What changed in this filing

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Item 1. Financial Statements

2024-06-28 compared with 2024-03-29 · 282 added, 213 removed, 694 unchanged (42% of the section changed)

3 unchanged sentences

(Dollars in thousands)

February 29, November 30,

May 31, November 30,

2024 (1) 2023 (1)

18 unchanged sentences

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

As of February 29, 2024, total assets include $ 2.7 billion related to consolidated VIEs of which $ 40.8 million is included in Homebuilding cash and cash equivalents, $ 2.0 million in Homebuilding receivables, net, $ 9.8 million in Homebuilding finished homes and construction in progress, $ 633.4 million in Homebuilding land and land under development, $ 67.1 million in Homebuilding deposits and pre-acquisition costs on real estate, $ 1.9 billion in Homebuilding consolidated inventory not owned, $ 0.3 million in Homebuilding investments in unconsolidated entities, $ 26.7 million in Homebuilding other assets and $ 33.1 million in Multifamily assets.

As of May 31, 2024, total assets include $ 3.0 billion related to consolidated VIEs of which $ 73.0 million is included in Homebuilding cash and cash equivalents, $ 5.9 million in Homebuilding receivables, net, $ 6.2 million in Homebuilding finished homes and construction in progress, $ 601.1 million in Homebuilding land and land under development, $ 75.5 million in Homebuilding deposits and pre-acquisition costs on real estate, $ 2.2 billion in Homebuilding consolidated inventory not owned, $ 0.3 million in Homebuilding investments in unconsolidated entities, $ 22.5 million in Homebuilding other assets and $ 33.6 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.

3 unchanged sentences

(In thousands, except share amounts)

February 29, November 30,

May 31, November 30,

2024 (2) 2023 (2)

3 unchanged sentences

Liabilities related to consolidated inventory not owned 3,227,478 2,540,894

Senior notes and other debts payable, net 2,830,332 2,816,482

Senior notes and other debt payable, net 2,241,507 2,816,482

Other liabilities 2,513,173 2,739,217

4 unchanged sentences

Total liabilities 11,651,917 12,532,337

Commitments and contingent liabilities (See Note 10)

Stockholders’ equity:

1 unchanged sentence

Class A common stock of $ 0.10 par value;

February 29, 2024 and November 30, 2023 - 400,000,000 shares;

February 29, 2024 - 259,834,181 shares and November 30, 2023 - 258,475,012 shares

May 31, 2024 and November 30, 2023 - 400,000,000 shares;

May 31, 2024 - 259,957,819 shares and November 30, 2023 - 258,475,012 shares

25,996 25,848

Class B common stock of $ 0.10 par value;

February 29, 2024 and November 30, 2023 - 90,000,000 shares;

February 29, 2024 - 36,601,215 shares and November 30, 2023 - 36,601,215 shares

May 31, 2024 and November 30, 2023 - 90,000,000 shares;

May 31, 2024 - 36,601,215 shares and November 30, 2023 - 36,601,215 shares

Additional paid-in capital 5,674,733 5,570,009

1 unchanged sentence

Treasury stock, at cost;

February 29, 2024 - 14,797,751 shares of Class A common stock and 3,294,072 shares of Class B common stock;

May 31, 2024 - 18,254,386 shares of Class A common stock and 3,700,597 shares of Class B common stock;

November 30, 2023 - 11,207,889 shares of Class A common stock and 2,920,200 shares of Class B common stock

5 unchanged sentences

Total liabilities and equity $ 38,667,670 39,234,303

(2) As of February 29, 2024, total liabilities include $ 1.8 billion related to consolidated VIEs as to which there was no recourse against the Company, of which $ 17.7 million is included in Homebuilding accounts payable, $ 1.7 billion in Homebuilding liabilities related to consolidated inventory not owned, $ 6.0 million in Homebuilding senior notes and other debts payable, $ 88.5 million in Homebuilding other liabilities, and $ 0.9 million in Multifamily liabilities.

(2) As of May 31, 2024, total liabilities include $ 2.1 billion related to consolidated VIEs as to which there was no recourse against the Company, of which $ 56.1 million is included in Homebuilding accounts payable, $ 2.0 billion in Homebuilding liabilities related to consolidated inventory not owned, $ 6.0 million in Homebuilding senior notes and other debt payable, $ 46.7 million in Homebuilding other liabilities, and $ 0.9 million in Multifamily liabilities.

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.

3 unchanged sentences

(In thousands, except per share amounts)

Three Months Ended

February 29, 2024 February 28, 2023

Three Months Ended Six Months Ended

May 31, May 31,

2024 2023 2024 2023

Homebuilding $ 8,381,059 7,670,017 15,312,050 13,826,322

13 unchanged sentences

Other income (expense), net and other gains (losses) 68,172 ( 9,960 ) 133,544 13,360

Lennar Other unrealized losses from technology investments ( 5,137 ) ( 23,954 )

Lennar Other unrealized gains (losses) from technology investments ( 21,514 ) 25,497 ( 26,651 ) 1,543

Earnings before income taxes 1,261,057 1,158,621 2,191,843 1,943,074

4 unchanged sentences

Other comprehensive income, net of tax:

Net unrealized gain on securities available-for-sale $ 362 851

Net unrealized gains on securities available-for-sale $ 1,355 573 1,717 1,424

Total other comprehensive income, net of tax $ 1,355 573 1,717 1,424

1 unchanged sentence

Total comprehensive income attributable to noncontrolling interests $ 6,275 6,048 6,862 8,822

Basic earnings per share $ 2.57 2.06

Diluted earnings per share $ 2.57 2.06

Basic and diluted earnings per share $ 3.45 3.01 6.01 5.07

See accompanying notes to condensed consolidated financial statements.

