What changed in this filing

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Item 1. Financial Statements

2025-04-04 compared with 2024-10-02 · 306 added, 340 removed, 651 unchanged (50% of the section changed)

3 unchanged sentences

(Dollars in thousands)

August 31, November 30,

February 28, November 30,

2025 (1) 2024 (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 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 February 28, 2025, total assets include $ 3.0 billion related to consolidated VIEs of which $ 72.3 million is included in Homebuilding cash and cash equivalents, $ 4.4 million in Homebuilding receivables, net, $ 5.6 million in Homebuilding finished homes and construction in progress, $ 342.4 million in Homebuilding land and land under development, $ 2.5 billion in Homebuilding consolidated inventory not owned, $ 67.7 million in Homebuilding deposits and pre-acquisition costs on real estate, $ 0.3 million in Homebuilding investments in unconsolidated entities, $ 11.7 million in Homebuilding other assets and $ 35.5 million in Multifamily assets.

As of November 30, 2024, total assets include $ 3.7 billion related to consolidated VIEs of which $ 67.0 million is included in Homebuilding cash and cash equivalents, $ 6.0 million in Homebuilding receivables, net, $ 9.7 million in Homebuilding finished homes and construction in progress, $ 602.9 million in Homebuilding land and land under development, $ 2.8 billion in Homebuilding consolidated inventory not owned, $ 71.8 million in Homebuilding deposits and pre-acquisition costs on real estate, $ 0.3 million in Homebuilding investments in unconsolidated entities, $ 42.3 million in Homebuilding other assets and $ 33.9 million in Multifamily assets.

3 unchanged sentences

(In thousands, except share amounts)

August 31, November 30,

February 28, November 30,

2025 (2) 2024 (2)

3 unchanged sentences

Liabilities related to consolidated inventory not owned 3,037,085 3,563,934

Senior notes and other debt payable, net 2,263,256 2,816,482

Senior notes and other debts payable, net 2,211,272 2,258,283

Other liabilities 3,076,776 3,201,552

8 unchanged sentences

Class A common stock of $ 0.10 par value;

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

February 28, 2025 and November 30, 2024 - 400,000,000 shares;

February 28, 2025 - 261,330,901 shares and November 30, 2024 - 259,979,453 shares

26,133 25,998

Class B common stock of $ 0.10 par value;

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

February 28, 2025 and November 30, 2024 - 90,000,000 shares;

February 28, 2025 - 36,601,215 shares and November 30, 2024 - 36,601,215 shares

Additional paid-in capital 5,812,802 5,729,434

1 unchanged sentence

Treasury stock, at cost;

August 31, 2024 - 21,171,248 shares of Class A common stock and 4,163,503 shares of Class B common stock;

February 28, 2025 - 29,146,431 shares of Class A common stock and 4,991,506 shares of Class B common stock;

November 30, 2024 - 23,814,148 shares of Class A common stock and 4,532,701 shares of Class B common stock

5 unchanged sentences

Total liabilities and equity $ 34,986,103 41,312,781

(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.

(2) As of February 28, 2025, total liabilities include $ 2.4 billion related to consolidated VIEs as to which there was no recourse against the Company, of which $ 67.8 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, $ 0.8 million in Homebuilding other liabilities, and $ 1.0 million in Multifamily liabilities.

As of November 30, 2024, total liabilities include $ 2.7 billion related to consolidated VIEs as to which there was no recourse against the Company, of which $ 67.3 million is included in Homebuilding accounts payable, $ 2.6 billion in Homebuilding liabilities related to consolidated inventory not owned, $ 6.0 million in Homebuilding senior notes and other debts payable, net, $ 45.8 million in Homebuilding other liabilities, and $ 1.0 million in Multifamily liabilities.

See accompanying notes to condensed consolidated financial statements.

Lennar Corporation and Subsidiaries

Condensed Consolidated Statements of Operations and Comprehensive Income

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

(In thousands, except per share amounts)

Three Months Ended Nine Months Ended

August 31, August 31,

2024 2023 2024 2023

Three Months Ended

February 28, 2025 February 29, 2024

Homebuilding $ 7,283,870 6,930,991

13 unchanged sentences

Other income, net and other gains 31,668 65,372

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

Lennar Other realized and unrealized losses from technology investments ( 62,503 ) ( 5,137 )

Earnings before income taxes 698,238 930,786

3 unchanged sentences

Net earnings attributable to Lennar $ 519,526 719,334

Other comprehensive income, net of tax:

Net unrealized gains on securities available-for-sale $ 444 208 2,161 1,632

Total other comprehensive income, net of tax $ 444 208 2,161 1,632

Other comprehensive income (loss), net of tax:

Net unrealized gains (losses) on securities available-for-sale $ ( 178 ) 362

Total other comprehensive income (loss), net of tax $ ( 178 ) 362

Total comprehensive income attributable to Lennar $ 519,348 719,696

5 unchanged sentences

(In thousands)

Nine Months Ended

Three Months Ended

February 28, 2025 February 29, 2024

Cash flows from operating activities:

Net earnings (including net earnings attributable to noncontrolling interests) $ 528,713 719,921

Adjustments to reconcile net earnings to net cash provided by operating activities:

Adjustments to reconcile net earnings to net cash (used in ) provided by operating activities:

Depreciation and amortization 31,332 27,139

3 unchanged sentences

Share-based compensation expense 84,085 87,680

Deferred income tax expense (benefit) 99,368 ( 102,322 )

