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Item 8. Financial Statements and Supplementary Data

2024-01-26 compared with 2023-01-26 · 350 added, 321 removed, 1120 unchanged (37% of the section changed)

19 unchanged sentences

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Lennar Homebuilding and Lennar Multifamily Investments in Unconsolidated Entities - Consolidation of Variable Interest Entities - Refer to Note 1, Summary of Significant Accounting Policies (Variable Interest Entities) , and Note 8, Variable Interest Entities , to the financial statements

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Critical Audit Matter Description

Certain of the Company’s investments in unconsolidated entities within their Homebuilding and Multifamily segments have complex structures and agreements which need to be evaluated for consolidation, including determining whether the joint venture is a variable interest entity (“VIE”), and if so, whether the Company is the primary beneficiary.

Generally Accepted Accounting Principles (“GAAP’’) requires the assessment of whether an entity is a Variable interest entity (“VIE”) and, if so, if the Company is the primary beneficiary at the inception of the entity or at a reconsideration event.

Additionally, GAAP requires the consolidation of VIEs in which an enterprise has a controlling financial interest.

A controlling financial interest will have both of the following characteristics:

(a) the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance and (b) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.

Certain of the Company’s investments in unconsolidated entities within their Homebuilding and Multifamily segments need to be evaluated for consolidation, including determining whether the joint venture is a VIE, and if so, whether the Company is the primary beneficiary.

This assessment is performed at the formation of the joint venture and upon the occurrence of reconsideration events.

This determination requires significant judgment by management.

As of November 30, 2022, the carrying value of the Company’s consolidated VIE’s assets and non-recourse liabilities was $880.2 million and $107.3 million, respectively.

Additionally, as of November 30, 2022, the carrying value of the Company’s investments in VIEs that are unconsolidated was $1.2 billion.

We identified the consolidation and primary beneficiary assessment upon formation and the occurrence of reconsideration events of some of the Company’s VIEs as a critical audit matter given the significant judgment required by management.

We identified the consolidation and primary beneficiary assessment upon formation and the occurrence of reconsideration events of certain of the Company’s VIE’s as a critical audit matter given the significant judgment required by management.

This required a high degree of auditor judgment and an increased extent of audit effort due to the complexity of the entity structures and agreements.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the accounting determination for all joint ventures included the following, among others:

Our audit procedures related to the accounting determination for the above mentioned joint ventures included the following, among others:

• We tested the design and operating effectiveness of the investment consolidation controls over the initial accounting assessment of joint ventures and the continuous reassessment for reconsideration events, as required by the accounting framework.

1 unchanged sentence

◦ Reading the joint venture agreements and other related documents and evaluating the structure and terms of the agreement as well as any reconsideration events which took place during the year to determine if the joint venture should be classified as a VIE.

◦ If an entity is determined to be a VIE, considering whether the Company appropriately determined the primary beneficiary by evaluating the contractual arrangements of the entity to determine if the Company has the power to direct activities, and if the Company has the obligation to absorb losses of the entity or the right to receive benefits from the entity that could be significant to the VIE.

◦ For those entities where the Company has determined it is the primary beneficiary, evaluating whether or not the Company consolidated the balances at the appropriate amounts.

◦ For all JVs, evaluated whether any reconsideration events during the year took place that would cause deconsolidation, and if so, verified that deconsolidation occurred properly.

◦ If an entity is determined to be a VIE, considering whether the Company appropriately determined the primary beneficiary by evaluating the contractual arrangements of the entity to determine if the Company has the power to direct activities that most significantly impact the VIE’s economic performance, and if the Company has the obligation to absorb losses of the entity or the right to receive benefits from the entity that could be significant to the VIE.

◦ For consolidated joint ventures, evaluated whether any reconsideration events occurred during the year that would result in deconsolidation, and if so, verified that deconsolidation occurred properly.

◦ Evaluating the evidence obtained in other areas of the audit to determine if there were additional reconsideration events that had not been identified by the Company, including, among others, reading joint venture board minutes and agreeing the terms of certain joint venture agreements and side agreements, if any.

13 unchanged sentences

Land and land under development 4,904,541 5,648,548

Inventory owned 15,360,207 17,367,055

Consolidated inventory not owned 2,992,528 2,331,231

Total inventories 21,432,011 18,715,304

Inventory owned and consolidated inventory not owned 18,352,735 19,698,286

Deposits and pre-acquisition costs on real estate 2,002,154 1,733,725

Investments in unconsolidated entities 1,143,909 1,173,164

7 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 consolidated balance sheets the assets of consolidated variable interest entities ("VIEs") that are owned by the consolidated VIEs and liabilities of consolidated VIEs as to which there is no recourse against the Company.

As of November 30, 2022, total assets include $ 1.4 billion related to consolidated VIEs of which $ 56.9 million is included in Homebuilding cash and cash equivalents, $ 0.3 million in Homebuilding receivables, net, $ 29.4 million in Homebuilding finished homes and construction in progress, $ 736.5 million in Homebuilding land and land under development, $ 533.8 million in Homebuilding consolidated inventory not owned, $ 1.0 million in Homebuilding investments in unconsolidated entities, $ 23.0 million in Homebuilding other assets, $ 33.2 million in Multifamily assets and $ 9.0 million in Lennar Other assets .

As of November 30, 2021, total assets include $ 1.1 billion related to consolidated VIEs of which $ 60.9 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, $ 697.1 million in Homebuilding land and land under development, $ 239.2 million in Homebuilding consolidated inventory not owned, $ 1.1 million in Homebuilding investments in unconsolidated entities, $ 17.4 million in Homebuilding other assets and $ 80.6 million in Multifamily assets.

As of November 30, 2023, total assets include $ 1.9 billion related to consolidated VIEs of which $ 22.8 million is included in Homebuilding cash and cash equivalents, $ 1.8 million in Homebuilding receivables, net, $ 18.3 million in Homebuilding finished homes and construction in progress, $ 628.0 million in Homebuilding land and land under development, $ 55.0 million in Homebuilding deposits and pre-acquisition costs on real estate, $ 1.2 billion in Homebuilding consolidated inventory not owned, $ 0.3 million in Homebuilding investments in unconsolidated entities, $ 23.0 million in Homebuilding other assets and $ 32.6 million in Multifamily assets .

As of November 30, 2022, total assets include $ 1.4 billion related to consolidated VIEs of which $ 56.9 million is included in Homebuilding cash and cash equivalents, $ 0.3 million in Homebuilding receivables, net, $ 29.4 million in Homebuilding finished homes and construction in progress, $ 687.8 million in Homebuilding land and land under development, $ 48.7 million in Homebuilding deposits and pre-acquisition costs on real estate, $ 533.8 million in Homebuilding consolidated inventory not owned, $ 1.0 million in Homebuilding investments in unconsolidated entities, $ 23.0 million in Homebuilding other assets, $ 33.2 million in Multifamily assets and $9.0 million in Lennar Other assets.

See accompanying notes to consolidated financial statements.

22 unchanged sentences

Class B common stock of $ 0.10 par value per share;

2022 and 2021 - 90,000,000 shares, Issued:

2023 and 2022 - 90,000,000 shares;

2023 - 36,601,215 shares;

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( 1,393,100 ) ( 210,389 )

Accumulated other comprehensive income (loss) 2,408 ( 1,341 )

Accumulated other comprehensive income 4,879 2,408

Total stockholders’ equity 26,580,664 24,100,500

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Total liabilities and equity $ 39,234,303 37,984,295

(2) As of November 30, 2023, total liabilities include $ 1.2 billion related to consolidated VIEs as to which there was no recourse against the Company, of which $ 53.7 million is included in Homebuilding accounts payable, $ 1.1 billion in Homebuilding liabilities related to consolidated inventory not owned, $ 38.1 million in Homebuilding other liabilities and $ 4.1 million in Multifamily liabilities.

As of November 30, 2022, total liabilities include $ 620.4 million related to consolidated VIEs as to which there was no recourse against the Company, of which $ 66.9 million is included in Homebuilding accounts payable, $ 510.9 million in Homebuilding liabilities related to consolidated inventory not owned, $ 29.4 million in Homebuilding senior notes and other debts payable, $ 7.2 million in Homebuilding other liabilities, $ 3.8 million in Multifamily liabilities and $2.2 million in Lennar Other liabilities.

As of November 30, 2021, total liabilities include $ 258.5 million related to consolidated VIEs as to which there was no recourse against the Company, of which $ 26.6 million is included in Homebuilding accounts payable, $ 196.6 million in Homebuilding liabilities related to consolidated inventory not owned, $ 20.1 million in Homebuilding senior notes and other debts payable, $ 12.3 million in Homebuilding other liabilities and $ 2.8 million in Multifamily liabilities.

See accompanying notes to consolidated financial statements.

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Total costs and expenses 28,866,807 26,949,763 22,052,243

Homebuilding equity in loss from unconsolidated entities ( 17,235 ) ( 14,205 ) ( 836 )

Homebuilding other income (expense), net 4,516 3,266 ( 29,749 )

Financial Services gain on deconsolidation — — 61,418

Multifamily equity in earnings from unconsolidated entities and other gain 52,821 9,031 21,934

Lennar Other equity in earnings (loss) from unconsolidated entities, other income (expense), net, and other gain (loss) ( 91,689 ) 231,731 ( 44,669 )

Lennar Other unrealized gain (loss) from technology investments ( 655,094 ) 510,802 —

Equity in earnings (losses) from unconsolidated entities ( 144,610 ) ( 36,301 ) 48,993

Other income (expense), net and other gains (losses) 30,517 ( 15,286 ) 180,830

Lennar Other unrealized gains (losses) from technology investments ( 50,162 ) ( 655,094 ) 510,802

Earnings before income taxes 5,202,304 6,014,566 5,819,058

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( 378,080 ) ( 383,047 ) ( 272,162 )

Cash dividends - Class B common stock ($ 1.50 per share for 2022 and $ 1.00 per share for 2021 and $ 0.625 per share for 2020)

Cash dividends - Class B common stock ($ 1.50 per share for 2023, $ 1.50 per share for 2022 and $ 1.00 per share for 2021)

( 52,480 ) ( 54,990 ) ( 37,614 )

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Amortization of discount/premium and accretion on debt, net ( 1,651 ) ( 2,163 ) ( 6,775 )

Equity in (earnings) loss from unconsolidated entities

36,302 ( 48,993 ) 22,127

Equity in (earnings) losses from unconsolidated entities 144,610 36,302 ( 48,993 )

Distributions of earnings from unconsolidated entities

2 unchanged sentences

Deferred income tax (benefit) expense ( 67,968 ) ( 246,653 ) 191,627

Unrealized (gain) loss on loans held-for-sale 33,287 14,449 ( 21,765 )

Lennar Other unrealized/realized (gains) losses 672,212 ( 680,576 ) —

Gain on sale of other assets, operating properties and equipment, CMBS bonds, other liabilities and real estate owned ( 7,617 ) ( 27,678 ) ( 8,626 )

Gain on deconsolidation of an entity — — ( 56,594 )

Loans held-for-sale unrealized loss 26,658 33,287 14,449

Lennar Other unrealized (gains) losses from technology investments and other (gains) losses 112,541 672,212 ( 680,576 )

Gain on sale of other assets, operating properties and equipment, CMBS bonds and other liabilities ( 7,015 ) ( 7,617 ) ( 27,678 )

