homes in [removed: 1,329] [added: 1,283] communities, including five communities being constructed by unconsolidated entities.

This was [removed: an increase] [added: a decrease] from [removed: 765] [added: the 1,329] communities, including [removed: four] [added: five] communities being constructed by unconsolidated entities, in which we were actively building and marketing homes at November 30, [removed: 2017.][added: 2018.]

Although homebuilders throughout the country have [removed: recently] [added: 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.

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

[removed: This] [added: 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.

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

[removed: Most recently our] [added: Our] marketing strategy has increasingly involved advertising through digital channels including [added: 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.

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

We strive to create a quality home buying experience for our customers through the participation of sales associates, on-site construction supervisors and customer care associates, all working in a team effort, [removed: which we believe leads] [added: as well as use of technology] to [removed: enhanced customer retention] [added: simplify the homebuying] and [removed: referrals.][added: financing process.]

Although we subcontract virtually all segments of construction to others and our contracts call for the [added: subcontractors to repair or replace any deficient items related to their trades, we are primarily responsible to the homebuyers for the correction of any deficiencies.]

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

We experienced a cancellation rate of [removed: 15%] [added: 16%] in [removed: both 2018 and 2017,] [added: 2019] and [removed: 16%] [added: 15%] in [removed: 2016.][added: 2018.]

We do not recognize revenue on homes [removed: under] [added: that are the subject of] sales contracts until the sales are closed and title passes to the new homeowners.

The backlog dollar value including unconsolidated entities at November 30, [removed: 2018] [added: 2019] was [removed: $6.6] [added: $6.3] billion, compared to [removed: $3.6 billion at November 30, 2017 and $2.9] [added: $6.6] billion at November 30, [removed: 2016.][added: 2018.]

We expect that [removed: substantially] [added: a substantial portion of] all homes currently in backlog will be delivered in fiscal year [removed: 2019.][added: 2020.]

[removed: Lennar] Homebuilding Investments in Unconsolidated Entities

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.

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

| • | *Strong Operating Margins -* We believe 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 position us for strong operating margins. |

| • | *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. |

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 believe this leads to enhanced customer retention and referrals.

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

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

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

Solar Business

If they are not renewed or replaced, we would have to find other sources of funding our mortgage originations, which might include our own funds.

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.

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.

RMF is now included as part of Financial Services.

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

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.

Lennar Other

Rialto Fund Investments

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

At November 30, 2019, our investment in strategic technology ventures was $285.7 million, which was included in our Lennar Other and Financial Services segments.

| • | 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; |

These include, among others, minimum

As of December 1, 2018, our reportable segments in addition to homebuilding were Lennar Financial Services, including Rialto Mortgage Finance ("RMF"), Lennar Multifamily and Corporate and Other.

We are also focused on a soft-pivot land strategy, shortening the average time between when we acquire land and when we expect to begin building homes on it.

This decreases the percentage of homesites we need to purchase outright versus control through options or other arrangements, as well as increases the rate of return on our homebuilding investment and generating net cash flow.

In 2017, we decided to increase our focus on our core homebuilding and related finance businesses, and to dispose of some of our non-core businesses.

| • | *Strong Operating Margins -* We believe our purchasing leverage combined with our attractive land purchases position us for strong operating margins. |

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

| • | *Soft-pivot land strategy* \- We are focused on shortening the average time between when we acquire land and when we expect to begin building homes on it. |

option contracts with unconsolidated entities in which we have investments.

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

subcontractors to repair or replace any deficient items related to their trades, we are primarily responsible to the homebuyers for the correction of any deficiencies.

At November 30, 2018, the 59 unconsolidated joint ventures includes 20 unconsolidated entities in which CalAtlantic or a subsidiary is the participant.

Homebuilding Ancillary Businesses

We have ancillary business activities that are related to our homebuilding business, but are not components of our core homebuilding operations.

During the year ended November 30, 2017, we monetized $200 million of future lease payments related to solar systems.

At November 30, 2018, our investment in strategic technology ventures was $117.6 million.

Title insurance services are provided in 39 states.

During 2018 and 2017, we issued, as agent, approximately 19,800 and 12,800 new homeowner policies, respectively, and renewed approximately 37,400 and 26,500 homeowner policies, respectively.

In March 2018, the Lennar Multifamily segment completed the first closing of a second Lennar Multifamily Venture, Lennar Multifamily Venture Fund II LP ("Venture Fund II") for the development, construction and property management of class-A multifamily assets.