2 unchanged sentences

(In thousands)

Three Months Ended

February 29, 2024 February 28, 2023

Six Months Ended

Cash flows from operating activities:

6 unchanged sentences

Share-based compensation expense 122,186 126,731

Deferred income tax (benefit) expense 11,979 ( 81,940 )

Loans held-for-sale unrealized loss 46,052 31,462

Lennar Other unrealized losses from technology investments and other (gains) losses 2,555 21,372

Gain on sale of other assets ( 2,671 ) —

Deferred income tax expense (benefit) 36,848 ( 131,520 )

Gains on redemption/repurchases of senior notes ( 825 ) ( 724 )

Loans held-for-sale unrealized losses 28,865 23,563

Lennar Other unrealized (gains) losses from technology investments and other (gains) losses 6,515 1,000

Gains on sale of other assets ( 13,585 ) ( 3,726 )

Valuation adjustments and write-offs of option deposits and pre-acquisition costs on real estate, and other assets 26,526 85,117

1 unchanged sentence

Decrease in receivables 30,956 435,880

Increase in inventories, excluding valuation adjustments ( 285,023 ) ( 156,229 )

(Increase) decrease in inventories, excluding valuation adjustments ( 631,180 ) 89,098

Increase in deposits and pre-acquisition costs on real estate ( 755,232 ) ( 78,357 )

16 unchanged sentences

(In thousands)

Three Months Ended

February 29, 2024 February 28, 2023

Six Months Ended

Cash flows from financing activities:

Net repayments under warehouse facilities $ ( 753,703 ) ( 978,053 )

Redemption/repurchases of senior notes ( 553,865 ) ( 157,764 )

Principal payments on notes payable and other borrowings ( 40,672 ) ( 34,515 )

Proceeds from other borrowings 6,230 —

Proceeds from liabilities related to consolidated inventory not owned 105,635 186,889

Proceeds from other borrowings 6,231 —

Payments related to liabilities related to consolidated inventory not owned ( 250,232 ) ( 372,687 )

18 unchanged sentences

Supplemental disclosures of non-cash investing and financing activities:

Homebuilding and Multifamily:

Purchases of inventories, land under development and other assets financed by sellers $ 23,081 13,500

Homebuilding:

Purchases of inventories and other assets financed by sellers $ 9,245 —

See accompanying notes to condensed consolidated financial statements.

5 unchanged sentences

Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements.

These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended November 30, 2023.

The basis of consolidation is unchanged from the disclosure in the Company's Notes to Consolidated Financial Statements section in its Annual Report on Form 10-K for the year ended November 30, 2023.

1 unchanged sentence

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

The condensed consolidated statements of operations for the three months ended February 29, 2024 are not necessarily indicative of the results to be expected for the full year.

The condensed consolidated statements of operations for the three and six months ended May 31, 2024 are not necessarily indicative of the results to be expected for the full year.

Use of Estimates

2 unchanged sentences

Cash and Cash Equivalents

Homebuilding cash and cash equivalents as of February 29, 2024 and November 30, 2023 included $ 512.0 million and $ 594.8 million, respectively, of cash held in escrow for approximately two days .

Homebuilding cash and cash equivalents as of May 31, 2024 and November 30, 2023 included $ 482.0 million and $ 594.8 million, respectively, of cash held in escrow for approximately two days .

Share-based Payments

During the three months ended February 29, 2024 and February 28, 2023, the Company granted employees 1.2 million and 1.6 million of nonvested shares, respectively.

During both the three months ended May 31, 2024 and 2023, the Company granted employees an immaterial number of nonvested shares.

During the six months ended May 31, 2024 and 2023, the Company granted employees 1.3 million and 2.0 million of nonvested shares, respectively.

Recently Adopted Accounting Pronouncements

3 unchanged sentences

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 condensed consolidated financial statements.

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

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

3 unchanged sentences

Reclassifications

Certain amounts in the Company's condensed consolidated statement of operations of prior year have been reclassified to conform to the fiscal 2024 presentation.

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

C ertain prior year segment information in the condensed consolidated financial statements have been reclassified to conform with the 2024 presentation.

This reclassification was for operational purposes and between segments and had no impact on the Company's total assets, total equity, revenue or net income in the condensed consolidated financial statements.

Lennar Corporation and Subsidiaries

11 unchanged sentences

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

(In thousands) February 29, 2024

(In thousands) May 31, 2024

Homebuilding Financial

4 unchanged sentences

Inventory owned and consolidated inventory not owned 19,901,500 — 608,214 — 20,509,714

Deposits and pre-acquisition costs on real estate 2,754,819 — 29,802 — 2,784,621

Investments in unconsolidated entities 1,263,905 — 561,892 350,574 2,176,371

Loans held-for-sale (2) — 1,721,911 — — 1,721,911

3 unchanged sentences

Investments held-to-maturity — 138,425 — — 138,425

Deposits and pre-acquisition costs on real estate 2,408,877 — 31,785 — 2,440,662

Investments in unconsolidated entities 1,206,564 — 586,438 289,691 2,082,693

Goodwill 3,442,359 189,699 — — 3,632,058

1 unchanged sentence

Total assets $ 33,410,456 3,043,941 1,377,243 836,030 38,667,670

Notes and other debts payable, net $ 2,830,332 1,564,290 — — 4,394,622

Notes and other debt payable, net $ 2,241,507 1,410,102 — — 3,651,609

Accounts payable, liabilities related to consolidated inventory not owned and other liabilities 7,468,009 173,261 246,776 112,262 8,000,308

9 unchanged sentences

Inventory owned and consolidated inventory not owned 18,352,735 — 544,935 — 18,897,670

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

Loans held-for-sale (2) — 2,086,809 — — 2,086,809

3 unchanged sentences

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

Goodwill 3,442,359 189,699 — — 3,632,058

1 unchanged sentence

Total assets $ 33,628,392 3,566,546 1,381,513 657,852 39,234,303

Notes and other debts payable, net $ 2,816,482 2,163,805 3,741 — 4,984,028

Notes and other debt payable, net $ 2,816,482 2,163,805 3,741 — 4,984,028

Accounts payable, liabilities related to consolidated inventory not owned and other liabilities 6,911,512 283,234 274,436 79,127 7,548,309

Total liabilities $ 9,727,994 2,447,039 278,177 79,127 12,532,337

(1) Receivables, net for Financial Services primarily related to loans sold to investors for which the Company had not yet been paid as of February 29, 2024 and November 30, 2023, respectively.

(1) Receivables, net for Financial Services primarily related to loans sold to investors for which the Company had not yet been paid as of May 31, 2024 and November 30, 2023, respectively.

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

(3) Investments in equity securities include investments of $ 123.1 million and $ 121.0 million without readily available fair values as of February 29, 2024 and November 30, 2023, respectively.

(3) Investments in equity securities include investments of $ 145.0 million and $ 121.0 million without readily available fair values as of May 31, 2024 and November 30, 2023, respectively.