Gain on sale of interest in unconsolidated entity and other Multifamily gain — — ( 1,167 )

Gain on sale of Financial Services' portfolio/businesses — — ( 3,811 )

(Gain) loss on retirement of senior notes and other debts payable — ( 2,204 ) 7,997

Valuation adjustments and write-offs of option deposits and pre-acquisition costs, other receivables and other assets 110,693 25,696 117,825

Gain on redemption/repurchases of senior notes and other debts payable ( 9,611 ) — ( 2,204 )

Valuation adjustments and write-offs of option deposits and pre-acquisition costs on real estate, other receivables and other assets 125,338 110,693 25,696

Changes in assets and liabilities:

(Increase) decrease in receivables ( 422,398 ) ( 289,776 ) 25,868

(Increase) decrease in inventories, excluding valuation adjustments and write-offs of option deposits and pre-acquisition costs ( 2,383,821 ) ( 1,960,614 ) 781,362

(Increase) decrease in other assets ( 13,330 ) ( 121,036 ) 90,534

(Increase) decrease in loans held-for-sale ( 202,920 ) ( 160,785 ) 176,617

Increase in accounts payable and other liabilities 701,113 881,309 266,488

Increase in receivables ( 329,191 ) ( 422,398 ) ( 289,776 )

(Increase) decrease in inventories, excluding valuation adjustments 2,274,083 ( 1,711,766 ) ( 1,184,121 )

Increase in deposits and pre-acquisition costs on real estate ( 295,761 ) ( 672,055 ) ( 776,493 )

Increase in other assets ( 85,005 ) ( 13,330 ) ( 121,036 )

Increase in loans held-for-sale ( 366,728 ) ( 202,920 ) ( 160,785 )

(Decrease) increase in accounts payable and other liabilities ( 625,862 ) 701,113 881,309

Net cash provided by operating activities $ 5,179,738 3,265,668 2,532,774

1 unchanged sentence

Net additions to operating properties and equipment $ ( 99,799 ) ( 57,214 ) ( 65,172 )

Proceeds from the sale of operating properties and equipment, other assets, CMBS bonds and real estate owned 24,686 41,551 33,934

Proceeds from the sale of other assets 13,215 24,686 41,551

Proceeds from sale of investment in consolidated/unconsolidated joint ventures — — 32,340

4 unchanged sentences

Proceeds from sale of commercial mortgage-backed securities bonds — 9,191 11,307

Decrease (increase) in Financial Services loans held-for-investment, net 19,491 29,397 ( 3,122 )

Decrease in Financial Services loans held-for-investment 14,329 19,491 29,397

Purchases of investment securities ( 8,000 ) ( 93,769 ) ( 128,162 )

8 unchanged sentences

Cash flows from financing activities:

Net borrowings (repayments) under warehouse facilities $ 409,067 262,107 ( 281,835 )

Redemption of senior notes ( 575,000 ) ( 1,159,851 ) ( 1,499,999 )

Net borrowings under warehouse facilities $ 28,712 409,067 262,107

Redemption/repurchases of senior notes ( 1,121,133 ) ( 575,000 ) ( 1,159,851 )

Principal payments on notes payable and other borrowings ( 105,118 ) ( 48,079 ) ( 195,212 )

1 unchanged sentence

Proceeds from liabilities related to consolidated inventory not owned 461,312 1,167,227 694,185

Payments related to liabilities from consolidated inventory not owned ( 682,385 ) ( 350,583 ) —

Payments related to consolidated inventory not owned ( 842,781 ) ( 682,385 ) ( 350,583 )

(Payments) proceeds related to other liabilities, net ( 5,187 ) ( 21,249 ) 25,564

22 unchanged sentences

Net non-cash contributions to unconsolidated entities 367 232,616 27,880

Non-cash right of use assets due to adoption of ASU 2016-02 — — 150,702

Non-cash lease liabilities due to adoption of ASU 2016-02 — — 159,717

Consolidation/deconsolidation of unconsolidated/consolidated entities, net:

Financial Services assets $ — — ( 217,565 )

Financial Services liabilities — — 115,175

Financial Services noncontrolling interests — — 102,390

Inventories — ( 101,946 ) —

1 unchanged sentence

Investments in unconsolidated entities — 7,303 —

Notes payable — — ( 44,924 )

Other liabilities — 6,203 —

13 unchanged sentences

Homebuilding revenues and related profits from sales of homes are recognized at the time of the closing of a sale, when title to and possession of the property are transferred to the homebuyer.

In order to promote sales of the homes, the Company may offer sales incentives to homebuyers.

In order to promote sales of homes, the Company may offer sales incentives to homebuyers.

The types of incentives vary on a community-by-community basis and home-by-home basis.

19 unchanged sentences

Homebuilding restricted cash consists of customer deposits on home sales held in restricted accounts until title transfers to the homebuyer, as required by the state and local governments in which the homes were sold, as well as funds on deposit to secure and support performance obligations.

Financial Services restricted cash consists of upfront deposits and application fees LMF Commercial receives before originating loans and is recognized as income once the loan has been originated, as well as cash held in escrow by the Company’s loan service provider on behalf of customers and lenders and is disbursed in accordance with agreements between the transacting parties.

Homebuilding cash and cash equivalents as of November 30, 2022 and 2021 included $ 1.0 billion and $ 940.4 million, respectively, of cash held in escrow for approximately two days .

Financial Services restricted cash consists of upfront deposits and application fees LMF Commercial receives before originating loans and is recognized as income once the loan has been originated, as well as cash held in escrow by the Company’s loan service provider on behalf of customers and lenders which is disbursed in accordance with agreements between the transacting parties.

Homebuilding cash and cash equivalents as of November 30, 2023 and 2022 included $ 594.8 million and $ 1.0 billion, respectively, of cash held in escrow for approximately two days .

LENNAR CORPORATION AND SUBSIDIARIES

2 unchanged sentences

The Company performs ongoing credit evaluations of its customers and generally does not require collateral for accounts receivable.

Receivables from land banks represent development costs incurred by the Company which are reimbursable from the land banks.

Mortgages and notes receivable arising from the sale of homes and land are generally collateralized by the property sold to the buyer.

Allowances are maintained for potential credit losses based on historical experience, present economic conditions and other factors considered relevant by the Company.

Balances for the years ended November 30, 2022 and 2021 are noted below:

Balances as of November 30, 2023 and 2022 are noted below:

(In thousands) 2023 2022

4 unchanged sentences

Receivables, net (1) $ 887,992 673,980

(1) At November 30, 2022 and 2021, receivables, net included $ 50 million and $ 85 million, respectively, related to a short-term loan due from Upward America that was repaid subsequent to each year end.

(1) Receivables, net as of November 30, 2022 included $ 50 million related to a short-term loan due from Upward America that was repaid subsequent to November 30, 2022.

Finished homes and construction in progress are included within inventories.

Inventories are stated at cost unless the inventory within a community is determined to be impaired, in which case the impaired inventory is written down to fair value.

Inventory costs include land, land development and home construction costs, real estate taxes, deposits on land purchase contracts and interest related to development and construction.

Inventory costs include land, land development and home construction costs, real estate taxes, and interest related to development and construction.

Construction overhead and selling expenses are expensed as incurred.

17 unchanged sentences

In order to arrive at the assumed absorption pace for home sales and the assumed sales prices included in the Company’s cash flow model, the Company analyzes its historical absorption pace and historical sales prices in the community and in other comparable communities in the geographical area.

In addition, the Company considers internal and external market studies and places greater emphasis on more current metrics and trends, which generally include, but are not limited to, statistics and forecasts on population demographics and on sales prices in neighboring communities, unemployment rates and availability and sales prices of competing product in the geographical area where the community is located as well as the

LENNAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

absorption pace realized in its most recent quarters and the sales prices included in the Company's current backlog for such communities.

availability and sales prices of competing product in the geographical area where the community is located as well as the absorption pace realized in its most recent quarters and the sales prices included in the Company's current backlog for such communities.

Generally, if the Company notices a variation from historical results over a span of two fiscal quarters, the Company considers such variation to be the establishment of a trend and adjusts its historical information accordingly in order to develop assumptions on the projected absorption pace and sales prices in the cash flow model for a community.

6 unchanged sentences

For example, changes in market conditions and other specific developments or changes in assumptions may cause the Company to re-evaluate its strategy regarding previously impaired inventory, as well as inventory not currently impaired but for which indicators of impairment may arise if market deterioration occurs, and certain other assets that could result in further valuation adjustments and/or additional write-offs of option deposits and pre-acquisition costs due to abandonment of those options contracts.

The Company's v aluation adjustments for finished homes and construction in progress were included in Homebuilding costs and expenses in the Company's consolidated statements of operations and comprehensive income (loss) for the years ended November 30, 2022 and 2021.

The Company's valuation adjustments for finished homes and construction in progress were included in Homebuilding costs and expenses in the Company's consolidated statements of operations and comprehensive income (loss) for the years ended November 30, 2023 and 2022.

The table below summarizes communities reviewed for indicators of impairment and communities with valuation adjustments recorded:

8 unchanged sentences

Years Ended November 30,

Unobservable inputs Range

Unobservable inputs Range Range

Average selling price (1) $ 179,000 — $ 850,000 $ 233,000 — $ 753,000

1 unchanged sentence

Discount rate 20 % 20 %

(1) Represents the projected average selling price on future deliveries for communities in which the Company recorded impairments on during the years ended November 30, 2022 and 2021.

The Company also has access to land inventory through option contracts, which generally enables the Company to defer acquiring portions of properties owned by third parties (including land funds) and unconsolidated entities until it has determined whether to exercise its option.

(1) Represents the projected average selling price on future deliveries for communities in which the Company recorded valuation adjustments during the years ended November 30, 2023 and 2022.

In the course of executing on the Company’s land light strategy, the Company may sell land to third parties (including land banks) and unconsolidated entities while maintaining an option to repurchase the land in the future.

Although, such transactions include cash consideration from the buyer and the transfer of title from the Company to the buyer, such transactions do not meet the criteria for revenue recognition under GAAP due to the Company’s option to repurchase the land from the buyer in the future.

As such, land related to such transactions remains on the Company’s accompanying consolidated balance sheet and is reclassified from land and land under development to consolidated inventory not owned.

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.

During the year ended November 30, 2023, consolidated inventory not owned increased by $ 661.3 million with a corresponding increase to liabilities related to consolidated inventory not owned in the accompanying consolidated balance sheet as of November 30, 2023.

The increase was primarily due to reclassifications from land and land under development to consolidated inventory not owned during the year ended November 30, 2023 as the

LENNAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Company continued to focus on increasing its controlled homesites as compared to owned homesites.

The increase was partially offset by takedowns during the year ended November 30, 2023.

Deposits and pre-acquisition costs on real estate

The Company has access to land inventory through option contracts, which generally enables the Company to defer acquiring portions of properties owned by third parties (including land banks) and unconsolidated entities until it has determined whether to exercise its option.

The use of option contracts allows the Company to reduce the financial risks associated with long-term land holdings.

A majority of the Company’s option contracts require a non-refundable cash deposit or irrevocable letter of credit based on a percentage of the purchase price of the land.

As of November 30, 2022, the Company had $ 2.0 billion of nonrefundable option deposits and pre-acquisition costs related to certain of these homesites, which were included in inventories in the accompanying consolidated balance sheet.

