What changed in this filing

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Item 1. Financial Statements

2021-10-01 compared with 2021-07-02 · 187 added, 169 removed, 770 unchanged (32% of the section changed)

3 unchanged sentences

(Dollars in thousands)

May 31, November 30,

August 31, November 30,

2021 (1) 2020 (1)

16 unchanged sentences

(1) Under certain provisions of Accounting Standards Codification ("ASC") Topic 810, Consolidations ("ASC 810"), the Company is required to separately disclose on its condensed consolidated balance sheets the assets owned by consolidated variable interest entities ("VIEs") and liabilities of consolidated VIEs as to which neither Lennar Corporation, nor any of its subsidiaries, has any obligations.

As of May 31, 2021, total assets include $ 940.6 million related to consolidated VIEs of which $ 39.0 million is included in Homebuilding cash and cash equivalents, $ 15.3 million in Homebuilding restricted cash, $ 14.3 million in Homebuilding finished homes and construction in progress, $ 564.7 million in Homebuilding land and land under development, $ 260.6 million in Homebuilding consolidated inventory not owned, $ 1.3 million in Homebuilding investments in unconsolidated entities, $ 27.2 million in Homebuilding other assets and $ 17.8 million in Multifamily assets.

As of August 31, 2021, total assets include $ 1.0 billion related to consolidated VIEs of which $ 61.1 million is included in Homebuilding cash and cash equivalents, $ 4.4 million in Homebuilding receivables, net, $ 14.3 million in Homebuilding finished homes and construction in progress, $ 623.9 million in Homebuilding land and land under development, $ 284.7 million in Homebuilding consolidated inventory not owned, $ 1.3 million in Homebuilding investments in unconsolidated entities, $ 17.1 million in Homebuilding other assets and $ 17.7 million in Multifamily assets.

As of November 30, 2020, total assets include $ 1.1 billion related to consolidated VIEs of which $ 32.1 million is included in Homebuilding cash and cash equivalents, $ 0.1 million in Homebuilding receivables, net, $ 14.2 million in Homebuilding finished homes and construction in progress, $ 486.8 million in Homebuilding land and land under development, $ 426.3 million in Homebuilding consolidated inventory not owned, $ 1.6 million in Homebuilding investments in unconsolidated entities, $ 120.6 million in Homebuilding other assets and $ 39.9 million in Multifamily assets.

3 unchanged sentences

(In thousands, except share amounts)

May 31, November 30,

August 31, November 30,

2021 (2) 2020 (2)

13 unchanged sentences

Class A common stock of $ 0.10 par value;

May 31, 2021 and November 30, 2020 - 400,000,000 shares;

May 31, 2021 - 300,486,193 shares and November 30, 2020 - 298,942,836 shares

August 31, 2021 and November 30, 2020 - 400,000,000 shares;

August 31, 2021 - 300,499,577 shares and November 30, 2020 - 298,942,836 shares

30,050 29,894

Class B common stock of $ 0.10 par value;

May 31, 2021 and November 30, 2020 - 90,000,000 shares;

May 31, 2021 - 39,443,168 shares and November 30, 2020 - 39,443,168 shares

August 31, 2021 and November 30, 2020 - 90,000,000 shares;

August 31, 2021 - 39,443,168 shares and November 30, 2020 - 39,443,168 shares

Additional paid-in capital 8,778,609 8,676,056

1 unchanged sentence

Treasury stock, at cost;

May 31, 2021 - 25,791,364 shares of Class A common stock and 1,822,016 shares of Class B common stock;

August 31, 2021 - 28,647,421 shares of Class A common stock and 1,822,016 shares of Class B common stock;

November 30, 2020 - 23,864,589 shares of Class A common stock and 1,822,016 shares of Class B common stock

6 unchanged sentences

(2) Under certain provisions of ASC 810, the Company is required to separately disclose on its condensed consolidated balance sheets the assets owned by consolidated VIEs and liabilities of consolidated VIEs as to which neither Lennar Corporation, nor any of its subsidiaries, has any obligations.

As of May 31, 2021, total liabilities include $ 340.1 million related to consolidated VIEs as to which there was no recourse against the Company, of which $ 24.4 million is included in Homebuilding accounts payable, $ 218.9 million in Homebuilding liabilities related to consolidated inventory not owned, $ 85.7 million in Homebuilding senior notes and other debts payable and $ 11.1 million in Homebuilding other liabilities.

As of August 31, 2021, total liabilities include $ 320.6 million related to consolidated VIEs as to which there was no recourse against the Company, of which $ 25.4 million is included in Homebuilding accounts payable, $ 232.8 million in Homebuilding liabilities related to consolidated inventory not owned, $ 50.0 million in Homebuilding senior notes and other debts payable and $ 12.5 million in Homebuilding other liabilities.

As of November 30, 2020, total liabilities include $ 528.5 million related to consolidated VIEs as to which there was no recourse against the Company, of which $ 28.4 million is included in Homebuilding accounts payable, $ 351.4 million in Homebuilding liabilities related to consolidated inventory not owned, $ 129.1 million in Homebuilding senior notes and other debt payable, $ 9.9 million in Homebuilding other liabilities and $ 9.8 million in Multifamily liabilities.

3 unchanged sentences

(In thousands, except per share amounts)

Three Months Ended Six Months Ended

May 31, May 31,

Three Months Ended Nine Months Ended

August 31, August 31,

2021 2020 2021 2020

12 unchanged sentences

Total costs and expenses 5,613,948 4,988,656 15,375,057 13,694,113

Homebuilding equity in loss from unconsolidated entities ( 1,688 ) ( 9,100 ) ( 6,253 ) ( 13,646 )

Homebuilding equity in earnings (loss) from unconsolidated entities 2,391 ( 6,431 ) ( 3,862 ) ( 20,077 )

Homebuilding other income (expense), net ( 5,570 ) ( 11,787 ) 3,043 ( 16,845 )

20 unchanged sentences

(In thousands)

Six Months Ended

Nine Months Ended

Cash flows from operating activities:

2 unchanged sentences

Depreciation and amortization 65,845 68,771

Amortization of discount/premium and accretion on debt, net ( 4,718 ) ( 13,839 )

Amortization of discount/premium on debt, net ( 6,257 ) ( 18,632 )

