Operating And Reporting Segments

12 Months Ended

Nov. 30, 2024

Segment Reporting [Abstract]

Operating And Reporting Segments

Operating and Reporting Segments

Each reportable segment follows the accounting policies described in Note 1 - "Summary of Significant Accounting Policies" to the consolidated financial statements. Operational results of each segment are not necessarily indicative of the results that would have occurred had the segment been an independent, stand-alone entity during the periods presented.

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

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

(In thousands)	At November 30, 2024
Assets:	Homebuilding		Financial Services	Multifamily	Lennar Other	Total
Cash and cash equivalents	$	4,662,643	175,382	30,948	40,691	4,909,664
Restricted cash	11,799		68,747	—	—	80,546
Receivables, net (1)	1,053,211		545,752	53,595	—	1,652,558
Inventory owned and consolidated inventory not owned	19,719,551		—	592,879	—	20,312,430
Deposits and pre-acquisition costs on real estate	3,625,372		—	32,643	—	3,658,015
Investments in unconsolidated entities	1,344,836		—	503,303	379,435	2,227,574
Loans held-for-sale (2)	—		2,250,718	—	—	2,250,718
Investments in equity securities (3)	—		—	—	347,810	347,810
Investments available-for-sale (4)	—		—	—	40,578	40,578
Loans held-for-investment, net	—		60,969	—	—	60,969
Investments held-to-maturity	—		135,646	—	—	135,646
Goodwill	3,442,359		189,699	—	—	3,632,058
Other assets	1,734,698		89,637	93,450	86,430	2,004,215
Total assets	$	35,594,469	3,516,550	1,306,818	894,944	41,312,781
Liabilities:
Notes and other debts payable, net	$	2,258,283	1,930,956	—	—	4,189,239
Liabilities related to consolidated inventory not owned	3,563,934		—	—	—	3,563,934
Accounts payable and other liabilities	5,040,992		209,752	181,883	105,756	5,538,383
Total liabilities	$	10,863,209	2,140,708	181,883	105,756	13,291,556

(In thousands)	At November 30, 2023
Assets:	Homebuilding		Financial Services	Multifamily	Lennar Other	Total
Cash and cash equivalents	$	6,273,724	159,491	39,334	1,948	6,474,497
Restricted cash	13,481		82,960	—	—	96,441
Receivables, net (1)	887,992		716,071	92,142	—	1,696,205
Inventory owned and consolidated inventory not owned	18,352,735		—	544,935	—	18,897,670
Deposits and pre-acquisition costs on real estate	2,002,154		—	32,063	—	2,034,217
Investments in unconsolidated entities	1,143,909		—	599,852	276,244	2,020,005
Loans held-for-sale (2)	—		2,086,809	—	—	2,086,809
Investments in equity securities (3)	—		—	—	297,243	297,243
Investments available-for-sale (4)	—		—	—	37,953	37,953
Loans held-for-investment, net	—		55,463	—	—	55,463
Investments held-to-maturity	—		140,676	—	—	140,676
Goodwill	3,442,359		189,699	—	—	3,632,058
Other assets	1,512,038		135,377	73,187	44,464	1,765,066
Total assets	$	33,628,392	3,566,546	1,381,513	657,852	39,234,303
Liabilities:
Notes and other debts payable, net	$	2,816,482	2,163,805	3,741	—	4,984,028
Liabilities related to consolidated inventory not owned	2,540,894		—	—	—	2,540,894
Accounts payable and other liabilities	4,370,618		283,234	274,436	79,127	5,007,415
Total liabilities	$	9,727,994	2,447,039	278,177	79,127	12,532,337

(1)Receivables, net for Financial Services primarily related to loans sold to investors for which the Company had not yet been paid as of November 30, 2024 and 2023, 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 $143.0 million and $121.0 million without readily available fair values as of November 30, 2024 and 2023, 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 consolidated balance sheet.