As of November 30, 2023, the Company had $ 1.9 billion of non-refundable option deposits and pre-acquisition costs related to certain of these homesites.

The Company’s option contracts sometimes include price adjustment provisions, which adjust the purchase price of the land to its approximate fair value at the time of acquisition or are based on the fair value at the time of takedown.

LENNAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Deposits and pre-acquisition costs on real estate are stated at cost unless the deposit or pre-acquisition costs within a community is determined to be impaired, in which case the impaired cost is written down to fair value.

Costs include deposits on land purchase contracts and capitalizable due diligence and development costs incurred prior to the acquisition of land.

Some option contracts contain a predetermined take-down schedule for the optioned land parcels.

However, in substantially all instances, the Company is not required to purchase land in accordance with those take-down schedules.

In substantially all instances, the Company has the right and ability to not exercise its option and forfeit its deposit without further penalty, other than termination of the option and loss of any unapplied portion of its deposit and pre-acquisition costs and the incurrence of any applicable termination fee associated with the option contract.

However, in substantially all instances, the Company has the right and ability to not exercise its option and forfeit its deposit without further penalty, other than termination of the option and loss of any unapplied portion of its deposit and pre-acquisition costs and the incurrence of any applicable termination fee associated with the option contract.

Therefore, in substantially all instances, the Company does not consider the take-down price to be a firm contractual obligation.

1 unchanged sentence

If the Company intends to walk away from an option contract, it records a charge to earnings in the period such decision is made for the unapplied deposit amount and any related pre-acquisition costs and accrues any applicable termination fee associated with the option contract.

During the year ended November 30, 2022, the Company wrote-off $ 47.9 million of deposit and pre-acquisition costs.

During the years ended November 30, 2023 and 2022, the Company wrote-off $ 19.9 million and $ 47.9 million, respectively, of deposit and pre-acquisition costs.

To reflect the purchase price of homesite takedowns related to option contracts that the Company decided to exercise, the Company had a net reclass related to option deposits from consolidated inventory not owned to finished homes and construction in progress in the accompanying consolidated balance sheet as of November 30, 2023.

In the course of executing on the Company’s land light strategy, the Company may sell land to third parties (including land funds) and unconsolidated entities while maintaining an option to repurchase the land in the future.

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.

During the year ended November 30, 2022, consolidated inventory not owned increased by $ 1.2 billion with a corresponding increase to liabilities related to consolidated inventory not owned in the accompanying consolidated balance sheet as of November 30, 2022.

The increase was primarily due to reclassifications from land and land under development to consolidated inventory not owned during the year ended November 30, 2022 as the Company continued to focus on increasing its controlled homesites as compared to owned homesites.

The increase was partially offset by takedowns during the year ended November 30, 2022.

Investments in Unconsolidated Entities

4 unchanged sentences

This evaluation includes certain critical assumptions made by management:

(1) projected future distributions from the unconsolidated entities, (2) discount rates applied to the future distributions and (3) various other factors, which include age of the venture, relationships with the other partners and banks, general economic market conditions, land status and liquidity needs of the unconsolidated entity.

(1) projected future distributions from the unconsolidated entities, (2) discount rates applied to the future distributions, (3) the length of the time and the extent to which the market value has been less than cost and (4) various other factors, which include age of the venture, relationships with the other partners and banks, general economic market conditions, land status and liquidity needs of the unconsolidated entity.

If the decline in the fair value of the investment is other-than-temporary, then these losses are included in Homebuilding other income, net, Multifamily other gain (loss) or Lennar Other other gain (loss).

During the year ended November 30, 2023, the Company estimated the fair value of an investment in an unconsolidated entity using a cash flow analysis with a 15 % discount rate and concluded that the investment had an other-than-temporary impairment of $ 36.8 million included in Homebuilding other income (expense) , net in the Company's consolidated statements of operations and comprehensive income.

The Company tracks its share of cumulative earnings and distributions of its joint ventures ("JVs").

5 unchanged sentences

A controlling financial interest will have both of the following characteristics:

The Company’s variable interest in VIEs may be in the form of (1) equity ownership, (2) contracts to purchase assets, (3) management and development agreements between the Company and a VIE, (4) loans provided by the Company to a VIE or other partner and/or (5) guarantees provided by members to banks and other third parties.

The Company examines specific criteria and uses its judgment when determining if it is the primary beneficiary of a VIE.

Factors considered in determining whether the Company is the primary beneficiary include risk and reward sharing, experience and financial condition of other

LENNAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

partner(s), voting rights, involvement in day-to-day capital and operating decisions, representation on a VIE’s executive committee, existence of unilateral kick-out rights or voting rights, level of economic disproportionality, if any, between the Company and the other partner(s) and contracts to purchase assets from VIEs.

The determination whether an entity is a VIE and, if so, whether the Company is the primary beneficiary may require it to exercise significant judgment.

the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance and (b) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.

The Company examines specific criteria and uses its judgment when determining if it is the primary beneficiary of a VIE.

Factors considered in determining whether the Company is the primary beneficiary include risk and reward sharing, experience and financial condition of other partner(s), voting rights, involvement in day-to-day capital and operating decisions, representation on a VIE’s executive committee, existence of unilateral kick-out rights or voting rights, level of economic disproportionality, if any, between the Company and the other partner(s) and contracts to purchase assets from VIEs.

The determination of whether an entity is a VIE and, if so, whether the Company is the primary beneficiary may require management to exercise significant judgment.

Generally, all major decision making in the Company’s joint ventures is shared among all partners.

In particular, business plans and budgets are generally required to be unanimously approved by all partners.

Usually, management and other fees earned by the Company are nominal and believed to be at market and there is no significant economic disproportionality between the Company and other partners.

Generally, the Company purchases less than a majority of the JV’s assets and the purchase prices under its option contracts are believed to be at market.

Generally, Homebuilding and Multifamily unconsolidated entities become VIEs due to insufficient equity at risk for

the JV entity as the partner(s) continue to provide subordinated financial support in the form of capital contributions.

Generally, the Company purchases less than a majority of the JV’s assets and the purchase prices under its option contracts are at market.

Generally, Homebuilding and Multifamily unconsolidated entities are determined to be VIEs due to insufficient equity at risk for the JV entity as the partner(s) continue to provide subordinated financial support in the form of capital contributions.

Homebuilding and Multifamily unconsolidated entities become VIEs and consolidate if the other partner(s) lack the intent and financial wherewithal to remain in the entity.

5 unchanged sentences

The fair value estimate is derived through various valuation methods, including the use of discounted expected future cash flows of each reporting unit.

The expected future cash flows for each segment are significantly impacted by current market conditions.

If these market conditions and resulting expected future cash flows for each reporting unit decline significantly, the actual results for each segment could differ from the Company's estimate, which would cause goodwill to be impaired.

The expected future cash flows for each reporting unit are significantly impacted by current market conditions.

The annual goodwill impairment analysis was performed as of September 30, 2023, and no impairment was recorded.

19 unchanged sentences

Available-for-sale securities are recorded at fair value.

Any unrealized holding gains or losses on available-for-sale securities are reported as accumulated other comprehensive gain or loss, which is a separate component of stockholders’ equity, net of tax, until realized.

Any unrealized holding gains or losses on available-for-sale securities are reported as accumulated other comprehensive income or loss, which is a separate component of stockholders’ equity, net of tax, until realized.

Securities classified as held-to-maturity are carried at amortized cost because they are purchased with the intent and ability to hold to maturity.

5 unchanged sentences

For equity securities without a readily determinable fair value, the investment is recorded at cost, less any impairment, plus or minus adjustments related to observable transactions for the same or similar securities, with unrealized gains and losses included in earnings.

The Lennar Other segment had investments in equity securities of $ 391.0 million and $ 1.0 billion that are recorded at fair value with unrealized gains and losses included in earnings, as of November 30, 2022 and 2021, respectively.

The Lennar Other segment had investments in equity securities of $ 297.2 million and $ 391.0 million that are recorded at fair value with unrealized gains and losses included in earnings, as of November 30, 2023 and 2022, respectively.

For equity method investments in the Lennar Other segment, the Company records the investment as Lennar Other investments in unconsolidated entities.

1 unchanged sentence

If there is a decline that is other-than-temporary, the investment is written down to fair value.

There was no impairment recorded during the years ended November 30, 2022 and 2021.

There were no impairments recorded during the years ended November 30, 2023 and 2022.

Interest and Real Estate Taxes

11 unchanged sentences

Total interest expense $ 257,893 312,731 365,373

(1) Included in Homebuilding other income (expense), net.

(1) Included in Homebuilding other income, net.

The Company records income taxes under the asset and liability method, whereby deferred tax assets and liabilities are recognized based on the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and attributable to operating loss and tax credit carryforwards.

8 unchanged sentences

Based on the analysis of positive and negative evidence, the Company believed that there was enough positive evidence for the Company to conclude that it was more likely than not that the Company would realize the majority of its deferred tax assets.

As of November 30, 2022 and 2021, the Company's net deferred tax assets of $ 242.4 million and liabilities of $ 4.2 million included a valuation allowance of $ 2.9 million and $ 2.7 million, respectively.

As of November 30, 2023 and 2022, the Company's net deferred tax assets of $ 326.5 million and $ 242.4 million included a valuation allowance of $ 2.3 million and $ 2.9 million, respectively.

See Note 5 for additional information.

21 unchanged sentences

Given the high degree of judgment required in determining these estimated liability amounts, actual future costs could differ significantly from the Company's currently estimated amounts.

The Company’s self-insurance reserve, net of expected recoveries, as of November 30, 2022 and 2021 was $ 210.1 million and $ 169.1 million and was included in Homebuilding other liabilities.

The Company’s self-insurance reserve, net of expected recoveries, as of November 30, 2023 and 2022 was $ 245.8 million and $ 210.1 million, respectively, and was included in Homebuilding other liabilities.

Amounts incurred in excess of the Company's self-insurance occurrence or aggregate retention limits are covered by insurance up to the Company's purchased coverage levels.

6 unchanged sentences

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

LENNAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Preferred Stock

The Company is authorized to issue 500,000 shares of preferred stock with a par value of $ 10 per share and 100 million shares of participating preferred stock with a par value of $ 0.10 per share.

No shares of preferred stock or participating preferred stock have been issued as of November 30, 2022 and 2021.

No shares of preferred stock or participating

LENNAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

preferred stock have been issued as of November 30, 2023 and 2022.

During the years ended November 30, 2023, 2022 and 2021 the Company’s Class A and Class B common stockholders received a per share annual dividend of $ 1.50 , $ 1.50 and $ 1.00 , respectively.

The only significant difference between the Class A common stock and Class B common stock is that Class A common stock entitles holders to one vote per share and the Class B common stock entitles holders to ten votes per share.

As of November 30, 2022, Stuart Miller, the Company’s Executive Chairman, directly owned, or controlled through family-owned entities, shares of Class A and Class B common stock, which represented approximately 36 % voting power of the Company’s stock.

During the year ended November 30, 2022, treasury stock decreased due to the Company's retirement of 46.7 million and 2.8 million treasury shares of Class A and Class B common stock, respectively, as authorized by the Company's Board of Directors.

The retirement of Class A and Class B common stock in treasury resulted in a reclass between treasury shares and additional paid-in capital within stockholders' equity.

During the year ended November 30, 2022, this decrease in treasury shares was partially offset by the Company's repurchase of 9.6 million and 1.3 million shares of Class A and Class B common stock, respectively, through the Company's stock repurchase program.

