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Financial Instruments and Fair Value Disclosures (Tables)
6 Months Ended
May 31, 2024
Fair Value Disclosures [Abstract]  
Carrying Amounts And Estimated Fair Value Of Financial Instruments
The following table presents the carrying amounts and estimated fair values of financial instruments held or issued by the Company at May 31, 2024 and November 30, 2023, using available market information and what the Company believes to be appropriate valuation methodologies. 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.
May 31, 2024November 30, 2023
(In thousands)Fair Value HierarchyCarrying AmountFair ValueCarrying AmountFair Value
ASSETS
Financial Services:
Loans held-for-investment, netLevel 3$54,355 54,355 55,463 55,463 
Investments held-to-maturityLevel 3138,425 139,504 140,676 139,396 
LIABILITIES
Homebuilding senior notes and other debt payable, netLevel 2$2,241,507 2,224,505 2,816,482 2,785,712 
Financial Services notes and other debt payable, netLevel 21,410,102 1,410,688 2,163,805 2,164,441 
Multifamily notes payable, netLevel 2— — 3,741 3,741 
Fair Value Measured On Recurring Basis
The Company’s financial instruments measured at fair value on a recurring basis are summarized below:
Fair Value HierarchyFair Value at
(In thousands)May 31, 2024November 30, 2023
Financial Services Assets:
Residential loans held-for-saleLevel 2$1,655,196 2,073,350 
LMF Commercial loans held-for-saleLevel 366,715 13,459 
Mortgage servicing rightsLevel 33,652 3,440 
Forward optionsLevel 12,768 5,937 
Lennar Other Assets:
Investments in equity securitiesLevel 1$152,946 176,198 
Investments available-for-saleLevel 339,669 37,953 
Residential and LMF Commercial loans held-for-sale in the table above include:
May 31, 2024November 30, 2023
(In thousands)Aggregate Principal BalanceChange in Fair ValueAggregate Principal BalanceChange in Fair Value
Residential loans held-for-sale$1,694,486 (39,290)2,083,776 (10,426)
LMF Commercial loans held-for-sale
69,700 (2,985)13,650 (191)
Schedule of Unobservable Inputs Used in Discounted Cash Flow Model to Determine the Fair Value of Communities
May 31, 2024
Discount rates at purchase6%84%
Coupon rates2.0%5.3%
Distribution datesOctober 2027December 2028
Stated maturity datesOctober 2050December 2051
The key assumptions, which are generally unobservable inputs, used in the valuation of the mortgage servicing rights include mortgage prepayment rates, discount rates and delinquency rates and are noted below:
As of May 31, 2024As of November 30, 2023
Unobservable inputs:
Mortgage prepayment rate8%8%
Discount rate13%13%
Delinquency rate 9%9%
The table below summarizes the most significant unobservable inputs used in the Company's discounted cash flow model to determine the fair value of its communities for which the Company recorded valuation adjustments:
Six Months Ended May 31,
20242023
Unobservable inputsRangeRange
Average selling price (1)$178,000282,000371,000663,000
Absorption rate per quarter (homes)1015626
Discount rate20%20%
(1)Represents the projected average selling price on future deliveries for communities in which the Company recorded valuation adjustments during both the six months ended May 31, 2024 and 2023.
