UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended February 28, 2023

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from _______ To _______

Commission File Number: 1-11749

Lennar Corporation

(Exact name of registrant as specified in its charter)

Delaware	95-4337490
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

5505 Blue Lagoon Drive, Miami, Florida 33126

(Address of principal executive offices) (Zip Code)

(305) 559-4000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, par value $.10	LEN	New York Stock Exchange
Class B Common Stock, par value $.10	LEN.B	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☑    No  ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☑    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	R	Accelerated filer	¨	Emerging growth company	☐
Non-accelerated filer	¨	Smaller reporting company	☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☑

Common stock outstanding as of February 28, 2023:

Class A 253,773,163

Class B 35,627,560

LENNAR CORPORATION
FORM 10-Q
For the period ended February 28, 2023
Part I	Financial Information
Item 1.	Financial Statements	3
	Condensed Consolidated Balance Sheets as of February 28, 2023 and November 30, 2022	3
	Condensed Consolidated Statements of Operations and Comprehensive Income for the three months ended February 28, 2023 and 2022	5
	Condensed Consolidated Statements of Cash Flows for the three months ended February 28, 2023 and 2022	6
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	38
Item 4.	Controls and Procedures	39
Part II	Other Information	40
Item 1.	Legal Proceedings	40
Item 1A.	Risk Factors	40
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40
Item 3 - 5.	Not Applicable	40
Item 6.	Exhibits	41
	Signatures	42

Part I. Financial Information

Item 1. Financial Statements

Lennar Corporation and Subsidiaries

Condensed Consolidated Balance Sheets

(Dollars in thousands)

(Unaudited)

	February 28,		November 30,
	2023 (1)		2022 (1)
ASSETS
Homebuilding:
Cash and cash equivalents	$	4,057,956	4,616,124
Restricted cash	22,504		23,046
Receivables, net	559,939		673,980
Inventories:
Finished homes and construction in progress	11,945,232		11,718,507
Land and land under development	7,459,185		7,382,273
Consolidated inventory not owned	2,223,469		2,331,231
Total inventories	21,627,886		21,432,011
Investments in unconsolidated entities	1,178,802		1,173,164
Goodwill	3,442,359		3,442,359
Other assets	1,412,654		1,323,478
	32,302,100		32,684,162
Financial Services	2,213,421		3,254,257
Multifamily	1,266,777		1,257,337
Lennar Other	790,856		788,539
Total assets	$	36,573,154	37,984,295

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

As of February 28, 2023, total assets include $1.4 billion related to consolidated VIEs of which $31.1 million is included in Homebuilding cash and cash equivalents, $0.7 million in Homebuilding receivables, net, $59.0 million in Homebuilding finished homes and construction in progress, $742.4 million in Homebuilding land and land under development, $502.0 million in Homebuilding consolidated inventory not owned, $0.7 million in Homebuilding investments in unconsolidated entities, $21.1 million in Homebuilding other assets, $31.0 million in Multifamily assets and $6.8 million in Lennar Other assets.

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

See accompanying notes to condensed consolidated financial statements.

3

Lennar Corporation and Subsidiaries

Condensed Consolidated Balance Sheets (Continued)

(In thousands, except share amounts)

(Unaudited)

	February 28,		November 30,
	2023 (2)		2022 (2)
LIABILITIES AND EQUITY
Homebuilding:
Accounts payable	$	1,490,808	1,616,128
Liabilities related to consolidated inventory not owned	1,867,373		1,967,551
Senior notes and other debts payable, net	4,033,335		4,047,294
Other liabilities	2,937,472		3,347,673
	10,328,988		10,978,646
Financial Services	1,317,775		2,353,904
Multifamily	283,380		313,484
Lennar Other	87,724		97,894
Total liabilities	12,017,867		13,743,928
Stockholders’ equity:
Preferred stock	—		—
Class A common stock of $0.10 par value; Authorized: February 28, 2023 and November 30, 2022 - 400,000,000 shares; Issued: February 28, 2023 - 258,339,930 shares and November 30, 2022 - 256,084,147 shares	25,834		25,608
Class B common stock of $0.10 par value; Authorized: February 28, 2023 and November 30, 2022 - 90,000,000 shares; Issued: February 28, 2023 - 36,601,215 shares and November 30, 2022 - 36,601,215 shares	3,660		3,660
Additional paid-in capital	5,503,789		5,417,796
Retained earnings	19,350,060		18,861,417
Treasury stock, at cost; February 28, 2023 - 4,566,767 shares of Class A common stock and 973,655 shares of Class B common stock; November 30, 2022 - 2,455,387 shares of Class A common stock and 419,860 shares of Class B common stock	(468,347)		(210,389)
Accumulated other comprehensive income	3,259		2,408
Total stockholders’ equity	24,418,255		24,100,500
Noncontrolling interests	137,032		139,867
Total equity	24,555,287		24,240,367
Total liabilities and equity	$	36,573,154	37,984,295

(2)As of February 28, 2023, total liabilities include $580.0 million related to consolidated VIEs as to which there was no recourse against the Company, of which $64.4 million is included in Homebuilding accounts payable, $477.6 million in Homebuilding liabilities related to consolidated inventory not owned, $30.1 million in Homebuilding senior notes and other debts payable, $2.1 million in Homebuilding other liabilities, $3.7 million in Multifamily liabilities and $2.1 million in Lennar Other liabilities.

