Operating and Reporting Segments

3 Months Ended

Feb. 28, 2025

Segment Reporting [Abstract]

Operating and Reporting Segments

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) South Central (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)	February 28, 2025
Assets:	Homebuilding		Financial Services	Multifamily	Lennar Other	Total
Cash and cash equivalents	$	2,283,928	188,833	15,030	28,981	2,516,772
Restricted cash	22,487		48,756	—	—	71,243
Receivables, net (1)	1,063,934		426,410	43,264	—	1,533,608
Inventory owned and consolidated inventory not owned	13,608,716		—	643,214	—	14,251,930
Deposits and pre-acquisition costs on real estate	5,161,259		—	10,825	—	5,172,084
Investments in unconsolidated entities (2)	2,645,734		—	472,668	375,393	3,493,795
Loans held-for-sale (3)	—		1,835,897	—	—	1,835,897
Investments in equity securities (4)	—		—	—	245,628	245,628
Investments available-for-sale (5)	—		—	—	40,401	40,401
Loans held-for-investment, net	—		52,674	—	—	52,674
Investments held-to-maturity	—		134,369	—	—	134,369
Goodwill	3,442,359		189,699	—	—	3,632,058
Other assets	1,657,511		124,140	90,151	133,842	2,005,644
Total assets	$	29,885,928	3,000,778	1,275,152	824,245	34,986,103
Liabilities:
Senior notes and other debts payable, net	$	2,211,272	1,397,125	—	—	3,608,397
Liabilities related to consolidated inventory not owned	3,037,085		—	—	—	3,037,085
Accounts payable and other liabilities	5,003,134		229,146	141,380	99,617	5,473,277
Total liabilities	$	10,251,491	1,626,271	141,380	99,617	12,118,759

(In thousands)	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 (3)	—		2,250,718	—	—	2,250,718
Investments in equity securities (4)	—		—	—	347,810	347,810
Investments available-for-sale (5)	—		—	—	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:
Senior notes and other debt 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

(1)Receivables, net for Financial Services are primarily related to loans sold to investors for which the Company had not yet been paid as of February 28, 2025 and November 30, 2024, respectively.

(2)Investments in unconsolidated entities as of February 28, 2025 include the carrying value of 20% of the total outstanding shares of Millrose common stock, which was $1.2 billion.

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

(4)Investments in equity securities include investments of $133.5 million and $143.0 million without readily available fair values as of February 28, 2025 and November 30, 2024, respectively.

(5)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.

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

	Three Months Ended
(In thousands)	February 28, 2025		February 29, 2024
Revenues:
Homebuilding	$	7,283,870	6,930,991
Financial Services	277,077		249,720
Multifamily	63,196		129,677
Lennar Other	7,402		2,542
	$	7,631,545	7,312,930
Earnings (loss) before income taxes:
Homebuilding	$	809,273	1,028,796
Financial Services	143,483		131,296
Multifamily	(23)		(15,639)
Lennar Other	(89,283)		(39,548)
Corporate and Unallocated (1)	(165,212)		(174,119)
	$	698,238	930,786

(1)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 (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 renamed its Texas reportable Homebuilding segment to South Central as a result of the Rausch acquisition (see Note 2 of the Notes to Condensed Consolidated Financial Statements) in order to streamline and synergize geographic homebuilding operations, assess performance, and allocate resources across the Company’s geographic homebuilding segments. The Company’s reportable Homebuilding segments and all other homebuilding operations not required to be reported separately have homebuilding divisions located in:

East: Florida, New Jersey and Pennsylvania

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

and Virginia     

South Central: Arkansas, Kansas, Missouri, Oklahoma and 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”), and Millrose investment.

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

(In thousands)	February 28, 2025		November 30, 2024
East	$	5,615,263	6,967,571
Central	4,415,791		5,567,451
South Central	4,214,025		4,238,587
West	10,280,135		12,148,434
Other	2,938,045		1,729,407
Corporate and Unallocated	2,422,669		4,943,019
Total Homebuilding	$	29,885,928	35,594,469

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

	Three Months Ended
(In thousands)	February 28, 2025		February 29, 2024
Revenues
East	$	1,653,755	1,877,938
Central	1,560,008		1,441,314
South Central	1,166,828		1,071,786
West	2,894,933		2,530,061
Other	8,346		9,892
	$	7,283,870	6,930,991
Operating earnings
East	$	222,622	376,909
Central	135,452		161,623
South Central	122,083		168,583
West	298,781		308,787
Other	30,335		12,894
	$	809,273	1,028,796

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 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 February 28, 2025, 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	560,000		—	560,000
August 2025	325,000		325,000	650,000
October 2025	50,000		100,000	150,000
December 2026	375,000		—	375,000
Total residential facilities	$	1,560,000	675,000	2,235,000
LMF commercial facilities maturing:
December 2025	200,000		—	200,000
January 2026	100,000		—	100,000
Total LMF commercial facilities	$	300,000	—	300,000
Total				$	2,535,000

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.

Borrowings and collateral under the facilities were as follows:

(In thousands)	February 28, 2025		November 30, 2024
Borrowings under the residential facilities	$	1,235,008	1,776,045
Collateral under the residential facilities	1,286,848		1,837,833
Borrowings under the LMF Commercial facilities	37,465		28,747

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. There was no provision for loan losses for the three months ended February 28, 2025. The provision for loan losses was immaterial for the three months ended February 29, 2024. Loan origination liabilities were $16.7 million as of both February 28, 2025 and November 30, 2024, 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
(Dollars in thousands)	February 28, 2025		February 29, 2024
Originations (1)	$	127,965	140,825
Sold	94,887		26,950
Securitizations	4		2

(1)During both the three months ended February 28, 2025 and February 29, 2024, the commercial loans originated were recorded as loans held-for-sale, which are held at fair value.

Investments held-to-maturity

At February 28, 2025 and November 30, 2024, 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 three months ended February 28, 2025 and February 29, 2024. 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, 2025		November 30, 2024
Carrying value	$	134,369	135,646
Outstanding debt, net of debt issuance costs	124,651		126,164
Incurred interest rate	3.4%		3.4%

	February 28, 2025
	Range
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 (losses), which includes proceeds of sales of 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/had 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 realized and unrealized losses from sales of shares and mark-to-market adjustments on the Company's technology investments:

	Three Months Ended
(In thousands)	February 28, 2025		February 29, 2024
Blend Labs (BLND)	$	(3,737)	2,936
Hippo (HIPO)	(12,890)		16,449
Opendoor (OPEN)	(18,786)		1,315
SmartRent (SMRT)	(4,483)		(1,963)
Sonder (SOND)	(19)		51
Sunnova (NOVA)	(22,588)		(23,925)
Lennar Other realized and unrealized losses from technology investments (1)	$	(62,503)	(5,137)

(1)During the three months ended February 28, 2025, the Company realized a loss of $28.4 million on the sale of its shares in Blend Labs, SmartRent, Sonder and Sunnova and, as of February 28, 2025, has a small remaining interest in Sunnova.