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

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

Three Months Ended

(In thousands) February 29, 2024 February 28, 2023

Three Months Ended Six Months Ended

May 31, May 31,

(In thousands) 2024 2023 2024 2023

Homebuilding $ 8,381,059 7,670,017 15,312,050 13,826,322

25 unchanged sentences

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

February 29, 2024 November 30, 2023

May 31, November 30,

(In thousands)

7 unchanged sentences

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

Three Months Ended

(In thousands) February 29, 2024 February 28, 2023

Three Months Ended Six Months Ended

May 31, May 31,

(In thousands) 2024 2023 2024 2023

East $ 2,202,245 2,119,297 4,125,041 3,817,140

18 unchanged sentences

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

At February 29, 2024, 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:

At May 31, 2024, 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

1 unchanged sentence

Residential facilities maturing:

March 2024 (1) $ 500,000 — 500,000

April 2024 250,000 250,000 500,000

May 2024 600,000 — 600,000

June 2024 (1) $ 500,000 — 500,000

June 2024 (2) 100,000 100,000 200,000

July 2024 505,000 — 505,000

September 2024 100,000 100,000 200,000

April 2025 250,000 250,000 500,000

Total residential facilities $ 1,455,000 450,000 1,905,000

4 unchanged sentences

Total $ 2,205,000

(1) Subsequent to February 29, 2024, the maturity date was extended to June 2024.

(1) Subsequent to May 31, 2024, the maturity date was extended to July 2024.

(2) Subsequent to May 31, 2024, the maximum aggregate committed and uncommitted commitment was reduced to $ 75 million each until maturity in August 2024.

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

2 unchanged sentences

Borrowings and collateral under the facilities were as follows:

(In thousands) February 29, 2024 November 30, 2023

(In thousands) May 31, 2024 November 30, 2023

Borrowings under the residential facilities $ 1,233,015 2,020,187

11 unchanged sentences

The Company establishes accruals for such possible losses based upon, among other things, an analysis of repurchase requests received, an estimate of potential repurchase claims not yet received and actual past repurchases and losses through the disposition of affected loans, as well as previous settlements.

While the Company believes that it has adequately reserved for known losses and projected repurchase requests, given the volatility in the residential mortgage industry and the uncertainty regarding the ultimate resolution of these claims, if either actual repurchases or the losses incurred resolving those repurchases exceed the Company’s expectations, additional recourse expense may be incurred.

The provision for loan losses was immaterial for both the three months ended

Lennar Corporation and Subsidiaries

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

February 29, 2024 and February 28, 2023.

Loan origination liabilities were $ 17.7 million and $ 17.6 million as of February 29, 2024 and November 30, 2023, respectively, and included in Financial Services’ liabilities in the Company's condensed consolidated balance sheets.

claims, if either actual repurchases or the losses incurred resolving those repurchases exceed the Company’s expectations, additional recourse expense may be incurred.

The provision for loan losses was immaterial for both the three and six months ended May 31, 2024 and 2023.

Loan origination liabilities were $ 18.3 million and $ 17.6 million as of May 31, 2024 and November 30, 2023, respectively, and included in Financial Services’ liabilities in the Company's condensed consolidated balance sheets.

LMF Commercial - loans held-for-sale

LMF Commercial originated commercial loans as follows:

Three Months Ended

(Dollars in thousands) February 29, 2024 February 28, 2023

Three Months Ended Six Months Ended

May 31, May 31,

(Dollars in thousands) 2024 2023 2024 2023

Originations (1) $ 71,510 84,590 212,335 164,070

1 unchanged sentence

Securitizations 3 2 5 3

(1) During both the three months ended February 29, 2024 and February 28, 2023, the commercial loans originated were recorded as loans held-for-sale, which are held at fair value.

(1) During both the three and six months ended May 31, 2024 and 2023, the commercial loans originated were recorded as loans held-for-sale, which are held at fair value.

Investments held-to-maturity

At February 29, 2024 and November 30, 2023, the Financial Services segment held commercial mortgage-backed securities (“CMBS”).

At May 31, 2024 and November 30, 2023, the Financial Services segment held commercial mortgage-backed securities (“CMBS”).

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

Based on the segment’s assessment, no impairment charges were recorded during the three months ended February 29, 2024 and February 28, 2023.

Based on the segment’s assessment, no impairment charges were recorded during the three or six months ended May 31, 2024 and 2023.

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

Details related to Financial Services' CMBS were as follows:

(Dollars in thousands) February 29, 2024 November 30, 2023

(Dollars in thousands) May 31, 2024 November 30, 2023

Carrying value $ 138,425 140,676

1 unchanged sentence

Incurred interest rate 3.4 % 3.4 %

February 29, 2024

Discount rates at purchase 6 % — 84 %

6 unchanged sentences

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.

Lennar Other primarily includes strategic investments in technology companies, primarily managed by the Company's LEN X subsidiary, and fund interests the Company retained when it sold the Rialto Capital Management ( “Rialto”) asset and investment management platform.

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

Revenues are generated from the sales of land, from construction activities, and management and promote fees generated from joint ventures 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 other gains (which includes sales of buildings and investments).

Lennar Corporation and Subsidiaries

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

The Company has investments in Blend Labs, Inc.

4 unchanged sentences

(“Sonder”) and Sunnova Energy International, Inc.

(“Sunnova”), which are held at market and will therefore change depending on the value of the Company's shareholdings in those entities on the last day of each quarter.

(“Sunnova”), which are held at market and the carrying value of which will therefore change depending on the value of the Company's 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 mark-to-market adjustments on the Company's technology investments:

Three Months Ended

(In thousands) February 29, 2024 February 28, 2023

Three Months Ended Six Months Ended

May 31, May 31,

(In thousands) 2024 2023 2024 2023

Blend Labs (BLND) $ 715 ( 1,332 ) 3,651 ( 746 )

4 unchanged sentences

Sunnova (NOVA) ( 11,410 ) 233 ( 35,335 ) ( 24,233 )

Lennar Other unrealized losses from technology investments $ ( 5,137 ) ( 23,954 )

Lennar Other unrealized gains (losses) from technology investments $ ( 21,514 ) 25,497 ( 26,651 ) 1,543

Doma Holdings, Inc.

(“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 February 29, 2024, the Company’s carrying value in Doma was zero as a result of allocated losses from Doma.

As of May 31, 2024, the Company’s carrying value in Doma was zero as a result of allocated losses from Doma.

(3) Investments in Unconsolidated Entities

1 unchanged sentence

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

(In thousands) February 29, 2024 November 30, 2023

(In thousands) May 31, 2024 November 30, 2023

Investments in unconsolidated entities (1) (2) $ 1,263,905 1,143,909

2 unchanged sentences

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

As of February 29, 2024 and November 30, 2023, the carrying amount of the Company's investment was $ 444.5 million and $ 422.2 million, respectively.

As of February 29, 2024 and November 30, 2023, the Homebuilding segment's unconsolidated entities had non-recourse debt with completion guarantees of $ 279.6 million and $ 316.5 million, respectively.