Schedule Of Gains And Losses Of Financial Instruments Measured on a Recurring Basis
The changes in fair values for Level 1 and Level 2 financial instruments measured on a recurring basis are shown below by financial instrument and financial statement line item:
Three Months EndedSix Months Ended
May 31,May 31,
(In thousands)2024202320242023
Changes in fair value included in Financial Services revenues:
Loans held-for-sale$17,187 7,899 (28,865)(23,563)
Mortgage loan commitments(1,447)13,783 (32,102)(35,061)
Forward contracts(28,973)(18,807)72,873 72,702 
Forward options(710)(100)(1,054)(952)
Changes in fair value included in Lennar Other unrealized gains (losses) from technology investments:
Investments in equity securities$(21,514)25,497 (26,651)1,543 
Changes in fair value included in other comprehensive income, net of tax:
Lennar Other investments available-for-sale$1,355 573 1,717 1,424 
Reconciliation Of Beginning And Ending Balance For The Company's Level 3 Recurring Fair Value Measurements
The following table sets forth the reconciliation of the beginning and ending balance for the Level 3 recurring fair value measurements in the Company's Financial Services segment:
Three Months Ended May 31,
20242023
(In thousands)Mortgage servicing rightsLMF Commercial loans held-for-saleMortgage servicing rightsLMF Commercial loans held-for-sale
Beginning balance$3,475 125,397 3,450 25,835 
Purchases/loan originations171 71,510 69 84,590 
Sales/loan originations sold, including those not settled— (129,335)— (88,102)
Disposals/settlements(44)— (80)— 
Changes in fair value (1)50 (857)(41)434 
Interest and principal paydowns— — — (3)
Ending balance$3,652 66,715 3,398 22,754 
Six Months Ended May 31,
20242023
(In thousands)Mortgage servicing rightsLMF Commercial loans held-for-saleMortgage servicing rightsLMF Commercial loans held-for-sale
Beginning balance$3,440 13,459 3,463 25,599 
Purchases/loan originations232 212,335 120 164,070 
Sales/loan originations sold, including those not settled— (156,285)— (165,302)
Disposals/settlements(70)— (143)— 
Changes in fair value (1)50 (2,985)(42)(11)
Interest and principal paydowns— 191 — (1,602)
Ending balance$3,652 66,715 3,398 22,754 
(1)Changes in fair value for LMF Commercial loans held-for-sale and Financial Services mortgage servicing rights are included in Financial Services' revenues.
Fair Value Measurements, Nonrecurring The assets measured at fair value on a nonrecurring basis are summarized below:
Three Months Ended May 31,
20242023
(In thousands)Fair Value
Hierarchy
Carrying ValueFair ValueTotal Losses, Net (1)Carrying ValueFair ValueTotal Losses, Net (1)
Non-financial assets - Homebuilding:
Finished homes and construction in progress (2)Level 3$120,553 100,968 (19,585)126,680 108,073 (18,607)
Land and land under development (2)Level 3— — — 574 561 (13)
Deposits and pre-acquisition costs on real estate (3)Level 3332 — (332)14,455 — (14,455)
Investments in unconsolidated entities (4)Level 3— — — 75,769 37,792 (37,977)
Six Months Ended May 31,
20242023
(In thousands)Fair Value
Hierarchy
Carrying ValueFair ValueTotal Losses, Net (1)Carrying ValueFair ValueTotal Losses, Net (1)
Non-financial assets - Homebuilding:
Finished homes and construction in progress (2)Level 3$192,309 168,985 (23,324)183,816 158,902 (24,914)
Land and land under development (2)Level 3— — — 25,735 23,703 (2,032)
Deposits and pre-acquisition costs on real estate (3)Level 33,202 — (3,202)17,130 — (17,130)
Investments in unconsolidated entities (4)Level 3— — — 78,834 37,792 (41,042)
(1)Represents losses due to valuation adjustments and deposit and pre-acquisition write-offs recorded during the respective periods.
(2)Valuation adjustments for finished homes and construction in progress, and land and land under development were included in Homebuilding costs and expenses.
(3)Forfeited deposits and write-off of pre-acquisition costs on real estate were included in Homebuilding costs and expenses in the Company's condensed consolidated statements of operations and comprehensive income for the three and six months ended May 31, 2024 and 2023.
(4)Valuation adjustments related to investments in unconsolidated entities were primarily included in Homebuilding other income (expense), net in the Company's condensed consolidated statements of operations and comprehensive income for the three and six months ended May 31, 2024 and 2023.
The table below summarizes communities reviewed for indicators of impairment and communities with valuation adjustments recorded:
Communities with valuation adjustments
At or for the Six Months Ended# of active communities# of communities with potential indicator of impairment# of communities
Fair Value
(in thousands)
Valuation Adjustments
(in thousands)
May 31, 20241,245324$25,769 $15,263 
May 31, 20231,25634542,408 12,247