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

Deferred income tax expense 23,472 11,979

Loans held-for-sale unrealized (gains) losses ( 30,403 ) 46,052

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

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

Lennar Other realized losses and unrealized (gains) losses from technology investments and other (gains) losses 71,427 2,555

Gains on sale of other assets ( 23,411 ) ( 2,671 )

Valuation adjustments and write-offs of option deposits and pre-acquisition costs on real estate, and other assets 28,261 6,609

Changes in assets and liabilities:

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

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

Decrease in receivables 117,753 379,102

Increase in inventories, excluding valuation adjustments ( 513,257 ) ( 285,023 )

Increase in deposits and pre-acquisition costs on real estate ( 757,972 ) ( 410,936 )

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

(Increase) decrease in other assets ( 57,501 ) 19,061

Decrease in loans held-for-sale 445,233 53,797

Decrease in accounts payable and other liabilities ( 215,035 ) ( 326,404 )

Net cash provided by operating activities 1,428,874 2,590,541

Net cash provided by (used in) operating activities ( 289,042 ) 367,867

Cash flows from investing activities:

Net additions of operating properties and equipment ( 56,043 ) ( 72,925 )

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

Proceeds from the sale of other assets 40,258 5,094

Proceeds from sale of investment in unconsolidated joint ventures 233,007 —

Proceeds from sales of investments 72,003 —

Investments in and contributions to unconsolidated entities ( 78,709 ) ( 117,593 )

Distributions of capital from unconsolidated entities 35,455 35,330

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

Acquisition, net of cash and restricted cash acquired ( 231,426 ) —

Decrease in Financial Services loans held-for-investment 8,467 2,749

Purchases of investment securities ( 3,456 ) ( 2,063 )

Proceeds from maturities/sales of investment securities 1,934 1,493

Net cash used in investing activities $ ( 176,824 ) ( 114,965 )

Net cash provided by (used in) investing activities $ 21,490 ( 147,915 )

See accompanying notes to condensed consolidated financial statements.

2 unchanged sentences

(In thousands)

Nine Months Ended

Three Months Ended

February 28, 2025 February 29, 2024

Cash flows from financing activities:

Net repayments under warehouse facilities $ ( 533,831 ) ( 599,514 )

Redemption/repurchases of senior notes ( 553,865 ) ( 633,059 )

Principal payments on notes payable and other borrowings ( 27,600 ) ( 19,251 )

Proceeds from liabilities related to consolidated inventory not owned 130,440 341,288

Proceeds from other borrowings — 6,230

Net cash distributed in connection with Millrose Properties, Inc.

spin-off ( 416,006 ) —

Proceeds from liabilities related to consolidated inventory not owned 259 67,650

Payments related to liabilities related to consolidated inventory not owned ( 255,862 ) ( 252,446 )

19 unchanged sentences

Homebuilding:

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

Payments of inventories financed by sellers $ 320 23,081

Net non-cash contributions to unconsolidated entities 17,330 —

Non-cash impacts of Millrose Properties, Inc.

Inventories $ ( 5,576,376 ) —

Investments in unconsolidated entities 1,194,711 —

Other assets ( 60,156 ) —

Notes payable 19,000 —

Retained earnings 4,422,821 —

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, as amended ("Form 10-K").

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, 2024.

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 and nine months ended August 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 months ended February 28, 2025 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 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 .

Homebuilding cash and cash equivalents as of February 28, 2025 and November 30, 2024 included $ 522.9 million and $ 265.6 million, respectively, of cash held in escrow for approximately two days .

Share-based Payments

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.

During the three months ended February 28, 2025 and February 29, 2024, the Company granted employees 1.4 million and 1.2 million of nonvested shares, respectively.

Recently Adopted Accounting Pronouncements

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

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

ASU 2023-07 will be applied retrospectively and is effective for the Company's fiscal year ending November 30, 2025 and interim reporting periods starting in the first quarter of fiscal 2026.

The Company is currently reviewing the impact that the adoption of ASU 2023-07 will have on its condensed consolidated financial statements and disclosures.

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

Improvements to Income Tax Disclosures .

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

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

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

ASU 2023-09 will be effective for the Company's fiscal year ending November 30, 2026 and may be applied either retrospectively or prospectively.

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”).

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

The Company is currently reviewing the impact that the adoption of ASU 2023-07 may have on its condensed consolidated financial statements and disclosures.

Reclassifications

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.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosure s (“ASU 2024-03”), which requires disclosure of disaggregated information about certain income statement expense line items in the notes to the financial statements on an interim and annual basis.

ASU 2024-03 will be effective for the Company's fiscal year ending November 30, 2028.

The Company is currently evaluating the impact that the adoption of ASU 2024-03 will have on its condensed consolidated financial statements.

Lennar Corporation and Subsidiaries

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

Reclassifications

As a result of the Company's change in Homebuilding reportable segments following the acquisition of Rausch Coleman Homes ("Rausch") (refer to Note 2 of the Notes to Condensed Consolidated Financial Statements for more information), the Company reclassified certain prior year segment information in the condensed consolidated financial statements to conform with the 2025 presentation.

In addition, certain amounts in the prior year's statement of cash flows were reclassified to conform with the 2025 presentation.

(2) Business Transactions

Spin-off of Millrose Properties, Inc.

On February 7, 2025, the Company completed the taxable spin-off of Millrose Properties, Inc.

("Millrose") through a distribution of approximately 80 % of Millrose's stock to its stockholders.

The Company will temporarily retain, but will not vote, the remaining 20 % of the total outstanding shares of Millrose common stock, which it expects to dispose of through a subsequent spin-off, split-off, public offering, private sale or any combination of these potential transactions later in the year.

