Supplemental Financial Information

3 Months Ended

Feb. 29, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Supplemental Financial Information

Supplemental Financial Information

The indentures governing the Company’s senior notes require that, if any of the Company’s 100% owned subsidiaries, other than its finance company subsidiaries and foreign subsidiaries, directly or indirectly guarantee at least $75 million principal amount of debt of Lennar Corporation, those subsidiaries must also guarantee Lennar Corporation’s obligations with regard to its senior notes. The entities referred to as "guarantors" in the following tables are subsidiaries that are not finance company subsidiaries or foreign subsidiaries and were guaranteeing the senior notes because at February 29, 2020 they were guaranteeing Lennar Corporation's letter of credit facilities and its Credit Facility, disclosed in Note 7 of the Notes to the Condensed Consolidated Financial Statements. The guarantees are full, unconditional and joint and several and the guarantor subsidiaries are 100% directly or indirectly owned by Lennar Corporation. A subsidiary's guarantee of Lennar senior notes will be suspended at any time when it is not directly or indirectly guaranteeing at least $75 million principal amount of debt of Lennar Corporation, and a subsidiary will be released from its guarantee and any other obligations it may have regarding the senior notes if all or substantially all its assets, or all of its capital stock, are sold or otherwise disposed of.

For purposes of the condensed consolidating statement of cash flows included in the following supplemental financial information, the Company's accounting policy is to treat cash received by Lennar Corporation (the "Parent") from its subsidiaries, to the extent of net earnings from such subsidiaries as a dividend and accordingly a return on investment within cash flows from operating activities. Distributions of capital received by the Parent from its subsidiaries are reflected as cash flows from investing activities. The cash outflows associated with the return on investment dividends and distributions of capital received by the Parent are reflected by the Guarantor and Non-Guarantor subsidiaries in the Dividends line item within cash flows from financing activities. All other cash flows between the Parent and its subsidiaries represent the settlement of receivables and payables between such entities in conjunction with the Parent's centralized cash management arrangement with its subsidiaries, which operates with the characteristics of a revolving credit facility, and are accordingly reflected net in the Intercompany line item within cash flows from investing activities for the Parent and net in the Intercompany line item within cash flows from financing activities for the Guarantor and Non-Guarantor subsidiaries.

Supplemental information for the subsidiaries that were guarantor subsidiaries at February 29, 2020 was as follows:

Condensed Consolidating Balance Sheet

February 29, 2020

(In thousands)	Lennar Corporation		Guarantor Subsidiaries	Non-Guarantor Subsidiaries		Consolidating Adjustments		Total
ASSETS
Homebuilding:
Cash and cash equivalents, restricted cash and receivables, net	$	392,022	696,826	16,585		—		1,105,433
Inventories	—		18,246,920	396,560		—		18,643,480
Investments in unconsolidated entities	—		944,034	2,682		—		946,716
Goodwill	—		3,442,359	—		—		3,442,359
Other assets	380,047		485,196	234,863		(38,254	)	1,061,852
Investments in subsidiaries	10,274,276		41,304	—		(10,315,580	)	—
Intercompany	12,879,536		—	—		(12,879,536	)	—
	23,925,881		23,856,639	650,690		(23,233,370	)	25,199,840
Financial Services	—		259,786	2,116,789		(1,011	)	2,375,564
Multifamily	—		—	1,113,903		—		1,113,903
Lennar Other	—		183,265	308,030		(6,903	)	484,392
Total assets	$	23,925,881	24,299,690	4,189,412		(23,241,284	)	29,173,699
LIABILITIES AND EQUITY
Homebuilding:
Accounts payable and other liabilities	$	751,475	1,894,224	314,782		(46,168	)	2,914,313
Liabilities related to consolidated inventory not owned	—		365,284	—		—		365,284
Senior notes and other debts payable	7,129,807		917,408	68,283		—		8,115,498
Intercompany	—		10,722,529	2,157,007		(12,879,536	)	—
	7,881,282		13,899,445	2,540,072		(12,925,704	)	11,395,095
Financial Services	—		42,628	1,316,095		—		1,358,723
Multifamily	—		—	201,992		—		201,992
Lennar Other	—		—	24,512		—		24,512
Total liabilities	7,881,282		13,942,073	4,082,671		(12,925,704	)	12,980,322
Total stockholders’ equity	16,044,599		10,357,617	(42,037	)	(10,315,580	)	16,044,599
Noncontrolling interests	—		—	148,778		—		148,778
Total equity	16,044,599		10,357,617	106,741		(10,315,580	)	16,193,377
Total liabilities and equity	$	23,925,881	24,299,690	4,189,412		(23,241,284	)	29,173,699