Equity in (earnings) loss from unconsolidated entities ( 64,571 ) 50,971

5 unchanged sentences

Gain on sale of other assets and operating properties and equipment ( 18,596 ) ( 15,846 )

Loss on consolidation — 4,824

Gain on deconsolidation of previously consolidated entity — ( 61,418 )

5 unchanged sentences

Changes in assets and liabilities:

Decrease (increase) in receivables 117,910 ( 7,758 )

Increase in inventories, excluding valuation adjustments and write-offs of option deposits and pre-acquisition costs ( 1,576,420 ) ( 159,138 )

Decrease in receivables 131,282 264,643

(Increase) decrease in inventories, excluding valuation adjustments and write-offs of option deposits and pre-acquisition costs ( 2,252,820 ) 113,429

Increase in other assets ( 154,005 ) ( 124,641 )

10 unchanged sentences

Proceeds from sale of Financial Services' portfolio/business 3,327 14,978

(Increase) decrease in Financial Services loans held-for-investment, net ( 3,864 ) 143

Increase in Financial Services loans held-for-investment, net 13,249 2,427

Purchases of investment securities ( 121,675 ) ( 49,293 )

6 unchanged sentences

(In thousands)

Six Months Ended

Nine Months Ended

Cash flows from financing activities:

5 unchanged sentences

Payments related to consolidated inventory not owned ( 238,273 ) —

Proceeds related to other liabilities, net — 3,567

(Payments) proceeds related to other liabilities, net ( 7,142 ) 6,559

Receipts related to noncontrolling interests 18,575 175,565

19 unchanged sentences

Non-cash contributions to unconsolidated entities 20,423 13,859

Lennar Other (non-cash impacts from sale of solar platform):

Non-cash increase in investment in equity securities $ 127,094 —

Non-cash increase in receivables 64,683 —

Non-cash increase in other liabilities ( 40,302 ) —

Consolidation/deconsolidation of unconsolidated/consolidated entities, net:

4 unchanged sentences

Operating properties and equipment and other assets — 6,870

Investments in unconsolidated entities — ( 68,290 )

Notes payable — ( 44,924 )

Other liabilities — ( 1,455 )

11 unchanged sentences

The Company has historically experienced, and expects to continue to experience, variability in quarterly results.

The condensed consolidated statements of operations for the three and six months ended May 31, 2021 are not necessarily indicative of the results to be expected for the full year.

The condensed consolidated statements of operations for the three and nine months ended August 31, 2021 are not necessarily indicative of the results to be expected for the full year.

Use of Estimates

2 unchanged sentences

Cash and Cash Equivalents

Homebuilding cash and cash equivalents as of May 31, 2021 and November 30, 2020 included $ 678.8 million and $ 314.3 million , respectively, of cash held in escrow.

On average for the three months ended May 31, 2021, cash was held in escrow for approximately four days .

Homebuilding cash and cash equivalents as of August 31, 2021 and November 30, 2020 included $ 666.8 million and $ 314.3 million , respectively, of cash held in escrow.

On average for the three months ended August 31, 2021, cash was held in escrow for approximately three days .

Share-based Payments

During both the three months ended May 31, 2021 and 2020, the Company granted employees an immaterial number of nonvested shares.

During the six months ended May 31, 2021 and 2020, the Company granted employees 1.4 million and 0.9 million nonvested shares, respectively.

During the three months ended August 31, 2021, the Company granted employees an immaterial number of nonvested shares.

During the three months ended August 31, 2020, the Company granted employees 0.9 million of nonvested shares.

During the nine months ended August 31, 2021 and 2020, the Company granted employees 1.4 million and 1.8 million nonvested shares, respectively.

Recently Adopted Accounting Pronouncements

19 unchanged sentences

The Company reclassed the balance of its investment in Doma, formerly States Title, to which the Company sold the majority of the Financial Services segment's retail title agency business and title insurance underwriter in the first quarter of 2019, from the Financial Services segment to the Lennar Other segment in the condensed consolidated balance sheets for all periods presented.

This was reclassed to be included in our strategic technology investments as the entity has announced that it will merge with a publicly traded special purpose acquisition company.

This was reclassed to be included in our strategic technology investments as the entity had announced that it would merge with a publicly traded special purpose acquisition company and during the three months ended August 31, 2021 completed the merger and became a publicly traded entity.

In addition, the Company reflected its contributions to its charitable foundation in a new line on its condensed consolidated statements of operations for all periods presented.

12 unchanged sentences

The assets and liabilities related to the Company’s segments were as follows:

(In thousands) May 31, 2021

(In thousands) August 31, 2021

Homebuilding Financial

39 unchanged sentences

(2) Loans held-for-sale related to unsold residential and commercial loans carried at fair value.

(3) Investments in equity securities include investments of $ 83.8 million and $ 61.6 million without readily available fair values as of May 31, 2021 and November 30, 2020, respectively.

(3) Investments in equity securities include investments of $ 63.9 million and $ 61.6 million without readily available fair values as of August 31, 2021 and November 30, 2020, respectively.

(4) Investments available-for-sale are carried at fair value with changes in fair value recorded as a component of accumulated other comprehensive income (loss) on the condensed consolidated balance sheet.

Financial information relating to the Company’s segments was as follows:

Three Months Ended May 31, 2021

Three Months Ended August 31, 2021

(In thousands) Homebuilding Financial Services Multifamily Lennar Other Corporate and

5 unchanged sentences

Earnings (loss) before income taxes 1,329,833 112,083 ( 9,393 ) 491,972 ( 110,141 ) 1,814,354

Three Months Ended May 31, 2020

Three Months Ended August 31, 2020

Revenues $ 5,505,120 237,068 115,170 12,896 — 5,870,254

5 unchanged sentences

Notes to Condensed Consolidated Financial Statements (unaudited) (Continued)

Six Months Ended May 31, 2021

Nine Months Ended August 31, 2021

(In thousands) Homebuilding Financial Services Multifamily Lennar Other Corporate and

5 unchanged sentences

Charitable foundation contribution — — — — 42,006 42,006

Earnings (loss) before income taxes 1,945,655 267,527 21,523 417,249 ( 228,055 ) 2,423,899

Six Months Ended May 31, 2020

Earnings before income taxes 3,275,488 379,610 12,130 909,221 ( 338,196 ) 4,238,253

Nine Months Ended August 31, 2020

$ 14,626,720 631,992 370,904 33,348 — 15,662,964

4 unchanged sentences

Earnings (loss) before income taxes 1,905,503 329,722 ( 4,001 ) ( 9,123 ) ( 262,959 ) 1,959,142

(1) Operating loss for Lennar Other for the nine months ended August 31, 2020 included a $ 25.0 million write-down of assets held by Rialto legacy funds because of the disruption in the capital markets as a result of COVID-19 and the economic shutdown.

