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 May 31, 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 May 31, 2023:

Class A 252,525,505

Class B 34,897,241

LENNAR CORPORATION
FORM 10-Q
For the period ended May 31, 2023
Part I	Financial Information
Item 1.	Financial Statements	3
	Condensed Consolidated Balance Sheets as of May 31, 2023 and November 30, 2022	3
	Condensed Consolidated Statements of Operations and Comprehensive Income for the three and six months ended May 31, 2023 and 2022	5
	Condensed Consolidated Statements of Cash Flows for the six months ended May 31, 2023 and 2022	6
	Notes to Condensed Consolidated Financial Statements	8
	Forward-Looking Statements	27
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	44
Item 4.	Controls and Procedures	44
Part II	Other Information	45
Item 1.	Legal Proceedings	45
Item 1A.	Risk Factors	45
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	45
Item 3 - 5.	Not Applicable	45
Item 6.	Exhibits	46
	Signatures	47

Part I. Financial Information

Item 1. Financial Statements

Lennar Corporation and Subsidiaries

Condensed Consolidated Balance Sheets

(Dollars in thousands)

(Unaudited)

	May 31,		November 30,
	2023 (1)		2022 (1)
ASSETS
Homebuilding:
Cash and cash equivalents	$	4,004,679	4,616,124
Restricted cash	19,000		23,046
Receivables, net	619,720		673,980
Inventories:
Finished homes and construction in progress	12,190,243		11,718,507
Land and land under development	7,114,082		7,382,273
Consolidated inventory not owned	2,382,495		2,331,231
Total inventories	21,686,820		21,432,011
Investments in unconsolidated entities	1,137,189		1,173,164
Goodwill	3,442,359		3,442,359
Other assets	1,582,299		1,323,478
	32,492,066		32,684,162
Financial Services	2,264,658		3,254,257
Multifamily	1,309,548		1,257,337
Lennar Other	791,415		788,539
Total assets	$	36,857,687	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 May 31, 2023, total assets include $1.6 billion related to consolidated VIEs of which $30.6 million is included in Homebuilding cash and cash equivalents, $0.3 million in Homebuilding receivables, net, $59.0 million in Homebuilding finished homes and construction in progress, $779.1 million in Homebuilding land and land under development, $622.4 million in Homebuilding consolidated inventory not owned, $0.5 million in Homebuilding investments in unconsolidated entities, $23.5 million in Homebuilding other assets, $34.4 million in Multifamily assets and $6.9 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)

	May 31,		November 30,
	2023 (2)		2022 (2)
LIABILITIES AND EQUITY
Homebuilding:
Accounts payable	$	1,700,895	1,616,128
Liabilities related to consolidated inventory not owned	2,014,506		1,967,551
Senior notes and other debts payable, net	3,852,258		4,047,294
Other liabilities	2,433,038		3,347,673
	10,000,697		10,978,646
Financial Services	1,311,928		2,353,904
Multifamily	298,523		313,484
Lennar Other	85,420		97,894
Total liabilities	11,696,568		13,743,928
Stockholders’ equity:
Preferred stock	—		—
Class A common stock of $0.10 par value; Authorized: May 31, 2023 and November 30, 2022 - 400,000,000 shares; Issued: May 31, 2023 - 258,433,210 shares and November 30, 2022 - 256,084,147 shares	25,843		25,608
Class B common stock of $0.10 par value; Authorized: May 31, 2023 and November 30, 2022 - 90,000,000 shares; Issued: May 31, 2023 - 36,601,215 shares and November 30, 2022 - 36,601,215 shares	3,660		3,660
Additional paid-in capital	5,546,128		5,417,796
Retained earnings	20,111,368		18,861,417
Treasury stock, at cost; May 31, 2023 - 5,907,705 shares of Class A common stock and 1,703,974 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	(675,686)		(210,389)
Accumulated other comprehensive income	3,832		2,408
Total stockholders’ equity	25,015,145		24,100,500
Noncontrolling interests	145,974		139,867
Total equity	25,161,119		24,240,367
Total liabilities and equity	$	36,857,687	37,984,295