Condensed Consolidating Balance Sheet

November 30, 2019

(In thousands)	Lennar Corporation		Guarantor Subsidiaries	Non-Guarantor Subsidiaries	Consolidating Adjustments		Total
ASSETS
Homebuilding:
Cash and cash equivalents, restricted cash and receivables, net	$	722,172	794,588	22,894	—		1,539,654
Inventories	—		17,396,139	380,368	—		17,776,507
Investments in unconsolidated entities	—		1,006,541	2,494	—		1,009,035
Goodwill	—		3,442,359	—	—		3,442,359
Other assets	344,941		500,356	217,607	(41,220	)	1,021,684
Investments in subsidiaries	10,453,165		26,773	—	(10,479,938	)	—
Intercompany	12,027,996		—	—	(12,027,996	)	—
	23,548,274		23,166,756	623,363	(22,549,154	)	24,789,239
Financial Services	—		275,812	2,731,285	(1,073	)	3,006,024
Multifamily	—		—	1,068,831	—		1,068,831
Lennar Other	—		158,194	339,988	(2,765	)	495,417
Total assets	$	23,548,274	23,600,762	4,763,467	(22,552,992	)	29,359,511
LIABILITIES AND EQUITY
Homebuilding:
Accounts payable and other liabilities	$	760,981	1,935,366	318,845	(45,058	)	2,970,134
Liabilities related to consolidated inventory not owned	—		260,266	—	—		260,266
Senior notes and other debts payable	6,837,776		885,783	53,079	—		7,776,638
Intercompany	—		10,122,374	1,905,622	(12,027,996	)	—
	7,598,757		13,203,789	2,277,546	(12,073,054	)	11,007,038
Financial Services	—		40,235	2,016,215	—		2,056,450
Multifamily	—		—	232,155	—		232,155
Lennar Other	—		—	30,038	—		30,038
Total liabilities	7,598,757		13,244,024	4,555,954	(12,073,054	)	13,325,681
Total stockholders’ equity	15,949,517		10,356,738	123,200	(10,479,938	)	15,949,517
Noncontrolling interests	—		—	84,313	—		84,313
Total equity	15,949,517		10,356,738	207,513	(10,479,938	)	16,033,830
Total liabilities and equity	$	23,548,274	23,600,762	4,763,467	(22,552,992	)	29,359,511

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)

Three Months Ended February 29, 2020

(In thousands)	Lennar Corporation			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating Adjustments		Total
Revenues:
Homebuilding	$	—		4,156,143		15,973		—		4,172,116
Financial Services	—			28,994		175,653		(5,986	)	198,661
Multifamily	—			—		132,617		—		132,617
Lennar Other	—			—		1,943		—		1,943
Total revenues	—			4,185,137		326,186		(5,986	)	4,505,337
Cost and expenses:
Homebuilding	—			3,684,697		17,343		(4,234	)	3,697,806
Financial Services	—			16,453		137,551		(2,660	)	151,344
Multifamily	—			—		137,348		—		137,348
Lennar Other	—			—		2,574		—		2,574
Corporate general and administrative	84,010			1,572		—		1,265		86,847
Total costs and expenses	84,010			3,702,722		294,816		(5,629	)	4,075,919
Homebuilding equity in earnings (loss) from unconsolidated entities	—			(4,734	)	188		—		(4,546	)
Homebuilding other income (expense), net	(357		)	(11,048	)	1,682		357		(9,366	)
Multifamily equity in earnings from unconsolidated entities and other gain	—			—		6,516		—		6,516
Lennar Other equity in earnings (loss) from unconsolidated entities	—			(4,930	)	5,049		—		119
Lennar Other income, net	—			—		1,411		—		1,411
Earnings (loss) before income taxes	(84,367		)	461,703		46,216		—		423,552
Benefit (provision) for income taxes	6,328			(25,837	)	(12,820	)	—		(32,329	)
Equity in earnings from subsidiaries	476,491			24,705		—		(501,196	)	—
Net earnings (including net loss attributable to noncontrolling interests)	398,452			460,571		33,396		(501,196	)	391,223
Less: Net loss attributable to noncontrolling interests	—			—		(7,229	)	—		(7,229	)
Net earnings attributable to Lennar	$	398,452		460,571		40,625		(501,196	)	398,452
Other comprehensive loss, net of tax:
Net unrealized loss on securities available-for-sale	$	—		—		(46	)	—		(46	)
Total other comprehensive loss, net of tax	$	—		—		(46	)	—		(46	)
Total comprehensive income attributable to Lennar	$	398,452		460,571		40,579		(501,196	)	398,406
Total comprehensive loss attributable to noncontrolling interests	$	—		—		(7,229	)	—		(7,229	)