Homebuilding Segments

10 unchanged sentences

(In thousands) East Central Texas West Other Corporate and Unallocated Total Homebuilding

May 31, 2021 $ 5,749,998 3,713,952 2,510,950 11,131,940 1,326,516 2,440,069 26,873,425

August 31, 2021 $ 5,909,905 3,889,907 2,714,717 11,281,110 1,369,977 2,415,137 27,580,753

November 30, 2020 5,308,114 3,438,600 2,150,916 10,504,374 1,301,618 2,825,803 25,529,425

Financial information relating to the Company’s homebuilding segments was as follows:

Three Months Ended May 31, 2021

Three Months Ended August 31, 2021

(In thousands) East Central Texas West Other Total Homebuilding

1 unchanged sentence

Operating earnings (loss) 356,895 197,229 186,008 608,815 ( 19,114 ) 1,329,833

309,827 159,048 176,057 492,811 ( 25,268 ) 1,112,475

Three Months Ended May 31, 2020

Three Months Ended August 31, 2020

$ 1,478,659 1,063,621 747,934 2,212,211 2,695 5,505,120

Operating earnings (loss) 244,189 132,678 116,111 342,834 ( 22,068 ) 813,744

192,887 103,904 99,887 280,094 ( 45,411 ) 631,361

Lennar Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited) (Continued)

Six Months Ended May 31, 2021

Nine Months Ended August 31, 2021

(In thousands) East Central Texas West Other Total Homebuilding

1 unchanged sentence

Operating earnings (loss) 928,805 488,300 491,708 1,423,332 ( 56,657 ) 3,275,488

571,910 291,071 305,700 814,517 ( 37,543 ) 1,945,655

Six Months Ended May 31, 2020

Nine Months Ended August 31, 2020

Revenues $ 3,908,421 2,839,415 1,933,918 5,920,804 24,162 14,626,720

5 unchanged sentences

The Financial Services segment operates generally in the same states as the Company’s homebuilding operations.

At May 31, 2021, the Financial Services warehouse facilities were all 364 -day repurchase facilities and were used to fund residential mortgages or commercial mortgages for LMF Commercial as follows:

At August 31, 2021, the Financial Services warehouse facilities were all 364 -day repurchase facilities and were used to fund residential mortgages or commercial mortgages for LMF Commercial as follows:

(In thousands) Maximum Aggregate Commitment

Residential facilities maturing:

June 2021 (1) $ 600,000

July 2021 200,000

October 2021 $ 200,000

December 2021 500,000

April 2022 100,000

July 2022 600,000

Total - Residential facilities

2 unchanged sentences

December 2021 (1) 411,438

July 2023 50,000

Total - LMF Commercial facilities

(1) Subsequent to May 31, 2021, the maturity due date was extended to July 2021.

(1) Includes $ 11.4 million warehouse repurchase facility used by LMF Commercial to finance the origination of floating rate accrual loans, which are reported as accrual loans within loans held-for-investment, net.

3 unchanged sentences

Borrowings and collateral under the facilities and their prior year predecessors were as follows:

(In thousands) May 31, 2021 November 30, 2020

(In thousands) August 31, 2021 November 30, 2020

Borrowings under the residential facilities $ 900,332 1,185,797

17 unchanged sentences

The activity in the Company’s loan origination liabilities was as follows:

Three Months Ended Six Months Ended

May 31, May 31,

Three Months Ended Nine Months Ended

August 31, August 31,

(In thousands) 2021 2020 2021 2020

5 unchanged sentences

LMF Commercial originated commercial loans as follows:

Three Months Ended Six Months Ended

May 31, May 31,

Three Months Ended Nine Months Ended

August 31, August 31,

(Dollars in thousands) 2021 2020 2021 2020

2 unchanged sentences

Securitizations 1 1 4 4

(1) During both the three and six months ended May 31, 2021 and 2020 all the commercial loans originated were recorded as loans held-for-sale, which are held at fair value.

(1) During both the three and nine months ended August 31, 2021 and 2020 all the commercial loans originated were recorded as loans held-for-sale, which are held at fair value.

Investments held-to-maturity

At May 31, 2021 and November 30, 2020, the Financial Services segment held commercial mortgage-backed securities ("CMBS").

At August 31, 2021 and November 30, 2020, the Financial Services segment held commercial mortgage-backed securities ("CMBS").

These securities are classified as held-to-maturity based on its intent and ability to hold the securities until maturity and changes in estimated cash flows are reviewed periodically to determine if an other-than-temporary impairment has occurred.

Based on the segment’s assessment, no impairment charges were recorded during either the three or six months ended May 31, 2021 or 2020.

Based on the segment’s assessment, no impairment charges were recorded during either the three or nine months ended August 31, 2021 or 2020.

The Company has financing agreements to finance CMBS that have been purchased as investments by the Financial Services segment.

Details related to Financial Services' CMBS were as follows:

(Dollars in thousands) May 31, 2021 November 30, 2020

(Dollars in thousands) August 31, 2021 November 30, 2020

Carrying value $ 161,532 164,230

1 unchanged sentence

Incurred interest rate 3.4 % 3.4 %

August 31, 2021

Discount rates at purchase 6 % — 84 %

9 unchanged sentences

Operations of the Lennar Other segment include operating earnings (loss) consisting of revenues generated primarily from the Company's share of carried interests in the Rialto fund investments retained after the sale of Rialto's asset and investment management platform, along with equity in earnings (loss) from the Rialto fund investments and strategic technology investments, gains (losses) from investments in equity securities and other income (expense), net from the remaining assets related to the Company's former Rialto segment.

During the three months ended May 31, 2021, the Company completed the sale of the Company's residential solar business to Sunnova Energy International Inc.

During the nine months ended August 31, 2021, the Company completed the sale of the Company's residential solar business to Sunnova Energy International Inc.

("Sunnova") for shares in Sunnova.

3 unchanged sentences

The fair value of the earnouts was also based on the probability of achieving full or partial earnouts.