As of November 30, 2018, Venture II had received $787 million of equity commitments, including a $255 million co-investment commitment by us comprised of cash, undeveloped land and preacquisition costs.

As of November 30, 2018, $252.1 million in equity commitments were called, of which we had contributed our share of $81.2 million, resulting in a remaining equity commitment for the Company of $173.8 million.

Venture II is currently seeded with eight undeveloped multifamily assets that were previously purchased by our Lennar Multifamily segment, which will contain approximately 3,000 apartments with projected project costs of approximately $1.3 billion.

Former Rialto Capital Management Operations

We sold the Rialto Management Group on November 30, 2018.

| • | Financial position, where we continue to focus on inventory management and liquidity; |

and privacy disclosures, forms of policies and premiums.

We are a plaintiff in [removed: many] [added: a number of] cases in which we seek contribution from our subcontractors for home repair costs.

In addition, we are a defendant in several lawsuits by [removed: persons] [added: entities] to which we sold pools of mortgages we originated, alleging breaches of warranties in the sale documents.

We expect to pay [added: a] monetary [removed: sanctions] [added: settlement] to resolve this matter, which we do not currently expect will be material.

In August 2019, a subsidiary of ours was notified by the Massachusetts Department of Environmental Protection of the subsidiary’s non-compliance with the Massachusetts Contingency Plan regulations related to the clean-up of certain materials at a development formerly owned by that subsidiary in Hingham, MA.

In July 2017, CalAtlantic Group, Inc., a subsidiary of ours, was notified by the San Francisco Regional Water Quality Control Board of CalAtlantic’s non-compliance with the Clean Water Act at a development in San Ramon, CA.

Our mortgage subsidiary was subpoenaed by the United States Department of Justice ("DOJ") regarding the adequacy of certain underwriting and quality control processes related to Federal Housing Administration loans originated and sold in prior years.

We provided information related to these loans and our processes to the DOJ.

In October 2018, we paid monetary sanctions and restitution to resolve this matter that were not material.

[removed: SECURITIES] [added: UNITED STATES SECURITIES] AND EXCHANGE COMMISSION

[removed: FORM 10-K][added: FORM 10-K]

[added: ☒] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) [removed: OF][added: OF THE SECURITIES EXCHANGE ACT OF 1934]

[removed: THE] [added: ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE] SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended November 30, [removed: 2018][added: 2019]

Commission file [removed: number 1-11749][added: number 1-11749]

[removed: ][added: ]

700 Northwest 107th [removed: Avenue, Miami, Florida 33172][added: Avenue, Miami, Florida 33172]

Registrant’s telephone number, including area code [removed: (305) 559-4000][added: (305) 559-4000]

| Title of each class | [added: Trading Symbol(s)] | Name of each exchange on which registered |

| [removed: Class] [added: Class] A Common Stock, par value [removed: 10¢] [added: 10¢] | [added: LEN] | [removed: New] [added: New] York Stock [removed: Exchange] [added: Exchange] |

| [removed: Class] [added: Class] B Common Stock, par value [removed: 10¢] [added: 10¢] | [added: LEN.B] | [removed: New] [added: New] York Stock [removed: Exchange] [added: Exchange] |

[removed: YES ¨ NO] [added: Yes ☐ No] ý

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T [added: (§232.405 of this chapter)] during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

| [removed: Large accelerated filer ý | Accelerated filer ¨ |] Non-accelerated filer [removed: ¨] | [added: ☐ |] Smaller reporting company [removed: ¨] | [added: ☐ | | |]

| [added: Large accelerated filer] | [added: ý] | [added: Accelerated filer] | [added: ☐ |] Emerging growth company [removed: ¨] | [added: ☐ |]

| If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨ | | | | [added: | |]

The aggregate market value of the registrant’s Class A and Class B common stock held by non-affiliates of the registrant [removed: (286,258,248] [added: (279,724,450] shares of Class A common stock and [removed: 15,650,943] [added: 15,719,447] shares of Class B common stock) as of May 31, [removed: 2018,] [added: 2019,] based on the closing sale price per share as reported by the New York Stock Exchange on such date, was [removed: $15,431,622,455.][added: $14,491,510,465.]