In connection with the spin-off, the Company contributed to Millrose $ 5.6 billion in land assets, representing approximately 87,000 homesites, and cash of $ 1.0 billion, which included $ 584.0 million of cash deposits related to option contracts.

The spin-off transaction accelerates Lennar's longstanding strategy of becoming a pure-play, asset-light, new home manufacturing company.

Acquisition of Rausch Coleman Homes

On February 10, 2025, the Company acquired Rausch, a residential homebuilder based in Fayetteville, Arkansas.

The Company acquired Rausch’s homebuilding operations while Millrose acquired Rausch's land assets and the Company has options on the land.

With this acquisition, the Company expanded its footprint into new markets in Arkansas (Bentonville/Fayetteville, Little Rock and Jonesboro), Oklahoma (Tulsa and Stillwater), Alabama (Birmingham and Tuscaloosa), and Kansas/Missouri (Kansas City), while adding to its existing footprint in Texas (Houston and San Antonio), Oklahoma (Oklahoma City), Alabama (Huntsville) and Florida (Gulf Coast).

The Company acquired $ 312.2 million of assets, primarily consisting of homes under construction, finished homesites, cash and other assets, and assumed liabilities of $ 50.4 million, primarily consisting of accounts payable and other liabilities.

The cash consideration paid by the Company to Rausch was funded from working capital.

(3) Operating and Reporting Segments

4 unchanged sentences

Homebuilding segments:

(1) East (2) Central (3) Texas (4) West

(1) East (2) Central (3) South Central (4) West

(5) Financial Services

2 unchanged sentences

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

(In thousands) August 31, 2024

Lennar Corporation and Subsidiaries

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

(In thousands) February 28, 2025

Homebuilding Financial

14 unchanged sentences

Total assets $ 29,885,928 3,000,778 1,275,152 824,245 34,986,103

Notes and other debt payable, net $ 2,263,256 1,545,416 — — 3,808,672

Accounts payable, liabilities related to consolidated inventory not owned and other liabilities 7,859,330 214,405 195,327 105,540 8,374,602

Senior notes and other debts payable, net $ 2,211,272 1,397,125 — — 3,608,397

Liabilities related to consolidated inventory not owned 3,037,085 — — — 3,037,085

Accounts payable and other liabilities 5,003,134 229,146 141,380 99,617 5,473,277

Total liabilities $ 10,251,491 1,626,271 141,380 99,617 12,118,759

Lennar Corporation and Subsidiaries

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

(In thousands) November 30, 2024

15 unchanged sentences

Total assets $ 35,594,469 3,516,550 1,306,818 894,944 41,312,781

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

Senior notes and other debt payable, net $ 2,258,283 1,930,956 — — 4,189,239

Liabilities related to consolidated inventory not owned 3,563,934 — — — 3,563,934

Accounts payable and other liabilities 5,040,992 209,752 181,883 105,756 5,538,383

Total liabilities $ 10,863,209 2,140,708 181,883 105,756 13,291,556

(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.

(1) Receivables, net for Financial Services are primarily related to loans sold to investors for which the Company had not yet been paid as of February 28, 2025 and November 30, 2024, respectively.

Lennar Corporation and Subsidiaries

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

(2) I nvestments in unconsolidated entities as of February 28, 2025 include the carrying value of 20 % of the total outstanding shares of Millrose common stock, which was $ 1.2 billion.

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

(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 in equity securities include investments of $ 133.5 million and $ 143.0 million without readily available fair values as of February 28, 2025 and November 30, 2024, respectively.

(5) 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 Nine Months Ended

August 31, August 31,

(In thousands) 2024 2023 2024 2023

Three Months Ended

(In thousands) February 28, 2025 February 29, 2024

Homebuilding $ 7,283,870 6,930,991

11 unchanged sentences

(1) Corporate and unallocated consists primarily of corporate general and administrative expenses and charitable foundation contributions.

Lennar Corporation and Subsidiaries

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

Homebuilding Segments

Information about homebuilding activities in states which are not economically similar to other states in the same geographic areas is grouped under “Homebuilding Other,” which is not considered a reportable segment.

Information about homebuilding activities in states which are not economically similar to other states in the same geographic area is grouped under “Homebuilding Other,” which is not considered a reportable segment.

Evaluation of segment performance is based primarily on operating earnings (loss) before income taxes.

Operations of the Company’s Homebuilding segments primarily include the construction and sale of single-family attached and detached homes as well as the purchase, development and sale of residential land directly and through the Company’s unconsolidated entities.

Operating earnings (loss) for the Homebuilding segments consist of revenues generated from the sales of homes and land, other revenues from management fees and forfeited deposits, equity in earnings (loss) from unconsolidated entities and other income (expense), net, less the cost of homes sold and land sold, and selling, general and administrative expenses incurred by the segment.

Operating earnings (loss) for the Homebuilding segments consist of revenues generated from the sales of homes and land, other revenues from management fees and forfeited deposits, equity in earnings (losses) from unconsolidated entities and other income (expense), net, less the cost of homes sold and land sold, and selling, general and administrative expenses incurred by the segment.

Homebuilding Other also includes management of a fund that acquires single-family homes and holds them as rental properties.

The Company renamed its Texas reportable Homebuilding segment to South Central as a result of the Rausch acquisition (see Note 2 of the Notes to Condensed Consolidated Financial Statements) in order to streamline and synergize geographic homebuilding operations, assess performance, and allocate resources across the Company’s geographic homebuilding segments.