In October 2021, the Company's Board of Directors authorized an increase to the Company's stock repurchase program to enable the Company to repurchase up to the lesser of an additional $ 1 billion in value, or 25 million in shares, of the Company’s outstanding Class A or Class B common stock.

As a result of prior authorizations being almost exhausted, in March 2022, the Company's Board of Directors approved an additional authorization for the Company to repurchase up to the lesser of $ 2 billion in value, or 30 million in shares, of the Company's outstanding Class A or Class B common stock.

The repurchase authority has no expiration date.

The following table provides information about the Company’s repurchases of Class A and Class B common stock:

As of November 30, 2023, Stuart Miller, the Company’s Executive Chairman and Co-Chief Executive Officer, directly owned, or controlled through family-owned entities, shares of Class A and Class B common stock, which represented approximately 36 % voting power of the Company’s stock.

In March 2022, the Company's Board of Directors approved an authorization for the Company to repurchase up to the lesser of $ 2 billion in value, or 30 million in shares, of its outstanding Class A or Class B common stock.

The repurchase authorization has no expiration date.

The authorization was in addition to what was remaining of the October 2021 stock repurchase program.

Subsequent to November 30, 2023, the Company's Board of Directors authorized an increase to its stock repurchase program to enable the Company to repurchase up to an additional $ 5 billion in value of our outstanding Class A or Class B common stock.

Repurchases are authorized to be made in open-market or private transactions.

The repurchase authorization has no expiration date.

November 30, 2023 November 30, 2022

18 unchanged sentences

A summary of the Company’s nonvested shares activity for the year ended November 30, 2023 was as follows:

LENNAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Shares Weighted Average Grant Date Fair Value

6 unchanged sentences

2,970,760 $ 92.51

LENNAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

At November 30, 2023, there was $ 112.5 million of unrecognized compensation expense related to unvested share-based awards granted under the Company’s share-based payment plan, all of which relates to nonvested shares with a weighted average remaining contractual life of 1.8 years.

2 unchanged sentences

Revenue Recognition

Title premiums on policies issued directly by the Company are recognized as revenue on the effective date of the title policies.

Premiums on title policies issued directly by the Company are recognized as revenue on the effective date of the title policies.

Escrow fees and loan origination revenues are recognized at the time the related real estate transactions are completed, usually upon the close of escrow.

19 unchanged sentences

Loans Held-for-Investment, Net

Loans for which the Company has the positive intent and ability to hold to maturity consist of mortgage loans carried at the principal amount outstanding, net of unamortized discounts and allowance for loan losses.

Loans for which the Company has the positive intent and ability to hold to maturity consist of mortgage loans carried at the principal amounts outstanding, net of unamortized discounts and allowance for credit losses.

Discounts are amortized over the estimated lives of the loans using the interest method.

The Financial Services segment also provides an allowance for credit losses.

The Financial Services segment provides an allowance for credit losses.

The provision recorded and the adequacy of the related allowance is determined by management’s continuing evaluation of the loan portfolio in light of past loan loss experience, credit worthiness and nature of underlying collateral, present economic conditions and other factors considered relevant by the Company’s management.

Anticipated changes in economic factors, which may influence the level of the

LENNAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

allowance, are considered in the evaluation by the Company’s management when the likelihood of the changes can be reasonably determined.

Anticipated changes in economic factors, which may influence the level of the allowance, are considered in the evaluation by the Company’s management when the likelihood of the changes can be reasonably determined.

While the Company’s management uses the best information available to make such evaluations, future adjustments to the allowance may be necessary as a result of future economic and other conditions that may be beyond management’s control.

1 unchanged sentence

The Financial Services segment, in the normal course of business, uses derivative financial instruments to reduce its exposure to fluctuations in mortgage-related interest rates.

The segment uses mortgage-backed securities ("MBS") forward commitments, option contracts, future contracts and investor commitments to protect the value of fixed rate-locked loan commitments and loans held-for-sale from fluctuations in mortgage-related interest rates.

The segment uses mortgage-backed securities ("MBS") forward commitments, option contracts, future contracts and investor commitments to protect the value of fixed rate-locked loan

LENNAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

commitments and loans held-for-sale from fluctuations in mortgage-related interest rates.

These derivative financial instruments are carried at fair value with the changes in fair value included in Financial Services revenues.

5 unchanged sentences

Interest income on these loans is calculated based on the interest rate of the loan and is recorded in Financial Services revenues in the accompanying consolidated statements of operations.

Substantially all of the mortgage loans originated are sold within a short period of time in a securitization on a servicing released, non-recourse basis;

Substantially all of the mortgage loans originated are sold within a short period of time in securitizations on a servicing-released, non-recourse basis;

although, the Company remains liable for certain limited industry-standard representations and warranties related to loan sales.

8 unchanged sentences

Recently Adopted Accounting Pronouncements

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes ("ASU 2019-12").

ASU 2019-12 was effective for the Company’s fiscal year beginning December 1, 2021.

The adoption of ASU 2019-12 did not have a material impact on the Company's consolidated financial statements.

In December, 2023, the FASB issued ASU 2023-09 (“ASU 2023-09”) Income Taxes (Topic 740):

Improvements to Income Tax Disclosures .

ASU 2023-09 requires public companies to annually (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income or loss by the applicable statutory income tax rate).

ASU 2023-09 will be effective for the annual reporting periods in fiscal years beginning after December 15, 2024.

The Company is currently evaluating ASU 2023-09 and does not expect it to have a material effect on the Company’s consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07, " Improvements to Reportable Segment Disclosures" ("ASU 2023-07").

ASU 2023-07 requires disclosure of significant segment expenses that are regularly provided to the chief operating decision maker ("CODM") and included within the segment measure of profit or loss, an amount and description of its composition for other segment items to reconcile to segment profit or loss, and the title and position of the entity’s CODM.

ASU 2023-07 will be applied retrospectively and is effective for annual reporting periods in fiscal years beginning after December 15, 2023, and interim reporting periods in fiscal years beginning after December 31, 2024.

The Company is currently reviewing the impact that the adoption of ASU 2023-07 may have on its Consolidated Financial Statements and disclosure.

In March 2020, the Financial Accounting Standards Board ("FASB") issued ASU 2020-04, Reference Rate Reform, which provides optional expedients and exceptions for applying U.S.

GAAP to contracts, hedging relationships, and other transactions affected by the discontinuation of the London Interbank Offered Rate (LIBOR) or by another reference rate expected to be discontinued.

The guidance was effective beginning March 12, 2020 and can be applied prospectively through December 31, 2022.

The guidance was effective beginning March 12, 2020 and can be applied prospectively through December 31, 2024, with earlier adoption permitted.

In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform - Scope, which clarified the scope and application of the original guidance.

In December 2022, the FASB issued ASU 2022-06 Reference Rate Reform - Deferral of the Sunset Date of Topic 848, which defers the sunset date from December 31, 2022 to December 31, 2024.

The adoption of ASU 2020-04 did not have a material impact on the Company's consolidated financial statements.

Reclassifications

Certain prior year amounts in the consolidated financial statements have been reclassified to conform with the 2022 presentation.

Certain amounts in the Company's consolidated statement of operations and consolidated balance sheets of prior year have been reclassified to conform to the fiscal 2023 presentation.

These reclassifications had no impact on the Company's total assets, total equity, revenues or net earnings in its consolidated financial statements.

2 unchanged sentences

Operating and Reporting Segments

Each reportable segment follows the same accounting policies described in Note 1—"Summary of Significant Accounting Policies" to the consolidated financial statements.

Each reportable segment follows the accounting policies described in Note 1 - "Summary of Significant Accounting Policies" to the consolidated financial statements.

Operational results of each segment are not necessarily indicative of the results that would have occurred had the segment been an independent, stand-alone entity during the periods presented.

19 unchanged sentences

Investments available-for-sale (4) — — — 37,953 37,953

Loans held-for-investments, net — 45,636 — — 45,636

Loans held-for-investment, net — 55,463 — — 55,463

Investments held-to-maturity — 140,676 — — 140,676

Deposits and pre-acquisition costs on real estate 2,002,154 — 32,063 — 2,034,217

Investments in unconsolidated entities 1,143,909 — 599,852 276,244 2,020,005

17 unchanged sentences

Investments available-for-sale (4) — — — 35,482 35,482

Loans held-for-investments, net — 44,582 — — 44,582

Loans held-for-investment, net — 45,636 — — 45,636

Investments held-to-maturity — 143,251 — — 143,251

Deposits and pre-acquisition costs on real estate 1,733,725 — 28,823 — 1,762,548

Investments in unconsolidated entities 1,173,164 — 648,126 316,523 2,137,813

10 unchanged sentences

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

Year ended November 30, 2022

(In thousands) Homebuilding Financial

Services (1) Multifamily Lennar

Other (2) Corporate and

unallocated (3) Total

Revenues $ 31,951,335 809,680 865,603 44,392 — 33,671,010

Operating earnings (loss) 6,777,317 383,302 69,493 ( 734,649 ) — 6,495,463

Corporate general and administrative expenses — — — — ( 414,498 ) ( 414,498 )

Charitable foundation contribution — — — — ( 66,399 ) ( 66,399 )

Earnings (loss) before income taxes 6,777,317 383,302 69,493 ( 734,649 ) ( 480,897 ) 6,014,566

Year ended November 30, 2021

(In thousands) Homebuilding Financial

Services Multifamily Lennar

Other (2) Corporate and

unallocated (3) Total

Revenues $ 25,545,242 898,745 665,232 21,457 — 27,130,676

Operating earnings 5,031,762 491,014 21,453 733,035 — 6,277,264

Corporate general and administrative expenses — — — — ( 398,381 ) ( 398,381 )

Charitable foundation contribution — — — — ( 59,825 ) ( 59,825 )

Earnings before income taxes 5,031,762 491,014 21,453 733,035 ( 458,206 ) 5,819,058

Year ended November 30, 2020

(In thousands) Homebuilding Financial

Services Multifamily Lennar

Other (2) Corporate and

unallocated (3) Total

Revenues $ 20,981,136 890,311 576,328 41,079 — 22,488,854

Operating earnings (loss) 2,988,907 480,952 22,681 ( 10,334 ) — 3,482,206

Corporate general and administrative expenses — — — — ( 333,446 ) ( 333,446 )

Charitable foundation contribution — — — — ( 24,972 ) ( 24,972 )

Years Ended November 30,

(In thousands) 2023 2022 2021

Homebuilding $ 32,660,987 31,951,335 25,545,242

Financial Services 976,859 809,680 898,745

Multifamily (1) 573,485 865,603 665,232

Lennar Other 22,035 44,392 21,457

$ 34,233,366 33,671,010 27,130,676

Earnings (loss) before income taxes:

Homebuilding $ 5,527,707 6,777,317 5,031,762

Financial Services (2) 509,461 383,302 491,014

Multifamily ( 50,651 ) 69,493 21,453

Lennar Other (3) ( 209,788 ) ( 734,649 ) 733,035

Corporate and Unallocated (4) ( 574,425 ) ( 480,897 ) ( 458,206 )

$ 5,202,304 6,014,566 5,819,058

(1) Revenues for Multifamily for the year ended November 30, 2022 included $ 237.5 million of land sales to unconsolidated entities.