As of May 31, 2024 and November 30, 2023, the carrying amount of the Company's investment was $ 448.1 million and $ 422.2 million, respectively.

As of May 31, 2024 and November 30, 2023, the Homebuilding segment's unconsolidated entities had non-recourse debt with completion guarantees of $ 279.3 million and $ 316.5 million, respectively.

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

1 unchanged sentence

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

As of both February 29, 2024 and November 30, 2023, the fair values of the repayment guarantees, maintenance guarantees, and completion guarantees were not material.

The Company believes that as of February 29, 2024, in the event it becomes legally obligated to perform under a guarantee of the obligation of a Homebuilding unconsolidated entity due to a triggering event under a guarantee, the collateral would be sufficient to repay at least a significant portion of the obligation or the Company and its partners would contribute additional capital into the venture.

As of both May 31, 2024 and November 30, 2023, the fair values of the repayment guarantees, maintenance guarantees, and completion guarantees were not material.

The Company believes that as of May 31, 2024, in the event it becomes legally obligated to perform under a guarantee of the obligation of a Homebuilding unconsolidated entity due to a triggering event under a guarantee, the collateral would be sufficient to repay at least a significant portion of the obligation or the Company and its partners would contribute additional capital into the venture.

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 7 of the Notes to Condensed Consolidated Financial Statements).

The details related to these are unchanged from the disclosure in the Company's Notes to the Financial Statements section in its Annual Report on Form 10-K for the year ended November 30, 2023.

The details related to these are unchanged from the disclosure in the

Lennar Corporation and Subsidiaries

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

Company's Notes to the Financial Statements section in its Annual Report on Form 10-K for the year ended November 30, 2023.

In 2021, the Company formed the Upward America Venture LP (“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.

Upward America is expected to raise equity commitments totaling $ 1.0 billion.

The commitments are primarily from institutional investors, including $ 78 million committed by Lennar.

As of February 29, 2024 and November 30, 2023, the carrying amount of the Company's investment in Upward America was $ 11.2 million and $ 14.8 million, respectively.

Lennar Corporation and Subsidiaries

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

As of May 31, 2024 and November 30, 2023, the carrying amount of the Company's investment in Upward America was $ 16.4 million and $ 14.8 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) have 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 the 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.

The details related to these are unchanged from the disclosure in the Company's Notes to the Financial Statements section in its Annual Report on Form 10-K for the year ended November 30, 2023.

As of both February 29, 2024 and November 30, 2023, the fair value of the completion guarantees was immaterial.

As of February 29, 2024 and November 30, 2023, Multifamily segment's unconsolidated entities had non-recourse debt with completion guarantees of $ 1.1 billion and $ 1.4 billion, respectively.

As of both May 31, 2024 and November 30, 2023, the fair value of the completion guarantees was immaterial.

As of May 31, 2024 and November 30, 2023, the Multifamily segment's unconsolidated entities had non-recourse debt with completion guarantees of $ 834.2 million and $ 1.4 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.

3 unchanged sentences

The details of the activity were as follows:

Three Months Ended

(In thousands) February 29, 2024 February 28, 2023

Three Months Ended Six Months Ended

(In thousands) May 31, 2024 May 31, 2023 May 31, 2024 May 31, 2023

General contractor services, net of deferrals $ 84,434 128,371 186,070 253,773

2 unchanged sentences

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

The Multifamily segment completed the initial closing of the CPPIB Fund.

The Multifamily segment completed the closing of the CPPIB Fund.

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

As of February 29, 2024, the Company had a $ 23.1 million investment in the CPPIB Fund.

As of May 31, 2024, the Company had a $ 24.6 million investment in the CPPIB Fund.

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

Details of LMV I and LMV II as of and during the three months ended February 29, 2024 are included below:

February 29, 2024

Details of LMV I and LMV II as of and during the six months ended May 31, 2024 are included below:

(In thousands) LMV I LMV II

5 unchanged sentences

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

Distributions to Lennar during the three months ended February 29, 2024 — 208

Distributions to Lennar during the six months ended May 31, 2024 7,245 208

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

Currently, the LMV I partners have decided to liquidate and sell substantially all of the individual project rental operations of LMV I in the second half of fiscal 2024.

Some of those assets were sold in June 2024.

As of May 31, 2024, the Company's net investment in LMV I was $ 162.9 million.

Other Unconsolidated Entities

Lennar Other's unconsolidated entities include fund investments the Company retained when it sold the Rialto assets and investment management platform in 2018, as well as strategic investments in technology companies and investment funds.

The Company's investment in the Rialto funds totaled $ 142.2 million and $ 148.7 million as of February 29, 2024 and November 30, 2023, 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 with a carrying value of $ 147.5 million and $ 127.5 million, as of February 29, 2024 and November 30, 2023, respectively.

Lennar Corporation and Subsidiaries

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

Company's investment in the Rialto funds totaled $ 146.9 million and $ 148.7 million as of May 31, 2024 and November 30, 2023, 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 with a carrying value of $ 203.7 million and $ 127.5 million, as of May 31, 2024 and November 30, 2023, respectively.

In addition, during both the three and six months ended May 31, 2024, there was a $ 46.5 million one-time realized gain in Lennar Other on the sale of a technology investment that was included in other income (expense), net and other gains (losses) on the Company’s condensed consolidated statements of operations and comprehensive income .

(4) Stockholders' Equity

The following tables reflect the changes in equity attributable to both Lennar Corporation and the noncontrolling interests of its consolidated subsidiaries in which it has less than a 100% ownership interest for the three months ended February 29, 2024 and February 28, 2023:

Three Months Ended February 29, 2024

Three Months Ended May 31, 2024

(In thousands) Total

5 unchanged sentences

Earnings Noncontrolling

Balance at November 30, 2023 $ 26,701,966 25,848 3,660 5,570,009 ( 1,393,100 ) 4,879 22,369,368 121,302

Balance at February 29, 2024 $ 26,777,930 25,983 3,660 5,651,836 ( 1,988,200 ) 5,241 22,949,315 130,095

Net earnings (including net earnings attributable to noncontrolling interests) 960,586 — — — — — 954,311 6,275

11 unchanged sentences

Total other comprehensive income, net of tax 1,355 — — — — 1,355 — —

Balance at May 31, 2024 $ 27,015,753 25,996 3,660 5,674,733 ( 2,597,806 ) 6,596 23,764,695 137,879