As of December 31, [removed: 2018,] [added: 2019,] the registrant had outstanding [removed: 286,454,512] [added: 278,120,159] shares of Class A common stock and [removed: 37,743,361] [added: 37,738,354] shares of Class B common stock.

| III | Definitive Proxy Statement to be filed pursuant to Regulation 14A on or before March [removed: 30, 2019.] [added: 29, 2020.] |

| For the fiscal year ended November 30, [removed: 2018] [added: 2019] | | | | |

| Item 1. | | [removed: [Business](#s28F4E8E3331F5FFFBBFE5BFA22263AE8)] [added: [Business](#s3CDB5A125B9A531EBF86398643D79C86)] | | [removed: [1](#s28F4E8E3331F5FFFBBFE5BFA22263AE8)] [added: [1](#s3CDB5A125B9A531EBF86398643D79C86)] |

| Item 1A. | | [Risk [removed: Factors](#s5E95B743E284517CB2A48C89B06EAD89)] [added: Factors](#sE4028F1DB9C65FD68026AE67D94CD70E)] | | [removed: [8](#s5E95B743E284517CB2A48C89B06EAD89)] [added: [8](#sE4028F1DB9C65FD68026AE67D94CD70E)] |

| Item 1B. | | [Unresolved Staff [removed: Comments](#s62EE349979695027AC54BC26CC576F3C)] [added: Comments](#s5FE88CDCC1795480B11929F9957E95DC)] | | [removed: [17](#s62EE349979695027AC54BC26CC576F3C)] [added: [16](#s5FE88CDCC1795480B11929F9957E95DC)] |

| Item 2. | | [removed: [Properties](#s5588DAA70E59532181FD22B0FB853BBE)] [added: [Properties](#s485B355C36D559C6816DB40D486C570A)] | | [removed: [17](#s5588DAA70E59532181FD22B0FB853BBE)] [added: [17](#s485B355C36D559C6816DB40D486C570A)] |

| Item 3. | | [Legal [removed: Proceedings](#sA8737DD08CA95B70BAB821A5D1B4EDC5)] [added: Proceedings](#s1168FF21175F583792A6FDB0B1BE9BA3)] | | [removed: [18](#sA8737DD08CA95B70BAB821A5D1B4EDC5)] [added: [17](#s1168FF21175F583792A6FDB0B1BE9BA3)] |

| Item 4. | | [Mine Safety [removed: Disclosures](#sFD33DEBDD32D5FC190200D8E18FAACD9)] [added: Disclosures](#s689BEA652CB55959B861D98D7F58B631)] | | [removed: [18](#sFD33DEBDD32D5FC190200D8E18FAACD9)] [added: [17](#s689BEA652CB55959B861D98D7F58B631)] |

| Item 5. | | [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#s2DD4A69656F45C268CE92819CF700D38)] [added: Securities](#sC36073129BB0587685E350899F1F433D)] | | [removed: [19](#s2DD4A69656F45C268CE92819CF700D38)] [added: [18](#sC36073129BB0587685E350899F1F433D)] |

| Item 6. | | [Selected Financial [removed: Data](#sE37D982BA7535A7C8A846881A1B83DEA)] [added: Data](#sB98B58949C7E5A4FB2AF93FE1B7E04D7)] | | [removed: [21](#sE37D982BA7535A7C8A846881A1B83DEA)] [added: [20](#sB98B58949C7E5A4FB2AF93FE1B7E04D7)] |

| Item 7. | | [Management's Discussion and Analysis of Financial Condition and Results of [removed: Operations](#s2E44B3ED4496500DBC9FB64C24F39654)] [added: Operations](#s6938391E27795369B7E90DB8A74DAC1F)] | | [removed: [22](#s2E44B3ED4496500DBC9FB64C24F39654)] [added: [21](#s6938391E27795369B7E90DB8A74DAC1F)] |

| Item 7A. | | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#s27919813A6AD5A029C3634927F9E3F30)] [added: Risk](#sF707441F816C5D8BA8C7970CC5C08762)] | | [removed: [63](#s27919813A6AD5A029C3634927F9E3F30)] [added: [54](#sF707441F816C5D8BA8C7970CC5C08762)] |

| Item 8. | | [Financial Statements and Supplementary [removed: Data](#s1CDD4F7985C45DF186BE924772C55FAC)] [added: Data](#s92457899D7385F23A77902D35D30E022)] | | [removed: [65](#s1CDD4F7985C45DF186BE924772C55FAC)] [added: [56](#s92457899D7385F23A77902D35D30E022)] |

| Item 9. | | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#s6611AA8ED6A057969C62BBFBAEB57D5C)] [added: Disclosure](#s10762B56047D5590A18C9378891CB710)] | | [removed: [122](#s6611AA8ED6A057969C62BBFBAEB57D5C)] [added: [111](#s10762B56047D5590A18C9378891CB710)] |

