What changed in this filing

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Item 1. Financial Statements

2024-10-02 compared with 2024-06-28 · 181 added, 166 removed, 810 unchanged (30% of the section changed)

3 unchanged sentences

(Dollars in thousands)

May 31, November 30,

August 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 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.

As of August 31, 2024, total assets include $ 3.3 billion related to consolidated VIEs of which $ 68.8 million is included in Homebuilding cash and cash equivalents, $ 7.0 million in Homebuilding receivables, net, $ 6.7 million in Homebuilding finished homes and construction in progress, $ 625.1 million in Homebuilding land and land under development, $ 2.5 billion in Homebuilding consolidated inventory not owned, $ 67.3 million in Homebuilding deposits and pre-acquisition costs on real estate, $ 0.3 million in Homebuilding investments in unconsolidated entities, $ 41.0 million in Homebuilding other assets and $ 34.0 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, $ 1.2 billion in Homebuilding consolidated inventory not owned, $ 55.0 million in Homebuilding deposits and pre-acquisition costs on real estate, $ 0.3 million in Homebuilding investments in unconsolidated entities, $ 23.0 million in Homebuilding other assets and $ 32.6 million in Multifamily assets.

See accompanying notes to condensed consolidated financial statements.

2 unchanged sentences

(In thousands, except share amounts)

May 31, November 30,

August 31, November 30,

2024 (2) 2023 (2)

14 unchanged sentences

Class A common stock of $ 0.10 par value;

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

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

August 31, 2024 - 259,978,383 shares and November 30, 2023 - 258,475,012 shares

25,998 25,848

Class B common stock of $ 0.10 par value;

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

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

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

Additional paid-in capital 5,706,711 5,570,009

1 unchanged sentence

Treasury stock, at cost;

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

August 31, 2024 - 21,171,248 shares of Class A common stock and 4,163,503 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 $ 39,740,982 39,234,303

(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.

(2) As of August 31, 2024, total liabilities include $ 2.4 billion related to consolidated VIEs as to which there was no recourse against the Company, of which $ 80.0 million is included in Homebuilding accounts payable, $ 2.3 billion in Homebuilding liabilities related to consolidated inventory not owned, $ 6.0 million in Homebuilding senior notes and other debt payable, $ 46.5 million in Homebuilding other liabilities, and $ 1.0 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 Six Months Ended

May 31, May 31,

Three Months Ended Nine Months Ended

August 31, August 31,

2024 2023 2024 2023

12 unchanged sentences

Total costs and expenses 8,129,984 7,258,891 22,088,702 19,785,358

Equity in losses from unconsolidated entities ( 4,309 ) ( 49,755 ) ( 34,854 ) ( 80,942 )

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

Equity in earnings (losses) from unconsolidated entities 186,621 ( 23,989 ) 151,767 ( 104,931 )

Other income, net and other gains 23,331 44,151 156,875 57,511

Lennar Other unrealized gains (losses) from technology investments 39,123 ( 15,713 ) 12,472 ( 14,170 )

14 unchanged sentences

(In thousands)

Six Months Ended

Nine Months Ended

Cash flows from operating activities:

3 unchanged sentences

Amortization of discount/premium and accretion on debt, net 407 ( 2,194 )

Equity in loss from unconsolidated entities 34,854 80,942

Equity in (earnings) loss from unconsolidated entities ( 151,767 ) 104,931

Distributions of earnings from unconsolidated entities 34,108 33,714

2 unchanged sentences

Gains on redemption/repurchases of senior notes ( 825 ) ( 6,878 )

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

Loans held-for-sale unrealized (gains) losses ( 1,617 ) 33,358

Lennar Other unrealized (gains) losses from technology investments and other (gains) losses ( 35,189 ) 14,131

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

Gains on sale of operating properties and equipment and other assets ( 15,428 ) ( 3,064 )

Valuation adjustments and write-offs of option deposits and pre-acquisition costs on real estate, and other assets 125,777 96,451

Changes in assets and liabilities:

Decrease in receivables 30,956 435,880

(Increase) decrease in receivables ( 24,170 ) 167,573

(Increase) decrease in inventories, excluding valuation adjustments ( 707,702 ) 127,312

Increase in deposits and pre-acquisition costs on real estate ( 984,843 ) ( 134,883 )