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

	Years Ended November 30,
(In thousands)	2024		2023	2022
Revenues:
Homebuilding	$	33,906,426	32,660,987	31,951,335
Financial Services	1,109,263		976,859	809,680
Multifamily (1)	411,537		573,485	865,603
Lennar Other	14,226		22,035	44,392
	$	35,441,452	34,233,366	33,671,010
Earnings (loss) before income taxes:
Homebuilding	$	5,342,252	5,527,707	6,777,317
Financial Services (2)	577,184		509,461	383,302
Multifamily	42,635		(50,651)	69,493
Lennar Other (3)	(47,967)		(209,788)	(734,649)
Corporate and Unallocated (4)	(729,196)		(574,425)	(480,897)
	$	5,184,908	5,202,304	6,014,566

(1)Revenues for Multifamily for the year ended November 30, 2022 included $237.5 million of land sales to unconsolidated entities.

(2)Financial Services operating earnings for the year ended November 30, 2022, included a $35.5 million one-time charge due to an increase in a litigation accrual related to a court judgement.

(3)Operating loss for Lennar Other for the year ended November 30, 2024 included $25.2 million of mark-to-market unrealized gains on the Company's publicly traded technology investments and a $46.5 million one-time gain on the sale of a technology investment. Operating loss for Lennar Other for the year ended November 30, 2023 included $50.2 million of mark-to-market unrealized losses on the

Company's publicly traded technology investments and a $65.0 million write-off of one of the Company's non-public technology investments. Operating loss for Lennar Other for the year ended November 30, 2022 included $655.1 million of mark-to-market unrealized losses on the Company's publicly traded technology investments.

(4)Corporate and unallocated expenses primarily represent costs of operations at the Company's corporate headquarters in Miami. These operations include the Company's executive offices, information technology, treasury, corporate accounting and tax, legal, internal audit and human resources. Also included are property expenses related to the leases of corporate offices, data processing, general corporate expenses and charitable foundation contributions to the Lennar Foundation.

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 (losses) from unconsolidated entities and other income (expense), net, less the cost of homes sold and land sold, and selling, general and administrative expenses incurred by the segment. Homebuilding Other also includes management of a fund that acquires single-family homes and holds them as rental properties.

The Company’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 and Pennsylvania

Central: Georgia, Illinois, Indiana, Maryland, Minnesota, North Carolina, South 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:

	At November 30,
(In thousands)	2024		2023
East	$	7,168,086	6,563,568
Central	5,366,936		4,511,496
Texas	4,238,587		3,337,280
West	12,148,434		11,298,812
Other	1,729,407		1,511,541
Corporate and Unallocated	4,943,019		6,405,695
Total Homebuilding	$	35,594,469	33,628,392

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

	Years Ended November 30,
(In thousands)	2024		2023	2022
Revenues:
East	$	8,492,955	8,727,154	8,389,182
Central	7,637,003		7,101,560	6,722,854
Texas	4,787,125		4,707,285	4,227,771
West	12,955,853		12,086,172	12,571,386
Other	33,490		38,816	40,142
	$	33,906,426	32,660,987	31,951,335
Operating earnings (loss):
East	$	1,599,024	1,991,950	2,062,654
Central	1,083,734		1,104,930	1,066,833
Texas	753,722		788,627	929,237
West	1,857,870		1,712,966	2,773,597
Other	47,902		(70,766)	(55,004)
	$	5,342,252	5,527,707	6,777,317
Interest expense:
East	$	40,041	55,216	70,809
Central	28,929		46,556	62,083
Texas	13,967		29,754	29,442
West	84,609		115,600	140,017
Other	12,446		10,467	10,380
	$	179,992	257,593	312,731
Depreciation and amortization:
East	$	32,098	33,279	23,084
Central	27,761		27,087	17,023
Texas	10,623		10,227	9,354
West	58,368		62,374	54,055
Other	346		286	774
	$	129,196	133,253	104,290
Net addition to operating properties and equipment:
East	$	734	637	2,065
Central	3,613		1,531	949
Texas	2,049		679	136
West	3,798		1,176	1,414
Other	54,202		45,754	6,537
	$	64,396	49,777	11,101

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. The Financial Services segment sells substantially all of the loans it originates within a short period of time in the secondary mortgage market, the majority of which are sold 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. Financial Services’ operating earnings consist of revenues generated primarily from mortgage financing, title and closing services, and sales of 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 November 30, 2024, the Financial Services segment had warehouse facilities which were all 364-day repurchase facilities and were used to fund residential mortgages or commercial mortgages for LMF Commercial as follows:

	Maximum Aggregate Commitment
(In thousands)	Committed Amount		Uncommitted Amount	Total
Residential facilities maturing:
April 2025	$	250,000	250,000	500,000
June 2025	1,400,000		—	1,400,000
August 2025	325,000		325,000	650,000
October 2025	100,000		100,000	200,000
December 2026	375,000		—	375,000
Total residential facilities	$	2,450,000	675,000	3,125,000
LMF commercial facilities maturing:
December 2024 (1)	200,000		—	200,000
January 2025	100,000		—	100,000
Total LMF commercial facilities	$	300,000	—	300,000
Total				$	3,425,000

(1)Subsequent to November 30, 2024, the maturity date was extended to December 2025.