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

See accompanying notes to condensed consolidated financial statements.

4

Lennar Corporation and Subsidiaries

Condensed Consolidated Statements of Operations and Comprehensive Income

(In thousands, except per share amounts)

(Unaudited)

	Three Months Ended
	February 28,
	2023		2022
Revenues:
Homebuilding	$	6,156,305	5,752,205
Financial Services	182,981		176,701
Multifamily	143,523		267,359
Lennar Other	7,620		7,251
Total revenues	6,490,429		6,203,516
Costs and expenses:
Homebuilding	5,274,714		4,641,898
Financial Services	104,244		85,910
Multifamily	148,956		263,737
Lennar Other	6,476		5,407
Corporate general and administrative	126,106		113,661
Charitable foundation contribution	13,659		12,538
Total costs and expenses	5,674,155		5,123,151
Homebuilding equity in earnings (loss) from unconsolidated entities	3,186		(286)
Homebuilding other income (expense), net	22,062		(171)
Multifamily equity in earnings (loss) from unconsolidated entities and other gain	(16,168)		1,805
Lennar Other equity in loss from unconsolidated entities, other expense, net, and other gain	(16,947)		(9,808)
Lennar Other unrealized loss from technology investments	(23,954)		(395,170)
Earnings before income taxes	784,453		676,735
Provision for income taxes	(185,145)		(167,420)
Net earnings (including net earnings attributable to noncontrolling interests)	599,308		509,315
Less: Net earnings attributable to noncontrolling interests	2,774		5,734
Net earnings attributable to Lennar	$	596,534	503,581
Other comprehensive income, net of tax:
Net unrealized gain on securities available-for-sale	$	851	742
Reclassification adjustments for gain included in earnings, net of tax	—		2,285
Total other comprehensive income, net of tax	$	851	3,027
Total comprehensive income attributable to Lennar	$	597,385	506,608
Total comprehensive income attributable to noncontrolling interests	$	2,774	5,734
Basic earnings per share	$	2.06	1.70
Diluted earnings per share	$	2.06	1.69

See accompanying notes to condensed consolidated financial statements.

5

Lennar Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

	Three Months Ended
	February 28,
	2023		2022
Cash flows from operating activities:
Net earnings (including net earnings attributable to noncontrolling interests)	$	599,308	509,315
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	20,305		20,089
Amortization of discount/premium on debt, net	(838)		(490)
Equity in loss from unconsolidated entities	31,187		9,752
Distributions of earnings from unconsolidated entities	4,623		4,822
Share-based compensation expense	86,558		81,457
Deferred income tax benefit	(81,940)		(54,032)
Loans held-for-sale unrealized loss	31,462		27,387
Lennar Other unrealized losses from technology investments	23,954		395,170
Valuation adjustments and write-offs of option deposits, pre-acquisition costs and other assets	25,846		11,509
Changes in assets and liabilities:
Decrease in receivables	602,757		380,502
Increase in inventories, excluding valuation adjustments and write-offs of option deposits and pre-acquisition costs	(177,705)		(1,913,634)
Increase in other assets	(8,139)		(49,968)
Decrease in loans held-for-sale	511,807		409,435
(Decrease) increase in accounts payable and other liabilities	(690,980)		96,455
Net cash provided by (used in) operating activities	978,205		(72,231)
Cash flows from investing activities:
Net additions of operating properties and equipment	(5,423)		(5,780)
Investments in and contributions to unconsolidated entities	(57,281)		(138,909)
Distributions of capital from unconsolidated entities	23,993		173,561
Proceeds from sale of commercial mortgage-backed securities bonds	—		9,191
Decrease in Financial Services loans held-for-investment, net	418		11,431
Purchases of investment securities	—		(71,269)
Proceeds from maturities/sales of investment securities	1,938		1,783
Net cash used in investing activities	$	(36,355)	(19,992)

See accompanying notes to condensed consolidated financial statements.

6

Lennar Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Continued)

(In thousands)

(Unaudited)

	Three Months Ended
	February 28,
	2023		2022
Cash flows from financing activities:
Net repayments under warehouse facilities	$	(963,455)	(528,667)
Principal payments on notes payable and other borrowings	(26,621)		(18,776)
Proceeds from liabilities related to consolidated inventory not owned	70,369		199,483
Payments related to consolidated inventory not owned	(177,891)		(166,100)
Payments related to other liabilities, net	(1,257)		—
Receipts related to noncontrolling interests	2,497		6,984
Payments related to noncontrolling interests	(21,256)		(59,388)
Common stock:
Repurchases	(257,958)		(581,300)
Dividends	(107,891)		(110,122)
Net cash used in financing activities	(1,483,463)		(1,257,886)
Net decrease in cash and cash equivalents and restricted cash	(541,613)		(1,350,109)
Cash and cash equivalents and restricted cash at beginning of period	4,815,770		2,955,683
Cash and cash equivalents and restricted cash at end of period	$	4,274,157	1,605,574
Summary of cash and cash equivalents and restricted cash:
Homebuilding	$	4,057,956	1,366,597
Financial Services	163,000		168,032
Multifamily	15,075		34,439
Lennar Other	6,825		2,757
Homebuilding restricted cash	22,504		27,025
Financial Services restricted cash	8,797		6,724
	$	4,274,157	1,605,574
Supplemental disclosures of non-cash investing and financing activities:
Homebuilding and Multifamily:
Purchases of inventories and other assets financed by sellers	$	13,500	6,150
Non-cash contributions to unconsolidated entities	$	120	124,864

See accompanying notes to condensed consolidated financial statements.