(2) Financial Services operating earnings for the year ended November 30, 2022, included a $ 35.5 million one-time charge due to an increase in a litigation accrual related to a court judgement.

(3) Operating loss for Lennar Other for the year ended November 30, 2023 included $ 50.2 million of mark-to-market unrealized losses on the Company's publicly traded technology investments and a $ 65.0 million write-off of one of the Company's non-public technology investments.

Operating loss for Lennar Other for the year ended November 30, 2022 included $ 655.1 million of mark-to-market unrealized losses on the Company's publicly traded technology investments.

Operating earnings for Lennar Other for the year ended November 30, 2021 included $ 510.8 million of mark-to-market unrealized gains on the Company's publicly traded technology investments.

LENNAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(1) Financial Services operating earnings for the year ended November 30, 2022 included a $ 35.5 million one-time charge due to an increase in a litigation accrual related to a court judgment.

(2) Operating loss for Lennar Other for the year ended November 30, 2022 included a $ 655.1 million mark-to-market unrealized loss on the Company's publicly traded technology investments.

Operating earnings for Lennar Other for the year ended November 30, 2021 included a $ 510.8 million mark-to-market unrealized gain on the Company's publicly traded technology investments.

Operating loss for Lennar Other for the year ended November 30, 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.

(4) Corporate and unallocated expenses primarily represent costs of operations at the Company's corporate headquarters in Miami.

These operations include the Company's executive offices, information technology, treasury, corporate accounting and tax, legal, internal audit and human resources.

Also included are property expenses related to the leases of corporate offices, data processing, general corporate expenses and charitable foundation contribution to the Lennar Foundation.

Also included are property expenses related to the leases of corporate offices, data processing, general corporate expenses and charitable foundation contributions to the Lennar Foundation.

Homebuilding Segments

8 unchanged sentences

Arizona, California, Colorado, Idaho, Nevada, Oregon, Utah and Washington

Urban divisions and other homebuilding related investments primarily in California, including Five Point Holdings, LLC ("FivePoint")

Urban divisions and other homebuilding related investments primarily in California, including FivePoint Holdings, LLC ("FivePoint")

The assets related to the Company's Homebuilding segments were as follows:

(In thousands) East Central Texas West Other Corporate and

Unallocated Total

Balance at November 30, 2022 $ 6,877,581 4,010,610 3,742,663 12,182,709 1,382,864 4,487,735 32,684,162

Balance at November 30, 2021 5,854,057 3,782,847 2,801,192 11,171,741 1,443,163 2,414,819 27,467,819

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

Year ended November 30, 2022

(In thousands) East Central Texas West Other Total

Revenues $ 9,266,013 5,846,023 4,227,771 12,571,386 40,142 31,951,335

Operating earnings (loss) 2,240,256 889,231 929,237 2,773,597 ( 55,004 ) 6,777,317

Interest expense 78,345 54,547 29,442 140,017 10,380 312,731

Depreciation and amortization 24,888 15,219 9,354 54,055 774 104,290

Net additions to operating properties and equipment 2,651 363 136 1,414 6,537 11,101

Year ended November 30, 2021

(In thousands) East Central Texas West Other Total

Revenues $ 6,870,944 4,826,535 3,241,321 10,563,756 42,686 25,545,242

Operating earnings (loss) 1,455,432 720,419 730,465 2,192,446 ( 67,000 ) 5,031,762

Interest expense 90,314 58,899 28,764 176,633 10,763 365,373

Depreciation and amortization 24,531 16,118 9,821 49,691 1,238 101,399

Net additions to (disposals of) operating properties

and equipment 219 239 ( 9 ) 26,375 14,950 41,774

(In thousands) 2023 2022

East $ 7,206,500 6,877,581

Central 3,868,564 4,010,610

Texas 3,337,280 3,742,663

West 11,298,812 12,182,709

Other 1,511,541 1,382,864

Corporate and Unallocated 6,405,695 4,487,735

Total Homebuilding $ 33,628,392 32,684,162

LENNAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Year ended November 30, 2020

(In thousands) East Central Texas West Other Total Homebuilding

Revenues $ 5,715,028 4,093,693 2,709,681 8,437,167 25,567 20,981,136

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

Years Ended November 30,

(In thousands) 2023 2022 2021

East $ 9,651,710 9,266,013 6,870,944

Central 6,177,004 5,846,023 4,826,535

Texas 4,707,285 4,227,771 3,241,321

West 12,086,172 12,571,386 10,563,756

Other 38,816 40,142 42,686

$ 32,660,987 31,951,335 25,545,242

Operating earnings (loss):

East $ 2,147,330 2,240,256 1,455,432

Central 949,542 889,231 720,419

Texas 788,548 929,237 730,465

West 1,712,966 2,773,597 2,192,446

Other ( 70,679 ) ( 55,004 ) ( 67,000 )

$ 5,527,707 6,777,317 5,031,762

Interest expense:

East $ 60,343 78,345 90,314

Central 41,429 54,547 58,899

Texas 29,754 29,442 28,764

West 115,600 140,017 176,633

Other 10,467 10,380 10,763

$ 257,593 312,731 365,373

Depreciation and amortization:

Net additions to (disposals of) operating properties and equipment 955 ( 11,370 ) 712 165,869 ( 32 ) 156,134

East $ 36,723 24,888 24,531

Central 23,643 15,219 16,118

Texas 10,227 9,354 9,821

West 62,374 54,055 49,691

Other 286 774 1,238

$ 133,253 104,290 101,399

Net addition to (disposal of) operating properties and equipment:

East $ 1,024 2,651 219

Central 1,144 363 239

Texas 679 136 ( 9 )

West 1,176 1,414 26,375

Other 45,754 6,537 14,950

$ 49,777 11,101 41,774

Financial Services

Operations of the Financial Services segment include primarily mortgage financing, title and closing services primarily for buyers of the Company’s homes.

It also includes originating and selling into securitizations commercial mortgage loans through its LMF Commercial business.

Operations of the Financial Services segment include mortgage financing, title and closing services primarily for buyers of the Company’s homes.

They also include originating and selling into securitizations commercial mortgage loans through its LMF Commercial business.

The Financial Services segment sells substantially all of the loans it originates within a short period of time in the secondary mortgage market, the majority of which are sold on a servicing-released, non-recourse basis.

2 unchanged sentences

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

At November 30, 2022, the Financial Services warehouse facilities were 364 -day repurchase facilities and were used to fund residential mortgages or commercial mortgages for LMF Commercial as follows:

(In thousands) Maximum Aggregate Commitment

LENNAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

At November 30, 2023, the Financial Services segment had warehouse facilities which were all 364 -day repurchase facilities and were used to fund residential mortgages or commercial mortgages for LMF Commercial as follows:

Maximum Aggregate Commitment

(In thousands) Committed Amount Uncommitted Amount Total

Residential facilities maturing:

December 2023 (1) $ 500,000 — 500,000

April 2024 250,000 250,000 500,000

May 2024 (2) 1,500,000 — 1,500,000

August 2023 1,000,000

June 2024 100,000 400,000 500,000

September 2024 100,000 100,000 200,000

Total residential facilities $ 2,450,000 750,000 3,200,000

LMF commercial facilities maturing:

December 2022 (1) $ 400,000

July 2023 50,000

November 2023 (1) 100,000 — 100,000

December 2023 (3) 400,000 — 400,000

Total LMF commercial facilities $ 500,000 — 500,000

Total $ 3,700,000

(1) Subsequent to November 30, 2022, the maturity date was extended to December 2023.

The Financial Services segment uses the residential facilities to finance its residential lending activities until the mortgage loans are sold to investors and the proceeds are collected.

(1) Subsequent to November 30, 2023, the maturity date of December 2023 was extended to March 2024 and the maturity date of November 2023 was extended to January 2024.

(2) In December 2023, the maximum aggregate commitment was reduced to $ 600 million until maturity in May 2024.

(3) Consists of two commercial facilities each with maximum aggregate commitment amounts of $ 200 million.

Subsequent to November 30, 2023, one of the facility's maturity date was extended to December 2024.

The Financial Services segment uses the residential mortgage loan warehouse facilities to finance its residential lending activities until the mortgage loans are sold to investors and the proceeds are collected.

The facilities are non-recourse to the Company and are expected to be renewed or replaced with other facilities when they mature.

The LMF Commercial facilities finance LMF Commercial loan originations and securitization activities and were secured by up to an 80 % interest in the originated commercial loans financed.

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

The LMF Commercial facilities finance LMF Commercial loan originations and securitization activities and were secured by up to 80 % interests in the originated commercial loans financed.

Borrowings and collateral under the facilities were as follows:

(In thousands) 2023 2022

Borrowings under the residential facilities $ 1,877,411 1,482,258

Collateral under the residential facilities 1,950,155 1,539,641

Borrowings under the LMF Commercial facilities 124,399 96,294

Borrowings under residential facilities $ 2,020,187 1,877,411

Collateral under residential facilities 2,097,020 1,950,155

Borrowings under LMF Commercial facilities 12,525 124,399

If the facilities are not renewed or replaced, the borrowings under the lines of credit will be repaid by selling the mortgage loans held-for-sale to investors and by collecting receivables on loans sold but not yet paid for.

1 unchanged sentence

Substantially all of the residential loans the Financial Services segment originates are sold within a short period in the secondary mortgage market on a servicing-released, non-recourse basis.

After the loans are sold, the Company retains potential liability for possible claims by purchasers that it breached certain limited industry-standard representations and warranties in the

LENNAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

loan sale agreements.

After the loans are sold, the Company retains potential liability for possible claims by purchasers that it breached certain limited industry-standard representations and warranties in the loan sale agreements.

Purchasers sometimes try to defray losses by purporting to have found inaccuracies related to sellers’ representations and warranties in particular loan sale agreements.

7 unchanged sentences

As of November 30, 2023 and 2022, loan origination liabilities were $ 17.6 million and $ 11.8 million, respectively, and included in Financial Services’ liabilities in the Company's consolidated balance sheets.

LENNAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

LMF Commercial - loans held-for-sale

LMF Commercial originated commercial loans as follows:

Years Ended November 30,

(Dollars in thousands) 2023 2022

2 unchanged sentences

Securitizations 10 6

(1) During both years ended November 30, 2022 and 2021 all the commercial loans originated were recorded as loans held-for-sale, which are held at fair value.

(1) During both years ended November 30, 2023 and 2022, the commercial loans originated were recorded as loans held-for-sale, which are held at fair value.

Investments held-to-maturity

4 unchanged sentences

Details related to Financial Services' CMBS were as follows:

(Dollars in thousands) November 30, 2022 November 30, 2021

(Dollars in thousands) 2023 2022

Carrying value $ 140,676 143,251

8 unchanged sentences

The Multifamily segment focuses on developing a geographically diversified portfolio of institutional quality multifamily rental properties in select U.S.

LENNAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The Multifamily Segment (i) manages, and owns interests in, funds that are engaged in the development of multifamily residential communities with the intention of holding the newly constructed and occupied properties as income and fee generating assets, and (ii) manages, and owns interests in, joint ventures that are engaged in the development of multifamily residential communities, in most instances with the intention of selling them when they are built and substantially occupied.

Our multifamily business is a vertically integrated platform with capabilities spanning development, construction, property management, asset management, and capital markets.

Revenues are generated from the sales of land, from construction activities, and management and promote fees generated from joint ventures and other gains (which includes sales of investments and buildings), less the cost of sales of land sold, expenses related to construction activities and general and administrative expenses.

