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 February ~~28, 2023~~29, 2024

☐ 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~~Waterford District 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~~“large accelerated filer,~~" "accelerated~~”“accelerated filer,~~" "smaller~~”“smaller reporting ~~company"~~company” and ~~"emerging~~“emerging growth ~~company"~~company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

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 February ~~28, 2023:~~29, 2024:

Class A ~~253,773,163~~245,036,430

Class B ~~35,627,560~~33,307,143

LENNAR CORPORATION

FORM 10-Q

For the period ended February ~~28, 2023~~29, 2024

Part I

Financial Information

~~Item 1.~~

~~Financial Statements~~

Item 1.

Financial Statements.

Condensed Consolidated Balance Sheets as of February ~~28, 202~~3 29, 2024 and November 30, ~~2022~~2023

Condensed Consolidated Statements of Operations and Comprehensive Income for the three months ended February 29, 2024 and February 28, 2023 ~~and 2022~~

Condensed Consolidated Statements of Cash Flows for the three months ended February 29, 2024 and February 28, 2023 ~~and 2022~~

Notes to Condensed Consolidated Financial Statements

Forward-Looking Statements

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of ~~Operations~~Operations.

2527

Item 3.

Quantitative and Qualitative Disclosures About Market ~~Risk~~Risk.

~~Item 4.~~

~~Controls and Procedures~~

~~Part II~~

~~Other Information~~

Item 4.

Controls and Procedures.

Part II

Other Information

Item 1.

Legal ~~Proceedings~~Proceedings.

4042

Item 1A.

Risk ~~Factors~~Factors.

4042

Item 2.

Unregistered Sales of Equity Securities and Use of ~~Proceeds~~Proceeds.

4042

Item 3 - 5.4.

Not ~~Applicable~~Applicable.

4042

Item 5.

Other Information.

Item 6.

~~Exhibits~~Exhibits.

4143

Signatures

4244

Part I. Financial Information

Item 1. Financial Statements

Lennar Corporation and Subsidiaries

Condensed Consolidated Balance Sheets

(Dollars in thousands)

(Unaudited)


		February 28,		November 30,
		2023 (1)		2022 (1)
	February 29,				February 29,	November 30,
	2024 (1)				2024 (1)	2023 (1)

ASSETS	ASSETS
ASSETS
ASSETS
Homebuilding:	Homebuilding:
Homebuilding:
Homebuilding:
Cash and cash equivalents
Cash and cash equivalents
Cash and cash equivalents	Cash and cash equivalents	$	4,057,956	4,616,124
Restricted cash	Restricted cash	22,504		23,046
Receivables, net	Receivables, net	559,939		673,980
Inventories:	Inventories:
Finished homes and construction in progress	Finished homes and construction in progress	11,945,232		11,718,507
Finished homes and construction in progress
Finished homes and construction in progress
Land and land under development	Land and land under development	7,459,185		7,382,273
Inventory owned
Consolidated inventory not owned	Consolidated inventory not owned	2,223,469		2,331,231
Total inventories		21,627,886		21,432,011
Inventory owned and consolidated inventory not owned
Deposits and pre-acquisition costs on real estate
Investments in unconsolidated entities	Investments in unconsolidated entities	1,178,802		1,173,164
Goodwill	Goodwill	3,442,359		3,442,359
Other assets	Other assets	1,412,654		1,323,478
		32,302,100		32,684,162
	33,765,567
Financial Services	Financial Services	2,213,421		3,254,257
Multifamily	Multifamily	1,266,777		1,257,337
Lennar Other	Lennar Other	790,856		788,539
Total assets	Total assets	$	36,573,154	37,984,295

(1)Under certain provisions of Accounting Standards Codification ~~("ASC"~~(“ASC”) Topic 810, Consolidations (" (“ASC ~~810"~~810”), the Company is required to separately disclose on its condensed consolidated balance sheets the assets owned by consolidated variable interest entities ~~("VIEs"~~(“VIEs”) and liabilities of consolidated VIEs as to which neither Lennar Corporation, nor any of its subsidiaries, has any obligations.

As of February ~~28, 2023,~~29, 2024, total assets include ~~$1.4~~$2.7 billion related to consolidated VIEs of which ~~$31.1~~$40.8 million is included in Homebuilding cash and cash equivalents, ~~$0.7~~$2.0 million in Homebuilding receivables, net, ~~$59.0~~$9.8 million in Homebuilding finished homes and construction in progress, ~~$742.4~~$633.4 million in Homebuilding land and land under development, ~~$502.0~~$67.1 million in Homebuilding deposits and pre-acquisition costs on real estate, $1.9 billion in Homebuilding consolidated inventory not owned, ~~$0.7~~$0.3 million in Homebuilding investments in unconsolidated entities, ~~$21.1~~$26.7 million in Homebuilding other assets ~~$31.0~~and $33.1 million in Multifamily ~~assets and $6.8 million in Lennar Other~~ assets.

As of November 30, ~~2022,~~2023, total assets include ~~$1.4~~$1.9 billion related to consolidated VIEs of which ~~$56.9~~$22.8 million is included in Homebuilding cash and cash equivalents, ~~$0.3~~$1.8 million in Homebuilding receivables, net, ~~$29.4~~$18.3 million in Homebuilding finished homes and construction in progress, ~~$736.5~~$628.0 million in Homebuilding land and land under development, ~~$533.8~~$55.0 million in Homebuilding deposits and pre-acquisition costs on real estate, $1.2 billion in Homebuilding consolidated inventory not owned, ~~$1.0~~$0.3 million in Homebuilding investments in unconsolidated entities, $23.0 million in Homebuilding other assets ~~$33.2~~and $32.6 million in Multifamily ~~assets and $9.0 million in Lennar Other~~ assets.

See accompanying notes to condensed consolidated financial statements.

Lennar Corporation and Subsidiaries

Condensed Consolidated Balance Sheets (Continued)

(In thousands, except share amounts)

(Unaudited)


		February 28,		November 30,
		2023 (2)		2022 (2)
	February 29,				February 29,	November 30,
	2024 (2)				2024 (2)	2023 (2)

LIABILITIES AND EQUITY	LIABILITIES AND EQUITY
LIABILITIES AND EQUITY
LIABILITIES AND EQUITY
Homebuilding:	Homebuilding:
Homebuilding:
Homebuilding:
Accounts payable
Accounts payable
Accounts payable	Accounts payable	$	1,490,808	1,616,128
Liabilities related to consolidated inventory not owned	Liabilities related to consolidated inventory not owned	1,867,373		1,967,551
Senior notes and other debts payable, net	Senior notes and other debts payable, net	4,033,335		4,047,294
Other liabilities	Other liabilities	2,937,472		3,347,673
		10,328,988		10,978,646
	10,128,947
Financial Services	Financial Services	1,317,775		2,353,904
Multifamily	Multifamily	283,380		313,484
Lennar Other	Lennar Other	87,724		97,894
Total liabilities	Total liabilities	12,017,867		13,743,928
Stockholders’ equity:	Stockholders’ equity:
Preferred stock	Preferred stock	—		—
Class A common stock of $0.10 par value; Authorized: February 28, 2023 and November 30, 2022 - 400,000,000 shares; Issued: February 28, 2023 - 258,339,930 shares and November 30, 2022 - 256,084,147 shares		25,834		25,608
Class B common stock of $0.10 par value; Authorized: February 28, 2023 and November 30, 2022 - 90,000,000 shares; Issued: February 28, 2023 - 36,601,215 shares and November 30, 2022 - 36,601,215 shares		3,660		3,660
Preferred stock
Preferred stock
Class A common stock of $0.10 par value; Authorized: February 29, 2024 and November 30, 2023 - 400,000,000 shares; Issued: February 29, 2024 - 259,834,181 shares and November 30, 2023 - 258,475,012 shares
Class B common stock of $0.10 par value; Authorized: February 29, 2024 and November 30, 2023 - 90,000,000 shares; Issued: February 29, 2024 - 36,601,215 shares and November 30, 2023 - 36,601,215 shares
Additional paid-in capital	Additional paid-in capital	5,503,789		5,417,796
Retained earnings	Retained earnings	19,350,060		18,861,417
Treasury stock, at cost; February 28, 2023 - 4,566,767 shares of Class A common stock and 973,655 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		(468,347)		(210,389)
Treasury stock, at cost; February 29, 2024 - 14,797,751 shares of Class A common stock and 3,294,072 shares of Class B common stock; November 30, 2023 - 11,207,889 shares of Class A common stock and 2,920,200 shares of Class B common stock
Accumulated other comprehensive income	Accumulated other comprehensive income	3,259		2,408
Total stockholders’ equity	Total stockholders’ equity	24,418,255		24,100,500
Noncontrolling interests	Noncontrolling interests	137,032		139,867
Total equity	Total equity	24,555,287		24,240,367
Total liabilities and equity	Total liabilities and equity	$	36,573,154	37,984,295

(2)As of February ~~28, 2023,~~29, 2024, total liabilities include ~~$580.0 million~~$1.8 billion related to consolidated VIEs as to which there was no recourse against the Company, of which ~~$64.4~~$17.7 million is included in Homebuilding accounts payable, ~~$477.6 million~~$1.7 billion in Homebuilding liabilities related to consolidated inventory not owned, ~~$30.1~~$6.0 million in Homebuilding senior notes and other debts payable, ~~$2.1~~$88.5 million in Homebuilding other liabilities, ~~$3.7~~and $0.9 million in Multifamily ~~liabilities and $2.1 million in Lennar Other~~ liabilities.