7

Lennar Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

(1)Basis of Presentation

Basis of Consolidation

The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission. 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, 2022. The basis of consolidation is unchanged from the disclosure in the Company's Notes to Consolidated Financial Statements section in its Form 10-K for the year ended November 30, 2022. In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for the fair presentation of the accompanying condensed consolidated financial statements have been made.

The Company has historically experienced, and expects to continue to experience, variability in quarterly results. The condensed consolidated statements of operations for the three months ended February 28, 2023 are not necessarily indicative of the results to be expected for the full year.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Cash and Cash Equivalents

Homebuilding cash and cash equivalents as of February 28, 2023 and November 30, 2022 included $488.0 million and $1.0 billion, respectively, of cash held in escrow for approximately two days.

Share-based Payments

During the three months ended February 28, 2023 and 2022, the Company granted employees 1.6 million and 1.4 million of nonvested shares, respectively.

Recently Adopted Accounting Pronouncements

In March 2020, the Financial Accounting Standards Board (FASB) issued ASU 2020-04, “Reference Rate Reform,” which provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by the discontinuation of the London Interbank Offered Rate (LIBOR) or by another reference rate expected to be discontinued. The guidance was effective beginning March 12, 2020 and can be applied prospectively through December 31, 2024, with earlier adoption permitted. In January 2021, the FASB issued ASU 2021-01, “Reference Rate Reform - Scope,” which clarified the scope and application of the original guidance. In December 2022, the FASB issued ASU 2022-06, "Reference Rate Reform - Deferral of the Sunset Date of Topic 848," which defers the sunset date from December 31, 2022 to December 31, 2024. The adoption of ASU 2020-04 did not have a material impact on the Company's condensed consolidated financial statements.

(2) Operating and Reporting Segments

The Company's homebuilding operations construct and sell homes primarily for first-time, move-up and active adult homebuyers primarily under the Lennar brand name. In addition, the Company's homebuilding operations purchase, develop and sell land to third parties. The Company's chief operating decision makers manage and assess the Company’s performance at a regional level. Therefore, the Company performed an assessment of its operating segments in accordance with ASC 280, Segment Reporting, and determined that the following are its operating and reportable segments:

Homebuilding segments: (1) East (2) Central (3) Texas (4) West

(5) Financial Services

(6) Multifamily

(7) Lennar Other

8

Lennar Corporation and Subsidiaries

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

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

(In thousands)	February 28, 2023
Assets:	Homebuilding		Financial Services	Multifamily	Lennar Other	Total
Cash and cash equivalents	$	4,057,956	163,000	15,075	6,825	4,242,856
Restricted cash	22,504		8,797	—	—	31,301
Receivables, net (1)	559,939		329,331	110,696	—	999,966
Inventories	21,627,886		—	439,947	—	22,067,833
Loans held-for-sale (2)	—		1,233,466	—	—	1,233,466
Investments in equity securities (3)	—		—	—	367,369	367,369
Investments available-for-sale (4)	—		—	—	36,332	36,332
Loans held-for-investment, net	—		45,327	—	—	45,327
Investments held-to-maturity	—		141,854	—	—	141,854
Investments in unconsolidated entities	1,178,802		—	635,499	315,632	2,129,933
Goodwill	3,442,359		189,699	—	—	3,632,058
Other assets	1,412,654		101,947	65,560	64,698	1,644,859
	$	32,302,100	2,213,421	1,266,777	790,856	36,573,154
Liabilities:
Notes and other debts payable, net	$	4,033,335	1,171,638	16,828	—	5,221,801
Accounts payable and other liabilities	6,295,653		146,137	266,552	87,724	6,796,066
	$	10,328,988	1,317,775	283,380	87,724	12,017,867

(In thousands)	November 30, 2022
Assets:	Homebuilding		Financial Services	Multifamily	Lennar Other	Total
Cash and cash equivalents	$	4,616,124	139,378	17,827	5,391	4,778,720
Restricted cash	23,046		14,004	—	—	37,050
Receivables, net (1)	673,980		826,163	114,134	—	1,614,277
Inventories	21,432,011		—	430,442	—	21,862,453
Loans held-for-sale (2)	—		1,776,311	—	—	1,776,311
Investments in equity securities (3)	—		—	—	391,026	391,026
Investments available-for-sale (4)	—		—	—	35,482	35,482
Loans held-for-investment, net	—		45,636	—	—	45,636
Investments held-to-maturity	—		143,251	—	—	143,251
Investments in unconsolidated entities	1,173,164		—	648,126	316,523	2,137,813
Goodwill	3,442,359		189,699	—	—	3,632,058
Other assets	1,323,478		119,815	46,808	40,117	1,530,218
	$	32,684,162	3,254,257	1,257,337	788,539	37,984,295
Liabilities:
Notes and other debts payable, net	$	4,047,294	2,135,093	16,749	—	6,199,136
Accounts payable and other liabilities	6,931,352		218,811	296,735	97,894	7,544,792
	$	10,978,646	2,353,904	313,484	97,894	13,743,928

(1)Receivables, net for Financial Services primarily related to loans sold to investors for which the Company had not yet been paid as of February 28, 2023 and November 30, 2022, respectively.