The multifamily business is a vertically integrated platform with capabilities spanning development, construction, property management, asset management, and capital markets.

Revenues are generated from the sales of land, from construction activities, and management and promote fees generated from joint ventures and other gains (which includes sales of buildings), less the cost of sales of land sold, expenses related to construction activities and general and administrative expenses.

Operations of the Multifamily Segment also include equity in earnings (loss) from unconsolidated entities.

3 unchanged sentences

("Blend Labs"), Hippo Holdings, Inc.

("Hippo"), Opendoor, Inc.

("Hippo"), Opendoor Technologies, Inc.

("Opendoor"), SmartRent, Inc.

1 unchanged sentence

("Sonder") and Sunnova Energy International, Inc.

("Sunnova"), which 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.

("Sunnova"), which are held at market and will therefore change depending on the value of the Company's

LENNAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

shareholdings in those entities on the last day of each quarter.

All the investments are accounted for as investments in equity securities which are held at fair value and the changes in fair values are recognized through earnings.

The following is a detail of Lennar Other unrealized gains (losses) from the Company's technology investments:

The following is a detail of Lennar Other unrealized losses from mark-to-market adjustments on the Company's technology investments:

Years Ended November 30,

(In thousands) 2023 2022

Blend Labs (BLND) mark-to-market $ ( 25,630 ) ( 6,744 )

Hippo (HIPO) mark-to-market ( 222,447 ) 207,634

Opendoor (OPEN) mark-to-market ( 265,276 ) 239,312

SmartRent (SMRT) mark-to-market ( 78,177 ) 79,483

Sonder (SOND) mark-to-market ( 2,339 ) —

Sunnova (NOVA) mark-to-market ( 61,225 ) ( 8,883 )

Lennar Other unrealized gains (losses) from technology investments $ ( 655,094 ) 510,802

Blend Labs (BLND) $ ( 130 ) ( 25,630 )

Hippo (HIPO) ( 19,210 ) ( 222,447 )

Opendoor (OPEN) 21,762 ( 265,276 )

SmartRent (SMRT) 5,914 ( 78,177 )

Sonder (SOND) ( 700 ) ( 2,339 )

Sunnova (NOVA) ( 57,798 ) ( 61,225 )

Lennar Other unrealized losses from technology investments $ ( 50,162 ) ( 655,094 )

Doma Holdings, Inc.

("Doma"), which went public during the year ended November 30, 2021, 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 November 30, 2022, the Company owned approximately 25 % of Doma.

("Doma"), which went public during the year ended November 30, 2021, is an investment that was accounted for under the equity method due to the Company's significant ownership interest of 25 % of Doma which allowed the Company to exercise significant influence.

As of November 30, 2023, the Company's carrying value in Doma was zero as a result of allocated losses from Doma.

During the year ended November 30, 2023, the Company wrote off $ 65.0 million relating to one of the Company's non-public technology cost method investments which was recorded in Other income (expense), net and other gains (losses) in the Company’s consolidated statements of operations and comprehensive income (loss).

Investments in Unconsolidated Entities

4 unchanged sentences

Underlying equity in unconsolidated entities' net assets (1) 1,436,239 1,504,315

(1) The basis difference was primarily as a result of the Company contributing its investment in three strategic joint ventures with a higher fair value than book value for an investment in the FivePoint entity.

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

4 unchanged sentences

In many instances, the Company is appointed as the day-to-day manager under the direction of a management committee that has shared powers among the partners of the unconsolidated entities and the Company receives management fees and/or reimbursement of expenses for performing this function.

The Company and/or its partners sometimes

LENNAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

obtain options or enter into other arrangements under which the Company can purchase portions of the land held by the unconsolidated entities.

The Company and/or its partners sometimes obtain options or enter into other arrangements under which the Company can purchase portions of the land held by the unconsolidated entities.

Option prices are generally negotiated prices that approximate fair value when the Company receives the options.

7 unchanged sentences

This in effect defers recognition of the Company’s share of the unconsolidated entities’ earnings related to these sales until the Company delivers a home and title passes to a third-party homebuyer.

The total debt of the Homebuilding unconsolidated entities in which the Company has investments was $ 1.4 billion and $ 1.2 billion as of November 30, 2022 and 2021, respectively, of which the Company's maximum recourse exposure was $ 9.1 million and $ 5.3 million as of November 30, 2022 and 2021, respectively.

The total debt of the Homebuilding unconsolidated entities in which the Company has investments was $ 1.4 billion as of both November 30, 2023 and 2022, of which the Company's maximum recourse exposure was $ 42.1 million and $ 9.1 million as of November 30, 2023 and 2022, respectively.

In most instances in which the Company has guaranteed debt of an unconsolidated entity, the Company’s partners have also guaranteed that debt and are required to contribute their share of the guarantee payments.

In a repayment guarantee, the Company and its venture partners guarantee repayment of a portion or all of the debt in the event of default before the lender would have to exercise its rights against the collateral.

The maintenance guarantees only apply if the value of the collateral (generally land and improvements) is less than a specified percentage of the loan balance.

The maintenance

LENNAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

guarantees only apply if the value of the collateral (generally land and improvements) is less than a specified percentage of the loan balance.

The Company would be required to make a payment under a maintenance guarantee to bring the value of the collateral above the specified percentage of the loan balance.

6 unchanged sentences

In certain instances, the Company has placed performance letters of credit and surety bonds with municipalities with regard to obligations of its joint ventures (see Note 4 of the Notes to Consolidated Financial Statements).

In 2021, the Company formed the Upward America Venture (“Upward America”), and is managing and participating in Upward America.

Upward America is an investment fund that acquires new single-family homes in high growth markets across the United States and rents them to the people who will live in them.

Upward America has raised equity commitments totaling $ 1.6 billion, including $ 350 million of equity commitments raised during the first quarter of 2022.

Upward America has raised equity commitments totaling $ 1.6 billion.

The commitments are primarily from institutional investors, including $ 125 million committed by Lennar.

During the year ended November 30, 2023, Lennar delivered 558 homes to Upward America.

As of November 30, 2022 and November 30, 2021, the carrying amount of the Company's investment in Upward America was $ 37.7 million and $ 13.3 million, respectively.

As of November 30, 2023 and 2022, the carrying amount of the Company's investment in Upward America was $ 14.8 million and $ 37.7 million, respectively.

Multifamily Unconsolidated Entities

The unconsolidated joint ventures in which the Multifamily segment has investments usually finance their activities with a combination of partner equity and debt financing.

In connection with many of the bank loans to Multifamily unconsolidated joint ventures, the Company (or entities related to them) has been required to give guarantees of completion and cost over-runs to the lenders and partners.

In connection with many of the bank loans to Multifamily unconsolidated joint ventures, the Company (or entities related to them) have been required to give guarantees of completion and cost over-runs to the lenders and partners.

Those completion guarantees may require that the guarantors complete the construction of the improvements for which the financing was obtained.

2 unchanged sentences

As of both November 30, 2023 and 2022, the fair value of the completion guarantees was immaterial.

As of November 30, 2022 and 2021, Multifamily segment's unconsolidated entities had non-recourse debt with completion guarantees of $ 1.0 billion and $ 855.2 million, respectively.

As of November 30, 2023 and 2022, Multifamily segment's unconsolidated entities had non-recourse debt with completion guarantees of $ 1.4 billion and $ 1.0 billion, 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.

The Multifamily segment also provides general contractor services for construction of some of the rental properties owned by unconsolidated entities in which the

LENNAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Company has investments.

Each Multifamily real estate investment trust has unilateral decision making rights related to development activities through its board of directors.

The Multifamily segment also provides general contractor services for construction of some of the rental properties owned by unconsolidated entities in which the Company has investments.

In some situations, the Multifamily segment sells land to various joint ventures and funds.

5 unchanged sentences

Land sales to joint ventures — 237,477 15,105

Management fee income 63,823 56,573 56,253

Management fee income, net of deferrals 67,901 63,823 56,573

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

During the first quarter of 2022, the Multifamily segment completed the initial closing of the Fund.

The Multifamily segment expects the Fund to have almost $ 1.0 billion in equity and Lennar's stated ownership percentage in the Fund is 4 %.

The Company has a $ 26.0 million investment in the Fund as of November 30, 2022 .

The Multifamily segment completed the initial closing of the Fund.

The Multifamily segment expects the Fund to have almost $ 1.0 billion in equity and Lennar's ownership percentage in the Fund is 4 %.

As of November 30, 2023, the Company has a $ 21.9 million investment in the Fund.

Additional dollars will be committed as opportunities are identified by the Fund.

LENNAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Details of LMV I and LMV II as of and during the year ended November 30, 2023 are included below:

6 unchanged sentences

Lennar's remaining commitments (1) 3,635 12,830

Distributions to Lennar 25,576 12,555

Distributions to Lennar during the year ended November 30, 2023 — —

(1) While there are remaining commitments with LMV I, there are no plans for additional capital calls.

Lennar Other Unconsolidated Entities

1 unchanged sentence

The Company's investment in the Rialto funds and investment vehicles totaled $ 148.7 million and $ 185.1 million as of November 30, 2023 and November 30, 2022, respectively.

In addition, the Company is entitled to a portion of the carried interest distributions by those funds.

The Company also had strategic technology investments in unconsolidated entities and investment funds of $ 127.5 million and $ 131.5 million, as of November 30, 2023 and November 30, 2022, respectively.

LENNAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Condensed Financial Information of Unconsolidated Entities

Summarized condensed financial information on a combined 100% basis related to the Company's unconsolidated entities that are accounted for under the equity method was as follows:

Summarized condensed financial information on a combined 100% basis related to the Company's unconsolidated entities that are accounted for under the equity method, of which the Company's investments in unconsolidated entities were $ 2.0 billion and $ 2.1 billion as of November 30, 2023 and 2022, respectively.

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

(In thousands) November 30, 2023

14 unchanged sentences

$ 6,985,059 8,457,100 2,796,270 18,238,429

Investments in unconsolidated entities $ 1,173,164 648,126 316,523 2,137,813

LENNAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(In thousands) November 30, 2022

14 unchanged sentences

$ 7,192,404 7,667,567 3,584,981 18,444,952

Investments in unconsolidated entities $ 972,084 654,029 346,270 1,972,383

(1) Debt noted above is net of debt issuance costs.

7 unchanged sentences

(1) Other income (expense), net included realized and unrealized gains (losses) on investments.

LENNAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Homebuilding Senior Notes and Other Debts Payable

(Dollars in thousands) 2023 2022

4.875 % senior notes due December 2023

$ 399,169 398,345

4.500 % senior notes due 2024 (1)

8 unchanged sentences

797,347 896,259

4.75 % senior notes due 2027

896,259 895,510

4.875 % senior notes due December 2023

5.875 % senior notes due 2024

1 unchanged sentence

$ 2,816,482 4,047,294

(1) During the year ended November 30, 2023, the Company repurchased $ 196.1 million and $ 100.0 million aggregate principal amount of 4.500 % senior notes due April 2024 and 4.75 % senior notes due November 2027, respectively, through open market repurchases.

The carrying amounts of the senior notes in the table above are net of debt issuance costs of $ 4.2 million and $ 7.6 million, as of November 30, 2023 and 2022, respectively.

In August 2022, the Company redeemed early $ 575 million aggregate principal amount of its 4.750 % senior notes due November 2022.