The investments in Opendoor Technologies, Inc ("Opendoor") and Sunnova are held at market and will therefore change depending on the value of the Company's share holdings on the last day of each quarter.

During the three months ended May 31, 2021, the Company's Lennar Other segment recorded a loss of $ 234.3 million and $ 38.3 million related to the mark to market of the Company's share holdings in Opendoor and Sunnova, respectively.

During the six months ended May 31, 2021 , Opendoor began trading on the Nasdaq stock market and the Company began to mark to market the Company's share holdings in the public entity.

The mark to market recognition was due to the investment now being accounted for as an investment in equity securities which is held at fair value and the change in fair value is recognized through earnings.

As of November 30, 2020, the investment in Opendoor was included in the Company's investments in unconsolidated entities and was accounted for using the equity method.

In addition, as previously noted, several of the Company's other strategic technology investments have announced plans to go public either through an initial public offering or by merging with a publicly traded special purpose acquisition company.

The investments in Opendoor Technologies, Inc.

("Opendoor"), Sunnova, Hippo Holdings, Inc.

("Hippo"), SmartRent, Inc.

("SmartRent") and Blend Labs, Inc.

("Blend") are held at market and will therefore change depending on the value of the Company's share holdings in those entities on the last day of each quarter.

The following is a detail of Lennar Other realized and unrealized gain (loss):

Three Months Ended Nine Months Ended

August 31, August 31,

2021 2020 2021 2020

Hippo (HIPO) mark to market $ 324,855 — 324,855 —

SmartRent (SMRT) mark to market 100,793 — 100,793 —

Opendoor (OPEN) mark to market 37,301 — 272,756 —

Sunnova (NOVA) mark to market 23,870 — ( 14,465 ) —

Blend Labs (BLND) mark to market 6,852 — 6,852 —

Gain on sale of solar business 1,531 — 153,006 —

Other realized gain — — 3,580 —

$ 495,202 — 847,377 —

During the nine months ended August 31, 2021 , Opendoor, Hippo, SmartRent and Blend began trading and the Company began to mark to market the Company's share holdings in the public entities.

The mark to market recognition was due to the entities in which the Company holds the investments going public and the loss of a contractual right to a board seat, where applicable, during the nine months ended August 31, 2021 and the investments now being accounted for as investments in equity securities which are held at fair value and the changes in fair value are recognized through earnings.

As of November 30, 2020, the investments were included in the Company's investments in unconsolidated entities and were accounted for using the equity method.

In addition, as previously noted, Doma Holdings, Inc.

("Doma") went public during the three months ended August 31, 2021.

Doma is an investment that continues to be accounted for under the equity method due to the Company's significant ownership interest which allows the Company to exercise significant influence.

As of August 31, 2021, the Company owns approximately 25 % of Doma and the carrying amount of the Company's investment is $ 62.4 million.

(3) Investments in Unconsolidated Entities

1 unchanged sentence

The investments in the Company's Homebuilding unconsolidated entities were as follows:

(In thousands) May 31, 2021 November 30, 2020

(In thousands) August 31, 2021 November 30, 2020

Investments in unconsolidated entities (1) (2) $ 983,429 953,177

2 unchanged sentences

(2) Included in the Company's recorded investments in Homebuilding unconsolidated entities is the Company's 40 % ownership of FivePoint.

As of May 31, 2021 and November 30, 2020, the carrying amount of the Company's investment was $ 387.0 million and $ 392.1 million, respectively.

As of August 31, 2021 and November 30, 2020, the carrying amount of the Company's investment was $ 389.8 million and $ 392.1 million, respectively.

The Company has an immaterial amount of recourse exposure to debt of the Homebuilding unconsolidated entities in which it has investments.

While the Company sometimes guarantees debt of unconsolidated entities, in most instances the Company’s partners have also guaranteed that debt and are required to contribute their shares of any payments.

In most instances the amount of guaranteed debt of an unconsolidated entity is less than the value of the collateral securing it.

Lennar Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited) (Continued)

instances the amount of guaranteed debt of an unconsolidated entity is less than the value of the collateral securing it.

In the first quarter of 2021, the Company formed the Upward America Venture ("the Venture").

The Venture will acquire single family homes for rent in high growth markets across the United States.

The Venture acquires single family homes for rent in high growth markets across the United States.

The Venture raised equity to get to a total commitment of $ 1.25 billion led by institutional investors.

4 unchanged sentences

The details related to these are unchanged from the disclosure in the Company's Notes to the Financial Statements section in its Form 10-K for the year ended November 30, 2020.

As of both May 31, 2021 and November 30, 2020, the fair value of the completion guarantees was immaterial.

As of May 31, 2021 and November 30, 2020, Multifamily segment's unconsolidated entities had non-recourse debt with completion guarantees of $ 748.4 million and $ 722.9 million, respectively.

Lennar Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited) (Continued)

As of both August 31, 2021 and November 30, 2020, the fair value of the completion guarantees was immaterial.

As of August 31, 2021 and November 30, 2020, Multifamily segment's unconsolidated entities had non-recourse debt with completion guarantees of $ 866.9 million and $ 722.9 million, respectively.

In many instances, the Multifamily segment is appointed as the construction, development and property manager for its Multifamily unconsolidated entities and receives fees for performing this function.

1 unchanged sentence

The details of the activity was as follows:

Three Months Ended Six Months Ended

May 31, May 31,

Three Months Ended Nine Months Ended

August 31, August 31,

(In thousands) 2021 2020 2021 2020

3 unchanged sentences

The Multifamily segment includes Multifamily Venture Fund I ("LMV I") and Multifamily Venture Fund II LP ("LMV II"), which are long-term multifamily development investment vehicles involved in the development, construction and property management of class-A multifamily assets.

Details of each as of and during the six months ended May 31, 2021 are included below:

Details of each as of and during the nine months ended August 31, 2021 are included below:

August 31, 2021

(In thousands) LMV I LMV II

5 unchanged sentences

Lennar's remaining commitments 5,286 19,619

Distributions to Lennar during the six months ended May 31, 2021 40,581 1,165

Distributions to Lennar during the nine months ended August 31, 2021 54,393 1,307

Lennar Other Unconsolidated Entities

1 unchanged sentence

These strategic investments include the Company's investment in Doma, formerly known as States Title, which was reclassified from the Financial Services segment.