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

(3)Investments in equity securities include investments of $178.0 million without readily available fair values as of both February 28, 2023 and November 30, 2022, respectively.

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

9

Lennar Corporation and Subsidiaries

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

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

	Three Months Ended February 28, 2023
(In thousands)	Homebuilding		Financial Services	Multifamily	Lennar Other	Corporate and Unallocated	Total
Revenues	$	6,156,305	182,981	143,523	7,620	—	6,490,429
Operating earnings (loss)	906,839		78,737	(21,601)	(39,757)	—	924,218
Corporate general and administrative expenses	—		—	—	—	126,106	126,106
Charitable foundation contribution	—		—	—	—	13,659	13,659
Earnings (loss) before income taxes	906,839		78,737	(21,601)	(39,757)	(139,765)	784,453
	Three Months Ended February 28, 2022
Revenues	$	5,752,205	176,701	267,359	7,251	—	6,203,516
Operating earnings (loss)	1,109,850		90,791	5,427	(403,134)	—	802,934
Corporate general and administrative expenses	—		—	—	—	113,661	113,661
Charitable foundation contribution	—		—	—	—	12,538	12,538
Earnings (loss) before income taxes	1,109,850		90,791	5,427	(403,134)	(126,199)	676,735

Homebuilding Segments

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

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

East: Alabama, Florida, New Jersey, Pennsylvania and South Carolina

Central: Georgia, Illinois, Indiana, Maryland, Minnesota, North Carolina, Tennessee and Virginia

Texas: Texas

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

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

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

(In thousands)	East		Central	Texas	West	Other	Corporate and Unallocated	Total Homebuilding
February 28, 2023	$	6,800,191	4,074,510	3,592,725	12,076,029	1,371,403	4,387,242	32,302,100
November 30, 2022	6,877,581		4,010,610	3,742,663	12,182,709	1,382,864	4,487,735	32,684,162

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

	Three Months Ended February 28, 2023
(In thousands)	East		Central	Texas	West	Other	Total Homebuilding
Revenues	$	1,875,977	1,048,007	1,022,052	2,205,061	5,208	6,156,305
Operating earnings (loss)	424,196		130,522	125,319	230,500	(3,698)	906,839
	Three Months Ended February 28, 2022
Revenues	$	1,670,186	1,109,272	812,619	2,150,798	9,330	5,752,205
Operating earnings (loss)	351,995		152,078	171,312	441,448	(6,983)	1,109,850

10

Lennar Corporation and Subsidiaries

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

Financial Services

Operations of the Financial Services segment include primarily mortgage financing, title and closing services primarily for buyers of the Company’s homes. It also includes originating and selling into securitizations commercial mortgage loans through its LMF Commercial business. Financial Services’ operating earnings consist of revenues generated primarily from mortgage financing, title and closing services, and property and casualty insurance, less the cost of such services and certain selling, general and administrative expenses incurred by the segment. The Financial Services segment operates generally in the same states as the Company’s homebuilding operations.

At February 28, 2023, the Financial Services warehouse facilities were all 364-day repurchase facilities and were used to fund residential mortgages or commercial mortgages for LMF Commercial as follows:

(In thousands)	Maximum Aggregate Commitment
Residential facilities maturing:
May 2023	$	200,000
August 2023	600,000
December 2023	500,000
Total - Residential facilities	$	1,300,000
LMF Commercial facilities maturing
July 2023	$	50,000
November 2023	100,000
December 2023	400,000
Total - LMF Commercial facilities	$	550,000
Total	$	1,850,000

The Financial Services segment uses the residential facilities to finance its residential lending activities until the mortgage loans are sold to investors and the proceeds are collected. The facilities are non-recourse to the Company and are expected to be renewed or replaced with other facilities when they mature. The LMF Commercial facilities finance LMF Commercial loan originations and securitization activities and were secured by up to 80% interests in the originated commercial loans financed.

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

(In thousands)	February 28, 2023		November 30, 2022
Borrowings under the residential facilities	$	1,028,283	1,877,411
Collateral under the residential facilities	1,064,394		1,950,155
Borrowings under the LMF Commercial facilities	11,397		124,399

If the facilities are not renewed or replaced, the borrowings under the lines of credit will be repaid by selling the mortgage loans held-for-sale to investors and by collecting receivables on loans sold but not yet paid for. Without the facilities, the Financial Services segment would have to use cash from operations and other funding sources to finance its lending activities.