As of November 30, ~~2022,~~2023, total liabilities include ~~$620.4 million~~$1.2 billion related to consolidated VIEs as to which there was no recourse against the Company, of which ~~$66.9~~$53.7 million is included in Homebuilding accounts payable, ~~$510.9 million~~$1.1 billion in Homebuilding liabilities related to consolidated inventory not owned, ~~$29.4 million in Homebuilding senior notes and other debt payable, $7.2~~$38.1 million in Homebuilding other liabilities, ~~$3.8~~and $4.1 million in Multifamily ~~liabilities and $2.2 million in Lennar Other~~ liabilities.

See accompanying notes to condensed consolidated financial statements.

Lennar Corporation and Subsidiaries

Condensed Consolidated Statements of Operations and Comprehensive Income

(In thousands, except per share amounts)

(Unaudited)

Three Months Ended

February 29, 2024

Revenues:

Homebuilding

Financial Services

Multifamily

Lennar Other

Total revenues

Costs and expenses:

Homebuilding

Financial Services

Multifamily

Lennar Other

Corporate general and administrative

Charitable foundation contribution

Total costs and expenses

Equity in losses from unconsolidated entities

Other income (expense), net and other gains (losses)

Three Months Ended

February 28,

Lennar Other unrealized losses from technology investments

2023

2022

Revenues:

Homebuilding

6,156,305

5,752,205

Financial Services

182,981

176,701

Multifamily

143,523

267,359

Lennar Other

7,620

7,251

Total revenues

6,490,429

6,203,516

Costs and expenses:

Homebuilding

5,274,714

4,641,898

Financial Services

104,244

85,910

Multifamily

148,956

263,737

Lennar Other

6,476

5,407

Corporate general and administrative

126,106

113,661

Charitable foundation contribution

13,659

12,538

Total costs and expenses

5,674,155

5,123,151

Homebuilding equity in earnings (loss) from unconsolidated entities

3,186

(286)

Homebuilding other income (expense), net

22,062

(171)

Multifamily equity in earnings (loss) from unconsolidated entities and other gain

(16,168)

1,805

Lennar Other equity in loss from unconsolidated entities, other expense, net, and other gain

(16,947)

(9,808)

Lennar Other unrealized loss from technology investments

(23,954)

(395,170)

Lennar Other unrealized losses from technology investments

Earnings before income taxes

784,453

676,735

Provision for income taxes

(185,145)

(167,420)

Provision for income taxes

Net earnings (including net earnings attributable to noncontrolling interests)

599,308

509,315

Less: Net earnings attributable to noncontrolling interests

2,774

5,734

Less: Net earnings attributable to noncontrolling interests

Net earnings attributable to Lennar

596,534

503,581

Other comprehensive income, net of tax:

Net unrealized gain on securities available-for-sale

851

742

Reclassification adjustments for gain included in earnings, net of tax

—

2,285

Net unrealized gain on securities available-for-sale

Total other comprehensive income, net of tax

851

3,027

Total comprehensive income attributable to Lennar

597,385

506,608

Total comprehensive income attributable to Lennar

Total comprehensive income attributable to noncontrolling interests

2,774

5,734

Basic earnings per share

2.06

1.70

Basic earnings per share

Diluted earnings per share

2.06

1.69

See accompanying notes to condensed consolidated financial statements.

Lennar Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

Three Months Ended

February 28,

2023

2022

February 29, 2024

February 28, 2023

Cash flows from operating activities:

Net earnings (including net earnings attributable to noncontrolling interests)

599,308

509,315

Adjustments to reconcile net earnings to net cash provided by operating activities:

Depreciation and amortization

20,305

20,089

Amortization of discount/premium on debt, net

(838)

(490)

Depreciation and amortization

Amortization of discount/premium and accretion on debt, net

Equity in loss from unconsolidated entities

31,187

9,752

Distributions of earnings from unconsolidated entities

4,623

4,822

Share-based compensation expense

86,558

81,457

Deferred income tax benefit

(81,940)

(54,032)

Deferred income tax (benefit) expense

Loans held-for-sale unrealized loss

31,462

27,387

Lennar Other unrealized losses from technology investments

23,954

395,170

Loans held-for-sale unrealized loss

Lennar Other unrealized losses from technology investments and other (gains) losses

Gain on sale of other assets

Valuation adjustments and write-offs of option deposits, pre-acquisition costs and other assets

25,846

11,509

Valuation adjustments and write-offs of option deposits and pre-acquisition costs on real estate, and other assets

Changes in assets and liabilities:

Decrease in receivables

602,757

380,502

Increase in inventories, excluding valuation adjustments and write-offs of option deposits and pre-acquisition costs

(177,705)

(1,913,634)

Increase in other assets

(8,139)

(49,968)

Decrease in receivables

Increase in inventories, excluding valuation adjustments

Increase in deposits and pre-acquisition costs on real estate

Decrease (increase) in other assets

Decrease in loans held-for-sale

511,807

409,435

(Decrease) increase in accounts payable and other liabilities

(690,980)

96,455

Net cash provided by (used in) operating activities

978,205

(72,231)

Decrease in accounts payable and other liabilities

Net cash provided by operating activities

Cash flows from investing activities:

Net additions of operating properties and equipment

(5,423)

(5,780)

Net additions of operating properties and equipment

Proceeds from the sale of other assets

Investments in and contributions to unconsolidated entities

(57,281)

(138,909)

Distributions of capital from unconsolidated entities

23,993

173,561

Proceeds from sale of commercial mortgage-backed securities bonds

—

9,191

Decrease in Financial Services loans held-for-investment, net

418

11,431

Decrease in Financial Services loans held-for-investment

Purchases of investment securities

—

(71,269)

Proceeds from maturities/sales of investment securities

1,938

1,783

Net cash used in investing activities

(36,355)

(19,992)

Net cash used in investing activities

See accompanying notes to condensed consolidated financial statements.

Lennar Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Continued)

(In thousands)

(Unaudited)

Three Months Ended

February 29, 2024

February 28,

February 29, 2024

2023

2022

February 29, 2024

Cash flows from financing activities:

Net repayments under warehouse facilities

(963,455)

(528,667)

Principal payments on notes payable and other borrowings

(26,621)

(18,776)

Principal payments on notes payable and other borrowings

Proceeds from other borrowings

Proceeds from liabilities related to consolidated inventory not owned

70,369

199,483

Payments related to consolidated inventory not owned

(177,891)

(166,100)

Payments related to liabilities related to consolidated inventory not owned

Payments related to other liabilities, net

(1,257)

—

Receipts related to noncontrolling interests

2,497

6,984

Receipts related to noncontrolling interests

Payments related to noncontrolling interests

(21,256)

(59,388)

Common stock:

Repurchases

(257,958)

(581,300)

Dividends

(107,891)

(110,122)

Dividends

Net cash used in financing activities

(1,483,463)

(1,257,886)

Net decrease in cash and cash equivalents and restricted cash

(541,613)

(1,350,109)

Net decrease in cash and cash equivalents and restricted cash

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

4,274,157

1,605,574

Cash and cash equivalents and restricted cash at end of period

Summary of cash and cash equivalents and restricted cash:

Homebuilding

4,057,956

1,366,597

Homebuilding

Financial Services

163,000

168,032

Multifamily

15,075

34,439

Multifamily

Lennar Other

6,825

2,757

Homebuilding restricted cash

22,504

27,025

Homebuilding restricted cash

Financial Services restricted cash

8,797

6,724

Financial Services restricted cash

Supplemental disclosures of non-cash investing and financing activities:

4,274,157

1,605,574

Supplemental disclosures of non-cash investing and financing activities:

Homebuilding and Multifamily:

Purchases of inventories and other assets financed by sellers

13,500

6,150

Non-cash contributions to unconsolidated entities

120

124,864

Homebuilding and Multifamily:

Purchases of inventories, land under development and other assets financed by sellers

See accompanying notes to condensed consolidated financial statements.