The Company’s reportable Homebuilding segments and all other homebuilding operations not required to be reported separately have homebuilding divisions located in:

Alabama, Florida, New Jersey and Pennsylvania

Georgia, Illinois, Indiana, Maryland, Minnesota, North Carolina, South Carolina, Tennessee, and Virginia

Florida, New Jersey and Pennsylvania

Alabama, Georgia, Illinois, Indiana, Maryland, Minnesota, North Carolina, South Carolina, Tennessee,

South Central:

Arkansas, Kansas, Missouri, Oklahoma and Texas

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

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

Urban divisions and other homebuilding related investments primarily in California, including FivePoint Holdings, LLC (“FivePoint”), and Millrose investment.

Lennar Corporation and Subsidiaries

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

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

August 31, November 30,

(In thousands)

(In thousands) February 28, 2025 November 30, 2024

East $ 5,615,263 6,967,571

Central 4,415,791 5,567,451

Texas 4,052,427 3,337,280

South Central 4,214,025 4,238,587

West 10,280,135 12,148,434

3 unchanged sentences

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

Three Months Ended Nine Months Ended

August 31, August 31,

(In thousands) 2024 2023 2024 2023

Three Months Ended

(In thousands) February 28, 2025 February 29, 2024

East $ 1,653,755 1,877,938

Central 1,560,008 1,441,314

Texas 1,286,625 1,176,875 3,554,836 3,340,539

South Central 1,166,828 1,071,786

West 2,894,933 2,530,061

1 unchanged sentence

$ 7,283,870 6,930,991

Operating earnings (loss)

Operating earnings

East $ 222,622 376,909

Central 135,452 161,623

Texas 197,767 219,881 550,924 528,261

South Central 122,083 168,583

West 298,781 308,787

1 unchanged sentence

$ 809,273 1,028,796

Lennar Corporation and Subsidiaries

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

Financial Services

3 unchanged sentences

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

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:

Lennar Corporation and Subsidiaries

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

At February 28, 2025, 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:

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

April 2025 $ 250,000 250,000 500,000

1 unchanged sentence

August 2025 325,000 325,000 650,000

August 2025 250,000 250,000 500,000

October 2025 50,000 100,000 150,000

December 2026 375,000 — 375,000

Total residential facilities $ 1,560,000 675,000 2,235,000

4 unchanged sentences

Total $ 2,535,000

(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) August 31, 2024 November 30, 2023

(In thousands) February 28, 2025 November 30, 2024

Borrowings under the residential facilities $ 1,235,008 1,776,045

12 unchanged sentences

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

There was no provision for loan losses for the three months ended February 28, 2025.

The provision for loan losses was immaterial for the three months ended February 29, 2024.

Loan origination liabilities were $ 16.7 million as of both February 28, 2025 and November 30, 2024, respectively, and included in Financial Services’ liabilities in the Company's condensed consolidated balance sheets.

Lennar Corporation and Subsidiaries

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

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 Nine Months Ended

August 31, August 31,

(Dollars in thousands) 2024 2023 2024 2023

Three Months Ended

(Dollars in thousands) February 28, 2025 February 29, 2024

Originations (1) $ 127,965 140,825

1 unchanged sentence

Securitizations 4 2

(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.

(1) During both the three months ended February 28, 2025 and February 29, 2024, the commercial loans originated were recorded as loans held-for-sale, which are held at fair value.

Investments held-to-maturity

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

At February 28, 2025 and November 30, 2024, 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 nine months ended August 31, 2024 and 2023.

Based on the segment’s assessment, no impairment charges were recorded during the three months ended February 28, 2025 and February 29, 2024.

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) August 31, 2024 November 30, 2023

(Dollars in thousands) February 28, 2025 November 30, 2024

Carrying value $ 134,369 135,646

1 unchanged sentence

Incurred interest rate 3.4 % 3.4 %

August 31, 2024

February 28, 2025

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 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 and other gains, which includes sales of buildings and investments.

Revenues are generated from the sales of land, from construction activities, and from management and promote fees generated from funds and 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 (losses) from unconsolidated entities and other gains (losses), which includes proceeds of sales of investments.

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 (losses) 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.

Lennar Corporation and Subsidiaries

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

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.

The Company has investments in Blend Labs, Inc.

The Company has/had investments in Blend Labs, Inc.

(“Blend Labs”), Hippo Holdings, Inc.

5 unchanged sentences

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 Nine Months Ended

August 31, August 31,

(In thousands) 2024 2023 2024 2023

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

Three Months Ended

(In thousands) February 28, 2025 February 29, 2024

Blend Labs (BLND) $ ( 3,737 ) 2,936

4 unchanged sentences

Sunnova (NOVA) ( 22,588 ) ( 23,925 )

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

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

Lennar Other realized and unrealized losses from technology investments (1) $ ( 62,503 ) ( 5,137 )

(1) During the three months ended February 28, 2025, the Company realized a loss of $ 28.4 million on the sale of its shares in Blend Labs, SmartRent, Sonder and Sunnova and, as of February 28, 2025, has a small remaining interest in Sunnova.

(4) Investments in Unconsolidated Entities

1 unchanged sentence

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

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

(In thousands) February 28, 2025 November 30, 2024

Investments in unconsolidated entities (1) (2) $ 2,645,734 1,344,836

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 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.

As of February 28, 2025 and November 30, 2024, the carrying amount of the Company's investment was $ 524.8 million and $ 470.8 million, respectively.

Additionally, included is the carrying value of approximately 20 % of the total outstanding shares of Millrose common stock, which was $ 1.2 billion as of February 28, 2025.

The Company has determined that Millrose is a VIE, but it is not the primary beneficiary.