Substantially all of the residential loans the Financial Services segment originates are sold within a short period in the secondary mortgage market on a servicing released, non-recourse basis. After the loans are sold, the Company retains potential liability for possible claims by purchasers that it breached certain limited industry-standard representations and warranties in the loan sale agreements. Purchasers sometimes try to defray losses by purporting to have found inaccuracies related to sellers’ representations and warranties in particular loan sale agreements. Mortgage investors could seek to have the Company buy back mortgage loans or compensate them for losses incurred on mortgage loans that the Company has sold based on claims that the Company breached its limited representations or warranties. The Company’s mortgage operations have established accruals for possible losses associated with mortgage loans previously originated and sold to investors. The Company establishes accruals for such possible losses based upon, among other things, an analysis of repurchase requests received, an estimate of potential repurchase claims not yet received and actual past repurchases and losses through the disposition of affected loans as well as previous settlements. While the Company believes that it has adequately reserved for known losses and projected repurchase requests, given the volatility in the residential mortgage industry and the uncertainty regarding the ultimate resolution of these claims, if either actual repurchases or the losses incurred resolving those repurchases exceed the Company’s expectations, additional recourse expense may be incurred. The provision for loan losses was immaterial for both the three months ended February 28, 2023 and 2022. Loan origination liabilities were $12.1 million and $11.8 million as of February 28, 2023 and November 30, 2022, respectively, and included in Financial Services’ liabilities in the Company's condensed consolidated balance sheets.

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Lennar Corporation and Subsidiaries

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

LMF Commercial - loans held-for-sale

LMF Commercial originated commercial loans as follows:

	Three Months Ended
	February 28,
(Dollars in thousands)	2023		2022
Originations (1)	$	79,480	264,845
Sold	77,200		178,082
Securitizations	1		1

(1)During both the three months ended February 28, 2023 and 2022, all the commercial loans originated were recorded as loans held-for-sale, which are held at fair value.

Investments held-to-maturity

At February 28, 2023 and November 30, 2022, 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 either the three months ended February 28, 2023 or 2022. The Company has financing agreements to finance CMBS that have been purchased as investments by the Financial Services segment.

Details related to Financial Services' CMBS were as follows:

(Dollars in thousands)	February 28, 2023		November 30, 2022
Carrying value	$	141,854	143,251
Outstanding debt, net of debt issuance costs	131,959		133,283
Incurred interest rate	3.4%		3.4%

	February 28, 2023
Discount rates at purchase	6%	—	84%
Coupon rates	2.0%	—	5.3%
Distribution dates	October 2027	—	December 2028
Stated maturity dates	October 2050	—	December 2051

Multifamily

The Company is actively involved, primarily through unconsolidated funds and joint ventures, in the development, construction and property management of multifamily rental properties. The Multifamily segment focuses on developing a geographically diversified portfolio of institutional quality multifamily rental properties in select U.S. markets.

The Multifamily Segment (i) manages, and owns interests in, funds that are engaged in the development of multifamily residential communities with the intention of holding the newly constructed and occupied properties as income and fee generating assets, and (ii) manages, and owns interests in, joint ventures that are engaged in the development of multifamily residential communities, in most instances with the intention of selling them when they are built and substantially occupied. Our multifamily business is a vertically integrated platform with capabilities spanning development, construction, property management, asset management, and capital markets. Revenues are generated from the sales of land, from construction activities, and management and promote fees generated from joint ventures and other gains (which includes sales of buildings), less the cost of sales of land sold, expenses related to construction activities and general and administrative expenses. Operations of the Multifamily Segment also include equity in earnings (loss) from unconsolidated entities.

Lennar Other

Lennar Other primarily includes strategic investments in technology companies, primarily managed by the Company's LENX subsidiary, and fund interests the Company retained when it sold the Rialto Capital Management ("Rialto") asset and investment management platform. Operations of the Lennar Other segment include operating earnings (loss) consisting of revenues generated primarily from the Company's share of carried interests in the Rialto fund investments, along with equity in earnings (loss) from the Rialto fund investments and technology investments, realized and unrealized gains (losses) from investments in equity securities and other income (expense), net from the remaining assets related to the Company's former Rialto segment.

12

Lennar Corporation and Subsidiaries

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

The Company has investments in Blend Labs, Inc. ("Blend Labs"), Hippo Holdings, Inc. ("Hippo"), Opendoor, Inc. ("Opendoor"), SmartRent, Inc. ("SmartRent"), Sonder Holdings, Inc. ("Sonder") and Sunnova Energy International, Inc. ("Sunnova"), which are held at market and will therefore change depending on the value of the Company's share holdings in those entities on the last day of each quarter. 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 (loss) from mark-to-market adjustments on the Company's technology investments:

	Three Months Ended
	February 28,
(In thousands)	2023		2022
Blend Labs (BLND)	$	586	(7,442)
Hippo (HIPO)	6,632		(124,457)
Opendoor (OPEN)	(7,691)		(143,361)
SmartRent (SMRT)	1,305		(44,363)
Sonder (SOND)	(320)		(506)
Sunnova (NOVA)	(24,466)		(75,041)
Lennar Other unrealized losses from technology investments	$	(23,954)	(395,170)

Doma Holdings, Inc. ("Doma"), which went public during the year ended November 30, 2021, is an investment that continues to be accounted for under the equity method due to the Company's significant ownership interest which allows the Company to exercise significant influence. As of February 28, 2023, the Company owned approximately 25% of Doma.