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"~~(“GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange ~~Commission.~~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.~~2023. 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.~~2023. 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 months ended February ~~28, 2023~~29, 2024 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 February ~~28, 2023~~29, 2024 and November 30, ~~2022~~2023 included ~~$488.0~~$512.0 million and ~~$1.0 billion,~~$594.8 million, respectively, of cash held in escrow for approximately two days.

Share-based Payments

During the three months ended February 29, 2024 and February 28, 2023, ~~and 2022,~~ the Company granted employees ~~1.6~~1.2 million and ~~1.4~~1.6 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,~~2023, the FASB issued ASU ~~2021-01,~~2023-09 (“ASU 2023-09”) ~~“Reference Rate Reform - Scope,~~Income Taxes (Topic 740): Improvements to Income Tax Disclosures~~” which clarified~~. ASU 2023-09 requires public companies to annually (1) disclose specific categories in the ~~scope~~rate reconciliation and ~~application~~(2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the ~~original guidance. In~~amount computed by multiplying pretax income or loss by the applicable statutory income tax rate). ASU 2023-09 will be effective for the annual reporting periods in fiscal years beginning after 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,~~15, 2024. The ~~adoption of~~Company is currently evaluating ASU ~~2020-04 did~~2023-09 and does not expect it to have a material ~~impact~~effect on the ~~Company's~~Company’s condensed consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07, “Improvements to Reportable Segment Disclosures”(“ASU 2023-07”). ASU 2023-07 requires disclosure of significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within the segment measure of profit or loss, an amount and description of its composition for other segment items to reconcile to segment profit or loss, and the title and position of the entity’s CODM. ASU 2023-07 will be applied retrospectively and is effective for annual reporting periods in fiscal years beginning after December 15, 2023, and interim reporting periods in fiscal years beginning after December 31, 2024. The Company is currently reviewing the impact that the adoption of ASU 2023-07 may have on its condensed consolidated financial statements and disclosures.

Reclassifications

Certain amounts in the Company's condensed consolidated statement of operations of prior year have been reclassified to conform to the fiscal 2024 presentation. These reclassifications had no impact on the Company's total assets, total equity, revenues or net earnings in its condensed consolidated financial statements.

Lennar Corporation and Subsidiaries

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

(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

(6) Multifamily

(7) Lennar Other

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


(In thousands)	February 29, 2024
Assets:	Homebuilding		Financial Services	Multifamily	Lennar Other	Total
Cash and cash equivalents	$	4,950,128	233,846	27,091	2,700	5,213,765
Restricted cash	12,635		35,068	—	—	47,703
Receivables, net (1)	897,371		304,716	82,605	—	1,284,692
Inventory owned and consolidated inventory not owned	19,374,070		—	568,689	—	19,942,759
Loans held-for-sale (2)	—		1,986,715	—	—	1,986,715

Investments in equity securities (3)	—		—	—	294,246	294,246
Investments available-for-sale (4)	—		—	—	38,315	38,315
Loans held-for-investment, net	—		56,845	—	—	56,845
Investments held-to-maturity	—		139,706	—	—	139,706
Deposits and pre-acquisition costs on real estate	2,408,877		—	31,785	—	2,440,662
Investments in unconsolidated entities	1,206,564		—	586,438	289,691	2,082,693
Goodwill	3,442,359		189,699	—	—	3,632,058
Other assets	1,473,563		109,847	82,671	124,959	1,791,040
Total assets	$	33,765,567	3,056,442	1,379,279	749,911	38,951,199
Liabilities:
Notes and other debts payable, net	$	2,830,332	1,564,290	—	—	4,394,622
Accounts payable, liabilities related to consolidated inventory not owned and other liabilities	7,298,615		157,043	249,625	73,364	7,778,647
Total liabilities	$	10,128,947	1,721,333	249,625	73,364	12,173,269

Lennar Corporation and Subsidiaries

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

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

(In thousands) February 28, 2023
Assets: Homebuilding Financial
Services Multifamily Lennar
Other Total
Cash and cash equivalents $ 4,057,956 163,000 15,075 6,825 4,242,856
Restricted cash 22,504 8,797 — — 31,301
Receivables, net (1) 559,939 329,331 110,696 — 999,966
Inventories 21,627,886 — 439,947 — 22,067,833
Loans held-for-sale (2) — 1,233,466 — — 1,233,466
Investments in equity securities (3) — — — 367,369 367,369
Investments available-for-sale (4) — — — 36,332 36,332
Loans held-for-investment, net — 45,327 — — 45,327
Investments held-to-maturity — 141,854 — — 141,854
Investments in unconsolidated entities 1,178,802 — 635,499 315,632 2,129,933
Goodwill 3,442,359 189,699 — — 3,632,058
Other assets 1,412,654 101,947 65,560 64,698 1,644,859
$ 32,302,100 2,213,421 1,266,777 790,856 36,573,154
Liabilities:
Notes and other debts payable, net $ 4,033,335 1,171,638 16,828 — 5,221,801
Accounts payable and other liabilities 6,295,653 146,137 266,552 87,724 6,796,066
$ 10,328,988 1,317,775 283,380 87,724 12,017,867


(In thousands)	(In thousands)	November 30, 2022						(In thousands)	November 30, 2023
Assets:	Assets:	Homebuilding		Financial Services	Multifamily	Lennar Other	Total	Assets:	Homebuilding	Financial Services	Multifamily	Lennar Other	Total
Cash and cash equivalents	Cash and cash equivalents	$	4,616,124	139,378	17,827	5,391	4,778,720
Restricted cash	Restricted cash	23,046		14,004	—	—	37,050
Receivables, net (1)	Receivables, net (1)	673,980		826,163	114,134	—	1,614,277
Inventories		21,432,011		—	430,442	—	21,862,453
Inventory owned and consolidated inventory not owned
Loans held-for-sale (2)	Loans held-for-sale (2)	—		1,776,311	—	—	1,776,311

Investments in equity securities (3)
Investments in equity securities (3)
Investments in equity securities (3)	Investments in equity securities (3)	—		—	—	391,026	391,026
Investments available-for-sale (4)	Investments available-for-sale (4)	—		—	—	35,482	35,482
Loans held-for-investment, net	Loans held-for-investment, net	—		45,636	—	—	45,636
Investments held-to-maturity	Investments held-to-maturity	—		143,251	—	—	143,251
Deposits and pre-acquisition costs on real estate
Investments in unconsolidated entities	Investments in unconsolidated entities	1,173,164		—	648,126	316,523	2,137,813
Goodwill	Goodwill	3,442,359		189,699	—	—	3,632,058
Other assets	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
Total assets
Liabilities:	Liabilities:
Notes and other debts payable, net	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
Notes and other debts payable, net
Notes and other debts payable, net
Accounts payable, liabilities related to consolidated inventory not owned and other liabilities
Total liabilities

(1)Receivables, net for Financial Services primarily related to loans sold to investors for which the Company had not yet been paid as of February ~~28, 2023~~29, 2024 and November 30, ~~2022,~~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 ~~$178.0~~$123.1 million and $121.0 million without readily available fair values as of ~~both~~ February ~~28, 2023~~29, 2024 and November 30, ~~2022,~~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 condensed consolidated balance sheet.

