Lennar Corporation

Last edited by Charlie Cray on June 13, 2008 - 2:23pm

Company Snapshot:

The Lennar Corporation is a Florida based developer, and one of the largest builders and financiers of single family homes in the United States. The company was founded in 1954 (as F&R Builders) and owns the brands Cambridge, Greystone, Lennar, NuHome, Patriot, U.S. Home, and Village Builders. In October of 2007, Lennar's debt reached junk bond status, after taking serious losses in the mortgage securities market and the housing downturn. The company delivered a total of 33,283 homes in 2007 despite company filings statement that it experienced a "significant decline in demand for newly built homes in almost all of our markets."

Ownership status:

Publicly traded

Chief executive officer:

Stuart A. Miller

Website:

http://www.lennar.com/

Tel:

305-559-4000

Corporate accountability

Tax issues:

According to the Wall Street Journal, Lennar is expecting to receive $800 million in refunded taxes this year. In 2007, Lennar sold a big swath of land -- about 11,000 home sites -- for $525 million to a partnership that it formed with Morgan Stanley. The deal's structure allowed Lennar to recognize a big loss that it applied against taxes paid the previous two years. (David Reilly, "Lennar $ 800 Million Tax Refund," WSJ (NY edition) 2/6/2008, p. C3.)

Environment and product safety:

In March of 2007 Lennar was sued for exposing workers and the surrounding community to clouds of asbestos dust that rose from its Hunters Point Shipyard project in San Francisco, CA after excavation during a construction project was undertaken without proper soil irrigation. The whistleblower who reported the dangerously high asbestos dust levels was allegedly retaliated against by local Lennar vice president Paul Menaker and others, who made racially disparaging remarks toward him and other African American workers.

Homeowners in Hutton, TX have complained that the company lied to increase profits, by willfully submitting a Builder's Certification that they had complied with HUD minimum standards, thereby concealing the fact that the homes were built on expansive soil.

Anti-competitive and consumer protection:

In its 2008 10-k filings, the company lists "slow growth" initiatives as a serious threat to its land procurement and development practices. The increase in defaults due to sub-prime mortgages in 2007 significantly damaged the company's profits by increasing the amount of housing on the market, which has put the company in a situation whereby if its financial performance further declines, it may not be able to maintain compliance with the covenants in its credit facilities and senior debt securities. Due to these financial instabilities, the company is vulnerable to significant financial loss due to growth control initiatives, environmental impact regulation, worker's safety regulation, and other federal, state and local regulations, whereas previously the increased administrative costs of such regulations would have been negligible.

News 8 in Austin, TX reported on June 4, 2008 that "the majority of houses in three different neighborhoods built by Lennar Homes have been plagued with cracks, nail pops and mold, among numerous other problems."

According to a report by the Laborers International Union (LIUNA), the number of subprime loans issued by Lennar (through its Universal American subsidiary) doubled between 2005 and 2006, at the peak of the housing bubble.

Eighty-nine homeowners from Bakersfield, CA filed a lawsuit against Lennar Homes for construction defects. Milstein, Adelman, and Kreger, the firm representing the homeowners, released a statement saying: "These homeowners have numerous problems with their homes including but not limited to cracking of stucco, cracking of concrete, window defects, roof defects, moisture intrusion into their homes and general poor construction qualify... Milstein, Adelman & Kreger is investigating these problems as well as problems of other homes constructed by Lennar Homes within the Westlake development." (KGET TV, story aired on 5/6/08)

Location(s)

Address of principal executive offices

700 Northwest 107th Avenue

Miami, FL, 33172

United States

See map: Google Maps

Financial information

Stock ticker symbol:

LEN

Total revenue:

$10,186.78 (Mil)

Fiscal year:

2007

Major lines of business/segments:

Housing Construction

Link to annual report:

10-K Form From EDGAR Database

Additional descriptive data

Geographic breakdown of revenues (sales and profits), assets, employees:

The company groups its homebuilding activities into segments labeled Homebuilding East, Homebuilding Central, Homebuilding West and Homebuilding Other. These segments have divisions in:

East: Florida, Maryland, New Jersey and Virginia
Central: Arizona, Colorado and Texas
West: California and Nevada
Other: Illinois, Minnesota, New York, North Carolina and South Carolina