| Item 9A. | | [Controls and [removed: Procedures](#s6B686181E18B56099FBE59A30903BBBD)] [added: Procedures](#s3FB98E8353015DD99AD3F5512448D166)] | | [removed: [122](#s6B686181E18B56099FBE59A30903BBBD)] [added: [111](#s3FB98E8353015DD99AD3F5512448D166)] |

| Item 9B. | | [Other [removed: Information](#s0CAF50AB2B7F5D97916CDC9482138826)] [added: Information](#s301D33DBAC8957F3B2BC6372423093D3)] | | [removed: [124](#s0CAF50AB2B7F5D97916CDC9482138826)] [added: [114](#s301D33DBAC8957F3B2BC6372423093D3)] |

| Item 10. | | [Directors, Executive Officers and Corporate [removed: Governance](#sB06177D2713E5BD38079B6D2C1022668)] [added: Governance](#s64316C80CC465FF99323ACF816C74A50)] | | [removed: [124](#sB06177D2713E5BD38079B6D2C1022668)] [added: [114](#s64316C80CC465FF99323ACF816C74A50)] |

| Item 11. | | [Executive [removed: Compensation](#sFF6C991FBD765A27B0B5219E6694E12C)] [added: Compensation](#s7D088B460B15572D86A2EE43981A7C15)] | | [removed: [124](#sFF6C991FBD765A27B0B5219E6694E12C)] [added: [114](#s7D088B460B15572D86A2EE43981A7C15)] |

| Item 12. | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#sF4FBBF77580A57C8909AE78000D62665)] [added: Matters](#sE90BDF36FAE852CDBFAB018B100B6560)] | | [removed: [124](#sF4FBBF77580A57C8909AE78000D62665)] [added: [114](#sE90BDF36FAE852CDBFAB018B100B6560)] |

| Item 13. | | [Certain Relationships and Related Transactions, and Director [removed: Independence](#s0FA5AFE5F2DE5FECA8E18FBC57DCE531)] [added: Independence](#s0948BBEC92075DB5AA6D0FD57F56DAD7)] | | [removed: [124](#s0FA5AFE5F2DE5FECA8E18FBC57DCE531)] [added: [114](#s0948BBEC92075DB5AA6D0FD57F56DAD7)] |

| Item 14. | | [Principal Accounting Fees and [removed: Services](#s0697EFE032125402AC2AA22871018635)] [added: Services](#sC2D7B26A2E055E86925DC30F24202BB9)] | | [removed: [124](#s0697EFE032125402AC2AA22871018635)] [added: [114](#sC2D7B26A2E055E86925DC30F24202BB9)] |

(Mark One)

or

For the Transition Period from _______ To _______

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| | | | | | |

| Signatures | | | | [118](#sAC2A61E20FD55377B799441F37BE973E) |

UNITED STATES

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.

| | | | |

| --- | --- | --- | --- |

| Signatures | | | | [128](#s67902876DB015B638526E88226636116) |

The following individuals are our executive officers as of January [removed: 28, 2019:][added: 27, 2020:]

| Stuart Miller | Executive Chairman | [removed: 61] [added: 62] |

| [removed: Richard] [added: Rick] Beckwitt | Chief Executive Officer | [removed: 59] [added: 60] |

| Jonathan M. Jaffe | President | [removed: 59] [added: 60] |

| Diane J. Bessette | Vice President, Chief Financial Officer and Treasurer | [removed: 58] [added: 59] |

| Mark Sustana | Vice President, General Counsel and Secretary | [removed: 57] [added: 58] |

| David M. Collins | Controller | [removed: 49] [added: 50] |

| Jeff J. McCall | [removed: Senior] [added: Executive] Vice President | [removed: 47] [added: 48] |

Before [removed: that,] [added: that time,] Mr. Miller served as our Chief Executive Officer from 1997 to April 2018 and our President from 1997 to April 2011.

Before [removed: that,] [added: that time,] Mr. Beckwitt served as our President from April 2011 to April 2018, and as our Executive Vice President from March 2006 to 2011.

Mr. Jaffe served as our Chief Operating Officer from December 2004 to January 2019, [removed: though] [added: and] he continues to have responsibility for the Company's operations nationally.

[added: Before that time,] Mr. McCall [removed: has] served as our Senior Vice President [removed: since] [added: from] February [removed: 2018.][added: 2018 to January 2020.]

[removed: Before that,] [added: From June 2011 to February 2018,] Mr. McCall served as Executive Vice President and Chief Financial Officer of CalAtlantic Group, Inc., or [removed: its predecessor, from June 2011 to February 2018.][added: a predecessor.]