Decrease (increase) in other assets 11,393 ( 111,955 )

Increase in other assets ( 84,751 ) ( 104,794 )

Decrease in loans held-for-sale 245,004 434,332

3 unchanged sentences

Net additions of operating properties and equipment ( 130,138 ) ( 53,610 )

Proceeds from the sale of other assets 18,709 7,762

Proceeds from the sale of operating properties and equipment and other assets 31,435 13,215

Investments in and contributions to unconsolidated entities ( 311,904 ) ( 152,530 )

Distributions of capital from unconsolidated entities 236,527 69,960

Decrease in Financial Services loans held-for-investment 2,960 8,882

(Increase) decrease in Financial Services loans held-for-investment ( 2,479 ) 12,222

Purchases of investment securities ( 4,519 ) ( 8,000 )

5 unchanged sentences

(In thousands)

Six Months Ended

Nine Months Ended

Cash flows from financing activities:

25 unchanged sentences

Homebuilding:

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

Purchases of inventories financed by sellers $ 34,245 13,500

Net non-cash contributions to unconsolidated entities 14,453 120

See accompanying notes to condensed consolidated financial statements.

9 unchanged sentences

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

The condensed consolidated statements of operations for the three and six months ended May 31, 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 nine months ended August 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 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 .

Homebuilding cash and cash equivalents as of August 31, 2024 and November 30, 2023 included $ 878.8 million and $ 594.8 million, respectively, of cash held in escrow for approximately two days .

Share-based Payments

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.

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

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

Recently Adopted Accounting Pronouncements

9 unchanged sentences

Reclassifications

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

Certain prior year segment information in the condensed consolidated financial statements has 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.

12 unchanged sentences

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

(In thousands) May 31, 2024

(In thousands) August 31, 2024

Homebuilding Financial

39 unchanged sentences

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 May 31, 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 August 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 $ 145.0 million and $ 121.0 million without readily available fair values as of May 31, 2024 and November 30, 2023, respectively.

(3) Investments in equity securities include investments of $ 147.5 million and $ 121.0 million without readily available fair values as of August 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 Six Months Ended

May 31, May 31,

Three Months Ended Nine Months Ended

August 31, August 31,

(In thousands) 2024 2023 2024 2023

26 unchanged sentences

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

May 31, November 30,

August 31, November 30,

(In thousands)

7 unchanged sentences

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

Three Months Ended Six Months Ended

May 31, May 31,

Three Months Ended Nine Months Ended

August 31, August 31,

(In thousands) 2024 2023 2024 2023

19 unchanged sentences

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

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:

At August 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:

June 2024 (1) $ 500,000 — 500,000

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

July 2024 505,000 — 505,000

September 2024 (1) $ 100,000 100,000 200,000

April 2025 250,000 250,000 500,000

June 2025 1,400,000 — 1,400,000

August 2025 75,000 75,000 150,000

August 2025 250,000 250,000 500,000

Total residential facilities $ 2,075,000 675,000 2,750,000

4 unchanged sentences

Total $ 3,050,000

(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.

(1) Subsequent to August 31, 2024, the maturity date was extended to October 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) May 31, 2024 November 30, 2023

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

Borrowings under the residential facilities $ 1,332,897 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 and nine months

Lennar Corporation and Subsidiaries

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

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.

ended August 31, 2024 and 2023.

Loan origination liabilities were $ 18.9 million and $ 17.6 million as of August 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 Six Months Ended

May 31, May 31,

Three Months Ended Nine Months Ended

August 31, August 31,

(Dollars in thousands) 2024 2023 2024 2023

2 unchanged sentences

Securitizations 4 3 9 6

(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.

(1) During both the three and nine months ended August 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 May 31, 2024 and November 30, 2023, the Financial Services segment held commercial mortgage-backed securities (“CMBS”).

At August 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 or six months ended May 31, 2024 and 2023.

Based on the segment’s assessment, no impairment charges were recorded during the three or nine months ended August 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) May 31, 2024 November 30, 2023

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

Carrying value $ 138,045 140,676

1 unchanged sentence

Incurred interest rate 3.4 % 3.4 %

August 31, 2024

Discount rates at purchase 6 % — 84 %

7 unchanged sentences

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).