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


	Three Months Ended

(In thousands)	February 29, 2024		February 28, 2023
Revenues:
Homebuilding	$	6,930,991	6,156,305
Financial Services	249,720		182,981
Multifamily	129,677		143,523
Lennar Other	2,542		7,620

	$	7,312,930	6,490,429
Earnings (loss) before income taxes:
Homebuilding	$	1,028,796	906,839
Financial Services	131,296		78,737
Multifamily	(15,639)		(21,601)
Lennar Other	(39,548)		(39,757)
Corporate and Unallocated (1)	(174,119)		(139,765)
	$	930,786	784,453

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

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 February 28, 2023
(In thousands) Homebuilding Financial Services Multifamily Lennar Other Corporate and
Unallocated Total
Revenues $ 6,156,305 182,981 143,523 7,620 — 6,490,429
Operating earnings (loss) 906,839 78,737 (21,601) (39,757) — 924,218
Corporate general and administrative expenses — — — — 126,106 126,106
Charitable foundation contribution — — — — 13,659 13,659
Earnings (loss) before income taxes 906,839 78,737 (21,601) (39,757) (139,765) 784,453
Three Months Ended February 28, 2022
Revenues $ 5,752,205 176,701 267,359 7,251 — 6,203,516
Operating earnings (loss) 1,109,850 90,791 5,427 (403,134) — 802,934
Corporate general and administrative expenses — — — — 113,661 113,661
Charitable foundation contribution — — — — 12,538 12,538
Earnings (loss) before income taxes 1,109,850 90,791 5,427 (403,134) (126,199) 676,735

Homebuilding Segments

Information about homebuilding activities in states which are not economically similar to other states in the same geographic ~~area~~areas is grouped under ~~"Homebuilding~~“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~~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"~~(“FivePoint”)

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

(In thousands) East Central Texas West Other Corporate and Unallocated Total Homebuilding
February 28, 2023 $ 6,800,191 4,074,510 3,592,725 12,076,029 1,371,403 4,387,242 32,302,100
November 30, 2022 6,877,581 4,010,610 3,742,663 12,182,709 1,382,864 4,487,735 32,684,162


	February 29, 2024		November 30, 2023

(In thousands)
East	$	6,827,717	6,563,568
Central	4,737,106		4,511,496
Texas	3,632,938		3,337,280
West	11,933,146		11,298,812
Other	1,544,543		1,511,541
Corporate and Unallocated	5,090,117		6,405,695
Total Homebuilding	$	33,765,567	33,628,392

Financial information relating to the Company’s homebuilding segments was as follows:
Three Months Ended February 28, 2023
(In thousands) East Central Texas West Other Total Homebuilding
Revenues $ 1,875,977 1,048,007 1,022,052 2,205,061 5,208 6,156,305
Operating earnings (loss) 424,196 130,522 125,319 230,500 (3,698) 906,839
Three Months Ended February 28, 2022
Revenues $ 1,670,186 1,109,272 812,619 2,150,798 9,330 5,752,205
Operating earnings (loss) 351,995 152,078 171,312 441,448 (6,983) 1,109,850


	Three Months Ended

(In thousands)	February 29, 2024		February 28, 2023
Revenues
East	$	1,922,797	1,697,843
Central	1,396,455		1,226,141
Texas	1,071,786		1,022,052
West	2,530,061		2,205,061
Other	9,892		5,208
	$	6,930,991	6,156,305

Operating earnings (loss)
East	$	376,881	398,432
Central	161,616		156,286
Texas	168,513		125,319
West	308,787		230,500
Other	12,999		(3,698)
	$	1,028,796	906,839

1011

Lennar Corporation and Subsidiaries

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

Financial Services

Operations of the Financial Services segment include ~~primarily~~ mortgage financing, title and closing services primarily for buyers of the Company’s homes. ItThey also ~~includes~~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, 2023,~~29, 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:

~~(In thousands)~~


	Maximum Aggregate Commitment
(In thousands)	Committed Amount		Uncommitted Amount	Total
Residential facilities maturing:
March 2024 (1)	$	500,000	—	500,000
April 2024	250,000		250,000	500,000
May 2024	600,000		—	600,000
June 2024	100,000		100,000	200,000
September 2024	100,000		100,000	200,000
Total residential facilities	$	1,550,000	450,000	2,000,000
LMF commercial facilities maturing:

December 2024	200,000		—	200,000
January 2025	100,000		—	100,000
Total LMF commercial facilities	$	300,000	—	300,000
Total				$	2,300,000

(1)Subsequent to February 29, 2024, the maturity date was extended to June 2024.

~~Maximum Aggregate Commitment~~

~~Residential facilities maturing:~~

~~May 2023~~

~~200,000~~

~~August 2023~~

~~600,000~~

~~December 2023~~

~~500,000~~

~~Total - Residential facilities~~

~~1,300,000~~

~~LMF Commercial facilities maturing~~

~~July 2023~~

~~50,000~~

~~November 2023~~

~~100,000~~

~~December 2023~~

~~400,000~~

~~Total - LMF Commercial facilities~~

~~550,000~~

~~Total~~

~~1,850,000~~

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 ~~and their prior year predecessors~~ were as follows:

(In thousands)

February 28, 2023

November 30, 2022

(In thousands)

February 29, 2024

November 30, 2023

Borrowings under the residential facilities

1,028,283

1,877,411

Collateral under the residential facilities

1,064,394

1,950,155

Borrowings under the LMF Commercial facilities

11,397

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 months ended February 28, 2023 and 2022. Loan origination liabilities were $12.1 million and $11.8 million as of February 28, 2023 and November 30, 2022, respectively, and included in Financial Services’ liabilities in the Company's condensed consolidated balance sheets.

1112

Lennar Corporation and Subsidiaries

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

February 29, 2024 and February 28, 2023. Loan origination liabilities were $17.7 million and $17.6 million as of February 29, 2024 and November 30, 2023, 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

February 28,

(Dollars in thousands)

2023

2022

(Dollars in thousands)

Originations (1)

79,480

264,845

Sold

77,200

178,082

Sold

Securitizations

(1)During both the three months ended February 29, 2024 and February 28, 2023, ~~and 2022, all~~ the commercial loans originated were recorded as loans held-for-sale, which are held at fair value.

Investments held-to-maturity

At February ~~28, 2023~~29, 2024 and November 30, ~~2022,~~2023, the Financial Services segment held commercial mortgage-backed securities ~~("CMBS"~~(“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 months ended February 29, 2024 and February 28, ~~2023 or 2022.~~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:

(Dollars in thousands)

February 28, 2023

November 30, 2022

(Dollars in thousands)

February 29, 2024

November 30, 2023

Carrying value

141,854

143,251

Outstanding debt, net of debt issuance costs

131,959

133,283

Incurred interest rate

3.4%

Incurred interest rate

3.4%


		February 28, 2023
	February 29, 2024								February 29, 2024
Discount rates at purchase	Discount rates at purchase	6%	—	84%	Discount rates at purchase	6%	—	84%
Coupon rates	Coupon rates	2.0%	—	5.3%	Coupon rates	2.0%	—	5.3%
Distribution dates	Distribution dates	October 2027	—	December 2028	Distribution dates	October 2027	—	December 2028
Stated maturity dates	Stated maturity dates	October 2050	—	December 2051	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. ~~Our~~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"~~“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.

1213

Lennar Corporation and Subsidiaries

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

The Company has investments in Blend Labs, Inc. ("(“Blend ~~Labs"~~Labs”), Hippo Holdings, Inc. ~~("Hippo"~~(“Hippo”), Opendoor Technologies, Inc. ~~("Opendoor"~~(“Opendoor”), SmartRent, Inc. ~~("SmartRent"~~(“SmartRent”), Sonder Holdings, Inc. ~~("Sonder"~~(“Sonder”) and Sunnova Energy International, Inc. ~~("Sunnova"~~(“Sunnova”), which are held at market and will therefore change depending on the value of the Company's ~~share holdings~~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 ~~(loss)~~(losses) from mark-to-market adjustments on the Company's technology investments:

Three Months Ended

(In thousands)

February 28,

(In thousands)

2023

2022

Blend Labs (BLND)

586

(7,442)

Blend Labs (BLND)

Hippo (HIPO)

6,632

(124,457)

Opendoor (OPEN)

(7,691)

(143,361)

Opendoor (OPEN)

SmartRent (SMRT)

1,305

(44,363)

Sonder (SOND)

(320)

(506)

Sonder (SOND)

Sunnova (NOVA)

(24,466)

(75,041)

Lennar Other unrealized losses from technology investments

(23,954)

(395,170)

Lennar Other unrealized losses from technology investments

Doma Holdings, Inc. ~~("Doma"~~(“Doma”), which went public during the year ended November 30, 2021, is an investment that ~~continues to be~~was accounted for under the equity method due to the Company's significant ownership interest of 25% of Doma which ~~allows~~allowed the Company to exercise significant influence. As of February ~~28, 2023,~~29, 2024, the ~~Company owned approximately 25%~~Company’s carrying value in Doma was zero as a result of allocated losses from Doma.