(2)As of May 31, 2023, total liabilities include $715.3 million related to consolidated VIEs as to which there was no recourse against the Company, of which $85.6 million is included in Homebuilding accounts payable, $597.9 million in Homebuilding liabilities related to consolidated inventory not owned, $25.9 million in Homebuilding senior notes and other debts payable, $3.9 million in Multifamily liabilities and $2.0 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			Six Months Ended
	May 31,			May 31,
	2023		2022	2023	2022
Revenues:
Homebuilding	$	7,670,017	7,977,982	13,826,322	13,730,187
Financial Services	222,979		200,166	405,960	376,867
Multifamily	151,744		176,021	295,267	443,380
Lennar Other	411		4,527	8,031	11,778
Total revenues	8,045,151		8,358,696	14,535,580	14,562,212
Costs and expenses:
Homebuilding	6,438,957		6,105,153	11,713,671	10,747,051
Financial Services	110,380		96,231	214,624	182,141
Multifamily	154,354		175,152	303,310	438,889
Lennar Other	6,795		8,236	13,271	13,643
Corporate general and administrative	124,752		105,207	250,858	218,868
Charitable foundation contribution	17,074		16,549	30,733	29,087
Total costs and expenses	6,852,312		6,506,528	12,526,467	11,629,679
Equity in loss from unconsolidated entities	(49,755)		(11,807)	(80,942)	(21,559)
Other income (expense), net and other gains (losses)	(9,960)		(7,562)	13,360	(6,270)
Lennar Other unrealized gains (losses) from technology investments	25,497		(77,965)	1,543	(473,135)
Earnings before income taxes	1,158,621		1,754,834	1,943,074	2,431,569
Provision for income taxes	(280,879)		(432,276)	(466,024)	(599,696)
Net earnings (including net earnings attributable to noncontrolling interests)	877,742		1,322,558	1,477,050	1,831,873
Less: Net earnings attributable to noncontrolling interests	6,048		1,802	8,822	7,536
Net earnings attributable to Lennar	$	871,694	1,320,756	1,468,228	1,824,337
Other comprehensive income, net of tax:
Net unrealized gain on securities available-for-sale	$	573	62	1,424	804
Reclassification adjustments for gain included in earnings, net of tax	—		—	—	2,285
Total other comprehensive income, net of tax	$	573	62	1,424	3,089
Total comprehensive income attributable to Lennar	$	872,267	1,320,818	1,469,652	1,827,426
Total comprehensive income attributable to noncontrolling interests	$	6,048	1,802	8,822	7,536
Basic earnings per share	$	3.01	4.50	5.07	6.17
Diluted earnings per share	$	3.01	4.49	5.07	6.16

    

See accompanying notes to condensed consolidated financial statements.

5

Lennar Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

	Six Months Ended
	May 31,
	2023		2022
Cash flows from operating activities:
Net earnings (including net earnings attributable to noncontrolling interests)	$	1,477,050	1,831,873
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	44,039		39,519
Amortization of discount/premium on debt, net	(1,691)		(959)
Equity in loss from unconsolidated entities	80,942		21,559
Distributions of earnings from unconsolidated entities	16,657		11,050
Share-based compensation expense	126,731		116,510
Deferred income tax benefit	(131,520)		(82,461)
Gain on repurchases of senior notes	(724)		—
Loans held-for-sale unrealized loss	23,563		27,037
Lennar Other unrealized (gains) losses from technology investments and other (gains) losses	1,000		482,829
Gain on sale of other assets and operating properties and equipment	(3,726)		(7,572)
Valuation adjustments and write-offs of option deposits, pre-acquisition costs and other assets	85,117		14,611
Changes in assets and liabilities:
Decrease in receivables	435,880		126,247
(Increase) decrease in inventories, excluding valuation adjustments and write-offs of option deposits and pre-acquisition costs	10,741		(3,114,358)
Increase in other assets	(111,955)		(26,053)
Decrease in loans held-for-sale	577,891		336,083
(Decrease) increase in accounts payable and other liabilities	(991,319)		276,695
Net cash provided by operating activities	1,638,676		52,610
Cash flows from investing activities:
Net additions of operating properties and equipment	(31,268)		(10,866)
Proceeds from the sale of operating properties and equipment and other assets	7,762		18,247
Investments in and contributions to unconsolidated entities	(108,306)		(261,372)
Distributions of capital from unconsolidated entities	46,499		239,123
Proceeds from sale of commercial mortgage-backed securities bonds	—		9,191
Decrease in Financial Services loans held-for-investment	8,882		16,576
Purchases of investment securities	(7,000)		(78,769)
Proceeds from maturities/sales of investment securities	2,859		3,102
Net cash used in investing activities	$	(80,572)	(64,768)

See accompanying notes to condensed consolidated financial statements.