Operations of the Multifamily Segment also include equity in earnings (loss) from unconsolidated entities and other gains, which includes sales of buildings and investments.

Lennar Corporation and Subsidiaries

11 unchanged sentences

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 Six Months Ended

May 31, May 31,

Three Months Ended Nine Months Ended

August 31, August 31,

(In thousands) 2024 2023 2024 2023

8 unchanged sentences

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

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

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

Investments in unconsolidated entities (1) (2) $ 1,309,622 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 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.

As of August 31, 2024 and November 30, 2023, the carrying amount of the Company's investment was $ 466.1 million and $ 422.2 million, respectively.

As of August 31, 2024 and November 30, 2023, the Homebuilding segment's unconsolidated entities had non-recourse debt with completion guarantees of $ 292.3 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 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.

As of both August 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 August 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

The details related to these are unchanged from the disclosure in

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.

the 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 is expected to raise equity commitments totaling $ 1.0 billion.

Upward America could raise equity commitments totaling $ 1.0 billion.

The commitments are primarily from institutional investors, including $ 78.1 million committed by Lennar.

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.

As of August 31, 2024 and November 30, 2023, the carrying amount of the Company's investment in Upward America was $ 20.5 million and $ 14.8 million, respectively.

Multifamily Unconsolidated Entities

2 unchanged sentences

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 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.

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

As of August 31, 2024 and November 30, 2023, the Multifamily segment's unconsolidated entities had non-recourse debt with completion guarantees of $ 904.2 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 Six Months Ended

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

Three Months Ended Nine Months Ended

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

General contractor services, net of deferrals $ 67,190 120,510 253,260 374,283

4 unchanged sentences

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

As of August 31, 2024, the Company had a $ 25.7 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 six months ended May 31, 2024 are included below:

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

August 31, 2024

(In thousands) LMV I LMV II

5 unchanged sentences

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

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

Distributions to Lennar 147,305 11,206

(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.

As of November 30, 2023, there were 38 rental operation projects in LMV I.

During the second half of fiscal 2024, the LMV I partners decided to liquidate and sell all of the individual rental operation projects of LMV I as the fund has come to the end of its contractual life.

During the three months ended August 31, 2024, 27 LMV I rental operation projects were sold to various third-party buyers.

The Company recognized a net gain of $ 179.0 million on the sale of these rental operation projects which was recorded as equity in earnings (losses) in the condensed consolidated statement of operations.

As a result, the Company received net cash distributions of $ 147.3 million during the three months ended August 31, 2024.

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.

Other Unconsolidated Entities

The Company's investment in the Rialto funds totaled $ 145.7 million and $ 148.7 million as of August 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 .

The Company also had strategic technology investments in unconsolidated entities and investment funds with a carrying value of $ 205.5 million and $ 127.5 million, as of August 31, 2024 and November 30, 2023, respectively.

In addition, during the nine months ended August 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 and six months ended May 31, 2024 and 2023:

Three Months Ended May 31, 2024

Three Months Ended August 31, 2024

(In thousands) Total

5 unchanged sentences

Earnings Noncontrolling

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

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

Net earnings (including net earnings attributable to noncontrolling interests) 1,187,274 — — — — — 1,162,674 24,600

11 unchanged sentences

Total other comprehensive income, net of tax 444 — — — — 444 — —

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

Balance at August 31, 2024 $ 27,557,708 25,998 3,660 5,706,711 ( 3,122,408 ) 7,040 24,791,519 145,188

Three Months Ended August 31, 2023

(In thousands) Total

5 unchanged sentences

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

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

Net earnings (including net earnings attributable to noncontrolling interests) 1,116,952 — — — — — 1,108,996 7,956

7 unchanged sentences

1,391 — — — — — — 1,391

Payments related to noncontrolling interests

( 22,795 ) — — — — — — ( 22,795 )

Non-cash purchase or activity of noncontrolling interests, net 2,797 — — 3,400 — — — ( 603 )

Total other comprehensive income, net of tax 208 — — — — 208 — —

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

Balance at August 31, 2023 $ 25,788,542 25,844 3,660 5,561,793 ( 1,052,000 ) 4,040 21,113,282 131,923

Lennar Corporation and Subsidiaries

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

Six Months Ended May 31, 2024

Nine Months Ended August 31, 2024

(In thousands) Total

19 unchanged sentences

Total other comprehensive income, net of tax 2,161 — — — — 2,161 — —

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

Balance at August 31, 2024 $ 27,557,708 25,998 3,660 5,706,711 ( 3,122,408 ) 7,040 24,791,519 145,188

Nine Months Ended August 31, 2023

(In thousands) Total

18 unchanged sentences

Non-cash purchase or activity of noncontrolling interests, net 15,946 — — 3,559 — — — 12,387

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.