~~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)

February 28, 2023

November 30, 2022

(In thousands)

February 29, 2024

November 30, 2023

Investments in unconsolidated entities (1) (2)

1,178,802

1,173,164

Underlying equity in unconsolidated entities' net assets (1)

1,524,006

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.~~FivePoint.

(2)Included in the Company's recorded investments in Homebuilding unconsolidated entities is the Company's 40% ownership of FivePoint. As of February ~~28, 2023~~29, 2024 and November 30, ~~2022,~~2023, the carrying amount of the Company's investment was ~~$395.3~~$444.5 million and ~~$382.9~~$422.2 million, respectively.

As of February ~~28, 2023~~29, 2024 and November 30, ~~2022,~~2023, the Homebuilding segment's unconsolidated entities had non-recourse debt with completion guarantees of ~~$340.2~~$279.6 million and ~~$333.6~~$316.5 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 February ~~28, 2023~~29, 2024 and November 30, ~~2022,~~2023, the fair values of the repayment guarantees, maintenance guarantees, and completion guarantees were not material. The Company believes that as of February ~~28, 2023,~~29, 2024, 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.~~2023.

In 2021, the Company formed the Upward America Venture LP ("(“Upward ~~America"~~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 the 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 February ~~28, 2023~~29, 2024 and November 30, ~~2022,~~2023, the carrying amount of the Company's investment in Upward America was ~~$34.3~~$11.2 million and ~~$37.7~~$14.8 million, respectively.

Lennar Corporation and Subsidiaries

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

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~~have 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.~~2023. As of both February ~~28, 2023~~29, 2024 and November 30, ~~2022,~~2023, the fair value of the completion guarantees was immaterial. As of February ~~28, 2023~~29, 2024 and November 30, ~~2022,~~2023, Multifamily segment's unconsolidated entities had non-recourse debt with completion guarantees of ~~$1.2~~$1.1 billion and ~~$1.0~~$1.4 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, JV and fund has unilateral decision making rights related to development and other sales activity through its executive committee or asset management committee. 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. In some situations, the Multifamily segment sells land to various joint ventures and funds. The details of the activity were as follows:

Three Months Ended

(In thousands)

February 28,

(In thousands)

2023

2022

General contractor services, net of deferrals

125,402

117,263

General contractor services, net of deferrals

General contractor costs

120,733

113,233

Land sales to joint ventures

—

131,553

General contractor costs

Management fee income, net of deferrals

18,121

13,127

Management fee income, net of deferrals

The Multifamily segment includes managing and investing in Multifamily Venture Fund I ("(“LMV I"I”), Multifamily Venture Fund II LP ("(“LMV ~~II"~~II”) and Canada Pension Plan Investments Fund (the ~~"Fund"~~“CPPIB Fund”), which are long-term multifamily development investment vehicles

~~Lennar Corporation and Subsidiaries~~

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

involved in the development, construction and property management of class-A multifamily assets. The Multifamily segment completed the initial closing of the CPPIB Fund. The Multifamily segment expects the CPPIB Fund to have almost $1$1.0 billion in equity and Lennar's ownership percentage in the CPPIB Fund is 4%. ~~The~~As of February 29, 2024, the Company ~~currently has~~had a ~~$20.3~~$23.1 million investment in the CPPIB Fund. Additional dollars will be committed as opportunities are identified by the ~~Fund~~CPPIB Fund.

Details of LMV I and LMV II as of and during the three months ended February ~~28, 2023~~29, 2024 are included below:

February 28, 2023

February 29, 2024

(In thousands)

LMV I

LMV II

(In thousands)

LMV I

LMV II

Lennar's carrying value of investments

211,275

290,766

Equity commitments

2,204,016

1,257,700

Equity commitments called

2,154,328

1,141,649

Lennar's equity commitments

504,016

381,000

Lennar's equity commitments called

500,381

366,804

Lennar's remaining commitments (1)

3,635

14,196

Distributions to Lennar during the three months ended February 28, 2023

—

Distributions to Lennar during the three months ended February 29, 2024

(1)While there are remaining commitments with LMV I and LMV II, there are no plans for additional capital calls.

Other Unconsolidated Entities

Lennar Other's unconsolidated entities ~~includes~~include 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 ~~and investment vehicles~~ totaled ~~$177.7~~$142.2 million and ~~$185.1~~$148.7 million as of February ~~28, 2023~~29, 2024 and November 30, ~~2022,~~2023, 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 with a carrying value of ~~$137.9~~$147.5 million and ~~$131.5~~$127.5 million, as of February ~~28, 2023~~29, 2024 and November 30, ~~2022,~~2023, respectively.

Lennar Corporation and Subsidiaries

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

(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 months ended February 29, 2024 and February 28, ~~2023 and 2022:~~2023:


	Three Months Ended February 29, 2024
(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 November 30, 2023	$	26,701,966	25,848	3,660	5,570,009	(1,393,100)	4,879	22,369,368	121,302
Net earnings (including net earnings attributable to noncontrolling interests)	719,921		—	—	—	—	—	719,334	587
Employee stock and directors plans	(83,473)		135	—	(65)	(83,543)	—	—	—

Purchases of treasury stock	(511,557)		—	—	—	(511,557)	—	—	—




Amortization of restricted stock	87,680		—	—	87,680	—	—	—	—
Cash dividends	(139,387)		—	—	—	—	—	(139,387)	—

Receipts related to noncontrolling interests	5,796		—	—	—	—	—	—	5,796
Payments related to noncontrolling interests	(1,979)		—	—	—	—	—	—	(1,979)
Non-cash purchase or activity of noncontrolling interests, net	(1,399)		—	—	(5,788)	—	—	—	4,389



Total other comprehensive income, net of tax	362		—	—	—	—	362	—	—
Balance at February 29, 2024	$	26,777,930	25,983	3,660	5,651,836	(1,988,200)	5,241	22,949,315	130,095


	Three Months Ended February 28, 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 November 30, 2022	$	24,240,367	25,608	3,660	5,417,796	(210,389)	2,408	18,861,417	139,867
Net earnings (including net earnings attributable to noncontrolling interests)	599,308		—	—	—	—	—	596,534	2,774
Employee stock and directors plans	(66,990)		226	—	(189)	(67,027)	—	—	—

Purchases of treasury stock	(190,931)		—	—	—	(190,931)	—	—	—



Amortization of restricted stock	86,558		—	—	86,558	—	—	—	—
Cash dividends	(107,891)		—	—	—	—	—	(107,891)	—

Receipts related to noncontrolling interests	2,497		—	—	—	—	—	—	2,497
Payments related to noncontrolling interests	(21,256)		—	—	—	—	—	—	(21,256)

Non-cash purchase or activity of noncontrolling interests, net	12,774		—	—	(376)	—	—	—	13,150


Total other comprehensive income, net of tax	851		—	—	—	—	851	—	—
Balance at February 28, 2023	$	24,555,287	25,834	3,660	5,503,789	(468,347)	3,259	19,350,060	137,032

~~Lennar Corporation and Subsidiaries~~

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

Three Months Ended February 28, 2022
(In thousands) Total
Equity Class A
Common Stock Class B
Common Stock Additional
Paid - in Capital Treasury
Stock Accumulated Other Comprehensive Income (Loss) Retained
Earnings Noncontrolling
Interests
Balance at November 30, 2021 $ 20,996,282 30,050 3,944 8,807,891 (2,709,448) (1,341) 14,685,329 179,857
Net earnings (including net earnings attributable to noncontrolling interests) 509,315 — — — — — 503,581 5,734
Employee stock and directors plans (54,886) 193 — (140) (54,939) — — —
Purchases of treasury stock (526,361) — — — (526,361) — — —
Amortization of restricted stock 81,457 — — 81,457 — — — —
Cash dividends (110,122) — — — — — (110,122) —
Receipts related to noncontrolling interests 6,984 — — — — — — 6,984
Payments related to noncontrolling interests (59,388) — — — — — — (59,388)
Non-cash purchase or activity of noncontrolling interests, net 1,124 — — (34,057) — — — 35,181
Total other comprehensive income, net of tax 3,027 — — — — 3,027 — —
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

On February ~~10, 2023,~~7, 2024, the Company paid a quarterly cash ~~dividends~~dividend of ~~$0.375~~$0.50 per share onfor both of its Class A and Class B common stock to holders of record at the close of business on January ~~27, 2023,~~24, 2024, as declared by its Board of Directors on January ~~12, 2023.~~9, 2024. The Company approved and paid cash dividends of $0.375 per share for each of the four quarters of ~~2022~~2023 on both its Class A and Class B common stock.