Information about our Executive Officers

Mr. McCall became an Executive Vice President on January 9, 2020.

Executive Officers of Lennar Corporation

Because of the nature of our homebuilding operations, [added: we hold] significant amounts of property [removed: are held] as inventory in [removed: the ordinary course of] [added: connection with] our homebuilding business.

We discuss these properties in the discussion of our homebuilding operations in [removed: Item] [added: Items] 1 [added: and 7] of this Report.

As of December 31, [removed: 2018,] [added: 2019,] the last reported sale price of our Class A and Class B common stock on the NYSE was [removed: $39.15] [added: $55.79] and [removed: $31.33,] [added: $44.70,] respectively.

As of December 31, [removed: 2018,] [added: 2019,] there were approximately [removed: 1,879] [added: 1,802] and [removed: 962] [added: 915] holders of record of our Class A and Class B common stock, respectively.

On January [removed: 10, 2019,] [added: 9, 2020,] our Board of Directors [removed: declared] [added: increased our annual dividend by 213% to $0.50 per share from $0.16 per share, resulting in] a quarterly cash dividend of [removed: $0.04] [added: $0.125] per share for both [removed: our] Class A and Class B common stock, which is payable on February [removed: 8, 2019,] [added: 7, 2020,] to holders of record at the close of business on January [removed: 25, 2019.][added: 24, 2020.]

The following table provides information about our repurchases of common stock during the three months ended November 30, [removed: 2018:][added: 2019:]

| (1) | [removed: Represents] [added: Includes] shares of Class A [added: and Class B] common stock withheld by us to cover withholding taxes due, at the election of certain holders of nonvested shares, with market value approximating the amount of withholding taxes due. |

| (2) | In [removed: June 2001, our Board of Directors authorized a stock repurchase program under which we were authorized to purchase up to 20 million shares of our outstanding Class A common stock or Class B common stock. This repurchase authorization had no expiration. We repurchased 6.0 million shares of Class A common stock for $249.9 million at an average share price of $41.63. Subsequent to November 30, 2018,] [added: January 2019,] our Board of Directors authorized a stock repurchase program, which replaced the June 2001 stock repurchase program, under which we are authorized to purchase up to the lesser of [removed: $1] [added: $1.0] billion in value, or 25 million in shares, of our outstanding Class A or Class B common stock. This repurchase authorization has no expiration. [added: Based on repurchases of $492.9 million to date under the repurchase authorization, we have a remaining authorization to purchase $507.1 million or the equivalent of approximately 9.1 million shares based on the December 31, 2019 Class A common stock price of $55.79.] |

The information required by Item 201(d) of Regulation S-K [added: relating to equity compensation plans] is provided in Item 12 of this Report.

The graph assumes $100 invested on November 30, [removed: 2013] [added: 2014] in our Class A common stock, the Dow Jones U.S. Home Construction Index and the Dow Jones U.S. Total Market Index, and the reinvestment of all dividends.

[removed: ][added: ]

| | [removed: 2013 | | | |] 2014 | | | [added: |] 2015 | | | 2016 | | | 2017 | | | 2018 | | [added: | 2019 | |]

| Dow Jones U.S. Home Construction Index | $ | 100 | | | [removed: 119] [added: 113] | | | [removed: 135] [added: 100] | | | [removed: 119] [added: 179] | | | [removed: 213] [added: 127] | | | [removed: 152] [added: 186] | |

| Dow Jones U.S. Total Market Index | $ | 100 | | | [removed: 116] [added: 102] | | | [removed: 118] [added: 110] | | | [removed: 128] [added: 134] | | | [removed: 157] [added: 141] | | | [removed: 166] [added: 163] | |

| September 1 to September 30, 2019 | 77,126 | | | $ | 54.08 | | | — | | | 16,890,000 | |

| October 1 to October 31, 2019 | 101,498 | | | $ | 59.97 | | | 95,000 | | | 16,795,000 | |

| November 1 to November 30, 2019 | 1,569,729 | | | $ | 58.92 | | | 1,569,729 | | | 15,225,271 | |

| Lennar Corporation | $ | 100 | | | 109 | | | 91 | | | 137 | | | 94 | | | 131 | |

On November 27, 2017, we paid a stock dividend of one share of Class B common stock for each 50 shares of Class A common stock or Class B common stock to holders of record at the close of business on November 10, 2017, as declared by our Board of Directors on October 30, 2017.