Lennar Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited) (Continued)

(4) Stockholders' Equity

The following tables reflect the changes in equity attributable to both Lennar Corporation and the noncontrolling interests of its consolidated subsidiaries in which it has less than a 100% ownership interest for the three and six months ended May 31, 2021 and 2020:

Three Months Ended May 31, 2021

Three Months Ended August 31, 2021

(In thousands) Total

5 unchanged sentences

Earnings Noncontrolling

Balance at February 28, 2021 $ 19,017,451 30,047 3,944 8,724,192 ( 1,348,710 ) ( 1,747 ) 11,488,520 121,205

Balance at May 31, 2021 $ 19,702,098 30,049 3,944 8,755,020 ( 1,452,874 ) ( 1,431 ) 12,241,400 125,990

Net earnings (including net earnings attributable to noncontrolling interests) 1,409,218 — — — — — 1,406,888 2,330

11 unchanged sentences

Total other comprehensive income, net of tax 131 — — — — 131 — —

Balance at May 31, 2021 $ 19,702,098 30,049 3,944 8,755,020 ( 1,452,874 ) ( 1,431 ) 12,241,400 125,990

Lennar Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited) (Continued)

Three Months Ended May 31, 2020

Balance at August 31, 2021 $ 20,779,539 30,050 3,944 8,778,609 ( 1,731,741 ) ( 1,300 ) 13,570,626 129,351

Three Months Ended August 31, 2020

(In thousands) Total

5 unchanged sentences

Earnings Noncontrolling

Balance at February 29, 2020 $ 16,193,377 29,802 3,944 8,609,944 ( 1,253,756 ) 452 8,654,213 148,778

Net earnings (including net loss attributable to noncontrolling interests)

516,098 — — — — — 517,406 ( 1,308 )

Balance at May 31, 2020 $ 16,632,624 29,804 3,944 8,630,442 ( 1,253,863 ) ( 338 ) 9,132,714 89,921

Net earnings (including net earnings attributable to noncontrolling interests) 669,323 — — — — — 666,418 2,905

Employee stock and directors plans

10 unchanged sentences

Total other comprehensive loss, net of tax 175 — — — — 175 — —

Balance at May 31, 2020 $ 16,632,624 29,804 3,944 8,630,442 ( 1,253,863 ) ( 338 ) 9,132,714 89,921

Six Months Ended May 31, 2021

Balance at August 31, 2020 $ 17,280,345 29,894 3,944 8,654,954 ( 1,276,691 ) ( 163 ) 9,760,165 108,242

Lennar Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited) (Continued)

Nine Months Ended August 31, 2021

(In thousands) Total

21 unchanged sentences

Total other comprehensive loss, net of tax ( 495 ) — — — — ( 495 ) — —

Balance at May 31, 2021 $ 19,702,098 30,049 3,944 8,755,020 ( 1,452,874 ) ( 1,431 ) 12,241,400 125,990

Six Months Ended May 31, 2020

Balance at August 31, 2021 $ 20,779,539 30,050 3,944 8,778,609 ( 1,731,741 ) ( 1,300 ) 13,570,626 129,351

Nine Months Ended August 31, 2020

(In thousands) Total

21 unchanged sentences

Total other comprehensive loss, net of tax ( 661 ) — — — — ( 661 ) — —

Balance at May 31, 2020 $ 16,632,624 29,804 3,944 8,630,442 ( 1,253,863 ) ( 338 ) 9,132,714 89,921

Lennar Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited) (Continued)

On June 18, 2021, the Company's Board of Directors declared a quarterly cash dividend of $ 0.25 per share on both its Class A and Class B common stock, payable on July 19, 2021 to holders of record at the close of business on July 2, 2021.

On May 5, 2021, the Company paid cash dividends of $ 0.25 per share on both its Class A and Class B common stock to holders of record at the close of business on April 21, 2021, as declared by its Board of Directors on April 7, 2021.

The Company approved and paid cash dividends of $ 0.125 per share for each of the first three quarters of 2020 and $ 0.25 per share in the fourth quarter of 2020 and first two quarter of 2021 on both its Class A and Class B common stock.

Balance at Aug 31, 2020 $ 17,280,345 29,894 3,944 8,654,954 ( 1,276,691 ) ( 163 ) 9,760,165 108,242

On September 29, 2021, the Company's Board of Directors declared a quarterly cash dividend of $ 0.25 per share on both its Class A and Class B common stock, payable on October 28, 2021 to holders of record at the close of business on October 14, 2021.

On July 19, 2021, the Company paid cash dividends of $ 0.25 per share on both its Class A and Class B common stock to holders of record at the close of business on July 2, 2021, as declared by its Board of Directors on June 18, 2021.

The Company approved and paid cash dividends of $ 0.125 per share for each of the first three quarters of 2020 and $ 0.25 per share in the fourth quarter of 2020 and each of the first three quarters of 2021 on both its Class A and Class B common stock.

In January 2021, the Company's Board of Directors authorized the repurchase of up to the lesser of $ 1 billion in value, excluding commissions, or 25 million in shares, of the Company's outstanding Class A and Class B common stock.

The repurchase has no expiration date.

The following table represents the repurchase of the Company's Class A and Class B common stocks under this program and its predecessor for the three and six months ended May 31, 2021 and 2020:

Three Months Ended Six Months Ended

May 31, 2021 May 31, 2020 May 31, 2021 May 31, 2020

The following table represents the repurchase of the Company's Class A and Class B common stocks under this program and its predecessor for the three and nine months ended August 31, 2021 and 2020:

Three Months Ended Nine Months Ended

August 31, 2021 August 31, 2020 August 31, 2021 August 31, 2020

(Dollars in thousands, except price per share) Class A Class B Class A Class B Class A Class B Class A Class B

Shares repurchased 2,500,000 — — — 4,010,000 — 4,250,000 115,000

Principal $ 98,440 $ — $ — $ — $ 141,540 $ — $ 282,274 $ 6,155

Total purchase price $ 246,335 $ — $ — $ — $ 387,875 $ — $ 282,274 $ 6,155

Average price per share $ 98.53 $ — $ — $ — $ 96.73 $ — $ 66.42 $ 53.52

Lennar Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited) (Continued)

(5) Income Taxes

The provision for income taxes and effective tax rate were as follows:

Three Months Ended Six Months Ended

May 31, May 31,

Three Months Ended Nine Months Ended

August 31, August 31,

(Dollars in thousands) 2021 2020 2021 2020

1 unchanged sentence

Effective tax rate (1) 22.4 % 22.2 % 23.1 % 19.5 %

(1) For the three and six months ended May 31, 2021 and 2020, the effective tax rate included state income tax expense and non-deductible executive compensation, partially offset by new energy efficient home and solar tax credits.