The Financial Services segment uses the 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.

Borrowings and collateral under the facilities were as follows:

	At November 30,
(In thousands)	2024		2023
Borrowings under residential facilities	$	1,776,045	2,020,187
Collateral under residential facilities	1,837,833		2,097,020
Borrowings under LMF Commercial facilities	28,747		12,525

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 years ended November 30, 2024 and 2023. Loan origination liabilities were $16.7 million and $17.6 million, as of November 30, 2024 and 2023, respectively, and included in Financial Services’ liabilities in the Company's consolidated balance sheets.

LMF Commercial - loans held-for-sale

LMF Commercial originated commercial loans as follows:

	Years Ended November 30,
(Dollars in thousands)	2024		2023
Originations (1)	$	568,520	466,043
Sold	$	522,647	430,707
Securitizations	13		10

(1)During both years ended November 30, 2024 and 2023, the commercial loans originated were recorded as loans held-for-sale, which are held at fair value.

Investments held-to-maturity

At November 30, 2024 and 2023, the Financial Services segment held commercial mortgage-backed securities ("CMBS"). These securities are classified as held-to-maturity based on the segment's intent and ability to hold the securities until maturity and changes in estimated cash flows are reviewed periodically to determine if an other-than-temporary impairment has occurred. Based on the segment’s assessment, no impairment charges were recorded during the years ended November 30, 2024 and 2023. 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:

	At November 30,
(Dollars in thousands)	2024			2023
Carrying value	$	135,646		140,676
Outstanding debt, net of debt issuance costs	$	126,164		131,093
Incurred interest rate	3.4		%	3.4	%

	At November 30, 2024
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 from management and promote fees generated from funds and joint ventures, less the cost of sales of land sold, expenses related to construction activities and general and administrative expenses. Operations of the Multifamily Segment also include equity in earnings (losses) from unconsolidated entities and other gains, which includes proceeds of sales of buildings and investments.

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 (losses) from the Rialto fund investments and technology investments, realized and unrealized gains (losses) from investments in equity securities and other income (expense), net from the remaining assets related to the Company's former Rialto segment.

The Company has investments in Blend Labs, Inc. ("Blend Labs"), Hippo Holdings, Inc. ("Hippo"), Opendoor Technologies, Inc. ("Opendoor"), SmartRent, Inc. ("SmartRent"), Sonder Holdings, Inc. ("Sonder") and Sunnova Energy

International, Inc. ("Sunnova"), which are held at market and the carrying value of which 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:

	Years Ended November 30,
(In thousands)	2024		2023
Blend Labs (BLND)	$	9,474	(130)
Hippo (HIPO)	73,243		(19,210)
Opendoor (OPEN)	(12,587)		21,762
SmartRent (SMRT)	(11,609)		5,914
Sonder (SOND)	15		(700)
Sunnova (NOVA)	(33,356)		(57,798)
Lennar Other unrealized gains (losses) from technology investments	$	25,180	(50,162)

Doma Holdings, Inc. ("Doma"), which went public during the year ended November 30, 2021, is an investment that was accounted for under the equity method due to the Company's significant ownership interest of 25% of Doma which allowed the Company to exercise significant influence. During the year ended November 30, 2024, the Company sold its investment in Doma and recorded a gain of $20.9 million in other income (expense), net, in the consolidated statement of operations and comprehensive income (loss).

During the year ended November 30, 2024, there was a $46.5 million one-time realized gain in Lennar Other on the sale of a technology investment that was included in other income (expense), net and other gains (losses) on the Company’s consolidated statements of operations and comprehensive income. During the year ended November 30, 2023, the Company wrote off $65.0 million relating to one of the Company's non-public technology cost method investments which was recorded in Other income (expense), net and other gains (losses) in the Company’s consolidated statements of operations and comprehensive income (loss).