The Company uses the equity method of accounting for its 20 % investment in Millrose.

The Company expects to dispose of the remaining 20 % in a subsequent spin-off, split-off, public offering, private sale or any combination of these potential transactions later in the year.

As of February 28, 2025 and November 30, 2024, the Homebuilding segment's unconsolidated entities had non-recourse debt with completion guarantees of $ 421.8 million and $ 287.0 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 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.

As of both February 28, 2025 and November 30, 2024, the fair values of the repayment guarantees, maintenance guarantees, and completion guarantees were not material.

The Company believes that as of February 28, 2025, 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 8 of the Notes to Condensed Consolidated Financial Statements).

The details related to these are unchanged from the disclosure in

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, 2024.

The Upward America Venture LP (“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 could raise equity commitments totaling $ 1.0 billion.

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

As of February 28, 2025 and November 30, 2024, the carrying amount of the Company's investment in Upward America was $ 16.7 million and $ 20.8 million, respectively.

Lennar Corporation and Subsidiaries

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

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 could raise equity commitments totaling $ 1.0 billion.

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

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

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 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.

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

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

Additionally, the Company guarantees the construction costs of the project as constructions cost over-runs would be paid by the Company.

Generally, these payments would increase the Company's investment in the entities and would increase its share of funds the entities distribute after the achievement of certain threshold.

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, 2024.

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.

As of both February 28, 2025 and November 30, 2024, the fair value of the completion guarantees was immaterial.

As of February 28, 2025 and November 30, 2024, the Multifamily segment's unconsolidated entities had non-recourse debt with completion guarantees of $ 665.9 million and $ 907.8 million, respectively.

The decrease in the non-recourse debt with completion guarantees was due to completion of projects and sale of rental operation projects in Multifamily Venture Fund I.

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 Nine Months Ended

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

Three Months Ended

(In thousands) February 28, 2025 February 29, 2024

General contractor services, net of deferrals $ 30,450 101,635

General contractor costs 28,314 95,688

Land sales to joint ventures 17,330 12,000

Management fee income, net of deferrals 6,941 16,042

2 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 August 31, 2024, the Company had a $ 25.7 million investment in the CPPIB Fund.

As of February 28, 2025, the Company has a $ 27.4 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 nine months ended August 31, 2024 are included below:

August 31, 2024

Details of LMV I and LMV II are included below:

February 28, 2025

(In thousands) LMV I LMV II

7 unchanged sentences

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

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)

Other Unconsolidated Entities

During the second half of fiscal 2024, the LMV I partners decided to liquidate and sell all of its 38 rental operation projects of LMV I as the fund has come to the end of its contractual life.

During the year ended November 30, 2024, 33 LMV I rental operation projects were sold to various third-party buyers.

As of February 28, 2025, two additional LMV I rental operation projects were sold to various third-party buyers.

Lennar 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 $ 145.7 million and $ 148.7 million as of August 31, 2024 and November 30, 2023, respectively.

The Company's investment in the Rialto funds totaled $ 136.6 million and $ 140.1 million as of February 28, 2025 and November 30, 2024, 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 $ 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 nine months ended August 31, 2024 and 2023:

Three Months Ended August 31, 2024

(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 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

Employee stock and directors plans

10 2 — 70 ( 62 ) — — —

Purchases of treasury stock ( 524,540 ) — — — ( 524,540 ) — — —

Amortization of restricted stock

31,908 — — 31,908 — — — —

Cash dividends ( 135,850 ) — — — — — ( 135,850 ) —

Receipts related to noncontrolling interests

2,322 — — — — — — 2,322

Payments related to noncontrolling interests

( 19,173 ) — — — — — — ( 19,173 )

Non-cash purchase or activity of noncontrolling interests, net ( 440 ) — — — — — — ( 440 )

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

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

Equity Class A

Common Stock Class B

Common Stock Additional

Paid - in Capital Treasury

Stock Accumulated Other Comprehensive Income Retained

Earnings Noncontrolling

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

Employee stock and directors plans

( 8,552 ) 1 — ( 620 ) ( 7,933 ) — — —

Purchases of treasury stock ( 368,381 ) — — — ( 368,381 ) — — —

Amortization of restricted stock

12,885 — — 12,885 — — — —

Cash dividends ( 107,082 ) — — — — — ( 107,082 ) —

Receipts related to noncontrolling interests

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 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)

Nine Months Ended August 31, 2024

Company also had strategic technology investments in unconsolidated entities and investment funds accounted for under the equity method of accounting with a carrying value of $ 238.8 million and $ 239.3 million, as of February 28, 2025 and November 30, 2024, respectively.

(5) Stockholders' Equity

Three Months Ended February 28, 2025

(In thousands) Total

3 unchanged sentences

Paid - in Capital Treasury

Stock Accumulated Other Comprehensive Income Retained

Stock Accumulated Other Comprehensive Income (Loss) Retained

Earnings Noncontrolling

11 unchanged sentences

( 5,389 ) — — — — — — ( 5,389 )

Millrose Properties, Inc.

spin-off ( 4,838,827 ) — — — — — ( 4,838,827 ) —

Non-cash purchase or activity of noncontrolling interests, net ( 27,859 ) — — ( 949 ) — — — ( 26,910 )

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

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

Total other comprehensive loss, net of tax ( 178 ) — — — — ( 178 ) — —

Balance at February 28, 2025 $ 22,867,344 26,133 3,660 5,812,802 ( 4,424,039 ) 7,351 21,302,131 139,306

Three Months Ended February 29, 2024

(In thousands) Total

19 unchanged sentences

Total other comprehensive income, net of tax 362 — — — — 362 — —

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.