The six months ended May 31, 2020 also included benefits related to the years ended November 30, 2018 and 2019, due to Congress retroactively extending the new energy efficient home tax credit in December 2019.

(1) For both the three and nine months ended August 31, 2021 and 2020, the effective tax rate included state income tax expense and non-deductible executive compensation, partially offset by new energy efficient home and solar tax credits.

The nine months ended August 31, 2020 also included benefits related to the years ended November 30, 2018 and 2019, due to Congress retroactively extending the new energy efficient home tax credit in December 2019.

(6) Earnings Per Share

4 unchanged sentences

The Company’s restricted common stock ("nonvested shares") is considered participating securities.

Lennar Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited) (Continued)

Basic and diluted earnings per share were calculated as follows:

Three Months Ended Six Months Ended

May 31, May 31,

Three Months Ended Nine Months Ended

August 31, August 31,

(In thousands, except per share amounts) 2021 2020 2021 2020

12 unchanged sentences

(1) The amounts presented relate to Rialto's Carried Interest Incentive Plan and represent the difference between the advanced tax distributions received from the Rialto funds included in the Lennar Other segment and the amount Lennar is assumed to own.

For both the three and six months ended May 31, 2021 and May 31, 2020, there were no options to purchase shares of common stock that were outstanding and anti-dilutive.

For both the three and nine months ended August 31, 2021 and 2020, there were no options to purchase shares of common stock that were outstanding and anti-dilutive.

Lennar Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited) (Continued)

(7) Homebuilding Senior Notes and Other Debts Payable

(Dollars in thousands) May 31, 2021 November 30, 2020

6.25 % senior notes due December 2021 (1)

$ 302,705 305,221

(Dollars in thousands) August 31, 2021 November 30, 2020

4.125 % senior notes due 2022 (1)

18 unchanged sentences

895,322 894,760

6.25 % senior notes due December 2021

Mortgage notes on land and other debt 478,251 583,257

$ 5,542,513 5,955,758

(1) Subsequent to May 31, 2021, the Company retired these notes.

The redemption price, which was paid in cash, was par plus accrued but unpaid interest.

The carrying amounts of the senior notes in the table above are net of debt issuance costs of $ 13.6 million and $ 15.9 million as of May 31, 2021 and November 30, 2020, respectively.

As of May 31, 2021 the maximum available borrowings on the Company's unsecured revolving credit facility (the "Credit Facility") were $ 2.5 billion and included a $ 300 million accordion feature, subject to additional commitments, thus the maximum borrowings could be $ 2.8 billion maturing in 2024.

(1) Subsequent to August 31, 2021, the Company provided notice that it would redeem on October 15, 2021 its $ 600 million 4.125 % senior unsecured notes, which have a scheduled maturity of January 15, 2022.

The carrying amounts of the senior notes in the table above are net of debt issuance costs of $ 12.4 million and $ 15.9 million as of August 31, 2021 and November 30, 2020, respectively.

In June 2021, the Company redeemed $ 300 million aggregate principal amount of its 6.25 % senior notes due December 2021.

The redemption price, which was paid in cash, was 100% of the principal amount plus accrued unpaid interest.

As of August 31, 2021 the maximum available borrowings on the Company's unsecured revolving credit facility (the "Credit Facility") were $ 2.5 billion and included a $ 300 million accordion feature, subject to additional commitments, thus the maximum borrowings could be $ 2.8 billion maturing in 2024.

The Credit Facility agreement (the "Credit Agreement") provides that up to $ 500 million in commitments may be used for letters of credit .

1 unchanged sentence

In addition to the Credit Facility, the Company has other letter of credit facilities with different financial institutions.

Lennar Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited) (Continued)

Procedures related to performance letters of credit, financial letters of credit and surety bonds are unchanged from the disclosure in the Company's Financial Condition and Capital Resources section in its Form 10-K for the year ended November 30, 2020.

The Company's outstanding performance letters of credit and surety bonds are described below:

(In thousands) May 31, 2021 November 30, 2020

(In thousands) August 31, 2021 November 30, 2020

Performance letters of credit $ 874,820 752,096

6 unchanged sentences

Reserves are determined based on historical data and trends with respect to similar product types and geographical areas.

The activity in the Company’s warranty reserve, which are included in Homebuilding other liabilities, was as follows:

Three Months Ended Six Months Ended

May 31, May 31,

The activity in

Lennar Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited) (Continued)

the Company’s warranty reserve, which are included in Homebuilding other liabilities, was as follows:

Three Months Ended Nine Months Ended

August 31, August 31,

(In thousands) 2021 2020 2021 2020

4 unchanged sentences

Warranty reserve, end of period $ 374,975 318,749 374,975 318,749

(1) The adjustments to pre-existing warranties from changes in estimates during the three and six months ended May 31, 2021 and May 31, 2020 primarily related to specific claims in certain of the Company's homebuilding communities and other adjustments.

(1) The adjustments to pre-existing warranties from changes in estimates during the three and nine months ended August 31, 2021 and August 31, 2020 primarily related to specific claims in certain of the Company's homebuilding communities and other adjustments.

(9) Financial Instruments and Fair Value Disclosures

The following table presents the carrying amounts and estimated fair values of financial instruments held or issued by the Company at May 31, 2021 and November 30, 2020, using available market information and what the Company believes to be appropriate valuation methodologies.

The following table presents the carrying amounts and estimated fair values of financial instruments held or issued by the Company at August 31, 2021 and November 30, 2020, using available market information and what the Company believes to be appropriate valuation methodologies.

Considerable judgment is required in interpreting market data to develop the estimates of fair value.

1 unchanged sentence

The table excludes cash and cash equivalents, restricted cash, receivables, net and accounts payable, all of which had fair values approximating their carrying amounts due to the short maturities and liquidity of these instruments.