Total other comprehensive income, net of tax 1,632 — — — — 1,632 — —

Balance at August 31, 2023 $ 25,788,542 25,844 3,660 5,561,793 ( 1,052,000 ) 4,040 21,113,282 131,923

On September 25, 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 October 24, 2024 to holders of record at the close of business on October 9, 2024.

On July 19, 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 July 5, 2024, as declared by its Board of Directors on June 20, 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.

2 unchanged sentences

The repurchase authorization has no expiration date.

At August 31, 2024, we have a remaining authorization to repurchase $ 3.9 billion in value of our Class A or B common stock.

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 May 31, Six Months Ended May 31,

Three Months Ended August 31, Nine Months Ended August 31,

2024 2023 2024 2023

7 unchanged sentences

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

Three Months Ended Six Months Ended

May 31, May 31,

Three Months Ended Nine Months Ended

August 31, August 31,

(Dollars in thousands) 2024 2023 2024 2023

1 unchanged sentence

Effective tax rate (1) 23.0 % 24.4 % 23.2 % 24.2 %

(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.

(1) For both the three and nine months ended August 31, 2024 and 2023, the effective tax rate included state income tax expense and non-deductible executive compensation, partially offset by tax credits.

The reduction in the effective tax rate from prior year for both the three and nine months ended August 31, 2024 is primarily due to additional tax credits recognized during the three months ended August 31, 2024.

(6) Earnings Per Share

5 unchanged sentences

Basic and diluted earnings per share were calculated as follows:

Three Months Ended Six Months Ended

May 31, May 31,

Three Months Ended Nine Months Ended

August 31, August 31,

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

5 unchanged sentences

Basic and diluted earnings per share $ 4.26 3.87 10.26 8.94

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.

For both the three and nine months ended August 31, 2024 and August 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

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

4.75 % senior notes due 2025

9 unchanged sentences

$ 2,263,256 2,816,482

(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.

(1) During the nine months ended August 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 $ 2.6 million and $ 4.2 million as of August 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.

During the nine months ended August 31, 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.

1 unchanged sentence

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

(In thousands) May 31, 2024

(In thousands) August 31, 2024

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

7 unchanged sentences

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

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

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

Performance letters of credit $ 1,606,070 1,404,541

6 unchanged sentences

(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 May 31, 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 August 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.

May 31, 2024 November 30, 2023

August 31, 2024 November 30, 2023

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

7 unchanged sentences

Financial Services - The fair values above are based on quoted market prices, if available.

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 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.

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

Lennar Corporation and Subsidiaries

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

financial information.

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.

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) May 31, 2024 November 30, 2023

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

Financial Services Assets:

7 unchanged sentences

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

May 31, 2024 November 30, 2023

August 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 May 31, 2024 and November 30, 2023.

The fair value of these are included in Financial Services’ loans held-for-sale as of August 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.

9 unchanged sentences

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

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

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

Unobservable inputs:

10 unchanged sentences

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

Three Months Ended Six Months Ended

May 31, May 31,

Three Months Ended Nine Months Ended

August 31, August 31,

(In thousands) 2024 2023 2024 2023

12 unchanged sentences

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 May 31,

Three Months Ended August 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 $ 3,366 150,867 3,416 37,295

Six Months Ended May 31,

Nine Months Ended August 31,

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

10 unchanged sentences

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

Three Months Ended May 31,

Three Months Ended August 31,

(In thousands) Fair Value

4 unchanged sentences

Deposits and pre-acquisition costs on real estate (3) Level 3 206 — ( 206 ) 1,580 — ( 1,580 )

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

Six Months Ended May 31,

Non-financial assets - Multifamily:

Land and land under development (4) Level 3 $ 139,980 49,970 ( 90,010 ) — — —

Nine Months Ended August 31,

(In thousands) Fair Value

5 unchanged sentences

Investments in unconsolidated entities (5) 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.