6

Lennar Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Continued)

(In thousands)

(Unaudited)

	Six Months Ended
	May 31,
	2023		2022
Cash flows from financing activities:
Net repayments under warehouse facilities	$	(978,053)	(404,060)
Repurchases of senior notes	(157,764)		—
Principal payments on notes payable and other borrowings	(34,515)		(22,600)
Proceeds from liabilities related to consolidated inventory not owned	186,889		557,498
Payments related to consolidated inventory not owned	(372,687)		(347,017)
Payments related to other liabilities, net	(2,621)		—
Receipts related to noncontrolling interests	4,918		18,095
Payments related to noncontrolling interests	(20,623)		(65,521)
Common stock:
Repurchases	(465,297)		(905,543)
Dividends	(218,277)		(220,968)
Net cash used in financing activities	(2,058,030)		(1,390,116)
Net decrease in cash and cash equivalents and restricted cash	(499,926)		(1,402,274)
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	$	4,315,844	1,553,409
Summary of cash and cash equivalents and restricted cash:
Homebuilding	$	4,004,679	1,314,741
Financial Services	259,738		138,662
Multifamily	18,539		61,190
Lennar Other	4,775		2,151
Homebuilding restricted cash	19,000		28,440
Financial Services restricted cash	9,113		8,225
	$	4,315,844	1,553,409
Supplemental disclosures of non-cash investing and financing activities:
Homebuilding and Multifamily:
Purchases of inventories financed by sellers	$	—	33,643
Non-cash contributions to unconsolidated entities	120		141,297
Consolidation/deconsolidation of unconsolidated/consolidated entities, net:
Inventories	$	—	82,514
Other assets	—		43
Investments in unconsolidated entities	—		(69,056)
Other liabilities	—		(435)
Noncontrolling interests	—		(13,066)

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 ("SEC"). 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 Annual Report on 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.

Seasonality

The Company has historically experienced, and expects to continue to experience, variability in quarterly results. The condensed consolidated statements of operations for the three and six months ended May 31, 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 May 31, 2023 and November 30, 2022 included $231.4 million and $1.0 billion, respectively, of cash held in escrow for approximately two days.

Share-based Payments

During both the three months ended May 31, 2023 and 2022, the Company granted employees an immaterial number of nonvested shares. During the six months ended May 31, 2023 and 2022, the Company granted employees 2.0 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.

Reclassifications

Certain amounts in the Company's condensed consolidated statement of operations of prior year have been reclassified to conform to the fiscal 2023 presentation.

(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

8

Lennar Corporation and Subsidiaries

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

(6) Multifamily

(7) Lennar Other

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

(In thousands)	May 31, 2023
Assets:	Homebuilding		Financial Services	Multifamily	Lennar Other	Total
Cash and cash equivalents	$	4,004,679	259,738	18,539	4,775	4,287,731
Restricted cash	19,000		9,113	—	—	28,113
Receivables, net (1)	619,720		354,548	115,865	—	1,090,133
Inventories	21,686,820		—	479,812	—	22,166,632
Loans held-for-sale (2)	—		1,175,280	—	—	1,175,280
Investments in equity securities (3)	—		—	—	412,593	412,593
Investments available-for-sale (4)	—		—	—	36,906	36,906
Loans held-for-investment, net	—		36,717	—	—	36,717
Investments held-to-maturity	—		141,360	—	—	141,360
Investments in unconsolidated entities	1,137,189		—	629,649	292,086	2,058,924
Goodwill	3,442,359		189,699	—	—	3,632,058
Other assets	1,582,299		98,203	65,683	45,055	1,791,240
	$	32,492,066	2,264,658	1,309,548	791,415	36,857,687
Liabilities:
Notes and other debts payable, net	$	3,852,258	1,157,040	16,912	—	5,026,210
Accounts payable and other liabilities	6,148,439		154,888	281,611	85,420	6,670,358
	$	10,000,697	1,311,928	298,523	85,420	11,696,568

(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 May 31, 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 $185.0 million and $178.0 million without readily available fair values as of both May 31, 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 (loss) 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			Six Months Ended
	May 31,			May 31,
(In thousands)	2023		2022	2023	2022
Revenues:
Homebuilding	$	7,670,017	7,977,982	13,826,322	13,730,187
Financial Services	222,979		200,166	405,960	376,867
Multifamily (1)	151,744		176,021	295,267	443,380
Lennar Other	411		4,527	8,031	11,778
	$	8,045,151	8,358,696	14,535,580	14,562,212
Earnings (loss) before income taxes:
Homebuilding	$	1,214,409	1,880,411	2,121,248	2,990,261
Financial Services	112,599		103,935	191,336	194,726
Multifamily	(8,162)		668	(29,763)	6,095
Lennar Other	(18,399)		(108,424)	(58,156)	(511,558)
Corporate and Unallocated (2)	(141,826)		(121,756)	(281,591)	(247,955)
	$	1,158,621	1,754,834	1,943,074	2,431,569

(1)Revenues for Multifamily for the six months ended May 31, 2022, included $147.8 million of land sales to unconsolidated entities.