May 31, 2021 November 30, 2020

August 31, 2021 November 30, 2020

(In thousands) Fair Value Hierarchy Carrying Amount Fair Value Carrying Amount Fair Value

10 unchanged sentences

Homebuilding —For senior notes and other debts payable, the fair value of fixed-rate borrowings is primarily based on quoted market prices and the fair value of variable-rate borrowings is based on expected future cash flows calculated using current market forward rates.

Lennar Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited) (Continued)

Lennar Other —The fair value for notes payable approximate their carrying value due to variable interest pricing terms and the short-term nature of the borrowings.

4 unchanged sentences

Fair value determined using significant unobservable inputs.

Lennar Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited) (Continued)

The Company’s financial instruments measured at fair value on a recurring basis are summarized below:

Fair Value Hierarchy Fair Value at

(In thousands) May 31, 2021 November 30, 2020

(In thousands) August 31, 2021 November 30, 2020

Financial Services Assets:

6 unchanged sentences

Residential and LMF Commercial loans held-for-sale in the table above include:

May 31, 2021 November 30, 2020

August 31, 2021 November 30, 2020

(In thousands) Aggregate Principal Balance Change in Fair Value Aggregate Principal Balance Change in Fair Value

4 unchanged sentences

The Company recognizes the fair value of its rights to service a mortgage loan as revenue upon entering into an interest rate lock loan commitment with a borrower.

The fair value of these are included in Financial Services’ loans held-for-sale as of May 31, 2021 and November 30, 2020.

The fair value of these are included in Financial Services’ loans held-for-sale as of August 31, 2021 and November 30, 2020.

Fair value of servicing rights is determined based on actual sales of servicing rights on loans with similar characteristics.

7 unchanged sentences

The key assumptions, which are generally unobservable inputs, used in the valuation of the mortgage servicing rights include mortgage prepayment rates, discount rates and delinquency rates and are noted below:

Unobservable inputs As of May 31, 2021 As of November 30, 2020

Unobservable inputs As of August 31, 2021 As of November 30, 2020

Mortgage prepayment rate 14 % 18 %

3 unchanged sentences

The Company’s investments in equity securities were recorded at fair value with all changes in fair value recorded to Lennar Other unrealized gain of the Company’s condensed consolidated statements of operations and comprehensive income (loss).

Lennar Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited) (Continued)

Lennar Other investments available-for-sale - The fair value of investments available-for-sale is calculated from model-based techniques that use discounted cash flow assumptions and the Company’s own estimates of CMBS spreads, market interest rate movements and the underlying loan credit quality.

1 unchanged sentence

The value of an assumed CMBS capital structure is calculated, generally, by discounting the cash flows associated with each CMBS class at market interest rates and at the Company’s own estimate of CMBS spreads.

Lennar Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited) (Continued)

The changes in fair values for Level 1 and Level 2 financial instruments measured on a recurring basis are shown below by financial instrument and financial statement line item:

Three Months Ended Six Months Ended

May 31, May 31,

Three Months Ended Nine Months Ended

August 31, August 31,

(In thousands) 2021 2020 2021 2020

10 unchanged sentences

Three Months Ended

May 31, 2021 May 31, 2020

August 31, 2021 August 31, 2020

(In thousands) Mortgage servicing rights LMF Commercial loans held-for-sale Mortgage servicing rights LMF Commercial loans held-for-sale

6 unchanged sentences

Ending balance $ 2,382 113,129 1,356 157,031

Six Months Ended

May 31, 2021 May 31, 2020

Nine Months Ended

August 31, 2021 August 31, 2020

(In thousands) Mortgage servicing rights LMF Commercial loans held-for-sale Mortgage servicing rights LMF Commercial loans held-for-sale

7 unchanged sentences

Ending balance $ 2,382 113,129 1,356 157,031

(1) The three and six months ended May 31, 2020 include $ 7.5 million related to the sale of a servicing portfolio.

(1) The nine months ended August 31, 2020 include $ 7.5 million related to the sale of a servicing portfolio.

(2) Changes in fair value for LMF Commercial loans held-for-sale and Financial Services mortgage servicing rights are included in Financial Services' revenues.

5 unchanged sentences

Three Months Ended

May 31, 2021 May 31, 2020

August 31, 2021 August 31, 2020

(In thousands) Fair Value

3 unchanged sentences

Land and land under development (1) Level 3 1,625 862 ( 763 ) 21,621 12,650 ( 8,971 )

Six Months Ended

May 31, 2021 May 31, 2020

Nine Months Ended

August 31, 2021 August 31, 2020

(In thousands) Fair Value

13 unchanged sentences

Communities with valuation adjustments

# of active communities # of communities with potential indicator of impairment # of communities Fair Value

At or for the Nine Months Ended # of active communities # of communities with potential indicator of impairment # of communities Fair Value

(in thousands)

1 unchanged sentence

(in thousands)

At or for the Six Months Ended

May 31, 2021 1,221 10 1 $ 17,117 $ 11,849

May 31, 2020 1,241 41 9 69,137 32,072

August 31, 2021 1,192 8 1 $ 17,117 $ 11,849

August 31, 2020 1,194 28 14 76,115 40,364

The table below summarizes the most significant unobservable inputs used in the Company's discounted cash flow model to determine the fair value of its communities for which the Company recorded valuation adjustments:

Six Months Ended

Nine Months Ended August 31,

Unobservable inputs Range

3 unchanged sentences

(10) Variable Interest Entities

The Company evaluated the joint venture ("JV") agreements of its JV's that were formed or that had reconsideration events, such as changes in the governing documents or to debt arrangements during the six months ended May 31, 2021 and based on the Company's evaluation, there were no VIEs that were consolidated or deconsolidated.

The Company evaluated the joint venture ("JV") agreements of its JV's that were formed or that had reconsideration events, such as changes in the governing documents or to debt arrangements during the nine months ended August 31, 2021 and based on the Company's evaluation, during the nine months ended August 31, 2021, the Company consolidated two entities that had a total combined assets and liabilities of $ 30.7 million and $ 0.7 million, respectively.

During the nine months ended August 31, 2021, there were no VIEs that were deconsolidated.

The carrying amount of the Company's consolidated VIE's assets and non-recourse liabilities are disclosed in the footnote to the condensed consolidated balance sheets.

Lennar Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited) (Continued)

The carrying amount of the Company's consolidated VIE's assets and non-recourse liabilities are disclosed in the footnote to the condensed consolidated balance sheets.