Non-financial assets - Multifamily:

Land and land under development (4) Level 3 $ 139,980 49,970 ( 90,010 ) — — —

Lennar Corporation and Subsidiaries

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

(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.

(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.

(4) Valuation adjustments for land and land under development were included in Multifamily costs and expenses.

(5) 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.

Finished homes and construction in progress are included within inventories.

6 unchanged sentences

Communities with valuation adjustments

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

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

(in thousands)

1 unchanged sentence

(in thousands)

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

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

August 31, 2024 1,283 24 4 $ 25,769 $ 15,263

August 31, 2023 1,247 21 6 53,211 18,844

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

Six Months Ended May 31,

Nine Months Ended August 31,

Unobservable inputs Range Range

2 unchanged sentences

Discount rate 20 % 20 %

(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.

(1) Represents the projected average selling price on future deliveries for communities in which the Company recorded valuation adjustments during both the nine months ended August 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 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.

During the three and nine months ended August 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 an immaterial amount of other-than-temporary impairment.

During the nine months ended August 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

2 unchanged sentences

(9) Variable Interest Entities

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.

During the nine months ended August 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 nine months ended August 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.

7 unchanged sentences

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

May 31, 2024 November 30, 2023

August 31, 2024 November 30, 2023

(In thousands) Investments in

8 unchanged sentences

$ 1,178,946 1,254,761 1,240,627 1,386,646

(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.

(1) As of August 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 $ 20.7 million and $ 69.8 million, respectively.

In addition, as of August 31, 2024 and November 30, 2023, there was recourse debt of VIEs of $ 44.2 million and $ 42.1 million, respectively.

(2) As of August 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 decrease in exposure as of August 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 August 31, 2024.

(3) As of both August 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 August 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 increase in exposure was due to the Company entering into a new JV which is a VIE and its continued contributions to 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 May 31, 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 August 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.

3 unchanged sentences

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.

Except for the unconsolidated VIEs discussed above, the Company and the other partners did not guarantee any debt of the other unconsolidated VIEs.

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.

Except for the unconsolidated VIEs discussed above, the Company and the other partners

Lennar Corporation and Subsidiaries

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

did not guarantee any debt of the other unconsolidated VIEs.

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.

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 $ 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.

Land under option with third party holding companies that the Company was economically compelled to takedown was $ 2.5 billion as of August 31, 2024 and is included in consolidated inventory not owned.

During the nine months ended August 31, 2024, consolidated inventory not owned increased by $ 850.1 million with a corresponding increase to liabilities related to consolidated inventory not owned in the accompanying condensed consolidated balance sheet as of August 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 May 31, 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) May 31, 2024 November 30, 2023

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

Non-refundable option deposits and pre-acquisition costs $ 2,890,534 1,949,219

1 unchanged sentence

Letters of credit in lieu of cash deposits under certain land and option contracts 307,678 198,920

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.

For the nine months ended August 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 August 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 August 31, 2024, the total deposits and pre-acquisition costs on real estate relating to contracts with the Land Bank were $ 820.7 million.

As of August 31, 2024, total consolidated inventory not owned and liabilities related to consolidated inventory not owned relating to contracts with the Land Bank were $ 768.1 million and $ 644.9 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.

9 unchanged sentences

Warranty and similar reserves for homes are established at an amount estimated to be adequate to cover potential costs for materials and labor with regard to warranty-type claims expected to be incurred subsequent to the delivery of a home.

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

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

Lennar Corporation and Subsidiaries

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

Three Months Ended Six Months Ended

May 31, May 31,

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

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

Three Months Ended Nine Months Ended

August 31, August 31,

(In thousands) 2024 2023 2024 2023

4 unchanged sentences

Warranty reserve, end of period $ 422,280 401,331 422,280 401,331

(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.

(1) The adjustments to pre-existing warranties from changes in estimates during the three and nine months ended August 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) May 31, 2024 November 30, 2023

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

Right-of-use assets $ 223,614 145,812

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 May 31, 2024 were as follows:

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

(In thousands) Lease Payments

9 unchanged sentences

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

Six Months Ended May 31,

Nine Months Ended August 31,

(In thousands) 2024 2023

3 unchanged sentences

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.

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

Forward-Looking Statements

35 unchanged sentences

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