Sentences and paragraphs of LEN's Risk Factors and MD&A, 10-K 2026-01-28 against 10-K 2025-01-23.
Each links to the text at sec.gov.
AddedRisk Factors
including while we seek legal enforcement. Even if we were to succeed in any legal proceedings against Millrose, there is no guarantee that a court would compel Millrose to deliver the homesites to us. Monetary damages may not be sufficient for us to fully recover our losses, particularly if we are not able to satisfy our obligations with respect to contracts with homebuyers.
Read it in 10-K 2026-01-28 at sec.gov ↗
AddedRisk Factors
Additionally, if in the future we are unable to identify or to develop and maintain the necessary relationships with suitable land banks, including Millrose, we will not be able to fully implement our land-light business strategy.
Read it in 10-K 2026-01-28 at sec.gov ↗
AddedMD&A
Lennar’s fourth quarter and year-end 2025 results reflect what is and continues to be a difficult housing market. However, while our margin has been under pressure as we focus on bringing affordable housing to an affordability-constrained consumer base, the underlying demand is still strong, while supply is short. During the past three years of difficult market conditions, we have maintained volume, grown our market share and re-engineered our operating platform for a better and more efficient future when the market normalizes.
Read it in 10-K 2026-01-28 at sec.gov ↗
AddedMD&A
We began the quarter with the expectation that declining interest rates were the start of a market recovery. While mortgage rates drifted marginally lower in the fourth quarter, the customer response remained tepid, suggesting a combination of poor affordability and diminished consumer confidence continued to limit demand. The threat of a government shutdown and ultimate actual shutdown in October and November further eroded already weak consumer confidence. While traffic was consistent, customers were both hesitant and limited by what they could afford to purchase. Clearly, inflation-driven affordability concerns rose to the center of the national conversation, shaping headlines and policy debates across the country. Cost inflation has clearly had a significant impact on the lifestyle of the average American family. At the same time, concerns about job security have become increasingly prominent as advancements in modern technology and artificial intelligence raise important questions about the future of employment for the American workforce.
Read it in 10-K 2026-01-28 at sec.gov ↗
AddedMD&A
On a positive note, the federal government has intensified its focus on the national housing crisis, with a strong likelihood of taking decisive action to enhance affordability. Although the specifics of potential programs remain to be seen, it is clear that significant attention is being devoted to developing impactful initiatives, while avoiding unintended negative consequences. This is the first time in decades that the federal government is actively recognizing the vital role that housing plays, not only in the broader national economy, but also in the well-being of American families.
Read it in 10-K 2026-01-28 at sec.gov ↗
AddedMD&A
We know that margins will remain under pressure in the first quarter of 2026 and sales and closings will be seasonally light. However, we have a lower cost structure, efficient product offerings and a strong market position that we expect to accommodate pent-up demand as rates moderate and confidence ultimately returns. Our strategy has positioned us for strong cash flow, higher returns on equity and capital, and stronger bottom line growth in the future. Meanwhile, we will remain focused on volume and even-flow production.
Read it in 10-K 2026-01-28 at sec.gov ↗
AddedMD&A
Margins are usually lowest during the first quarter of a fiscal year, and we expect our margins in the first quarter of 2026 will be between 15% and 16%, depending on market conditions. We expect that in the first quarter of fiscal 2026, we will sell between 18,000 and 19,000 homes and deliver between 17,000 and 18,000 homes at an average sales price of between $365,000 and $375,000. We expect to deliver approximately 85,000 homes in the full 2026 fiscal year.
Read it in 10-K 2026-01-28 at sec.gov ↗
AddedMD&A
As we have driven growth, production and volume, we have created efficiencies and technology that will make us a better company in the future. We have materially reduced our inventory, our construction costs, and our cycle times, and we have increased, and will continue to increase, our inventory turn. We are determined to build more with less capital deployed so that as margins begin to grow, returns on capital and equity will grow faster.
Read it in 10-K 2026-01-28 at sec.gov ↗
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AddedMD&A
We are also very enthusiastic about our technology initiatives. They have made us, and are continuing to make us, faster and better in the way that we engage with our customers. We are trying to be the best manufacturing model that we can be. The programs that we have in place are helping us absorb the price reductions we are required to give to maintain desired volume levels. They offer us the likelihood of substantially increasing profit levels when market conditions return to normal.
Read it in 10-K 2026-01-28 at sec.gov ↗
AddedMD&A
(1) Homebuilding other income (expense), net and other gains (losses), net included a one-time loss of $156.1 million on the Millrose Exchange Offer for the year ended November 30, 2025.
Read it in 10-K 2026-01-28 at sec.gov ↗
AddedMD&A
As previously announced, Lennar Corporation completed our acquisition of Rausch Coleman Homes ("Rausch") in February 2025. Prior year information includes only stand-alone data for Lennar Corporation for the year ended November 30, 2024.
Read it in 10-K 2026-01-28 at sec.gov ↗
AddedMD&A
In November, we completed the Millrose Exchange Offer in a non-cash transaction, accepting 8,049,594 shares of Lennar Class A common stock in exchange for 33,298,754 shares of Millrose Class A common stock, which represented approximately 20% of Millrose's outstanding shares. The exchange resulted in a $1.1 billion reduction in investments in unconsolidated entities and stockholders' equity as of November 30, 2025 and a one-time loss of $156.1 million in Homebuilding other income (expense), net, in our consolidated statements of operations and comprehensive income.
Read it in 10-K 2026-01-28 at sec.gov ↗
AddedMD&A
For the years ended November 30, 2025 and 2024, we had a tax provision of $705.6 million and $1.2 billion, which resulted in an overall effective income tax rate of 25.3% and 23.6%, respectively. For both periods, our effective income tax rate included state income tax expense and non-deductible executive compensation, partially offset by tax credits. The increase in the effective tax rate for the year ended November 30, 2025 compared to the prior period was primarily due to the loss related to the Millrose Exchange Offer not being recognized for tax purposes. On July 4, 2025, the One Big Beautiful Bill Act (the "Act") was enacted, introducing various changes to U.S. federal tax law. The Act did not have a material impact on our consolidated financial statements for the fiscal year ended November 30, 2025, and we are still evaluating the potential impact of the Act on future periods.
Read it in 10-K 2026-01-28 at sec.gov ↗
AddedMD&A
(3) During the year ended November 30, 2025, backlog includes 908 acquired homes of which 181,716 and 11 homes were in the Central,
Read it in 10-K 2026-01-28 at sec.gov ↗