A VIE’s assets can only be used to settle obligations of that VIE.

6 unchanged sentences

The Company’s recorded investments in VIEs that are unconsolidated and its estimated maximum exposure to loss were as follows:

May 31, 2021 November 30, 2020

August 31, 2021 November 30, 2020

(In thousands) Investments in

8 unchanged sentences

$ 884,330 1,058,373 949,447 1,101,506

(1) As of May 31, 2021 and November 30, 2020, the maximum exposure to loss of Homebuilding's investments in unconsolidated VIEs was limited to its investments in unconsolidated VIEs, except as of May 31, 2021, with regard to the Company's remaining commitment to fund capital in the Upward America Venture, a single family for rent platform.

(2) As of May 31, 2021 and November 30, 2020, the maximum exposure to loss of Multifamily's investments in unconsolidated VIEs was primarily limited to its investments in the unconsolidated VIEs, except with regard to the remaining equity commitment of $ 34.7 million and $ 88.1 million, respectively, to fund LMV I and LMV II for future expenditures related to the construction and development of its projects.

(3) As of May 31, 2021, the decrease in investments in unconsolidated VIEs and maximum exposure to loss was related to an entity which had a reconsideration event due to the payoff of a note receivable which caused the entity to no longer be considered a VIE.

(1) As of August 31, 2021 and November 30, 2020, the maximum exposure to loss of Homebuilding's investments in unconsolidated VIEs was limited to its investments in unconsolidated VIEs, except as of August 31, 2021, with regard to the Company's remaining commitment to fund capital in the Upward America Venture, a single family for rent platform.

The increase was due to the Company's commitment to fund the Upward America Venture.

(2) As of August 31, 2021 and November 30, 2020, the maximum exposure to loss of Multifamily's investments in unconsolidated VIEs was primarily limited to its investments in the unconsolidated VIEs, except with regard to the remaining equity commitment of $ 24.9 million and $ 88.1 million, respectively, to fund LMV I and LMV II for future expenditures related to the construction and development of its projects.

The decrease was due to the funding of capital for LMV I and LMV II.

(3) As of August 31, 2021, the decrease in investments in unconsolidated VIEs and maximum exposure to loss was related to an entity which had a reconsideration event due to the payoff of a note receivable which caused the entity to no longer be considered a VIE.

While these entities are VIEs, the Company has determined that the power to direct the activities of the VIEs that most significantly impact the VIEs’ economic performance is generally shared and the Company and its partners are not de-facto agents.

9 unchanged sentences

Although the Company does not have legal title to the optioned land, if the Company is deemed to be the primary beneficiary or makes a significant deposit for optioned land, it may need to consolidate the land under option at the purchase price of the optioned land.

During the six months ended May 31, 2021, consolidated inventory not owned increased by $ 73.4 million with a corresponding increase to liabilities related to consolidated inventory not owned in the accompanying condensed consolidated balance sheet as of May 31, 2021.

The increase was primarily due to additions in the six months ended May 31, 2021 as the Company focused on increasing its controlled homesites.

To reflect the purchase price of the homesite takedowns, the Company had a net reclass related to option deposits from consolidated inventory not owned to land under development in the accompanying condensed consolidated balance sheet as of May 31, 2021.

The liabilities related to consolidated inventory not

During the nine months ended August 31, 2021, consolidated inventory not owned increased by $ 167.8 million with a corresponding increase to liabilities related to consolidated inventory not owned in the accompanying condensed consolidated balance sheet as of August 31, 2021.

The increase was primarily due to additions in the nine months ended August 31, 2021 as the Company focused on increasing its controlled homesites, partially offset by takedowns.

The liabilities related to consolidated inventory not owned primarily represent the difference between the option exercise prices for the optioned land and the Company’s cash deposits.

Lennar Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited) (Continued)

owned primarily represent the difference between the option exercise prices for the optioned land and the Company’s cash deposits.

The Company's exposure to losses on its option contracts with third parties and unconsolidated entities were as follows:

(Dollars in thousands) May 31, 2021 November 30, 2020

(Dollars in thousands) August 31, 2021 November 30, 2020

Non-refundable option deposits and pre-acquisition costs $ 1,079,078 414,154

13 unchanged sentences

The following table includes additional information about the Company's leases:

(Dollars in thousands) May 31, 2021 November 30, 2020

(Dollars in thousands) August 31, 2021 November 30, 2020

Right-of-use assets $ 157,164 113,390

2 unchanged sentences

Weighted-average discount rate 2.9 % 3.1 %

Future minimum payments under the noncancellable leases in effect at May 31, 2021 were as follows:

Future minimum payments under the noncancellable leases in effect at August 31, 2021 were as follows:

(In thousands) Lease Payments

2021 $ 17,932

2026 and thereafter 74,108

4 unchanged sentences

This also does not include minimum lease payments for executed and legally enforceable leases that have not yet commenced.

As of May 31, 2021, the minimum lease payments for these leases that have not yet commenced were immaterial.

As of August 31, 2021, the minimum lease payments for these leases that have not yet commenced were immaterial.

(2) The Company's leases do not include a readily determinable implicit rate.

As such, the Company has estimated the discount rate for these leases to determine the present value of lease payments at the lease commencement date or as of December 1, 2019, which was the effective date of ASU 2016-02.

As of May 31, 2021, the weighted average remaining lease term and weighted average discount rate used in calculating the lease liabilities were 8.4 years and 3.0 %, respectively.

As of August 31, 2021, the weighted average remaining lease term and weighted average discount rate used in calculating the lease liabilities were 8.3 years and 2.9 %, respectively.

The Company recognized the lease liabilities on its condensed consolidated balance sheets within accounts payable or other liabilities of the respective segments.

The Company's rental expense and payments on lease liabilities were as follows:

Six months ended

(In thousands) May 31, 2021 May 31, 2020

Nine months ended

(In thousands) August 31, 2021 August 31, 2020

Rental expense $ 63,232 62,554

Payment on lease liabilities 22,174 40,359

Lennar Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited) (Continued)

On occasion, the Company may sublease rented space which is no longer used for the Company's operations.

For both the six months ended May 31, 2021 and 2020, the Company had an immaterial amount of sublease income.

For both the nine months ended August 31, 2021 and 2020, the Company had an immaterial amount of sublease income.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements