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Financial Instruments and Fair Value Disclosure (Tables)

12 Months Ended

Nov. 30, 2024

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 November 30, 2024 and 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.


		At November 30,
		2024			2023
	Fair Value	Carrying		Fair	Carrying	Fair
(In thousands)	Hierarchy	Amount		Value	Amount	Value
ASSETS

Financial Services:
Loans held-for-investment, net	Level 3	$	60,969	61,044	55,463	55,463
Investments held-to-maturity	Level 3	135,646		138,160	140,676	139,396




LIABILITIES
Homebuilding senior notes and other debt payable, net	Level 2	$	2,258,283	2,264,375	2,816,482	2,785,712
Financial Services notes and other debt payable, net	Level 2	1,930,956		1,931,515	2,163,805	2,164,441
Multifamily notes payable, net	Level 2	—		—	3,741	3,741

Fair Value Measured on a Recurring Basis

The Company’s financial instruments measured at fair value on a recurring basis are summarized below:


		Fair Value at November 30,
(In thousands)	Fair Value Hierarchy	2024		2023
Financial Services Assets:
Residential loans held-for-sale	Level 2	$	2,200,402	2,073,350
LMF Commercial loans held-for-sale	Level 3	50,316		13,459
Mortgage servicing rights	Level 3	3,463		3,440
Forward options	Level 1	1,458		5,937
Lennar Other Assets:
Investments in equity securities	Level 1	204,777		176,198
Investments available-for-sale	Level 3	40,578		37,953

Residential and LMF Commercial loans held-for-sale in the table above include:


	November 30,
	2024		2023
(In thousands)	Aggregate Principal Balance		Change in Fair Value	Aggregate Principal Balance	Change in Fair Value





Residential loans held-for-sale	$	2,263,310	(62,907)	2,083,776	(10,426)
LMF Commercial loans held-for-sale	50,020		296	13,650	(191)

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:


	Years Ended November 30,
	2024		2023

(In thousands)	Mortgage servicing rights		LMF Commercial loans held-for-sale	Mortgage servicing rights	LMF Commercial loans held-for-sale
Beginning balance	$	3,440	13,459	3,463	25,599
Purchases/loan originations	463		568,520	200	466,043
Sales/loan originations sold, including those not settled	—		(522,647)	—	(430,707)
Disposals/settlements (1)	(261)		(9,500)	(277)	(45,667)
Changes in fair value (2)	(179)		296	54	(191)
Interest and principal paydowns	—		188	—	(1,618)
Ending balance	$	3,463	50,316	3,440	13,459

(1)LMF Commercial includes $9.5 million of loans that was converted to loans held-for-sale during the year ended November 30, 2024.

(2)Changes in fair value for LMF Commercial loans held-for-sale and Financial Services mortgage servicing rights are included in Financial Services' revenues.

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:


	Years Ended November 30,
(In thousands)	2024		2023	2022
Changes in fair value included in Financial Services revenues:
Loans held-for-sale	$	(52,482)	(26,658)	(33,287)
Mortgage loan commitments	(44,106)		1,016	43,695
Forward contracts	61,372		(28,431)	(48,790)
Forward options	(133)		(522)	(142)




Changes in fair value included in Lennar Other unrealized gains (losses) from technology investments:
Investments in equity securities	$	25,180	(50,162)	(655,094)
Changes in fair value included in other comprehensive income, net of tax:
Lennar Other investments available-for-sale	$	2,650	2,471	1,464

Schedule of Significant Unobservable Inputs Used to Determine Fair Value of Communities

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:


	Years Ended November 30,
	2024			2023
Unobservable inputs	Range			Range
Average selling price (1)	$178,000	—	$702,000	$179,000	—	$850,000
Absorption rate per quarter (homes)	6	—	15	3	—	26
Discount rate	20%			20%

(1)Represents the projected average selling price on future deliveries for communities in which the Company recorded valuation adjustments during the years ended November 30, 2024 and 2023.


	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

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:


			November 30, 2024
Unobservable inputs
Mortgage prepayment rate			8%
Discount rate			13%
Delinquency rate			12%

Communities Reviewed for Indicators of Impairment and Communities with Valuation Adjustments Needed

The Company's valuation adjustments for finished homes and construction in progress were included in Homebuilding costs and expenses in the Company's consolidated statements of operations and comprehensive income (loss) for the years ended November 30, 2024 and 2023. The table below summarizes communities reviewed for indicators of impairment and communities with valuation adjustments recorded:


	At November 30,	Communities with valuation adjustments for the years ended November 30,
	# of communities with potential indicators of impairment	# of communities	Fair Value (in thousands)	Valuation Adjustments (in thousands)

2024	33	6	$40,465	$18,599
2023	25	18	95,731	37,500

The assets measured at fair value on a nonrecurring basis are summarized below:


	Years Ended November 30,
		2024				2023			2022
(In thousands)	Fair Value Hierarchy	Carrying Value		Fair Value	Total Losses, Net (1)	Carrying Value	Fair Value	Total Losses, Net (1)	Carrying Value	Fair Value	Total Losses, Net (1)




Non-financial assets
Homebuilding:
Finished homes and construction in progress (2)	Level 3	$	516,081	467,946	(48,135)	458,569	396,795	(61,774)	347,300	295,663	(51,637)
Land and land under development (2)	Level 3	—		—	—	52,147	49,539	(2,608)	135,844	126,135	(9,709)

Deposits and pre-acquisition costs on real estate (3)	Level 3	5,120		—	(5,120)	19,914	—	(19,914)	47,893	—	(47,893)
Investments in unconsolidated entities (4)	Level 3	—		—	—	78,834	37,792	(41,042)	1,454	—	(1,454)
Non-financial assets
Multifamily:
Land and land under development (5)	Level 3	$	139,980	49,970	(90,010)	—	—	—	—	—	—
Investments in unconsolidated entities (6)	Level 3	24,753		—	(24,753)	—	—	—	—	—	—

(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 (loss).

(4)Valuation adjustments related to Homebuilding investments in unconsolidated entities were primarily included in other income (expense), net in the Company's consolidated statements of operations and comprehensive income (loss) for the years ended November 30, 2023 and 2022, respectively.

(5)Valuation adjustments for land and land under development were included in Multifamily costs and expenses.

(6)Valuation adjustments related to Multifamily investments in unconsolidated entities were included in other income (expense), net in the Company's consolidated statements of operations and comprehensive income (loss) for the year ended November 30, 2024.

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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