13

Lennar Corporation and Subsidiaries

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

(3)Investments in Unconsolidated Entities

Homebuilding Unconsolidated Entities

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

(In thousands)	February 28, 2023		November 30, 2022
Investments in unconsolidated entities (1) (2)	$	1,178,802	1,173,164
Underlying equity in unconsolidated entities' net assets (1)	1,524,006		1,504,315

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

(2)Included in the Company's recorded investments in Homebuilding unconsolidated entities is the Company's 40% ownership of FivePoint. As of February 28, 2023 and November 30, 2022, the carrying amount of the Company's investment was $395.3 million and $382.9 million, respectively.

As of February 28, 2023 and November 30, 2022, the Homebuilding segment's unconsolidated entities had non-recourse debt with completion guarantees of $340.2 million and $333.6 million, respectively.

The Company has an immaterial amount of recourse exposure to debt of the Homebuilding unconsolidated entities in which it has investments. While the Company sometimes guarantees debt of unconsolidated entities, in most instances the Company’s partners have also guaranteed that debt and are required to contribute their shares of any payments. In most instances, the amount of guaranteed debt of an unconsolidated entity is less than the value of the collateral securing it.

As of both February 28, 2023 and November 30, 2022, the fair values of the repayment guarantees, maintenance guarantees, and completion guarantees were not material. The Company believes that as of February 28, 2023, in the event it becomes legally obligated to perform under a guarantee of the obligation of a Homebuilding unconsolidated entity due to a triggering event under a guarantee, the collateral would be sufficient to repay at least a significant portion of the obligation or the Company and its partners would contribute additional capital into the venture. In certain instances, the Company has placed performance letters of credit and surety bonds with municipalities with regard to obligations of its joint ventures (see Note 7 of the Notes to Condensed Consolidated Financial Statements). The details related to these are unchanged from the disclosure in the Company's Notes to the Financial Statements section in its Form 10-K for the year ended November 30, 2022.

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 people who will live in them. Upward America has raised equity commitments totaling $1.6 billion. The commitments are primarily from institutional investors, including $125 million committed by Lennar. As of February 28, 2023 and November 30, 2022, the carrying amount of the Company's investment in Upward America was $34.3 million and $37.7 million, respectively.

Multifamily Unconsolidated Entities

The unconsolidated joint ventures in which the Multifamily segment has investments usually finance their activities with a combination of partner equity and debt financing. In connection with many of the bank loans to Multifamily unconsolidated joint ventures, the Company (or entities related to them) has been required to give guarantees of completion and cost over-runs to the lenders and partners. The details related to these are unchanged from the disclosure in the Company's Notes to the Financial Statements section in its Form 10-K for the year ended November 30, 2022. As of both February 28, 2023 and November 30, 2022, the fair value of the completion guarantees was immaterial. As of February 28, 2023 and November 30, 2022, Multifamily segment's unconsolidated entities had non-recourse debt with completion guarantees of $1.2 billion and $1.0 billion, respectively.

In many instances, the Multifamily segment is appointed as the construction, development and property manager for its Multifamily unconsolidated entities and receives fees for performing this function. The Multifamily segment also provides general contractor services for construction of some of the rental properties owned by unconsolidated entities in which the Company has investments. The details of the activity were as follows:

	Three Months Ended
	February 28,
(In thousands)	2023		2022
General contractor services, net of deferrals	$	125,402	117,263
General contractor costs	120,733		113,233
Land sales to joint ventures	—		131,553
Management fee income, net of deferrals	18,121		13,127

The Multifamily segment includes Multifamily Venture Fund I ("LMV I"), Multifamily Venture Fund II LP ("LMV II") and Canada Pension Plan Investments Fund (the "Fund"), which are long-term multifamily development investment vehicles

14

Lennar Corporation and Subsidiaries

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

involved in the development, construction and property management of class-A multifamily assets. The Multifamily segment completed the initial closing of the Fund. The Multifamily segment expects the Fund to have almost $1 billion in equity and Lennar's ownership percentage in the Fund is 4%. The Company currently has a $20.3 million investment in the Fund. Additional dollars will be committed as opportunities are identified by the Fund

Details of LMV I and LMV II as of and during the three months ended February 28, 2023 are included below:

	February 28, 2023
(In thousands)	LMV I		LMV II
Lennar's carrying value of investments	$	211,275	290,766
Equity commitments	2,204,016		1,257,700
Equity commitments called	2,154,328		1,141,649
Lennar's equity commitments	504,016		381,000
Lennar's equity commitments called	500,381		366,804
Lennar's remaining commitments (1)	3,635		14,196
Distributions to Lennar during the three months ended February 28, 2023	—		—

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

Other Unconsolidated Entities

Lennar Other's unconsolidated entities includes 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 and investment vehicles totaled $177.7 million and $185.1 million as of February 28, 2023 and November 30, 2022, respectively. In addition, the Company is entitled to a portion of the carried interest distributions by those funds. The Company also had strategic technology investments in unconsolidated entities and investment funds of $137.9 million and $131.5 million, as of February 28, 2023 and November 30, 2022, respectively.