Our Board of Directors evaluates each quarter the decision whether to declare a dividend and the amount of the dividend.

| September 1 to September 30, 2018 | 523 | | | $ | 49.83 | | | — | | | 6,218,968 | |

| October 1 to October 31, 2018 | 8,187 | | | $ | 45.84 | | | 1,849,599 | | | 4,369,369 | |

| November 1 to November 30, 2018 | 1,558 | | | $ | 37.10 | | | 4,150,401 | | | 218,968 | |

| Lennar Corporation | $ | 100 | | | 133 | | | 144 | | | 120 | | | 181 | | | 123 | |

The following table sets forth our selected consolidated financial and operating information as of or for each of the years ended November 30, [removed: 2014] [added: 2015] through [removed: 2018.][added: 2019.]

| | [removed: At] [added: As of] or for the Years Ended November 30, | | | | | | | | | | | | | | |

| (Dollars in thousands, except per share amounts) | [removed: 2018] [added: 2019] | | | | [removed: 2017] [added: 2018] | | | [removed: 2016] [added: 2017] | | | [removed: 2015] [added: 2016] | | | [removed: 2014] [added: 2015] | |

| [removed: Lennar] Homebuilding | $ | [removed: 19,077,597] [added: 20,793,216] | | | [removed: 11,200,242] [added: 19,077,597] | | | [removed: 9,741,337] [added: 11,188,876] | | | [removed: 8,466,945] [added: 9,741,337] | | | [removed: 7,025,130] [added: 8,466,945] | |

| [removed: Lennar] Multifamily | $ | [removed: 421,132] [added: 604,700] | | | [removed: 394,771] [added: 421,132] | | | [removed: 287,441] [added: 394,771] | | | [removed: 164,613] [added: 287,441] | | | [removed: 69,780] [added: 164,613] | |

| Total revenues | $ | [removed: 20,571,631] [added: 22,259,561] | | | [removed: 12,646,365] [added: 20,571,631] | | | [removed: 10,949,999] [added: 12,646,365] | | | [removed: 9,474,008] [added: 10,949,999] | | | [removed: 7,779,812] [added: 9,474,008] | |

| [removed: Lennar] Multifamily | $ | [removed: 42,695] [added: 16,390] | | | [removed: 73,432] [added: 42,695] | | | [removed: 71,174] [added: 73,432] | | | [removed: (7,171] [added: 71,174] | [removed: )] | | [removed: (10,993] [added: (7,171] | ) |

| Gain on sale of Rialto investment and asset management platform | $ | [removed: 296,407] [added: —] | | | [removed: —] [added: 296,407] | | | — | | | — | | | — | |

| Acquisition and integration costs related to CalAtlantic | $ | [removed: 152,980] [added: —] | | | [removed: —] [added: 152,980] | | | — | | | — | | | — | |

| Corporate general and administrative expenses | $ | [removed: 343,934] [added: 341,114] | | | [removed: 285,889] [added: 343,934] | | | [removed: 232,562] [added: 285,889] | | | [removed: 216,244] [added: 232,562] | | | [removed: 177,161] [added: 216,244] | |

| Earnings before income taxes | $ | [removed: 2,262,684] [added: 2,434,292] | | | [removed: 1,189,611] [added: 2,262,684] | | | [removed: 1,330,469] [added: 1,189,611] | | | [removed: 1,209,616] [added: 1,330,469] | | | [removed: 969,784] [added: 1,209,616] | |

| Net earnings attributable to Lennar | $ | [removed: 1,695,831] [added: 1,849,052] | | | [removed: 810,480] [added: 1,695,831] | | | [removed: 911,844] [added: 810,480] | | | [removed: 802,894] [added: 911,844] | | | [removed: 638,916] [added: 802,894] | |

| Diluted earnings per share | $ | [removed: 5.44] [added: 5.74] | | | [removed: 3.38] [added: 5.44] | | | [removed: 3.86] [added: 3.38] | | | [removed: 3.39] [added: 3.86] | | | [removed: 2.75] [added: 3.39] | |

| Total assets | $ | [removed: 28,566,181] [added: 29,359,511] | | | [removed: 18,745,034] [added: 28,566,181] | | | [removed: 15,361,781] [added: 18,745,034] | | | [removed: 14,419,509] [added: 15,361,781] | | | [removed: 12,923,151] [added: 14,419,509] | |

| [removed: Lennar] Homebuilding | $ | [removed: 8,543,868] [added: 7,776,638] | | | [removed: 6,410,003] [added: 8,543,868] | | | [removed: 4,575,977] [added: 6,410,003] | | | [removed: 5,025,130] [added: 4,575,977] | | | [removed: 4,661,266] [added: 5,025,130] | |