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)

Three Months Ended February 28, 2019

(In thousands)	Lennar Corporation			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating Adjustments		Total
Revenues:
Homebuilding	$	—		3,614,041		9,680		—		3,623,721
Financial Services	—			48,917		99,249		(4,855	)	143,311
Multifamily	—			—		97,394		—		97,394
Lennar Other	—			—		3,656		—		3,656
Total revenues	—			3,662,958		209,979		(4,855	)	3,868,082
Cost and expenses:
Homebuilding	—			3,225,929		12,307		599		3,238,835
Financial Services	—			38,378		92,268		(6,307	)	124,339
Multifamily	—			—		101,178		—		101,178
Lennar Other	—			—		1,622		—		1,622
Corporate general and administrative	77,529			549		—		1,265		79,343
Total costs and expenses	77,529			3,264,856		207,375		(4,443	)	3,545,317
Homebuilding equity in earnings (loss) from unconsolidated entities	—			(13,951	)	195		—		(13,756	)
Homebuilding other income (expense), net	(408		)	(2,396	)	857		412		(1,535	)
Multifamily equity in earnings from unconsolidated entities and other gain	—			—		10,581		—		10,581
Lennar Other equity in earnings (loss) from unconsolidated entities	—			(3,346	)	11,676		—		8,330
Lennar Other expense, net	—			—		(7,261	)	—		(7,261	)
Earnings (loss) before income taxes	(77,937		)	378,409		18,652		—		319,124
Benefit (provision) for income taxes	19,437			(93,839	)	(5,298	)	—		(79,700	)
Equity in earnings from subsidiaries	298,410			4,773		—		(303,183	)	—
Net earnings (including net loss attributable to noncontrolling interests)	239,910			289,343		13,354		(303,183	)	239,424
Less: Net loss attributable to noncontrolling interests	—			—		(486	)	—		(486	)
Net earnings attributable to Lennar	$	239,910		289,343		13,840		(303,183	)	239,910
Other comprehensive income, net of tax:
Net unrealized gain on securities available-for-sale	$	—		—		208		—		208
Total other comprehensive income, net of tax	$	—		—		208		—		208
Total comprehensive income attributable to Lennar	$	239,910		289,343		14,048		(303,183	)	240,118
Total comprehensive loss attributable to noncontrolling interests	$	—		—		(486	)	—		(486	)