(4)Stockholders' Equity

The following tables reflect the changes in equity attributable to both Lennar Corporation and the noncontrolling interests of its consolidated subsidiaries in which it has less than a 100% ownership interest for the three months ended February 28, 2023 and 2022:

			Three Months Ended February 28, 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 Interests
Balance at November 30, 2022	$	24,240,367	25,608	3,660	5,417,796	(210,389)	2,408	18,861,417	139,867
Net earnings (including net earnings attributable to noncontrolling interests)	599,308		—	—	—	—	—	596,534	2,774
Employee stock and directors plans	(66,990)		226	—	(189)	(67,027)	—	—	—
Purchases of treasury stock	(190,931)		—	—	—	(190,931)	—	—	—
Amortization of restricted stock	86,558		—	—	86,558	—	—	—	—
Cash dividends	(107,891)		—	—	—	—	—	(107,891)	—
Receipts related to noncontrolling interests	2,497		—	—	—	—	—	—	2,497
Payments related to noncontrolling interests	(21,256)		—	—	—	—	—	—	(21,256)
Non-cash purchase or activity of noncontrolling interests, net	12,774		—	—	(376)	—	—	—	13,150
Total other comprehensive income, net of tax	851		—	—	—	—	851	—	—
Balance at February 28, 2023	$	24,555,287	25,834	3,660	5,503,789	(468,347)	3,259	19,350,060	137,032

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Lennar Corporation and Subsidiaries

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

			Three Months Ended February 28, 2022
(In thousands)	Total Equity		Class A Common Stock	Class B Common Stock	Additional Paid - in Capital	Treasury Stock	Accumulated Other Comprehensive Income (Loss)	Retained Earnings	Noncontrolling Interests
Balance at November 30, 2021	$	20,996,282	30,050	3,944	8,807,891	(2,709,448)	(1,341)	14,685,329	179,857
Net earnings (including net earnings attributable to noncontrolling interests)	509,315		—	—	—	—	—	503,581	5,734
Employee stock and directors plans	(54,886)		193	—	(140)	(54,939)	—	—	—
Purchases of treasury stock	(526,361)		—	—	—	(526,361)	—	—	—
Amortization of restricted stock	81,457		—	—	81,457	—	—	—	—
Cash dividends	(110,122)		—	—	—	—	—	(110,122)	—
Receipts related to noncontrolling interests	6,984		—	—	—	—	—	—	6,984
Payments related to noncontrolling interests	(59,388)		—	—	—	—	—	—	(59,388)
Non-cash purchase or activity of noncontrolling interests, net	1,124		—	—	(34,057)	—	—	—	35,181
Total other comprehensive income, net of tax	3,027		—	—	—	—	3,027	—	—
Balance at February 28, 2022	$	20,847,432	30,243	3,944	8,855,151	(3,290,748)	1,686	15,078,788	168,368

On February 10, 2023, the Company paid cash dividends of $0.375 per share on both its Class A and Class B common stock to holders of record at the close of business on January 27, 2023, as declared by its Board of Directors on January 12, 2023. The Company approved and paid cash dividends of $0.375 per share for each of the four quarters of 2022 on both its Class A and Class B common stock.

In March 2022, the Company's Board of Directors approved an authorization for the Company to repurchase up to the lesser of $2 billion in value, or 30 million in shares, of its outstanding Class A or Class B common stock. The repurchase authorization has no expiration date. The authorization was in addition to what was remaining of the October 2021 stock repurchase program. The following table represents the repurchases of the Company's Class A and Class B common stock under the authorized repurchase programs:

	Three Months Ended
	February 28,
	2023				2022
(Dollars in thousands, except price per share)	Class A		Class B		Class A		Class B
Shares repurchased	1,446,205		553,795		4,616,000		652,000
Total purchase price	$	143,068	$	46,105	$	472,924	$	53,331
Average price per share	$	98.93	$	83.25	$	102.45	$	81.80

(5)Income Taxes

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

	Three Months Ended
	February 28,
(Dollars in thousands)	2023	2022
Provision for income taxes	$185,145	167,420
Effective tax rate (1)	23.7%	25.0%

(1)In the three months ended February 28, 2023, the Company's overall effective income tax rate was lower than in the three months ended February 28, 2022, primarily due to the reinstatement of the new energy efficient home credit as a result of the enactment of the Inflation Reduction Act during the third quarter of 2022. For both the three months ended February 28, 2023 and 2022, the effective tax rate included state income tax expense and non-deductible executive compensation, partially offset by energy efficient home and solar tax credits.

16

Lennar Corporation and Subsidiaries

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

(6)Earnings Per Share

Basic earnings per share is computed by dividing net earnings attributable to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company.

