We are one of the nation's largest homebuilders and a provider of financial services.
Our homebuilding operations include the sale and construction of single-family
attached and detached homes, as well as the purchase, development and sale of
residential land directly and through unconsolidated entities in which we have
investments. Our financial services operations provide mortgage financing, title
insurance, closing services and insurance agency services for both buyers of our
homes and others. We sell substantially all of the loans that we originate in
the secondary mortgage market. Through our financial services operations, we also
provide high-speed Internet and cable television services to residents of communities
we develop and to others.
We primarily sell single-family attached and detached homes in communities
targeted to first-time, move-up and active adult homebuyers.'We operate primarily
under the Lennar and U.S. Home brand names and utilize a dual marketing strategy
consisting of our Everything's Included' and Design StudioSM programs.
In our homebuilding operations, we generally acquire land for development and
for the construction of homes, which we sell to homebuyers. We also sell land
to third parties. Land acquisitions are subject to strict underwriting criteria
and may be made directly or through unconsolidated entities in which we have
investments. Through unconsolidated entities, we reduce and share our risk by
limiting the amount of our capital invested in land, while increasing our access
to potential future homesites. Unconsolidated entities, in some instances, also
help us acquire land to which we could not otherwise obtain access, or could
not obtain access on as favorable terms, without the participation of a strategic
partner. Our partners in these entities generally are unrelated homebuilders,
land sellers or other real estate entities.
We offer a diversified line of homes for first-time, move-up and active adult
homebuyers. With homes priced from under $100,000 to above $1,000,000 and available
in a variety of environments ranging from urban infill communities to golf course
communities, we are focused on providing homes for a wide spectrum of buyers.
Our unique dual marketing strategy of Everything's Included' and Design StudioSM
provides customers with the flexibility to choose how they would like to purchase
their new home. In our Everything's Included' program, we make the homebuying
experience simple by including desirable, top-of-the-line features as standard
items. In our Design StudioSM program, we provide an individualized homebuying
experience and personalized design consultation in our design studios, offering
a diverse selection of upgrades and options for a new home. We sell our homes
primarily from models that we have designed and constructed.
We employ sales associates who are paid salaries, commissions or both to complete
on-site sales of homes. We also sell homes through independent brokers. We advertise
our communities in newspapers and other local and regional publications, on
billboards and through our website, www.lennar.com. Our website allows homebuyers
to search for homes with specific design criteria in their price range and desired
location. In addition, we advertise our active adult communities in areas where
prospective active adult homebuyers live.
We have participated in charitable down-payment assistance programs for a small
percentage of our homebuyers. Through these programs, we make a donation to
a non-profit organization that provides financial assistance to a homebuyer,
who would not otherwise have sufficient funds for a down payment.
We provide a full spectrum of conventional, FHA-insured and VA-guaranteed,
first and second lien residential mortgage loan products to our homebuyers and
others through our financial services subsidiaries, Universal American Mortgage
Company, LLC and Eagle Home Mortgage, Inc., in Arizona, California, Colorado,
Florida, Illinois, Maryland, Minnesota, Nevada, New Jersey, New Mexico, North
Carolina, Ohio, Oregon, Pennsylvania, South Carolina, Texas, Virginia, Washington
and Wisconsin. In 2004, our financial services subsidiaries provided loans to
approximately 71% of our homebuyers who obtained mortgage financing in areas
where we offered services. Because of the availability of mortgage loans from
our financial services subsidiaries, as well as independent mortgage lenders,
we believe access to financing has not been, and is not, a significant obstacle
for most purchasers of our homes.
We provide title insurance and title and closing services to our homebuyers
and others. We provided title and closing services for approximately 188,000
real estate transactions and issued approximately 185,000 title insurance policies
during 2004 through subsidiaries of North American Title Group, Inc. Title and
closing services are provided by agency subsidiaries in Arizona, California,
Colorado, District of Columbia, Florida, Illinois, Maryland, Minnesota, Nevada,
Pennsylvania, Texas and Virginia. North American Title Insurance Corporation
in Florida, Illinois, Texas and Virginia and North American Title Insurance
Company in Arizona, California, Colorado and Nevada provide title insurance
underwriting.
We provide high-speed Internet and cable television services to residents of
our communities and others through subsidiaries of Strategic Holdings, Inc.
doing business under the name Lennar Communications Ventures.
Competition
The residential homebuilding industry is highly competitive. We compete for
homebuyers in each of the market regions where we operate with numerous national,
regional and local builders, as well as with resales of existing homes and with
the rental housing market. We compete for homebuyers on the basis of a number
of interrelated factors including location, price, reputation, amenities, design,
quality and financing. In addition to competition for homebuyers, we also compete
with other homebuilders for desirable properties, raw materials and reliable,
skilled labor. We compete for land buyers with third parties in our efforts
to sell land to homebuilders and others. We believe we are competitive in the
market regions where we operate primarily due to our:
Excellent land position, particularly in land-constrained markets, where we
have increased the number of homesites we own and/or control;
Strong presence in some of the fastest growing homebuilding markets in the
United States;
Balance sheet, where we continue to focus on liquidity while maintaining a
strong capital structure; and
Dual marketing strategy consisting of our Everything's Included' and Design
StudioSM programs.
Our financial services operations compete with other mortgage lenders, including
national, regional and local mortgage bankers and brokers, savings and loan
associations and other financial institutions, in the origination and sale of
mortgage loans. Principal competitive factors include interest rates and other
features of mortgage loan products available to the consumer. We compete with
other insurance agencies, including national, regional and local insurance agencies,
in the sale of title insurance, homeowner insurance and related insurance services.
Principal competitive factors include cost and other features of insurance products
available to the consumer. We compete with other escrow companies and other
title insurance agencies for closing services. Principal competitive factors
include service and price. We compete with other communication service providers
in the sale of high-speed Internet and cable television services. Principal
competitive factors include price, quality, service and availability.