Three Months Ended May 31, 2023

(In thousands) Total

Equity Class A

Common Stock Class B

Common Stock Additional

Paid - in Capital Treasury

Stock Accumulated Other Comprehensive Income Retained

Earnings Noncontrolling

Balance at February 28, 2023 $ 24,555,287 25,834 3,660 5,503,789 ( 468,347 ) 3,259 19,350,060 137,032

Three Months Ended February 28, 2023

Net earnings (including net earnings attributable to noncontrolling interests) 877,742 — — — — — 871,694 6,048

Employee stock and directors plans

4,229 9 — 1,631 2,589 — — —

Purchases of treasury stock ( 209,928 ) — — — ( 209,928 ) — — —

Amortization of restricted stock

40,173 — — 40,173 — — — —

Cash dividends ( 110,386 ) — — — — — ( 110,386 ) —

Receipts related to noncontrolling interests

2,421 — — — — — — 2,421

Non-cash purchase or activity of noncontrolling interests, net 1,008 — — 535 — — — 473

Total other comprehensive income, net of tax 573 — — — — 573 — —

Balance at May 31, 2023 $ 25,161,119 25,843 3,660 5,546,128 ( 675,686 ) 3,832 20,111,368 145,974

Lennar Corporation and Subsidiaries

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

Six Months Ended May 31, 2024

(In thousands) Total

19 unchanged sentences

Total other comprehensive income, net of tax 1,717 — — — — 1,717 — —

Balance at February 28, 2023 $ 24,555,287 25,834 3,660 5,503,789 ( 468,347 ) 3,259 19,350,060 137,032

On February 7, 2024, the Company paid a quarterly cash dividend of $ 0.50 per share for both of its Class A and Class B common stock to holders of record at the close of business on January 24, 2024, as declared by its Board of Directors on January 9, 2024.

The Company approved and paid cash dividends of $ 0.375 per share for each of the four quarters of 2023 on both its Class A and Class B common stock.

Lennar Corporation and Subsidiaries

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

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.

Balance at May 31, 2024 $ 27,015,753 25,996 3,660 5,674,733 ( 2,597,806 ) 6,596 23,764,695 137,879

Six Months Ended May 31, 2023

(In thousands) Total

Equity Class A

Common Stock Class B

Common Stock Additional

Paid - in Capital Treasury

Stock Accumulated Other Comprehensive Income Retained

Earnings Noncontrolling

Balance at November 30, 2022 $ 24,240,367 25,608 3,660 5,417,796 ( 210,389 ) 2,408 18,861,417 139,867

Net earnings (including net earnings attributable to noncontrolling interests) 1,477,050 — — — — — 1,468,228 8,822

Employee stock and directors plans

( 62,761 ) 235 — 1,442 ( 64,438 ) — — —

Purchases of treasury stock ( 400,859 ) — — — ( 400,859 ) — — —

Amortization of restricted stock

126,731 — — 126,731 — — — —

Cash dividends ( 218,277 ) — — — — — — ( 218,277 ) —

Receipts related to noncontrolling interests

4,918 — — — — — — 4,918

Payments related to noncontrolling interests

( 20,623 ) — — — — — — ( 20,623 )

Non-cash purchase or activity of noncontrolling interests, net 13,149 — — 159 — — — 12,990

Total other comprehensive loss, net of tax 1,424 — — — — 1,424 — —

Balance at May 31, 2023 $ 25,161,119 25,843 3,660 5,546,128 ( 675,686 ) 3,832 20,111,368 145,974

On June 20, 2024, the Company's Board of Directors declared a quarterly cash dividend of $ 0.50 per share on both its Class A and Class B common stock, payable on July 19, 2024 to holders of record at the close of business on July 5, 2024.

On May 8, 2024, the Company paid a quarterly cash dividend of $ 0.50 per share for both of its Class A and Class B common stock to holders of record at the close of business on April 24, 2024, as declared by its Board of Directors on April 10, 2024.

The Company approved and paid cash dividends of $ 0.375 per share for each of the four quarters of 2023 for both its Class A and Class B common stock.

In January 2024, the Company's Board of Directors authorized an increase to its stock repurchase program to enable it to repurchase up to an additional $ 5 billion in value of its outstanding Class A or Class B common stock.

2 unchanged sentences

The following table sets forth the repurchases of the Company's Class A and Class B common stock under the authorized repurchase programs:

Three Months Ended

February 29, 2024 February 28, 2023

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

Three Months Ended May 31, Six Months Ended May 31,

2024 2023 2024 2023

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

Shares repurchased 3,393,475 406,525 1,269,681 730,319 6,419,603 780,397 2,715,886 1,284,114

1 unchanged sentence

Average price per share $ 160.09 $ 146.54 $ 109.32 $ 94.49 $ 155.47 $ 142.50 $ 103.78 $ 89.65

Lennar Corporation and Subsidiaries

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

(5) Income Taxes

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

Three Months Ended

(Dollars in thousands) February 29, 2024 February 28, 2023

Three Months Ended Six Months Ended

May 31, May 31,

(Dollars in thousands) 2024 2023 2024 2023

Provision for income taxes $ 300,471 280,879 511,336 466,024

Effective tax rate (1) 23.9 % 24.4 % 23.4 % 24.1 %

(1) In the three months ended February 29, 2024, the Company's overall effective income tax rate was lower than in the three months ended February 28, 2023, primarily due to excess tax benefits from share-based compensation.

For both the three months ended February 29, 2024 and February 28, 2023, the effective tax rate included state income tax expense and non-deductible executive compensation, partially offset by energy efficient home and solar tax credits.

(1) For both the three and six months ended May 31, 2024 and 2023, the effective tax rate included state income tax expense and non-deductible executive compensation, partially offset by energy efficient home and solar tax credits.

(6) Earnings Per Share

5 unchanged sentences

Basic and diluted earnings per share were calculated as follows:

Three Months Ended

(In thousands, except per share amounts) February 29, 2024 February 28, 2023

Three Months Ended Six Months Ended

May 31, May 31,

(In thousands, except per share amounts) 2024 2023 2024 2023

Net earnings attributable to Lennar $ 954,311 871,694 1,673,645 1,468,228

1 unchanged sentence

undistributed earnings allocated to nonvested shares 8,007 9,935 13,923 15,695

Numerator for basic earnings per share 712,434 589,915

net amount attributable to Rialto's Carried Interest Incentive Plan (1) — 1,038

Numerator for diluted earnings per share $ 712,434 588,877

Denominator for basic earnings per share - weighted average common shares outstanding 276,946 286,074

Denominator for diluted earnings per share - weighted average common shares outstanding 276,946 286,074

Basic earnings per share $ 2.57 2.06

Diluted earnings per share $ 2.57 2.06

(1) The amount presented relate to Rialto's Carried Interest Incentive Plan and represents 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.