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

In May 2022, the Company amended the credit agreement governing its unsecured revolving credit facility (the “Credit Facility") which increased the commitment from $ 2.5 billion to $ 2.6 billion and extended the maturity to May 2027, except for $ 350 million which matures in April 2024.The Credit Facility has a $ 425 million accordion feature, subject to additional commitments, thus the maximum borrowings are $ 3.0 billion.

In November 2023, the Company redeemed $ 378 million aggregate principal amount of its 4.875 % senior notes due December 2023 at an early redemption price of 100% of the principal amount outstanding.

In addition, during the year ended November 30, 2023, the Company repurchased $ 21.8 million aggregate principal amount of these senior notes through open market repurchases .

In August 2023, the Company redeemed $ 425 million aggregate principal amount of its 5.875 % senior notes due November 2024 at an early redemption price of 100 % of the principal amount outstanding using cash on hand, resulting in a pre-tax gain of $ 6.0 million, included in Homebuilding other income (expense), net.

LENNAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The maximum available borrowings on the Company's unsecured revolving credit facility (the "Credit Facility") were as follows:

(In thousands) November 30, 2023

Commitments - maturing in April 2024 $ 350,000

Commitments - maturing in May 2027 2,225,000

Total commitments $ 2,575,000

Accordion feature 425,000

Total maximum borrowings capacity $ 3,000,000

The proceeds available under the Credit Facility, which are subject to specified conditions for borrowing, may be used for working capital and general corporate purposes.

16 unchanged sentences

Anticipated future costs primarily for site improvements related to performance surety bonds 2,499,680 2,273,694

LENNAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The terms of each of the Company's senior notes outstanding at November 30, 2023 were as follows:

1 unchanged sentence

(Dollars in thousands)

4.875 % senior notes due December 2023

$ 400,000 393,622 99.169 % November 2015

4.500 % senior notes due 2024

1 unchanged sentence

4.750 % senior notes due 2025

425,000 (3) (3) (3)

4.750 % senior notes due 2025

500,000 495,528 100 % April 2015

8 unchanged sentences

(2) The Company generally has historically used the net proceeds for working capital and general corporate purposes, which can include the repayment or repurchase of other outstanding senior notes.

(3) These notes were obligations of CalAtlantic when it was acquired, and were subsequently exchanged in part for notes of the Company.

As part of purchase accounting, the senior notes have been recorded at their fair value as of the date of acquisition (February 12, 2018).

(3) These notes represent obligations of CalAtlantic when it was acquired that were subsequently exchanged in part for the notes of the Company.

As part of the purchase accounting, the senior notes have been recorded at their fair value as of the date of acquisition (February 12, 2018).

All of the senior notes are guaranteed by certain of the Company's 100% owned subsidiaries, which are primarily the Company's homebuilding subsidiaries.

Although the guarantees are full, unconditional and joint and several while they are in effect, (i) a subsidiary will have its guarantee suspended at any time when it is not directly or indirectly guaranteeing at least $ 75 million of debt of Lennar Corporation (the parent company) other than senior notes, and (ii) a subsidiary will be released from its guarantee and any other obligations it may have regarding the senior notes if all or substantially all its assets, or all of its capital stock, are sold or otherwise disposed of.

At November 30, 2022, the Company had mortgage notes on land and other debt due at various dates through 2036 bearing interest at rates up to 8.0 % with an average interest rate of 4.3 %.

At November 30, 2022 and 2021, the carrying amount of the mortgage notes on land and other debt was $ 413.9 million and $ 441.5 million, respectively.

During the years ended November 30, 2022 and 2021, the Company retired $ 48.1 million and $ 195.2 million, respectively, of mortgage notes on land and other debt.

LENNAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

from its guarantee and any other obligations it may have regarding the senior notes if all or substantially all its assets, or all of its capital stock, are sold or otherwise disposed of.

The terms of the Company's mortgage on land and other debt at November 30, 2023 were as follows:

As of November 30, Various Maturity Dates Through Interest Rates Up To Average Interest Rate

(Dollars in thousands) 2023 2022

Carrying value $ 311,720 413,873 2031 7.5 % 4.6 %

Retired during the year 11,835 48,079

The minimum aggregate principal maturities of Homebuilding senior notes and other debts payable during the five years subsequent to November 30, 2023 and thereafter are as follows:

2 unchanged sentences

2027 1,165,021

2027 1,265,349

Thereafter 33,355

The Company expects to pay its near-term maturities as they come due through cash generated from operations, the issuance of additional debt or equity offerings as well as borrowings under the Company's Credit Facility.

LENNAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The Company expects to pay its near-term maturities as they come due through either cash generated from operations, the issuance of additional debt or equity offerings or borrowings under the Company's Credit Facility.

The provision for income taxes consisted of the following:

21 unchanged sentences

home tax credit through 2032.

(2) During fiscal year 2020, Congress extended the new energy efficient home tax credit for homes delivered from 2018 to 2021, with retroactive effect for 2018 and 2019.

(2) Includes a $ 50.2 million benefit related to the resolution of an uncertain tax position during fiscal year 2022.

11 unchanged sentences

Employee stock incentive plan 40,270 37,573

Unrealized losses on investments in equity securities 53,684 29,903

Other assets 51,785 52,770

5 unchanged sentences

Deferred income 168,316 253,659

Unrealized gains on investments in equity securities — 164,534

Other liabilities 55,734 46,270

Total deferred tax liabilities 375,962 477,655

Net deferred tax assets (liabilities) $ 242,408 ( 4,245 )

Net deferred tax assets $ 326,478 242,408

The detail of the Company's net deferred tax assets (liabilities) was as follows:

Years Ended November 30,

(In thousands) 2023 2022

Net deferred tax assets (liabilities):

Net deferred tax assets:

Homebuilding $ 163,917 154,143

2 unchanged sentences

Lennar Other 70,954 46,214

Net deferred tax assets (liabilities) $ 242,408 ( 4,245 )

(1) Net deferred tax assets and net deferred tax liabilities detailed above are included within other assets and other liabilities in the respective segments.

Net deferred tax assets $ 326,478 242,408

A reduction of the carrying amounts of deferred tax assets by a valuation allowance is required if, based on the available evidence, it is more likely than not that such assets will not be realized.

1 unchanged sentence

This assessment considers, among other matters, the nature, frequency and severity of current and cumulative losses, actual earnings, forecasts of future profitability, the duration of statutory carryforward periods, the Company’s experience with loss carryforwards not expiring unused and tax planning alternatives.

As of November 30,

(In thousands) 2023 2022

5 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(2) At November 30, 2022 and 2021, the Company had federal tax effected NOL carryforwards that may be carried forward to offset future taxable income and begin to expire in 2029.

(3) At November 30, 2022 and 2021, the Company had state tax effected NOL carryforwards that may be carried forward from 10 to 20 years or indefinitely, depending on the tax jurisdiction, with certain losses expiring between 2022 and 2039.

(2) As of November 30, 2023 and 2022, the Company had federal tax effected NOL carryforwards that may be carried forward to offset future taxable income and begin to expire in 2029.

(3) As of November 30, 2023 and 2022, the Company had state tax effected NOL carryforwards that may be carried forward from 10 to 20 years or indefinitely, depending on the tax jurisdiction, with certain losses expiring between 2023 and 2041.

The following table summarizes the changes in gross unrecognized tax benefits:

2 unchanged sentences

Gross unrecognized tax benefits, beginning of year $ — 12,285 12,285

Lapse of statute of limitations — — ( 349 )

Decreases due to settlements with tax authorities — ( 12,285 ) —

1 unchanged sentence

The following summarizes the changes in interest and penalties accrued with respect to gross unrecognized tax benefits:

Years Ended November 30,

(In thousands) 2023 2022

16 unchanged sentences

Numerator for basic earnings per share 3,889,975 4,562,145 4,377,192

net amount attributable to noncontrolling interests in Rialto's Carried Interest Incentive Plan (1) 4,919 2,907 8,971

net amount attributable to Rialto's Carried Interest Incentive Plan (1) — 4,919 2,907

Numerator for diluted earnings per share $ 3,889,975 4,557,226 4,374,285

Denominator for basic earnings per share - weighted average common shares outstanding 283,319 289,824 306,612

Effect of dilutive securities:

Share-based payments — — 1

Denominator for diluted earnings per share - weighted average common shares outstanding 283,319 289,824 306,612

1 unchanged sentence

Diluted earnings per share $ 13.73 15.72 14.27

(1) The amounts above relate to Rialto's Carried Interest Incentive Plan and represent the difference between the advanced tax distributions received by the Lennar Other segment and the amount Lennar, as the parent company, is assumed to own.

(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 the years ended November 30, 2023, 2022 and 2021, there were no options to purchase shares of common stock that were outstanding and anti-dilutive.

LENNAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Financial Instruments and Fair Value Disclosures

1 unchanged sentence

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

The use of different market assumptions and/or estimation methodologies might have a material effect on the estimated fair value amounts.

The use of different market assumptions and/or estimation methodologies might have a material effect on the

LENNAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

estimated fair value amounts.

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.

28 unchanged sentences

Forward options Level 1 5,937 9,473

Lennar Other:

Lennar Other Assets:

Investments in equity securities Level 1 176,198 212,981

15 unchanged sentences

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

LMF Commercial loans held-for-sale — The fair value of loans held-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.

LMF Commercial loans held-for-sale - The fair value of commercial loans held-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.

Loan values are calculated by allocating the change in value of an assumed CMBS capital structure to each loan.

16 unchanged sentences

Lennar Other investments in equity securities - The fair value of investments in equity securities was calculated based on independent quoted market prices.

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

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

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.

11 unchanged sentences

Forward options ( 522 ) ( 142 ) —

Changes in fair value included in Lennar Other unrealized gain (loss) from technology investments:

Changes in fair value included in Lennar Other unrealized gains (losses) from technology investments:

Investments in equity securities $ ( 50,162 ) ( 655,094 ) 510,802

2 unchanged sentences

Interest on Financial Services loans held-for-sale and LMF Commercial loans held-for-sale measured at fair value is calculated based on the interest rate of the loans and recorded as revenues in the Financial Services’ statement of operations.

The following table represents the reconciliation of the beginning and ending balance for the Level 3 recurring fair value measurements in the Company's Financial Services segment:

The following table sets forth the reconciliation of the beginning and ending balance for the Level 3 recurring fair value measurements in the Company's Financial Services segment:

Years Ended November 30,

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

Beginning of year $ 2,492 68 2,113 193,588

Beginning balance $ 3,463 25,599 2,492 68

Purchases/loan originations 200 466,043 353 740,345

4 unchanged sentences

Interest and principal paydowns — ( 1,618 ) — ( 480 )

End of year $ 3,463 25,599 2,492 68

(1) The year ended November 30, 2021 includes $ 28.5 million of loans sold/paid outside of LMF Commercial ’s six securitizations and $ 7.3 million of loans converted to loans held-for-investment.

Ending balance $ 3,440 13,459 3,463 25,599

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

16 unchanged sentences

Investments in unconsolidated entities (3) Level 3 78,834 37,792 ( 41,042 ) 1,454 — ( 1,454 ) — — —

(1) Represents losses due to valuation adjustments and deposit and acore write-offs recorded during the year.

(1) Represents losses due to valuation adjustments and deposit and pre-acquisition write-offs recorded during the respective periods.