Condensed Consolidating Statement of Cash Flows

Three Months Ended February 29, 2020

(In thousands)	Lennar Corporation			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating Adjustments		Total
Cash flows from operating activities:
Net earnings (including net loss attributable to noncontrolling interests)	$	398,452		460,571		33,396		(501,196	)	391,223
Distributions of earnings from guarantor and non-guarantor subsidiaries	501,196			—		—		(501,196	)	—
Other adjustments to reconcile net earnings (including net loss attributable to noncontrolling interests) to net cash provided by (used in) operating activities	(514,919		)	(686,494	)	691,970		501,196		(8,247	)
Net cash provided by (used in) operating activities	384,729			(225,923	)	725,366		(501,196	)	382,976
Cash flows from investing activities:
Investments in and contributions to unconsolidated entities, net of distributions of capital	—			(1,178	)	8,895		—		7,717
Proceeds from the sales of operating properties and equipment and other assets	—			13,067		—		—		13,067
Other	(330		)	913		(8,188	)	—		(7,605	)
Intercompany	(672,022		)	—		—		672,022		—
Net cash provided by (used in) investing activities	(672,352		)	12,802		707		672,022		13,179
Cash flows from financing activities:
Net borrowings under unsecured revolving credit facilities	300,000			—		—		—		300,000
Net repayments under warehouse facilities	—			—		(755,602	)	—		(755,602	)
Net repayments on other borrowings, other liabilities, and other notes payable	—			(55,580	)	(15,573	)	—		(71,153	)
Net receipts related to noncontrolling interests	—			—		72,179		—		72,179
Common stock:
Repurchases	(295,988		)	—		—		—		(295,988	)
Dividends	(39,240		)	(460,571	)	(40,625	)	501,196		(39,240	)
Intercompany	—			605,744		66,278		(672,022	)	—
Net cash provided by (used in) financing activities	(35,228		)	89,593		(673,343	)	(170,826	)	(789,804	)
Net increase (decrease) in cash and cash equivalents and restricted cash	(322,851		)	(123,528	)	52,730		—		(393,649	)
Cash and cash equivalents and restricted cash at beginning of period	713,828			532,304		222,559		—		1,468,691
Cash and cash equivalents and restricted cash at end of period	$	390,977		408,776		275,289		—		1,075,042

Condensed Consolidating Statement of Cash Flows

Three Months Ended February 28, 2019

(In thousands)	Lennar Corporation			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating Adjustments		Total
Cash flows from operating activities:
Net earnings (including net loss attributable to noncontrolling interests)	$	239,910		289,343		13,354		(303,183	)	239,424
Distributions of earnings from guarantor and non-guarantor subsidiaries	298,410			4,773		—		(303,183	)	—
Other adjustments to reconcile net earnings (including net loss attributable to noncontrolling interests) to net cash provided by (used in) operating activities	(339,730		)	(1,082,776	)	355,476		303,183		(763,847	)
Net cash provided by (used in) operating activities	198,590			(788,660	)	368,830		(303,183	)	(524,423	)
Cash flows from investing activities:
Investments in and contributions to unconsolidated entities, net of distributions of capital	—			(60,660	)	(3,177	)	—		(63,837	)
Proceeds from sales of real estate owned	—			—		2,696		—		2,696
Proceeds from sale of investment in unconsolidated entity	—			—		17,790		—		17,790
Proceeds from sales of Financial Services retail mortgage and real estate brokerage business	—			21,517		2,929		—		24,446
Other	(8,411		)	(15,686	)	(34,986	)	—		(59,083	)
Intercompany	(1,121,791		)	—		—		1,121,791		—
Net cash used in investing activities	(1,130,202		)	(54,829	)	(14,748	)	1,121,791		(77,988	)
Cash flows from financing activities:
Net borrowings under unsecured revolving credit facilities	725,000			—		—		—		725,000
Net borrowings (repayments) under warehouse facilities	—			5,801		(514,456	)	—		(508,655	)
Net payments on other borrowings, other liabilities, and other notes payable	—			(79,281	)	(3,697	)	—		(82,978	)
Net payments related to noncontrolling interests	—			—		(2,949	)	—		(2,949	)
Common stock:
Issuances	607			—		—		—		607
Repurchases	(49,143		)	—		—		—		(49,143	)
Dividends	(12,860		)	(289,343	)	(13,840	)	303,183		(12,860	)
Intercompany	—			973,489		148,302		(1,121,791	)	—
Net cash provided by (used in) financing activities	663,604			610,666		(386,640	)	(818,608	)	69,022
Net decrease in cash and cash equivalents and restricted cash	(268,008		)	(232,823	)	(32,558	)	—		(533,389	)
Cash and cash equivalents and restricted cash at beginning of period	624,694			721,968		249,316		—		1,595,978
Cash and cash equivalents and restricted cash at end of period	$	356,686		489,145		216,758		—		1,062,589