Lennar Corporation and Subsidiaries

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

For both the three months ended February 29, 2024 and February 28, 2023, there were no options to purchase shares of common stock that were outstanding and anti-dilutive.

(7) Homebuilding Senior Notes and Other Debts Payable

(Dollars in thousands) February 29, 2024 November 30, 2023

Numerator for basic and diluted earnings per share 943,611 858,187 1,656,007 1,448,237

Denominator for basic and diluted earnings per share - weighted average common shares outstanding 273,703 284,910 275,325 285,492

Basic and diluted earnings per share $ 3.45 3.01 6.01 5.07

For both the three and six months ended May 31, 2024 and May 31, 2023, there were no options to purchase shares of common stock that were outstanding and anti-dilutive.

(7) Homebuilding Senior Notes and Other Debt Payable

(Dollars in thousands) May 31, 2024 November 30, 2023

4.75 % senior notes due 2025

7 unchanged sentences

4.50 % senior notes due 2024

797,513 797,347

Mortgage notes on land and other debt 290,376 311,720

$ 2,241,507 2,816,482

The carrying amounts of the senior notes in the table above are net of debt issuance costs of $ 3.8 million and $ 4.2 million as of February 29, 2024 and November 30, 2023, respectively.

(1) During both the three and six months ended May 31, 2024, the Company repurchased $ 100 million aggregate principal amount of senior notes due November 2027, through open market repurchases.

The carrying amounts of the senior notes in the table above are net of debt issuance costs of $ 3.0 million and $ 4.2 million as of May 31, 2024 and November 30, 2023, respectively.

Lennar Corporation and Subsidiaries

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

In April 2024, the Company redeemed $ 454 million aggregate principal amount of its 4.50 % senior notes due April 2024.

The redemption price, which was paid in cash, was 100 % of the principal amount outstanding.

In April 2024, $ 350 million of the Company's unsecured revolving credit facility matured.

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

(In thousands) February 29, 2024

Commitments - maturing in April 2024 $ 350,000

(In thousands) May 31, 2024

Commitments - maturing in May 2027 $ 2,225,000

Total commitments $ 2,575,000

Accordion feature 425,000

6 unchanged sentences

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

(In thousands) February 29, 2024 November 30, 2023

(In thousands) May 31, 2024 November 30, 2023

Performance letters of credit $ 1,485,725 1,404,541

5 unchanged sentences

The terms of guarantees are unchanged from the disclosure in the Company's Financial Condition and Capital Resources section in its Annual Report on Form 10-K for the year ended November 30, 2023.

Lennar Corporation and Subsidiaries

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

(8) Financial Instruments and Fair Value Disclosures

The following table presents the carrying amounts and estimated fair values of financial instruments held or issued by the Company at February 29, 2024 and November 30, 2023, using available market information and what the Company believes to be appropriate valuation methodologies.

The following table presents the carrying amounts and estimated fair values of financial instruments held or issued by the Company at May 31, 2024 and November 30, 2023, using available market information and what the Company believes to be appropriate valuation methodologies.

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

1 unchanged sentence

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

February 29, 2024 November 30, 2023

May 31, 2024 November 30, 2023

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

2 unchanged sentences

Investments held-to-maturity Level 3 138,425 139,504 140,676 139,396

Homebuilding senior notes and other debts payable, net Level 2 $ 2,830,332 2,808,473 2,816,482 2,785,712

Financial Services notes and other debts payable, net Level 2 1,564,290 1,564,710 2,163,805 2,164,441

Homebuilding senior notes and other debt payable, net Level 2 $ 2,241,507 2,224,505 2,816,482 2,785,712

Financial Services notes and other debt payable, net Level 2 1,410,102 1,410,688 2,163,805 2,164,441

Multifamily notes payable, net Level 2 — — 3,741 3,741

2 unchanged sentences

The fair values for instruments that do not have quoted market prices are estimated by the Company on the basis of discounted cash flows or other financial information.

For notes and other debts payable, the fair values approximate their carrying value due to variable interest pricing terms and the short-term nature of the majority of the borrowings.

For notes and other debt payable, the fair values approximate their carrying value due to variable interest pricing terms and the short-term nature of the majority of the borrowings.

Lennar Corporation and Subsidiaries

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

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

7 unchanged sentences

Fair Value Hierarchy Fair Value at

(In thousands) February 29, 2024 November 30, 2023

(In thousands) May 31, 2024 November 30, 2023

Financial Services Assets:

6 unchanged sentences

Investments available-for-sale Level 3 39,669 37,953

Lennar Corporation and Subsidiaries

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

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

February 29, 2024 November 30, 2023

May 31, 2024 November 30, 2023

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

4 unchanged sentences

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

The fair value of these are included in Financial Services’ loans held-for-sale as of February 29, 2024 and November 30, 2023.

The fair value of these are included in Financial Services’ loans held-for-sale as of May 31, 2024 and November 30, 2023.

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

7 unchanged sentences

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

As of February 29, 2024 As of November 30, 2023

Lennar Corporation and Subsidiaries

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

As of May 31, 2024 As of November 30, 2023

Unobservable inputs:

9 unchanged sentences

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

Lennar Corporation and Subsidiaries

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

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

Three Months Ended

(In thousands) February 29, 2024 February 28, 2023

Three Months Ended Six Months Ended

May 31, May 31,

(In thousands) 2024 2023 2024 2023

Changes in fair value included in Financial Services revenues:

3 unchanged sentences

Forward options ( 710 ) ( 100 ) ( 1,054 ) ( 952 )

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

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

Investments in equity securities $ ( 21,514 ) 25,497 ( 26,651 ) 1,543

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.