| Stockholders’ equity | $ | [removed: 14,581,535] [added: 15,949,517] | | | [removed: 7,872,317] [added: 14,581,535] | | | [removed: 7,026,042] [added: 7,872,317] | | | [removed: 5,648,944] [added: 7,026,042] | | | [removed: 4,827,020] [added: 5,648,944] | |

| Total equity | $ | [removed: 14,682,957] [added: 16,033,830] | | | [removed: 7,986,132] [added: 14,682,957] | | | [removed: 7,211,567] [added: 7,986,132] | | | [removed: 5,950,072] [added: 7,211,567] | | | [removed: 5,251,302] [added: 5,950,072] | |

| Shares outstanding (000s) | [removed: 324,238] [added: 315,893] | | | | [removed: 239,964] [added: 324,238] | | | [removed: 239,133] [added: 239,964] | | | [removed: 215,804] [added: 239,133] | | | [removed: 209,697] [added: 215,804] | |

| Stockholders’ equity per share | $ | [removed: 44.97] [added: 50.49] | | | [removed: 32.81] [added: 44.97] | | | [removed: 29.38] [added: 32.81] | | | [removed: 26.18] [added: 29.38] | | | [removed: 23.02] [added: 26.18] | |

| [removed: Lennar Homebuilding] [added: Homebuilding] Data (including unconsolidated entities): | | | | | | | | | | | | | | | |

| Number of homes delivered | [removed: 45,627] [added: 51,491] | | | | [removed: 29,394] [added: 45,627] | | | [removed: 26,563] [added: 29,394] | | | [removed: 24,292] [added: 26,563] | | | [removed: 21,003] [added: 24,292] | |

| New orders | [removed: 45,826] [added: 51,439] | | | | [removed: 30,348] [added: 45,826] | | | [removed: 27,372] [added: 30,348] | | | [removed: 25,106] [added: 27,372] | | | [removed: 22,029] [added: 25,106] | |

| Backlog of home sales contracts | [removed: 15,616] [added: 15,577] | | | | [removed: 8,935] [added: 15,616] | | | [removed: 7,623] [added: 8,935] | | | [removed: 6,646] [added: 7,623] | | | [removed: 5,832] [added: 6,646] | |

| Backlog dollar value | $ | [removed: 6,570,123] [added: 6,300,542] | | | [removed: 3,550,366] [added: 6,570,123] | | | [removed: 2,891,538] [added: 3,550,366] | | | [removed: 2,477,751] [added: 2,891,538] | | | [removed: 1,974,328] [added: 2,477,751] | |

| Financial Services | $ | 824,810 | | | 954,631 | | | 891,957 | | | 809,694 | | | 734,491 | |

| Lennar Other | $ | 36,835 | | | 118,271 | | | 170,761 | | | 111,527 | | | 107,959 | |

| Homebuilding | $ | 2,502,905 | | | 2,254,487 | | | 1,264,394 | | | 1,344,740 | | | 1,271,270 | |

| Financial Services | $ | 224,642 | | | 199,716 | | | 195,307 | | | 207,439 | | | 197,477 | |

| Lennar Other | $ | 31,469 | | | (33,707 | ) | | (57,633 | ) | | (60,322 | ) | | (35,716 | ) |

| Financial Services | $ | 1,745,755 | | | 1,558,702 | | | 1,191,344 | | | 1,300,704 | | | 1,211,704 | |

| Lennar Other | $ | 15,178 | | | 14,488 | | | 371,168 | | | 398,859 | | | 418,324 | |

| Multifamily | $ | 36,125 | | | — | | | — | | | — | | | — | |

| Lennar Financial Services | $ | 867,831 | | | 770,109 | | | 687,255 | | | 620,527 | | | 454,381 | |

| Rialto | $ | 205,071 | | | 281,243 | | | 233,966 | | | 221,923 | | | 230,521 | |

| Lennar Homebuilding | $ | 2,254,650 | | | 1,269,039 | | | 1,344,932 | | | 1,271,641 | | | 1,033,721 | |

| Lennar Financial Services | $ | 187,430 | | | 155,524 | | | 163,617 | | | 127,795 | | | 80,138 | |

| Rialto | $ | (21,584 | ) | | (22,495 | ) | | (16,692 | ) | | 33,595 | | | 44,079 | |

| Lennar Financial Services | $ | 1,256,174 | | | 937,431 | | | 1,077,228 | | | 858,300 | | | 704,143 | |

| Rialto | $ | 317,016 | | | 625,081 | | | 622,335 | | | 771,728 | | | 617,077 | |

We have audited the accompanying consolidated balance sheets of Lennar Corporation and subsidiaries (the "Company") as of November 30, [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] the related consolidated statements of operations and comprehensive income (loss), equity, and cash flows, for each of the three years in the period ended November 30, [removed: 2018,] [added: 2019,] and the related notes (collectively referred to as the "consolidated financial statements").