All outstanding nonvested shares that contain non-forfeitable rights to dividends or dividend equivalents that participate in undistributed earnings with common stock are considered participating securities and are included in computing earnings per share pursuant to the two-class method. The two-class method is an earnings allocation formula that determines earnings per share for each class of common stock and participating securities according to dividends or dividend equivalents and participation rights in undistributed earnings. The Company’s restricted common stock ("nonvested shares") is considered participating securities.

Basic and diluted earnings per share were calculated as follows:

	Three Months Ended
	February 28,
(In thousands, except per share amounts)	2023		2022
Numerator:
Net earnings attributable to Lennar	$	596,534	503,581
Less: distributed earnings allocated to nonvested shares	724		780
Less: undistributed earnings allocated to nonvested shares	5,895		4,548
Numerator for basic earnings per share	589,915		498,253
Less: net amount attributable to Rialto's Carried Interest Incentive Plan (1)	1,038		1,798
Numerator for diluted earnings per share	$	588,877	496,455
Denominator:
Denominator for basic earnings per share - weighted average common shares outstanding	286,074		293,930
Denominator for diluted earnings per share - weighted average common shares outstanding	286,074		293,930
Basic earnings per share	$	2.06	1.70
Diluted earnings per share	$	2.06	1.69

(1)The amounts presented relate to Rialto's Carried Interest Incentive Plan and represent the difference between the advanced tax distributions received from the Rialto funds included in the Lennar Other segment and the amount Lennar is assumed to own.

For both the three months ended February 28, 2023 and 2022, there were no options to purchase shares of common stock that were outstanding and anti-dilutive.

(7)Homebuilding Senior Notes and Other Debts Payable

(Dollars in thousands)	February 28, 2023		November 30, 2022
4.875% senior notes due December 2023	$	399,369	399,169
4.50% senior notes due 2024	649,156		648,975
5.875% senior notes due 2024	432,961		434,128
4.75% senior notes due 2025	499,003		498,892
5.25% senior notes due 2026	403,953		404,257
5.00% senior notes due 2027	351,645		351,741
4.75% senior notes due 2027	896,446		896,259
Mortgage notes on land and other debt	400,802		413,873
	$	4,033,335	4,047,294

The carrying amounts of the senior notes in the table above are net of debt issuance costs of $6.9 million and $7.6 million as of February 28, 2023 and November 30, 2022, respectively.

17

Lennar Corporation and Subsidiaries

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

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

(In thousands)	February 28, 2023
Commitment - maturing in April 2024	$	350,000
Commitment - maturing in May 2027	2,225,000
Total commitment	$	2,575,000
Accordion feature	425,000
Total maximum borrowings capacity	$	3,000,000

The proceeds available under the Credit Facility, which are subject to specified conditions for borrowing, may be used for working capital and general corporate purposes. The credit agreement also provides that up to $500 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 Form 10-K for the year ended November 30, 2022. In addition to the Credit Facility, the Company has other letter of credit facilities with different financial institutions.

The Company's processes for posting performance and financial letters of credit and surety bonds are unchanged from the disclosure in the Company's Financial Condition and Capital Resources section in its Form 10-K for the year ended November 30, 2022. The Company's outstanding performance letters of credit and surety bonds are disclosed below:

(In thousands)	February 28, 2023		November 30, 2022
Performance letters of credit	$	1,236,516	1,259,033
Financial letters of credit	457,117		503,659
Surety bonds	4,166,287		4,136,715
Anticipated future costs primarily for site improvements related to performance surety bonds	2,288,199		2,273,694

All of the senior notes are guaranteed by certain of the Company's 100% owned subsidiaries, which are primarily homebuilding subsidiaries. The guarantees are full and unconditional. The terms of guarantees are unchanged from the disclosure in the Company's Financial Condition and Capital Resources section in its Form 10-K for the year ended November 30, 2022.

(8)Product Warranty

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:

	Three Months Ended
	February 28,
(In thousands)	2023		2022
Warranty reserve, beginning of the period	$	418,017	377,021
Warranties issued	53,679		49,192
Adjustments to pre-existing warranties from changes in estimates (1)	(4,058)		4,724
Payments	(64,304)		(56,791)
Warranty reserve, end of period	$	403,334	374,146

(1)The adjustments to pre-existing warranties from changes in estimates during the three months ended February 28, 2023 and 2022 primarily related to specific claims in certain of the Company's homebuilding communities and other adjustments.

18

Lennar Corporation and Subsidiaries

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

(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 February 28, 2023 and November 30, 2022, 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. The use of different market assumptions and/or estimation methodologies might have a material effect on the estimated fair value amounts. The table excludes cash and cash equivalents, restricted cash, receivables, net and accounts payable, all of which had fair values approximating their carrying amounts due to the short maturities and liquidity of these instruments.

		February 28, 2023			November 30, 2022
(In thousands)	Fair Value Hierarchy	Carrying Amount		Fair Value	Carrying Amount	Fair Value
ASSETS
Financial Services:
Loans held-for-investment, net	Level 3	$	45,327	45,334	45,636	45,647
Investments held-to-maturity	Level 3	141,854		141,767	143,251	143,208
LIABILITIES
Homebuilding senior notes and other debts payable, net	Level 2	$	4,033,335	3,958,592	4,047,294	3,993,242