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

On February 12, 2025, 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 day January 29, 2025.

The Company approved and paid cash dividends of $ 0.50 per share for each of the four quarters of 2024 for both its Class A and Class B common stock.

1 unchanged sentence

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

This authorization was in addition to what was remaining of the Company's March 2022 stock repurchase program.

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.

At February 28, 2025, we have a remaining authorization to repurchase $ 2.7 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 August 31, Nine Months Ended August 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

Lennar Corporation and Subsidiaries

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

Three Months Ended

February 28, 2025 February 29, 2024

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

Shares repurchased 4,770,000 458,805 3,026,128 373,872

1 unchanged sentence

Average price per share $ 135.14 $ 126.68 $ 150.29 $ 138.11

Lennar Corporation and Subsidiaries

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

(6) Income Taxes

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

Three Months Ended Nine Months Ended

August 31, August 31,

(Dollars in thousands) 2024 2023 2024 2023

Three Months Ended

(Dollars in thousands) February 28, 2025 February 29, 2024

Provision for income taxes $ 169,525 210,865

Effective tax rate (1) 24.6 % 22.7 %

(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.

(1) For the three months ended February 28, 2025 and February 29, 2024, the effective tax rate included state income tax expense and non-deductible executive compensation, partially offset by tax credits.

The increase in the effective tax rate from the prior year quarter was primarily due to a decrease in excess tax benefits from shared-based compensation and a decrease in solar tax credits.

(7) Earnings Per Share

5 unchanged sentences

Basic and diluted earnings per share were calculated as follows:

Three Months Ended Nine Months Ended

August 31, August 31,

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

Three Months Ended

(In thousands, except per share amounts) February 28, 2025 February 29, 2024

Net earnings attributable to Lennar $ 519,526 719,334

4 unchanged sentences

Basic and diluted earnings per share $ 1.96 2.57

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.

For both the three months ended February 28, 2025 and February 29, 2024, there were no options to purchase shares of common stock that were outstanding and anti-dilutive.

(8) Homebuilding Senior Notes and Other Debt Payable

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

(Dollars in thousands) February 28, 2025 November 30, 2024

4.75 % senior notes due 2025

6 unchanged sentences

698,411 698,266

4.50 % senior notes due 2024

Mortgage notes on land and other debt 260,573 307,440

$ 2,211,272 2,258,283

(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.

The carrying amounts of the senior notes in the table above are net of debt issuance costs of $ 2.1 million and $ 2.4 million as of February 28, 2025 and November 30, 2024, respectively.

Lennar Corporation and Subsidiaries

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

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.

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) August 31, 2024

In November 2024, the Company amended and restated the credit agreement governing its unsecured revolving credit facility (the "Credit Facility").

During the three months ended February 28, 2025, the Company received an additional $ 150 million in commitments.

The maximum available borrowings on the Credit Facility were as follows:

(In thousands) At February 28, 2025

Commitments - maturing in May 2027 $ 225,000

Commitments - maturing in November 2029 2,800,000

Total commitments $ 3,025,000

Accordion feature 475,000

1 unchanged sentence

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

The Credit Facility also provides that up to $ 500 million in commitments may be used for letters of credit.

The credit agreement also provides that up to $ 477.5 million in commitments may be used for letters of credit.

The maturity, debt covenants and details of the Credit Facility 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, 2024.

2 unchanged sentences

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

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

(In thousands) February 28, 2025 November 30, 2024

Performance letters of credit $ 1,748,316 1,668,061

6 unchanged sentences

(9) Financial Instruments and Fair Value Disclosures

The following table presents the carrying amounts and estimated fair values of financial instruments held or issued by the Company at August 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 February 28, 2025 and November 30, 2024, 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.

August 31, 2024 November 30, 2023

At February 28, 2025 At November 30, 2024

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

4 unchanged sentences

Financial Services notes and other debt payable, net Level 2 1,397,125 1,397,646 1,930,956 1,931,515

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

The following methods and assumptions are used by the Company in estimating fair values:

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

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.

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.

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

Fair Value Measurements:

5 unchanged sentences

Fair Value Hierarchy Fair Value at

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

(In thousands) February 28, 2025 November 30, 2024

Financial Services Assets:

7 unchanged sentences

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

August 31, 2024 November 30, 2023

February 28, 2025 November 30, 2024

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

2 unchanged sentences

83,075 ( 281 ) 50,020 296

The estimated fair values of the Company's financial instruments have been determined by using available market information and what the Company believes to be appropriate valuation methodologies.

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

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

The following methods and assumptions are used by the Company in estimating fair values.

Financial Services residential loans held-for-sale - Fair value is based on independent quoted market prices, where available, or the prices for other mortgage whole loans with similar characteristics.

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 August 31, 2024 and November 30, 2023.

The fair value of these are included in Financial Services’ loans held-for-sale as of February 28, 2025 and November 30, 2024.

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 August 31, 2024 As of November 30, 2023

February 28, 2025 November 30, 2024

Unobservable inputs:

2 unchanged sentences

Delinquency rate 14 % 12 %

Forward options - Fair value of forward options is based on independent quoted market prices for similar financial instruments.

The fair value of these are included in Financial Services' other assets and the Company recognizes the changes in the fair value of the premium paid as Financial Services' Revenue.

Forward contracts, forward options and interest rate swaps - Fair value of forward contracts, forward options and interest rate swaps is based on independent quoted market prices for similar financial instruments.