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of November 30, [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] and the results of its operations and its cash flows for each of the three years in the period ended November 30, [removed: 2018,] [added: 2019,] in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of November 30, [removed: 2018,] [added: 2019,] based on criteria established in *Internal Control - Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated January [removed: 28, 2019,] [added: 27, 2020,] expressed an unqualified opinion on the Company's internal control over financial reporting.

November 30, [removed: 2018] [added: 2019] and [removed: 2017][added: 2018]

| | [removed: 2018 (1)] [added: 2019] | | | | [removed: 2017 (1)] [added: 2018] | | [added: | 2017 | |]

| [removed: Lennar Homebuilding:] [added: Homebuilding:] | | | | | | |

| Cash and cash equivalents | $ | [removed: 1,337,807] [added: 1,200,832] | | | [removed: 2,282,925] [added: 1,337,807] | |

| Restricted cash | [removed: 12,399] [added: 9,698] | | | | [removed: 8,740] [added: 12,399] | |

| Receivables, net | [removed: 236,841] [added: 329,124] | | | | [removed: 137,667] [added: 236,841] | |

| Finished homes and construction in progress | [removed: 8,681,357] [added: 9,195,721] | | | | [removed: 4,676,279] [added: 8,681,357] | |

| Land and land under development | [removed: 8,178,388] [added: 8,267,647] | | | | [removed: 5,791,338] [added: 8,178,388] | |

| Consolidated inventory not owned | [removed: 208,959] [added: 313,139] | | | | [removed: 393,273] [added: 208,959] | |

| Total inventories | [removed: 17,068,704] [added: 17,776,507] | | | | [removed: 10,860,890] [added: 17,068,704] | |

| [removed: Goodwill] [added: Homebuilding goodwill (2)] | [added: $ |] 3,442,359 | | | [added: 3,442,359] | [added: | |] 136,566 | |

| Other assets | [removed: 1,355,782] [added: 1,021,684] | | | | [removed: 863,404] [added: 1,355,782] | |

| [removed: Lennar Multifamily] [added: Multifamily] | [removed: 874,219] [added: 1,068,831] | | | | [added: 874,219 | | |] 710,725 | |

| Total assets | $ | [removed: 28,566,181] [added: 29,359,511] | | | [added: 28,566,181 | | |] 18,745,034 | |

As of November 30, 2018, total assets include $666.2 million related to consolidated VIEs of which $57.6 million is included in [removed: Lennar] Homebuilding cash and cash equivalents, $0.2 million in [removed: Lennar] Homebuilding receivables, net, $81.7 million in [removed: Lennar] Homebuilding finished homes and construction in progress, $293.1 million in [removed: Lennar] Homebuilding land and land under development, $209.0 million in [removed: Lennar] Homebuilding consolidated inventory not owned, $3.8 million in [removed: Lennar] Homebuilding investments in unconsolidated entities, $10.5 million in [removed: Lennar] Homebuilding other assets and $10.3 million in [removed: Rialto] [added: Lennar Other] assets.

As of November 30, [removed: 2017,] [added: 2019,] total assets include [removed: $799.4] [added: $980.2] million related to consolidated VIEs of which [removed: $15.8] [added: $15.5] million is included in [removed: Lennar] Homebuilding cash and cash equivalents, $0.2 million in [removed: Lennar] Homebuilding receivables, net, [removed: $53.2] [added: $97.5] million in [removed: Lennar] Homebuilding finished homes and construction in progress, [removed: $229.0] [added: $283.2] million in [removed: Lennar] Homebuilding land and land under development, [removed: $393.3] [added: $301.0] million in [removed: Lennar] Homebuilding consolidated inventory not owned, [removed: $4.6] [added: $2.5] million in [removed: Lennar] Homebuilding investments in unconsolidated entities, [removed: $11.8] [added: $10.0] million in [removed: Lennar] Homebuilding other assets, [removed: $42.7] [added: $221.2] million in [removed: Lennar Multifamily] [added: Financial Services] assets and [removed: $48.8] [added: $49.1] million in [removed: Rialto] [added: Multifamily] assets.