(2) Valuation adjustments for finished homes and construction in progress, and land and land under development were included in Homebuilding costs and expenses.

During the year ended November 30, 2022, total losses, net, for land and land underdevelopment

During the years ended November 30, 2023 and 2022, total losses, net, for land and land under development included $ 19.9 million and $ 47.9 million, respectively, of deposit and pre-acquisition cost write-offs.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

included $ 47.9 million of deposit and pre-acquisition cost write-offs.

Valuation adjustments related to investments in unconsolidated entities were included in equity in earnings (loss) from unconsolidated entities and/or Homebuilding other income (expense), net in the Company's consolidated statements of operations and comprehensive income for the years ended November 30, 2022, 2021 and 2020.

(3) Valuation adjustments related to investments in unconsolidated entities were primarily included in Homebuilding other income (expense), net in the Company's consolidated statements of operations and comprehensive income for the year ended November 30, 2023.

See Note 1 for a detailed description of the Company’s process for identifying and recording valuation adjustments related to Homebuilding inventory.

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 year ended November 30, 2022 and based on the Company's evaluation, there were six entities that were consolidated and had a total combined assets of $ 134.8 million and an immaterial amount of liabilities.

During the year ended November 30, 2022, there were four VIEs that deconsolidated that had total assets of $ 244.3 million and liabilities of $ 74.2 million.

During the year ended November 30, 2023, 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.

Based on the Company's evaluation, there were no variable interest entities ("VIEs") that were consolidated or deconsolidated during the year ended November 30, 2023.

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

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The VIEs are not guarantors of the Company’s senior notes or other debts payable.

The assets held by a VIE usually are collateral for that VIE’s debt.

The assets held by a VIE are usually collateral for that VIE’s debt.

The Company and other partners do not generally have an obligation to make capital contributions to a VIE unless the Company and/or the other partner(s) have entered into debt guarantees with the VIE’s lenders.

Other than debt guarantee agreements with the VIE’s lenders, there are no liquidity arrangements or agreements to fund capital or purchase assets that could require the Company to provide financial support to a VIE.

While the Company has option contracts to purchase land from certain of its VIEs, the Company is not required to purchase the assets and could walk away from the contracts.

Other than debt guarantee agreements with VIE’s lenders, there are no liquidity arrangements or agreements to fund capital or purchase assets that could require the Company to provide financial support to a VIE.

While the Company has option contracts to purchase land from certain of its VIEs, the Company is not required to purchase the assets and could walk away from the contracts, but that would require forfeiture of deposits and pre-acquisition costs.

Unconsolidated VIEs

T he Company’s recorded investments in VIEs that are unconsolidated and its estimated maximum exposure to loss were as follows:

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

As of November 30,

(In thousands) Investments in Unconsolidated VIEs Lennar’s Maximum Exposure to Loss Investments in

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$ 1,240,627 1,386,646 1,393,622 1,551,856

(1) As of November 30, 2022 and 2021, the maximum exposure to loss of Homebuilding's investments in unconsolidated VIEs was limited to its investments in unconsolidated VIEs, except with regard to the Company's remaining $ 77.3 million and $ 106.1 million, respectively, commitment to fund capital in Upward America, and $ 52.7 million and $ 87.9 million, respectively, of receivables relating to a short-term loan and management fee owed to the Company by Upward America.

(2) As of November 30, 2022 and 2021, the maximum exposure to loss of Multifamily's investments in unconsolidated VIEs was primarily limited to its investments in the unconsolidated VIEs.

The maximum exposure for LMV I and LMV II in addition to the investment also included to the remaining combined equity commitment of $ 19.3 million and $ 23.1 million as of November 30, 2022 and 2021, respectively, for future expenditures related to the construction and development of its projects.

(3) As of both November 30, 2022 and 2021, the maximum exposure to loss of the Financial Services segment was limited to its investment in the unconsolidated VIEs and related to the Financial Services' CMBS investments held-to-maturity.

(4) At November 30, 2022, the maximum recourse exposure to loss of the Lennar Other segment was limited to its investments in the unconsolidated VIEs.

(1) As of November 30, 2023 and 2022, the Company's maximum exposure to loss of Homebuilding's investments in unconsolidated VIEs was limited to its investments in unconsolidated VIEs, except with regard to the Company's remaining commitment to fund capital in Upward America of $ 69.8 million and $ 77.3 million, respectively.

In addition, as of November 30, 2023, there was recourse debt of VIEs of $ 42.1 million and as of November 30, 2022, there was $ 52.7 million of receivables relating to a short-term loan and management fee owed to the Company by Upward America.

(2) As of November 30, 2023 and 2022, the Company's maximum exposure to loss of Multifamily's investments in unconsolidated VIEs was primarily limited to its investments in the unconsolidated VIEs.

The maximum exposure for LMV I and LMV II in addition to the investment also included the remaining combined equity commitment of $ 12.8 million and $ 19.3 million as of November 30, 2023 and 2022, respectively, for future expenditures related to the construction and development of its projects.

The decrease in exposure for the year ended November 30, 2023 is primarily due to the removal of LMV I as the Fund does not expect to call for equity in the future.

As a result, LMV I is not a VIE as of November 30, 2023.

(3) As of both November 30, 2023 and 2022, the Company's maximum exposure to loss of the Financial Services segment was limited to its investment in the unconsolidated VIEs and related to the Financial Services' CMBS investments held-to-maturity.

(4) At November 30, 2023, the Company's maximum recourse exposure to loss of the Lennar Other segment was limited to its investments in the unconsolidated VIEs.

LENNAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The Company and its JV partners generally fund JVs as needed and in accordance with business plans to allow the entities to finance their activities.

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The Company does not have the unilateral ability to exercise participating voting rights without partner consent.

LENNAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

There are no liquidity arrangements or agreements to fund capital or purchase assets that could require the Company to provide financial support to the VIEs.

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Option Contracts

The Company has access to land through option contracts, which generally enable it to control portions of properties owned by third parties (including land funds) and unconsolidated entities until the Company has determined whether to exercise the options.

The Company evaluates all option contracts for land to determine whether they are VIEs and, if so, whether the Company is the primary beneficiary of certain of these option contracts.

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.

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

The Company has access to land through option contracts, which generally enable it to control portions of properties owned by third parties (including land banks) until the Company has determined whether to exercise the options.

The Company evaluates option contracts with third party land holding companies for land to determine whether they are VIEs and, if so, whether the Company is the primary beneficiary of certain of these option contracts.

Although the Company does not have legal title to the optioned land, if the Company is deemed to be the primary beneficiary and makes a significant deposit or pre-acquisition cost investment for optioned land, or is otherwise economically compelled to takedown the optioned land, it may need to consolidate the land under option at the purchase price of the optioned land.

Land under option with third party holding companies that the Company was economically compelled to takedown was $ 1.2 billion as of November 30, 2023 and is included in consolidated inventory not owned.

Consolidated inventory not owned related to land financing transactions, which are land sale transactions that did not meet the criteria for revenue recognition and derecognition of land by the Company as a result of the Company maintaining an option to repurchase the land in the future, was $ 1.8 billion as of November 30, 2023.

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

(In thousands) 2023 2022

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Letters of credit in lieu of cash deposits under certain land and option contracts 198,920 163,942

For the year ended November 30, 2023, the Company purchased a significant portion of land from one land bank (the "land bank”).

There were no amounts due to the land bank as of November 30, 2023, resulting from land purchases as the full purchase price of the land is typically paid to the land bank at closing when land is purchased by the Company.

As of November 30, 2023, the total deposits and pre-acquisition costs on real estate relating to contracts with the land bank were $ 438.7 million.

As of November 30, 2023, total consolidated inventory not owned and liabilities related to consolidated inventory not owned relating to contracts with the land bank were $ 693.1 million and $ 577.9 million, respectively.

The Company believes there are other land banks that could be substituted should the land bank become unavailable or non-competitive with respect to land banking of future land.

Thus, the Company does not believe that the loss of the Company’s relationship with this land bank would have a material adverse effect on the Company’s business, financial condition or cash flows.

Commitments and Contingent Liabilities

The Company is party to various claims, legal actions and complaints arising in the ordinary course of business.

The Company is party to various claims, legal actions and complaints relating to homes sold by the Company arising in the ordinary course of business.

In the opinion of management, the disposition of these matters will not have a material adverse effect on the Company’s consolidated financial statements.

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However, the financial effect of litigation concerning purchases and sales of property may depend upon the value of the subject property, which may have changed from the time the agreement for purchase or sale was entered into.

LENNAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The Company is subject to the usual obligations associated with entering into contracts (including option contracts) for the purchase, development and sale of real estate, which it does in the routine conduct of its business.

Option contracts generally enable the Company to control portions of properties owned by third parties (including land funds) and unconsolidated entities until the Company determines whether to exercise the option.

Option contracts generally enable the Company to control portions of properties owned by third parties (including land banks) and unconsolidated entities until the Company determines whether to exercise the option.

The use of option contracts allows the Company to reduce the financial risks associated with long-term land holdings.

At November 30, 2022, the Company had $ 2.0 billion of non-refundable option deposits and pre-acquisition costs related to certain of these homesites, which were included in inventories in the consolidated balance sheet.

At November 30, 2023, the Company had $ 1.9 billion of non-refundable option deposits and pre-acquisition costs related to certain of these homesites, which were recorded in deposits and pre-acquisition costs on real estate in the consolidated balance sheet.

The Company has entered into agreements to lease certain office facilities and equipment under operating leases.

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Weighted-average discount rate 3.4 %

LENNAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The Company has entered into agreements to lease certain office facilities and equipment under operating leases.

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As of November 30, 2023 , the Company recognized the lease liabilities on its consolidated balance sheets within accounts payable and other liabilities of the respective segments.

The Company's rental expense was as follows:

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

Years Ended November 30,

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

For the years ended November 30, 2022 and 2021, the Company had an immaterial amount of sublease income.

For both the years ended November 30, 2023 and 2022, the Company had an immaterial amount of sublease income.

The Company is committed, under various letters of credit, to perform certain development and construction activities and provide certain guarantees in the normal course of business.

Outstanding letters of credit under these arrangements totaled $ 1.8 billion at November 30, 2023.

Additionally, at November 30, 2022, the Company had outstanding surety bonds of $ 4.1 billion including performance surety bonds related to site improvements at various projects (including certain projects in the Company’s joint ventures) and financial surety bonds.

Additionally, at November 30, 2023, the Company had outstanding surety bonds of $ 4.5 billion including performance surety bonds related to site improvements at various projects (including certain projects of the Company’s 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 are completed.

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The Company does not presently anticipate any draws upon these bonds that would have a material effect on its consolidated financial statements.

LENNAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Substantially all of the loans the Financial Services segment originates are sold within a short period in the secondary mortgage market on a servicing-released, non-recourse basis.

Since the 2008 housing downturn, there has been an industry-wide effort by purchasers to defray their losses by purporting to have found inaccuracies related to sellers’ representations and warranties in particular loan sale agreements.

Purchasers continue to try to defray any losses incurred by purporting to have found inaccuracies related to sellers’ representations and warranties in particular loan sale agreements.

Mortgage investors or others could seek to have the Company buy back mortgage loans or compensate them for losses incurred on mortgage loans that the Company has sold based on claims that the Company breached its limited representations or warranties.

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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-K

Item 8. Financial Statements and Supplementary Data