The fair value of these are included in Financial Services' other assets and other liabilities and the Company recognizes the changes in the fair value of the premium paid as Financial Services' Revenue.

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

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

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

2 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 Nine Months Ended

August 31, August 31,

(In thousands) 2024 2023 2024 2023

Three Months Ended

(In thousands) February 28, 2025 February 29, 2024

Changes in fair value included in Financial Services revenues:

3 unchanged sentences

Forward options 1,134 ( 344 )

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

Interest rate swaps ( 3,296 ) 1,554

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

Investments in equity securities $ ( 62,503 ) ( 5,137 )

Changes in fair value included in other comprehensive income, net of tax:

Changes in fair value included in other comprehensive income (loss), net of tax:

Lennar Other investments available-for-sale $ ( 178 ) 362

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 August 31,

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

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

Purchases/loan originations 174 236,665 34 161,308

Sales/loan originations sold, including those not settled — ( 145,325 ) — ( 100,562 )

Disposals/settlements ( 122 ) ( 9,500 ) ( 94 ) ( 45,667 )

Changes in fair value (1) ( 338 ) 2,312 78 ( 535 )

Interest and principal paydowns — — — ( 3 )

Ending balance $ 3,366 150,867 3,416 37,295

Nine Months Ended August 31,

Three Months Ended

February 28, 2025 February 29, 2024

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

7 unchanged sentences

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

Lennar Corporation and Subsidiaries

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

The Company’s assets measured at fair value on a nonrecurring basis are those assets for which the Company has recorded valuation adjustments and write-offs.

1 unchanged sentence

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

Three Months Ended August 31,

Three Months Ended

February 28, 2025 February 29, 2024

(In thousands) Fair Value

5 unchanged sentences

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

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 $ 313,120 280,761 ( 32,359 ) 250,822 216,703 ( 34,119 )

Land and land under development (2) Level 3 — — — 50,895 48,315 ( 2,580 )

Deposits and pre-acquisition costs on real estate (3) Level 3 3,408 — ( 3,408 ) 18,710 — ( 18,710 )

Investments in unconsolidated entities (4) Level 3 $ 7,594 — ( 7,594 ) — — —

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)

(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.

(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.

(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.

(4) Valuation adjustments related to investments in unconsolidated entities were primarily included in Multifamily other income (expense), net in the Company's condensed consolidated statements of operations and comprehensive income (loss) for the three months ended February 28, 2025.

Finished homes and construction in progress are included within inventories.

6 unchanged sentences

Communities with valuation adjustments

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

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

(in thousands)

1 unchanged sentence

(in thousands)

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

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

February 28, 2025 1,584 46 2 $ 14,934 $ 3,834

February 29, 2024 1,227 31 2 4,863 1,521

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:

Nine Months Ended August 31,

Three Months Ended

February 28, 2025 February 29, 2024

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 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.

(1) Represents the projected average selling price on future deliveries for communities in which the Company recorded valuation adjustments during both the three months ended February 28, 2025 and February 29, 2024.

Lennar Corporation and Subsidiaries

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

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, 2024.

The Company evaluates if a decrease in the fair value of an investment below the carrying value is other-than-temporary.

2 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 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

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

During the three months ended February 28, 2025, the Company evaluated the fair value of its investments in unconsolidated entities using a cash flow analysis and concluded that the investments had an other-than-temporary impairment of $ 7.6 million included in Multifamily other income (expense), net in the Company's condensed consolidated statements of operations and comprehensive income (loss).

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.

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.

(10) Variable Interest Entities

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.

During the three months ended February 28, 2025, 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 during the three months ended February 28, 2025.

During the three months ended February 28, 2025, there was a deconsolidation of a VIE that had a total assets and liabilities of $ 315.8 million and $ 19.5 million, respectively.

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.

5 unchanged sentences

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

Lennar Corporation and Subsidiaries

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

Unconsolidated VIEs

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

August 31, 2024 November 30, 2023

February 28, 2025 November 30, 2024

(In thousands) Investments in

8 unchanged sentences

$ 2,416,045 2,487,606 1,193,963 1,271,059

(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 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.

(1) As of February 28, 2025 and November 30, 2024, 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 $ 20.2 million and $ 20.4 million, respectively.

In addition, as of both February 28, 2025 and November 30, 2024, there was recourse debt of VIEs of $ 44.2 million.

As of February 28, 2025, the increase in Homebuilding’s investment in VIEs was primarily due to the Company’s temporary 20 % investment in the total outstanding shares of Millrose common stock, which was $ 1.2 billion.

(2) As of February 28, 2025 and November 30, 2024, the Company's maximum exposure to loss of Multifamily's investments in unconsolidated VIEs was primarily limited to its investments in the unconsolidated VIEs.

(3) As of both February 28, 2025 and November 30, 2024, 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 investments.

(4) As of both February 28, 2025 and November 30, 2024, 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 August 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 February 28, 2025 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

Lennar Corporation and Subsidiaries

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

did not guarantee any debt of the other unconsolidated 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.

3 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 $ 2.5 billion as of August 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 $ 1.4 billion as of August 31, 2024.

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 August 31, 2024.

As of February 28, 2025, land under option with third parties that the Company was compelled to takedown was $ 2.5 billion, of which $1.1 billion were land purchase contract obligations due to land banks upon maturity of the contracts.

The Company's intention is to have other land banks close on the land purchase commitments and the Company will option the land from the land banks.

Land under option with third parties is included in consolidated inventory not owned.

During the three months ended February 28, 2025, consolidated inventory not owned decreased by $ 630.0 million with a corresponding decrease to liabilities related to consolidated inventory not owned in the accompanying condensed consolidated balance sheet as of February 28, 2025.