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

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:

	May 31,		November 30,
	2023		2022
(In thousands)
East	$	7,027,996	6,877,581
Central	4,115,812		4,010,610
Texas	3,522,252		3,742,663
West	11,854,686		12,182,709
Other	1,391,807		1,382,864
Corporate and Unallocated	4,579,513		4,487,735
Total Homebuilding	$	32,492,066	32,684,162

10

Lennar Corporation and Subsidiaries

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

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

	Three Months Ended			Six Months Ended
	May 31,			May 31,
(In thousands)	2023		2022	2023	2022
Revenues
East	$	2,323,281	2,214,451	4,199,258	3,884,637
Central	1,412,408		1,283,990	2,460,415	2,393,262
Texas	1,141,612		1,095,500	2,163,664	1,908,119
West	2,781,097		3,370,462	4,986,158	5,521,260
Other	11,619		13,579	16,827	22,909
	$	7,670,017	7,977,982	13,826,322	13,730,187
Operating earnings (loss)
East	$	505,923	553,819	930,119	905,814
Central	215,076		206,795	345,598	358,873
Texas	183,041		272,857	308,360	444,169
West	355,472		847,849	585,972	1,289,297
Other	(45,103)		(909)	(48,801)	(7,892)
	$	1,214,409	1,880,411	2,121,248	2,990,261

Financial Services

Operations of the Financial Services segment include mortgage financing, title and closing services primarily for buyers of the Company’s homes. They also include 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 May 31, 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:
June 2023 (1)	$	200,000
December 2023	500,000
April 2024	500,000
May 2024	600,000
Total residential facilities	$	1,800,000
LMF Commercial facilities maturing:
July 2023	$	50,000
November 2023	100,000
December 2023	400,000
Total LMF commercial facilities	$	550,000
Total	$	2,350,000

(1)Subsequent to May 31, 2023, the maturity date was extended to June 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. 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.

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Lennar Corporation and Subsidiaries

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

Borrowings and collateral under the facilities were as follows:

(In thousands)	May 31, 2023		November 30, 2022
Borrowings under the residential facilities	$	1,020,958	1,877,411
Collateral under the residential facilities	1,054,138		1,950,155
Borrowings under the LMF Commercial facilities	4,425		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 and six months ended May 31, 2023 and 2022. Loan origination liabilities were $14.0 million and $11.8 million as of May 31, 2023 and November 30, 2022, respectively, and included in Financial Services’ liabilities in the Company's condensed consolidated balance sheets.

LMF Commercial - loans held-for-sale

LMF Commercial originated commercial loans as follows:

	Three Months Ended			Six Months Ended
	May 31,			May 31,
(Dollars in thousands)	2023		2022	2023	2022
Originations (1)	$	84,590	143,650	164,070	408,495
Sold	88,102		145,385	165,302	323,467
Securitizations	2		1	3	2

(1)During both the three and six months ended May 31, 2023 and 2022, the commercial loans originated were recorded as loans held-for-sale, which are held at fair value.

Investments held-to-maturity

At May 31, 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 or six months ended May 31, 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)	May 31, 2023		November 30, 2022
Carrying value	$	141,360	143,251
Outstanding debt, net of debt issuance costs	131,656		133,283
Incurred interest rate	3.4%		3.4%

12

Lennar Corporation and Subsidiaries

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

	May 31, 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. The multifamily business is a vertically integrated platform with capabilities spanning development, construction, property management, asset management, and capital markets. Revenues are generated from the sales of land, from construction activities, and management and promote fees generated from joint ventures and other gains (which includes sales of buildings), less the cost of sales of land sold, expenses related to construction activities and general and administrative expenses. Operations of the Multifamily Segment also include equity in earnings (loss) from unconsolidated entities.

Lennar Other

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.

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 shareholdings in those entities on the last day of each quarter. All the investments are accounted for as investments in equity securities which are held at fair value and the changes in fair values are recognized through earnings. The following is a detail of Lennar Other unrealized gains (losses) from mark-to-market adjustments on the Company's technology investments:

	Three Months Ended			Six Months Ended
	May 31,			May 31,
(In thousands)	2023		2022	2023	2022
Blend Labs (BLND)	$	(1,332)	(13,550)	(746)	(20,992)
Hippo (HIPO)	(4,399)		(37,946)	2,233	(162,403)
Opendoor (OPEN)	22,512		(20,999)	14,821	(164,360)
SmartRent (SMRT)	8,621		(3,950)	9,926	(48,313)
Sonder (SOND)	(138)		(1,626)	(458)	(2,132)
Sunnova (NOVA)	233		106	(24,233)	(74,935)
Lennar Other unrealized gains (losses) from technology investments	$	25,497	(77,965)	1,543	(473,135)

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 May 31, 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)	May 31, 2023		November 30, 2022
Investments in unconsolidated entities (1) (2)	$	1,137,189	1,173,164
Underlying equity in unconsolidated entities' net assets (1)	1,501,303		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 May 31, 2023 and November 30, 2022, the carrying amount of the Company's investment was $391.4 million and $382.9 million, respectively.