Lennar Corporation and Subsidiaries

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

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:

Three Months Ended

February 29, 2024 February 28, 2023

Three Months Ended May 31,

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

6 unchanged sentences

Ending balance $ 3,652 66,715 3,398 22,754

Six Months Ended May 31,

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

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

Purchases/loan originations 232 212,335 120 164,070

Sales/loan originations sold, including those not settled — ( 156,285 ) — ( 165,302 )

Disposals/settlements ( 70 ) — ( 143 ) —

Changes in fair value (1) 50 ( 2,985 ) ( 42 ) ( 11 )

Interest and principal paydowns — 191 — ( 1,602 )

Ending balance $ 3,652 66,715 3,398 22,754

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

2 unchanged sentences

The assets measured at fair value on a nonrecurring basis are summarized below:

Three Months Ended

February 29, 2024 February 28, 2023

Three Months Ended May 31,

(In thousands) Fair Value

3 unchanged sentences

Land and land under development (2) Level 3 — — — 574 561 ( 13 )

Deposits and pre-acquisition costs on real estate (3) Level 3 332 — ( 332 ) 14,455 — ( 14,455 )

Investments in unconsolidated entities (4) Level 3 — — — 75,769 37,792 ( 37,977 )

Six Months Ended May 31,

(In thousands) Fair Value

Hierarchy Carrying Value Fair Value Total Losses, Net (1) Carrying Value Fair Value Total Losses, Net (1)

Non-financial assets - Homebuilding:

Finished homes and construction in progress (2) Level 3 $ 192,309 168,985 ( 23,324 ) 183,816 158,902 ( 24,914 )

Land and land under development (2) Level 3 — — — 25,735 23,703 ( 2,032 )

Deposits and pre-acquisition costs on real estate (3) Level 3 3,202 — ( 3,202 ) 17,130 — ( 17,130 )

Investments in unconsolidated entities (4) Level 3 — — — 78,834 37,792 ( 41,042 )

(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 three months ended February 29, 2024 and February 28, 2023, total losses, net, for land and land under development included $ 2.9 million and $ 14.5 million, respectively, of deposit and pre-acquisition cost write-offs.

(3) Valuation adjustments related to investments in unconsolidated entities were primarily included in Homebuilding other income (expense), net in the Company's condensed consolidated statements of operations and comprehensive income for the three months ended February 28, 2023.

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.

The Company disclosed its accounting policy related to inventories and its review for indicators of impairment in the Summary

Lennar Corporation and Subsidiaries

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

of Significant Accounting Policies in its Annual Report on Form 10-K for the year ended November 30, 2023.

(3) Forfeited deposits and write-off of pre-acquisition costs on real estate were included in Homebuilding costs and expenses in the Company's condensed consolidated statements of operations and comprehensive income for the three and six months ended May 31, 2024 and 2023.

(4) Valuation adjustments related to investments in unconsolidated entities were primarily included in Homebuilding other income (expense), net in the Company's condensed consolidated statements of operations and comprehensive income for the three and six months ended May 31, 2024 and 2023.

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.

The Company disclosed its accounting policy related to inventories and its review for indicators of impairment in the Summary of Significant Accounting Policies in its Annual Report on Form 10-K for the year ended November 30, 2023.

The Company estimates the fair value of inventory evaluated for impairment based on market conditions and assumptions made by management at the time the inventory is evaluated, which may differ materially from actual results if market conditions or assumptions change.

3 unchanged sentences

Communities with valuation adjustments

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

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

(in thousands)

1 unchanged sentence

(in thousands)

February 29, 2024 1,227 31 2 $ 4,863 $ ( 1,521 )

February 28, 2023 1,210 27 — — —

May 31, 2024 1,245 32 4 $ 25,769 $ 15,263

May 31, 2023 1,256 34 5 42,408 12,247

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

Three Months Ended

February 29, 2024

Unobservable inputs Range

Six Months Ended May 31,

Unobservable inputs Range Range

Average selling price (1) $ 178,000 — 282,000 371,000 — 663,000

1 unchanged sentence

Discount rate 20 % 20 %

(1) Represents the projected average selling price on future deliveries for communities in which the Company recorded valuation adjustments during the quarter ended February 29, 2024.

(1) Represents the projected average selling price on future deliveries for communities in which the Company recorded valuation adjustments during both the six months ended May 31, 2024 and 2023.

The Company disclosed its accounting policy related to investments in unconsolidated entities and its review for indicators of impairment for the long-lived assets of an unconsolidated entity and the decline in the fair value of an investment below the carrying value in the Summary of Significant Accounting Policies in its Annual Report on Form 10-K for the year ended November 30, 2023.

3 unchanged sentences

The Company generally estimates the fair value of an investment in an unconsolidated entity by using a cash flow analysis for estimated future net distributions from an unconsolidated entity, subject to the perceived risks associated with the unconsolidated entity’s cash flow streams.

During the three months ended February 29, 2024, the Company evaluated the fair value of its investments in unconsolidated entities using a cash flow analysis and concluded that the investments had no other-than-temporary impairment.

During the three and six months ended May 31, 2024, the Company evaluated the fair value of its investments in unconsolidated entities using a cash flow analysis and concluded that the investments had no other-than-temporary impairment.

During the three and six months ended May 31, 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 condensed consolidated statements of operation and comprehensive income.

Lennar Corporation and Subsidiaries

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

The Company estimates the fair value of investments in unconsolidated entities evaluated for impairment based on market conditions and assumptions made by management at the time the investment is evaluated, which may differ materially from actual results if market conditions or assumptions change.

(9) Variable Interest Entities

During the three months ended February 29, 2024, 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 three months ended February 29, 2024.

During the six months ended May 31, 2024, the Company evaluated the joint venture (“JV”) agreements of its JVs 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 six months ended May 31, 2024.

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

Lennar Corporation and Subsidiaries

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

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

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

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

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

4 unchanged sentences

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

February 29, 2024 November 30, 2023

May 31, 2024 November 30, 2023

(In thousands) Investments in

8 unchanged sentences

$ 1,152,142 1,228,384 1,240,627 1,386,646

(1) As of February 29, 2024 and November 30, 2023, 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 $ 68.8 million and $ 69.8 million, respectively.

In addition, as of February 29, 2024 and November 30, 2023, there was recourse debt of a VIE of $ 42.0 million and $ 42.1 million, respectively.

(2) As of February 29, 2024 and November 30, 2023, 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 II, in addition to the investment, also included the remaining combined equity commitment of $ 12.8 million as of both February 29, 2024 and November 30, 2023 for future expenditures related to the construction and development of its projects.

(3) As of both February 29, 2024 and November 30, 2023, 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 February 29, 2024, the Company's maximum recourse exposure to loss of the Lennar Other segment was limited to its investments in the unconsolidated VIEs.

(1) As of May 31, 2024 and November 30, 2023, 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 $ 21.2 million and $ 69.8 million, respectively.

In addition, as of May 31, 2024 and November 30, 2023, there was recourse debt of a VIE of $ 42.9 million and $ 42.1 million, respectively.

(2) As of May 31, 2024 and November 30, 2023, 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 II, in addition to the investment, also included the remaining combined equity commitment of $ 12.8 million as of November 30, 2023, for expenditures related to the construction and development of its projects.