Lennar Corporation and Subsidiaries

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

In March 2022, the Company's Board of Directors approved an authorization for the Company to repurchase up to the lesser of $2 billion in value, or 30 million in shares, of its outstanding Class A or Class B common stock. The repurchase authorization has no expiration date. The authorization was in addition to what was remaining of the October 2021 stock repurchase program. In January 2024, the Company's Board of Directors authorized an increase to its stock repurchase program to enable it to repurchase up to an additional $5 billion in value of its outstanding Class A or Class B common stock. Repurchases are authorized to be made in open-market or private transactions. The repurchase authorization has no expiration date.The following table ~~represents~~sets forth the repurchases of the Company's Class A and Class B common stock under the authorized repurchase programs:


		Three Months Ended
		Three Months Ended
		Three Months Ended
		Three Months Ended
		February 29, 2024
		February 28,
		February 29, 2024
		2023				2022
		February 29, 2024
(Dollars in thousands, except price per share)
(Dollars in thousands, except price per share)
(Dollars in thousands, except price per share)	(Dollars in thousands, except price per share)	Class A		Class B		Class A		Class B
Shares repurchased	Shares repurchased	1,446,205		553,795		4,616,000		652,000
Shares repurchased
Shares repurchased
Total purchase price
Total purchase price
Total purchase price	Total purchase price	$	143,068	$	46,105	$	472,924	$	53,331
Average price per share	Average price per share	$	98.93	$	83.25	$	102.45	$	81.80
Average price per share
Average price per share

(5)Income Taxes

The provision for income taxes and effective tax rate were as follows:

Three Months Ended

(Dollars in thousands)

February 28,

(Dollars in thousands)

2023

2022

Provision for income taxes

$185,145

167,420

Provision for income taxes

Effective tax rate (1)

23.7%

25.0%

Effective tax rate (1)

(1)In the three months ended February ~~28, 2023,~~29, 2024, the Company's overall effective income tax rate was lower than in the three months ended February 28, ~~2022,~~2023, primarily due to ~~the reinstatement of the new energy efficient home credit as a result of the enactment of the Inflation Reduction Act during the third quarter of 2022.~~excess tax benefits from share-based compensation. For both the three months ended February 29, 2024 and February 28, 2023, ~~and 2022,~~ the effective tax rate included state income tax expense and non-deductible executive compensation, partially offset by energy efficient home and solar tax credits.

~~Lennar Corporation and Subsidiaries~~

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

(6)Earnings Per Share

Basic earnings per share is computed by dividing net earnings attributable to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company.

All outstanding nonvested shares that contain non-forfeitable rights to dividends or dividend equivalents that participate in undistributed earnings with common stock are considered participating securities and are included in computing earnings per share pursuant to the two-class method. The two-class method is an earnings allocation formula that determines earnings per share for each class of common stock and participating securities according to dividends or dividend equivalents and participation rights in undistributed earnings. The Company’s restricted common stock ("(“nonvested ~~shares"~~shares”) is considered participating securities.

Basic and diluted earnings per share were calculated as follows:

Three Months Ended

(In thousands, except per share amounts)

February 28,

(In thousands, except per share amounts)

2023

2022

Numerator:

Net earnings attributable to Lennar

596,534

503,581

Less: distributed earnings allocated to nonvested shares

724

780

Less: distributed earnings allocated to nonvested shares

Less: undistributed earnings allocated to nonvested shares

5,895

4,548

Numerator for basic earnings per share

589,915

498,253

Numerator for basic earnings per share

Less: net amount attributable to Rialto's Carried Interest Incentive Plan (1)

1,038

1,798

Numerator for diluted earnings per share

588,877

496,455

Numerator for diluted earnings per share

Denominator:

Denominator for basic earnings per share - weighted average common shares outstanding

286,074

293,930

Denominator for diluted earnings per share - weighted average common shares outstanding

286,074

293,930

Denominator for diluted earnings per share - weighted average common shares outstanding

Basic earnings per share

2.06

1.70

Diluted earnings per share

2.06

1.69

Diluted earnings per share

(1)The ~~amounts~~amount presented relate to Rialto's Carried Interest Incentive Plan and ~~represent~~represents the difference between the advanced tax distributions received from the Rialto funds included in the Lennar Other segment and the amount Lennar is assumed to own.

Lennar Corporation and Subsidiaries

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

For both the three months ended February 29, 2024 and February 28, 2023, ~~and 2022,~~ there were no options to purchase shares of common stock that were outstanding and anti-dilutive.

(7)Homebuilding Senior Notes and Other Debts Payable


(Dollars in thousands)	(Dollars in thousands)	February 28, 2023		November 30, 2022	(Dollars in thousands)	February 29, 2024	November 30, 2023

4.875% senior notes due December 2023		$	399,369	399,169

4.50% senior notes due 2024	4.50% senior notes due 2024	649,156		648,975
5.875% senior notes due 2024		432,961		434,128

4.50% senior notes due 2024

4.50% senior notes due 2024

4.75% senior notes due 2025
4.75% senior notes due 2025
4.75% senior notes due 2025	4.75% senior notes due 2025	499,003		498,892
5.25% senior notes due 2026	5.25% senior notes due 2026	403,953		404,257
5.00% senior notes due 2027	5.00% senior notes due 2027	351,645		351,741
4.75% senior notes due 2027	4.75% senior notes due 2027	896,446		896,259

Mortgage notes on land and other debt	Mortgage notes on land and other debt	400,802		413,873
		$	4,033,335	4,047,294
Mortgage notes on land and other debt
Mortgage notes on land and other debt
	$

The carrying amounts of the senior notes in the table above are net of debt issuance costs of ~~$6.9~~$3.8 million and ~~$7.6~~$4.2 million as of February ~~28, 2023~~29, 2024 and November 30, ~~2022,~~2023, respectively.

~~Lennar Corporation and Subsidiaries~~

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

The maximum available borrowings on the Company's unsecured revolving credit facility (the ~~"Credit Facility"~~“Credit Facility”) were as follows:


(In thousands)	February ~~28, 2023~~29, 2024
~~Commitment~~Commitments - maturing in April 2024	$	350,000
~~Commitment~~Commitments - maturing in May 2027	2,225,000
Total ~~commitment~~commitments	$	2,575,000
Accordion feature	425,000
Total maximum borrowings capacity	$	3,000,000

The proceeds available under the Credit Facility, which are subject to specified conditions for borrowing, may be used for working capital and general corporate purposes. The ~~credit agreement~~Credit Facility also provides that up to $500 million in commitments may be used for letters of credit. The maturity, debt covenants and details of the Credit Facility are unchanged from the disclosure in the Company's Financial Condition and Capital Resources section in its Annual Report on Form 10-K for the year ended November 30, ~~2022.~~2023. In addition to the Credit Facility, the Company has other letter of credit facilities with different financial institutions.

The Company's processes for posting performance and financial letters of credit and surety bonds are unchanged from the disclosure in the Company's Financial Condition and Capital Resources section in its Annual Report on Form 10-K for the year ended November 30, ~~2022.~~2023. The Company's outstanding ~~performance~~ letters of credit and surety bonds are disclosed below:

(In thousands)

February 28, 2023

November 30, 2022

(In thousands)

February 29, 2024

November 30, 2023

Performance letters of credit

1,236,516

1,259,033

Financial letters of credit

457,117

503,659

Surety bonds

4,166,287

4,136,715

Anticipated future costs primarily for site improvements related to performance surety bonds

2,288,199

2,273,694

All of the senior notes are guaranteed by certain of the Company's 100% owned subsidiaries, which are primarily homebuilding subsidiaries. The guarantees are full and unconditional. The terms of guarantees are unchanged from the disclosure in the Company's Financial Condition and Capital Resources section in its Annual Report on Form 10-K for the year ended November 30, ~~2022.~~

~~(8)Product Warranty~~

Warranty and similar reserves for homes are established at an amount estimated to be adequate to cover potential costs for materials and labor with regard to warranty-type claims expected to be incurred subsequent to the delivery of a home. Reserves are determined based on historical data and trends with respect to similar product types and geographical areas. The activity in the Company’s warranty reserve, which is included in Homebuilding other liabilities, was as follows:
Three Months Ended
February 28,
(In thousands) 2023 2022
Warranty reserve, beginning of the period $ 418,017 377,021
Warranties issued 53,679 49,192
Adjustments to pre-existing warranties from changes in estimates (1) (4,058) 4,724
Payments (64,304) (56,791)
Warranty reserve, end of period $ 403,334 374,146

~~(1)~~The adjustments to pre-existing warranties from changes in estimates during the three months ended February 28, 2023 and 2022 primarily related to specific claims in certain of the Company's homebuilding communities and other adjustments.2023.