As of May 31, 2023 and November 30, 2022, the Homebuilding segment's unconsolidated entities had non-recourse debt with completion guarantees of $312.8 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 May 31, 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 May 31, 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 Annual Report on 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 May 31, 2023 and November 30, 2022, the carrying amount of the Company's investment in Upward America was $22.6 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 Annual Report on Form 10-K for the year ended November 30, 2022. As of both May 31, 2023 and November 30, 2022, the fair value of the completion guarantees was immaterial. As of May 31, 2023 and November 30, 2022, Multifamily segment's unconsolidated entities had non-recourse debt with completion guarantees of $1.3 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. Each Multifamily real estate investment trust has unilateral decision making rights related to development activities through its board of directors. 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			Six Months Ended
	May 31,			May 31,
(In thousands)	2023		2022	2023	2022
General contractor services, net of deferrals	$	128,371	125,606	253,773	242,869
General contractor costs	122,064		118,802	242,797	232,035
Land sales to joint ventures	—		16,207	—	147,760
Management fee income, net of deferrals	17,494		16,327	35,615	29,454

14

Lennar Corporation and Subsidiaries

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

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 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%. As of May 31, 2023, the Company has a $28.2 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 six months ended May 31, 2023 are included below:

	May 31, 2023
(In thousands)	LMV I		LMV II
Lennar's carrying value of investments	$	204,631	282,347
Equity commitments	2,204,016		1,257,700
Equity commitments called	2,154,328		1,218,619
Lennar's equity commitments	504,016		381,000
Lennar's equity commitments called	500,381		368,170
Lennar's remaining commitments (1)	3,635		12,830
Distributions to Lennar during the six months ended May 31, 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 totaled $170.8 million and $185.1 million as of May 31, 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 $121.3 million and $131.5 million, as of May 31, 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 and six months ended May 31, 2023 and 2022:

	Three Months Ended May 31, 2023
(In thousands)	Total Equity		Class A Common Stock	Class B Common Stock	Additional Paid - in Capital	Treasury Stock	Accumulated Other Comprehensive Income	Retained Earnings	Noncontrolling Interests
Balance at February 28, 2023	$	24,555,287	25,834	3,660	5,503,789	(468,347)	3,259	19,350,060	137,032
Net earnings (including net earnings attributable to noncontrolling interests)	877,742		—	—	—	—	—	871,694	6,048
Employee stock and directors plans	4,229		9	—	1,631	2,589	—	—	—
Purchases of treasury stock	(209,928)		—	—	—	(209,928)	—	—	—
Amortization of restricted stock	40,173		—	—	40,173	—	—	—	—
Cash dividends	(110,386)		—	—	—	—	—	(110,386)	—
Receipts related to noncontrolling interests	2,421		—	—	—	—	—	—	2,421
Non-cash purchase or activity of noncontrolling interests, net	1,008		—	—	535	—	—	—	473
Total other comprehensive income, net of tax	573		—	—	—	—	573	—	—
Balance at May 31, 2023	$	25,161,119	25,843	3,660	5,546,128	(675,686)	3,832	20,111,368	145,974

15

Lennar Corporation and Subsidiaries

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

	Three Months Ended May 31, 2022
(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 February 28, 2022	$	20,847,432	30,243	3,944	8,855,151	(3,290,748)	1,686	15,078,788	168,368
Net earnings (including net earnings attributable to noncontrolling interests)	1,322,558		—	—	—	—	—	1,320,756	1,802
Employee stock and directors plans	(2,533)		6	—	994	(3,533)	—	—	—
Retirement of treasury stock	—		(4,667)	(284)	(3,533,425)	3,538,376	—	—	—
Purchases of treasury stock	(320,710)		—	—	—	(320,710)	—	—	—
Amortization of restricted stock	35,053		—	—	35,053	—	—	—	—
Cash dividends	(110,846)		—	—	—	—	—	(110,846)	—
Receipts related to noncontrolling interests	11,111		—	—	—	—	—	—	11,111
Payments related to noncontrolling interests	(3,708)		—	—	—	—	—	—