The decrease in exposure as of May 31, 2024 is primarily due to the removal of LMV II as the Fund does not expect to call for equity in the future.

As a result, LMV II is not a VIE as of May 31, 2024.

(3) As of both May 31, 2024 and November 30, 2023, 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) As of both May 31, 2024 and 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.

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.

Because such JVs are expected to make future capital calls in order to continue to finance their activities, the entities are determined to be VIEs as of February 29, 2024 in accordance with ASC 810 due to insufficient equity at risk.

Because such JVs are expected to make future capital calls in order to continue to finance their activities, the entities are determined to be VIEs as of May 31, 2024 in accordance with ASC 810 due to insufficient equity at risk.

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

5 unchanged sentences

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

Lennar Corporation and Subsidiaries

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

Option Contracts

2 unchanged sentences

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 $ 1.9 billion as of February 29, 2024 and is included in consolidated inventory not owned.

Consolidated inventory not owned related to land financing transactions,

Lennar Corporation and Subsidiaries

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

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 $ 1.7 billion as of February 29, 2024.

During the three months ended February 29, 2024, consolidated inventory not owned increased by $ 555.4 million with a corresponding increase to liabilities related to consolidated inventory not owned in the accompanying condensed consolidated balance sheet as of February 29, 2024.

Land under option with third party holding companies that the Company was economically compelled to takedown was $ 2.2 billion as of May 31, 2024 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 $ 1.5 billion as of May 31, 2024.

During the six months ended May 31, 2024, consolidated inventory not owned increased by $ 761.0 million with a corresponding increase to liabilities related to consolidated inventory not owned in the accompanying condensed consolidated balance sheet as of May 31, 2024.

The increase was primarily due to land financing transactions and the consolidation of homesites under option that the Company is economically compelled to takedown.

These increases were partially offset by homesite takedowns.

To reflect the purchase price of the homesite takedowns, the Company had a net reclass related to option deposits from consolidated inventory not owned to finished homes and construction in progress in the accompanying condensed consolidated balance sheet as of February 29, 2024.

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.

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

(Dollars in thousands) February 29, 2024 November 30, 2023

(Dollars in thousands) May 31, 2024 November 30, 2023

Non-refundable option deposits and pre-acquisition costs $ 2,645,428 1,949,219

1 unchanged sentence

Letters of credit in lieu of cash deposits under certain land and option contracts 269,725 198,920

For the three months ended February 29, 2024, 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 February 29, 2024, 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 February 29, 2024, the total deposits and pre-acquisition costs on real estate relating to contracts with the Land Bank were $ 669.9 million.

As of February 29, 2024, total consolidated inventory not owned and liabilities related to consolidated inventory not owned relating to contracts with the Land Bank were $ 886.2 million and $ 749.2 million, respectively.

For the six months ended May 31, 2024, 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 May 31, 2024, 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 May 31, 2024, the total deposits and pre-acquisition costs on real estate relating to contracts with the Land Bank were $ 777.5 million.

As of May 31, 2024, total consolidated inventory not owned and liabilities related to consolidated inventory not owned relating to contracts with the Land Bank were $ 827.1 million and $ 697.2 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.

11 unchanged sentences

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

Three Months Ended

(In thousands) February 29, 2024 February 28, 2023

Lennar Corporation and Subsidiaries

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

Three Months Ended Six Months Ended

May 31, May 31,

(In thousands) 2024 2023 2024 2023

Warranty reserve, beginning of the period $ 405,558 403,334 414,796 418,017

3 unchanged sentences

Warranty reserve, end of period $ 403,448 415,154 403,448 415,154

(1) The adjustments to pre-existing warranties from changes in estimates during the three months ended February 29, 2024 and February 28, 2023 primarily related to specific claims in certain of the Company's homebuilding communities and other adjustments.

Lennar Corporation and Subsidiaries

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

(1) The adjustments to pre-existing warranties from changes in estimates during the three and six months ended May 31, 2024 and 2023 primarily related to specific claims in certain of the Company's homebuilding communities and other adjustments.

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

4 unchanged sentences

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

(Dollars in thousands) February 29, 2024 November 30, 2023

(Dollars in thousands) May 31, 2024 November 30, 2023

Right-of-use assets $ 151,600 145,812

3 unchanged sentences

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

Future minimum payments under the noncancellable leases in effect at February 29, 2024 were as follows:

Future minimum payments under the noncancellable leases in effect at May 31, 2024 were as follows:

(In thousands) Lease Payments

9 unchanged sentences

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

Three Months Ended

(In thousands) February 29, 2024 February 28, 2023

Six Months Ended May 31,

(In thousands) 2024 2023

Rental expense $ 54,684 52,998

1 unchanged sentence

This building contains approximately 213,200 square feet of office space, of which the Company leases approximately 53,000 square feet of unused office space to other tenants.

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

For both the three months ended February 29, 2024 and February 28, 2023, the Company had an immaterial amount of sublease income.

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

For both the six months ended May 31, 2024 and 2023, the Company had an immaterial amount of sublease income.

Forward-Looking Statements

15 unchanged sentences

natural disasters or catastrophic events for which our insurance may not provide adequate coverage;

our inability to successfully execute our strategies, including our land lighter strategy and our planned spin-off of certain businesses and assets;

our inability to successfully execute our strategies, including our land light strategy and our planned spin-off;

a decline in the value of the land and home inventories we maintain and resulting possible future write downs of the carrying value of our real estate assets;

the forfeiture of deposits related to land purchase options we decide not to exercise;

the potential negative impact to our business of public health issues, including the coronavirus (COVID-19) pandemic;

the potential negative impact to our business of public health issues such as a major epidemic or pandemic that could have a negative impact on the economy and on our businesses;

possible unfavorable outcomes in legal proceedings;

11 unchanged sentences

and changes in accounting conventions that adversely affect our reported earnings.

Please see our Annual Report on Form 10-K for the fiscal year ended November 30, 2023 and our other filings with the SEC for a further discussion of these and other risks and uncertainties which could affect our future results.

Please see our Annual Report on Form 10-K for the fiscal year ended November 30, 2023, filed with the Securities and Exchange Commission (the “SEC”) on January 26, 2024, as amended by our Annual Report on Form 10-K/A filed with the SEC on April 25, 2024, and our other filings with the SEC for a further discussion of these and other risks and uncertainties which could affect our future results.

We undertake no obligation, other than those imposed by securities laws, to publicly revise any forward-looking statements to reflect events or circumstances after the date of those statements or to reflect the occurrence of anticipated or unanticipated events.

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

What changed 10-Q

Item 1. Financial Statements