The decrease was primarily due to homesite takedowns and reassessment of certain

Lennar Corporation and Subsidiaries

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

option contracts.

This reassessment resulted in a decrease of $ 1.1 billion of consolidated inventories not owned with a corresponding decrease of $ 1.0 billion of liabilities related to consolidated inventories not owned.

The decrease was partially offset by the consolidation of homesites under option that the Company is economically compelled to takedown, which resulted in an increase of $ 801.4 million of consolidated inventories not owned with a corresponding increase of $ 739.2 million of liabilities related to consolidated inventories not owned.

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

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

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

(In thousands) At February 28, 2025 At November 30, 2024

Non-refundable option deposits and pre-acquisition costs $ 5,055,676 3,529,889

1 unchanged sentence

Letters of credit in lieu of cash deposits under certain land and option contracts 401,454 341,834

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.

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

For the three months ended February 28, 2025, the Company purchased a significant portion of land from three land banks (the “Land Banks”).

There were no amounts due to the Land Banks as of February 28, 2025, resulting from land purchases as the full purchase price of the land is typically paid to the Land Banks at closing when land is purchased by the Company.

As of February 28, 2025, the total deposits and pre-acquisition costs on real estate relating to contracts with the Land Banks were $ 2.2 billion.

As of February 28, 2025, total consolidated inventory not owned and liabilities related to consolidated inventory not owned relating to contracts with the Land Banks were $ 815.9 million and $ 633.4 million, respectively.

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

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

As discussed in Note 2, on February 7, 2025, the Company completed the spin-off of Millrose.

The spin-off involved $5.6 billion of land assets, representing approximately 87,000 homesites.

The Company entered into a Master Option Agreement ("Agreement") to option the land back from Millrose.

As a result of entering into the Agreement with Millrose, the Company paid $584.0 million of option deposits to Millrose at the spin-off.

Subsequently, on February 10, 2025, Millrose acquired Rausch’s land assets (except for any homesites with homes under construction which were acquired by the Company) and Lennar paid Millrose an additional $95.5 million in option deposits.

As of February 28, 2025, total deposits and pre-acquisition costs on real estate relating to option contracts with Millrose were $680.3 million.

(11) Commitments and Contingent Liabilities

7 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)

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

Three Months Ended

(In thousands) February 28, 2025 February 29, 2024

Warranty reserve, beginning of the period $ 446,240 414,796

3 unchanged sentences

Warranty reserve, end of period $ 428,926 405,558

(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.

(1) The adjustments to pre-existing warranties from changes in estimates during the three months ended February 28, 2025 and February 29, 2024 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) August 31, 2024 November 30, 2023

(Dollars in thousands) At February 2025 At November 30, 2024

Right-of-use assets $ 270,683 275,248

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 August 31, 2024 were as follows:

Future minimum payments under the noncancellable leases in effect at February 28, 2025 were as follows:

(In thousands) Lease Payments

7 unchanged sentences

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

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

As of February 28, 2025, the Company recognized the lease liabilities on its condensed consolidated balance sheets within accounts payable and other liabilities of the respective segments.

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

Nine Months Ended August 31,

(In thousands) 2024 2023

Three Months Ended

(In thousands) February 28, 2025 February 29, 2024

Rental expense $ 51,504 26,217

2 unchanged sentences

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

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

For both the three months ended February 28, 2025 and February 29, 2024, the Company had an immaterial amount of sublease income.

Forward-Looking Statements

10 unchanged sentences

the impact of increased cost of mortgage financing for homebuyers, increased interest rates or increased competition in the mortgage industry;

supply shortages and increased costs related to construction materials and labor;

supply shortages and increased costs related to construction materials and labor, including lumber, and labor;

changes in trade policy affecting our business, including new or increased tariffs, as well as the potential impact of retaliatory tariffs and other penalties;

changes in U.S and foreign governmental laws, regulations and policies, including retaliatory policies against the United States, that may impact our business and operations;

cost increases related to real estate taxes and insurance;

the effect of increased interest rates with regard to our funds' borrowings on the willingness of the funds to invest in new projects;

reductions in the market value of the Company's investments in public companies;

reductions in the market value of our investments in public companies;

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

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

our inability to successfully execute our strategies, including our land light strategy;

any potential subsequent transactions we may enter into following our spin-off of Millrose Properties, Inc.;

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 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;

changes in general economic and financial conditions that reduce demand for our products and services, lower our profit margins or reduce our access to credit;

our inability to acquire land at anticipated prices;

the possibility that we will incur nonrecurring costs that affect earnings in one or more reporting periods;

the possibility that the benefit from our increasing use of technology will not justify its cost;

increased competition for home sales from other sellers of new and resale homes;

becoming unable to pay down debt;

government actions or other factors that might force us to terminate our program of repurchasing our stock;

the failure of the participants in various joint ventures to honor their commitments;

difficulty obtaining land-use entitlements or construction financing;

new laws or regulatory changes that adversely affect the profitability of our businesses (including changes in tax laws or liabilities);

our inability to refinance our debt on terms that are as favorable as our current arrangements;

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, 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.

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

labor shortages due to increased enforcement of restrictions on immigration;

possible unfavorable outcomes results in legal proceedings;

and conditions in the capital, credit and financial markets;

changes in laws, regulations or the regulatory environment affecting our business.

Please see our Annual Report on Form 10-K for the fiscal year ended November 30, 2024, filed with the Securities and Exchange Commission (the “SEC”) on January 23, 2025 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