Lennar Corporation and Subsidiaries

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

~~(9)~~(8)Financial Instruments and Fair Value Disclosures

The following table presents the carrying amounts and estimated fair values of financial instruments held or issued by the Company at February ~~28, 2023~~29, 2024 and November 30, ~~2022,~~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.

February 28, 2023

November 30, 2022

February 29, 2024

(In thousands)

Fair Value Hierarchy

Carrying Amount

Fair Value

Carrying Amount

Fair Value

ASSETS

Financial Services:

Loans held-for-investment, net

Level 3

45,327

45,334

45,636

45,647

Loans held-for-investment, net

Investments held-to-maturity

Level 3

141,854

141,767

143,251

143,208

LIABILITIES

Homebuilding senior notes and other debts payable, net

Level 2

4,033,335

3,958,592

4,047,294

3,993,242

Financial Services notes and other debts payable, net

Level 2

1,171,638

1,172,302

2,135,093

2,135,797

Financial Services notes and other debts payable, net

Multifamily notes payable, net

Level 2

16,828

16,749

The following methods and assumptions are used by the Company in estimating fair values:

Financial Services - —The fair values above are based on quoted market prices, if available. The fair values for instruments that do not have quoted market prices are estimated by the Company on the basis of discounted cash flows or other financial information. For notes and other debts payable, the fair values approximate their carrying value due to variable interest pricing terms and the short-term nature of the majority of the borrowings.

Homebuilding - —For senior notes and other debts payable, the fair value of fixed-rate borrowings is primarily based on quoted market prices and the fair value of variable-rate borrowings is based on expected future cash flows calculated using current market forward rates.

Multifamily - —For notes payable, the fair values approximate their carrying value due to variable interest pricing terms and the short-term nature of the borrowings.

Fair Value Measurements:

GAAP provides a framework for measuring fair value, expands disclosures about fair value measurements and establishes a fair value hierarchy which prioritizes the inputs used in measuring fair value summarized as follows:

Level 1: Fair value determined based on quoted prices in active markets for identical assets.

Level 2: Fair value determined using significant other observable inputs.

Level 3: Fair value determined using significant unobservable inputs.

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

Fair Value Hierarchy

Fair Value at

Fair Value Hierarchy

Fair Value at

(In thousands)

Fair Value Hierarchy

February 28, 2023

November 30, 2022

(In thousands)

February 29, 2024

November 30, 2023

Financial Services Assets:

Residential loans held-for-sale

Level 2

1,207,631

1,750,712

LMF Commercial loans held-for-sale

Level 3

25,835

25,599

Mortgage servicing rights

Level 3

3,450

3,463

Mortgage servicing rights

Forward options

Level 1

6,167

9,473

Lennar Other:

Lennar Other Assets:

Investments in equity securities

Level 1

189,324

212,981

Investments available-for-sale

Level 3

36,332

35,482

Lennar Corporation and Subsidiaries

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

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

February 29, 2024

November 30, 2023

February 28, 2023

November 30, 2022

(In thousands)

Aggregate Principal Balance

Change in Fair Value

Aggregate Principal Balance

Change in Fair Value

Aggregate Principal Balance

Change in Fair Value

Aggregate Principal Balance

Change in Fair Value

Residential loans held-for-sale

1,222,860

(15,229)

1,734,480

16,233

Residential loans held-for-sale

LMF Commercial loans held-for-sale

26,280

(445)

24,000

1,599

Financial Services residential loans held-for-sale - Fair value is based on independent quoted market prices, where available, or the prices for other mortgage whole loans with similar characteristics. The Company recognizes the fair value of its rights to service a mortgage loan as revenue upon entering into an interest rate lock loan commitment with a borrower. The fair value of these are included in Financial Services’ loans held-for-sale as of February ~~28, 2023~~29, 2024 and November 30, ~~2022.~~2023. Fair value of servicing rights is determined based on actual sales of servicing rights on loans with similar characteristics.

LMF Commercial loans held-for-sale - The fair value of commercial loans held-for-sale is calculated from model-based techniques that use discounted cash flow assumptions and the Company’s own estimates of CMBS spreads, market interest rate movements and the underlying loan credit quality. The details and methods of the calculation are unchanged from the fair value 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.~~2023. These methods use unobservable inputs in estimating a discount rate that is used to assign a value to each loan. While the cash payments on the loans are contractual, the discount rate used and assumptions regarding the relative size of each class in the CMBS capital structure can significantly impact the valuation. Therefore, the estimates used could differ materially from the fair value determined when the loans are sold to a securitization trust.

Mortgage servicing rights - Financial Services records mortgage servicing rights when it sells loans on a servicing-retained basis or through the acquisition or assumption of the right to service a financial asset. The fair value of the mortgage servicing rights is calculated using third-party valuations. 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 February 29, 2024
		As of February 29, 2024
		As of February 29, 2024					As of November 30, 2023
Unobservable inputs	Unobservable inputs	As of February 28, 2023	As of November 30, 2022

Mortgage prepayment rate
Mortgage prepayment rate
Mortgage prepayment rate	Mortgage prepayment rate	8%	8%	8%		8%
Discount rate	Discount rate	13%	13%	Discount rate	13%		13%
Delinquency rate	Delinquency rate	8%	7%	Delinquency rate	9%		9%

Forward options - Fair value of forward options is based on independent quoted market prices for similar financial instruments. The fair value of these are included in Financial Services' other assets and the Company recognizes the changes in the fair value of the premium paid as Financial Services' Revenue.

Lennar Other investments in equity securities - The fair value of investments in equity securities was calculated based on independent quoted market prices. The Company’s investments in equity securities were recorded at fair value with all changes in fair value recorded to Lennar Other unrealized ~~gain (loss)~~gains (losses) from technology investments on the Company’s condensed consolidated statements of operations and comprehensive income.

Lennar Other investments available-for-sale - The fair value of investments available-for-sale is calculated from model-based techniques that use discounted cash flow assumptions and the Company’s own estimates of CMBS spreads, market interest rate movements and the underlying loan credit quality. Loan values are calculated by allocating the change in value of an assumed CMBS capital structure to each loan. The value of an assumed CMBS capital structure is calculated, generally, by discounting the cash flows associated with each CMBS class at market interest rates and at the Company’s own estimate of CMBS spreads.

Lennar Corporation and Subsidiaries

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

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 Ended

(In thousands)

February 28,

(In thousands)

2023

2022

Changes in fair value included in Financial Services revenues:

Loans held-for-sale

(31,462)

(27,387)

Mortgage loan commitments

(48,844)

13,797

Mortgage loan commitments

Forward contracts

91,509

9,900

Forward contracts

Forward options

(852)

—

Changes in fair value included in Lennar Other unrealized loss from technology investments:

Forward options

Changes in fair value included in Lennar Other unrealized losses from technology investments:

Investments in equity securities

(23,954)

(395,170)

Changes in fair value included in other comprehensive income, net of tax:

Lennar Other investments available-for-sale

851

742

Interest on Financial Services loans held-for-sale and LMF Commercial loans held-for-sale measured at fair value is calculated based on the interest rate of the loans and recorded as revenues in the Financial Services’ statement of operations.

The following table ~~represents~~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
		Three Months Ended
		Three Months Ended
		Three Months Ended
		February 29, 2024
		February 28,
		February 29, 2024
		2023			2022
		February 29, 2024
(In thousands)
(In thousands)
(In thousands)	(In thousands)	Mortgage servicing rights		LMF Commercial loans held-for-sale	Mortgage servicing rights	LMF Commercial loans held-for-sale
Beginning balance	Beginning balance	$	3,463	25,599	2,492	68
Beginning balance
Beginning balance
Purchases/loan originations
Purchases/loan originations
Purchases/loan originations	Purchases/loan originations	51		79,480	82	264,845
Sales/loan originations sold, including those not settled	Sales/loan originations sold, including those not settled	—		(77,200)	—	(178,082)
Sales/loan originations sold, including those not settled
Sales/loan originations sold, including those not settled
Disposals/settlements
Disposals/settlements
Disposals/settlements	Disposals/settlements	(63)		—	(159)	—
Changes in fair value (1)	Changes in fair value (1)	(1)		(445)	378	(590)
Changes in fair value (1)
Changes in fair value (1)
Interest and principal paydowns
Interest and principal paydowns
Interest and principal paydowns	Interest and principal paydowns	—		(1,599)	—	(446)
Ending balance	Ending balance	$	3,450	25,835	2,793	85,795
Ending balance
Ending balance

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

The Company’s assets measured at fair value on a nonrecurring basis are those assets for which the Company has recorded valuation adjustments and write-offs. The fair values included in the table below represent only those assets whose carrying values were adjusted to fair value during the respective periods disclosed. The assets measured at fair value on a nonrecurring basis are summarized below:

Three Months Ended

February 28,

2023

2022

Three Months Ended

February 29, 2024

February 28, 2023

(In thousands)

Fair Value
Hierarchy

Carrying Value

Fair Value

Total Losses, Net (1)

Carrying Value

Fair Value

Total Losses, Net (1)

(In thousands)

Fair Value
Hierarchy

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

164,544

158,237

(6,307)

15,358

13,841

(1,517)

Land and land under development (2)

Level 3

39,616

23,142

(16,474)

20,752

10,760

(9,992)

Other assets (3)

Level 3

3,065

—

(3,065)

—

Non-financial assets - Homebuilding:

Finished homes and construction in progress (2)

Land and land under development (2)

Investments in unconsolidated entities (3)

(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. During the three months ended February 29, 2024 and February 28, 2023, total losses, net, for land and land ~~underdevelopment~~under development included $2.9 million and $14.5 million, respectively, of deposit and pre-acquisition cost write-offs.

(3)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 months ended February 28, 2023.

Finished homes and construction in progress are included within inventories. Inventories are stated at cost unless the inventory within a community is determined to be impaired, in which case the impaired inventory is written down to fair value. The Company disclosed its accounting policy related to inventories and its review for indicators of impairment in the Summary

Lennar Corporation and Subsidiaries

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

~~The Company disclosed its accounting policy related to inventories and its review for indicators of impairment in the Summary~~ of Significant Accounting Policies in its Annual Report on Form 10-K for the year ended November 30, ~~2022.~~2023.

The Company estimates the fair value of inventory evaluated for impairment based on market conditions and assumptions made by management at the time the inventory is evaluated, which may differ materially from actual results if market conditions or assumptions change. For example, changes in market conditions and other specific developments or changes in assumptions may cause the Company to re-evaluate its strategy regarding previously impaired inventory, as well as inventory not currently impaired but for which indicators of impairment may arise if market deterioration occurs, and certain other assets that could result in further valuation adjustments and/or additional write-offs of option deposits and pre-acquisition costs due to abandonment of those options contracts.

On a quarterly basis, the Company reviews its active communities for indicators of potential impairments. The table below summarizes communities reviewed for indicators of impairment and communities with valuation adjustments recorded:

Communities with valuation adjustments

At or for the Three Months Ended

# of active communities

# of communities with potential indicator of impairment

# of communities

Fair Value

(in thousands)

Valuation Adjustments

(in thousands)

At or for the Three Months Ended

# of active communities

# of communities with potential indicator of impairment

# of communities

Fair Value

(in thousands)

Valuation Adjustments

(in thousands)

February 29, 2024

February 28, 2023

1,210

—

February 28, 2022

1,199

—

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:


	Three Months Ended
	February 29, 2024
Unobservable inputs	Range
Average selling price (1)	$178,000	—	197,000
Absorption rate per quarter (homes)	10	—	13
Discount rate	20%

(1)Represents the projected average selling price on future deliveries for communities in which the Company recorded valuation adjustments during the quarter ended February 29, 2024.

The Company disclosed its accounting policy related to investments in unconsolidated entities and its review for indicators of impairment for the long-lived assets of an unconsolidated entity and the decline in the fair value of an investment below the carrying value in the Summary of Significant Accounting Policies in its Annual Report on Form 10-K for the year ended November 30, 2023.

The Company evaluates if a decrease in the fair value of an investment below the carrying value is other-than-temporary. This evaluation includes certain critical assumptions made by management: (1) projected future distributions from the unconsolidated entities, (2) discount rates applied to the future distributions, (3) the length of the time and the extent to which the market value has been less than cost and (4) various other factors, which include age of the venture, relationships with the other partners and banks, general economic market conditions, land status, length of the time and the extent to which the market value has been below the carrying value, and liquidity needs of the unconsolidated entity. The Company generally estimates the fair value of an investment in an unconsolidated entity by using a cash flow analysis for estimated future net distributions from an unconsolidated entity, subject to the perceived risks associated with the unconsolidated entity’s cash flow streams. During the three months ended February 29, 2024, the Company evaluated the fair value of its investments in unconsolidated entities using a cash flow analysis and concluded that the investments had no other-than-temporary impairment.

The Company estimates the fair value of investments in unconsolidated entities evaluated for impairment based on market conditions and assumptions made by management at the time the investment is evaluated, which may differ materially from actual results if market conditions or assumptions change.

~~(10)~~(9)Variable Interest Entities

~~The~~During the three months ended February 29, 2024, the Company evaluated the joint venture ~~("JV"~~(“JV”) agreements of its JV's that were formed or that had reconsideration events, such as changes in the governing documents or to debt arrangements. Based on the Company's evaluation, there were no variable interest entities ~~("VIEs"~~(“VIEs”) that were consolidated or deconsolidated during the three months ended February ~~28, 2023.~~29, 2024.

The carrying amount of the Company's consolidated VIEs' assets and non-recourse liabilities are disclosed in the footnote to the condensed consolidated balance sheets.

Lennar Corporation and Subsidiaries

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

A VIE’s assets can only be used to settle obligations of that VIE. The VIEs are not guarantors of the Company’s senior notes or other debts payable. The assets held by a VIE are usually a collateral for that VIE’s debt. The Company and other partners do not generally have an obligation to make capital contributions to a VIE unless the Company and/or the other partner(s) have entered into debt guarantees with VIE’s lenders. Other than debt guarantee agreements with VIE’s lenders, there are no liquidity arrangements or agreements to fund capital or purchase assets that could require the Company to provide financial support to a VIE. While the Company has option contracts to purchase land from certain of its VIEs, the Company is not required to purchase the assets and could walk away from the ~~contracts.~~contracts, but that would require forfeiture of deposits and pre-acquisition costs.

Unconsolidated VIEs

The Company’s recorded investments in VIEs that are unconsolidated and related estimated maximum exposure to loss were as follows:


		February 28, 2023			November 30, 2022
	February 29, 2024									February 29, 2024		November 30, 2023
(In thousands)	(In thousands)	Investments in Unconsolidated VIEs		Lennar’s Maximum Exposure to Loss	Investments in Unconsolidated VIEs	Lennar’s Maximum Exposure to Loss	(In thousands)	Investments in Unconsolidated VIEs	Lennar’s Maximum Exposure to Loss		Investments in Unconsolidated VIEs		Lennar’s Maximum Exposure to Loss
Homebuilding (1)	Homebuilding (1)	$	637,253	720,432	586,935	718,719
Multifamily (2)	Multifamily (2)	384,537		403,752	607,484	633,934
Financial Services (3)	Financial Services (3)	141,854		141,854	143,251	143,251
Lennar Other (4)	Lennar Other (4)	63,349		63,349	55,952	55,952
		$	1,226,993	1,329,387	1,393,622	1,551,856
	$

(1)As of February ~~28, 2023~~29, 2024 and November 30, ~~2022,~~2023, the Company's maximum exposure to loss of Homebuilding's investments in unconsolidated VIEs was limited to its investments in unconsolidated VIEs, except with regard to the Company's remaining ~~$68.6 million and $77.3 million, respectively,~~ commitment to fund capital in Upward ~~America.~~America of $68.8 million and $69.8 million, respectively. In addition, as of February ~~28,~~29, 2024 and November 30, 2023, there was recourse debt of a VIE of ~~$10.5~~$42.0 million and ~~as of November 30, 2022, there was $52.7~~$42.1 million, ~~of receivables relating to a short-term loan and management fee owed to the Company by Upward America.~~respectively.

(2)As of February ~~28, 2023~~29, 2024 and November 30, ~~2022,~~2023, the Company's maximum exposure to loss of Multifamily's investments in unconsolidated VIEs was primarily limited to its investments in the unconsolidated VIEs. The maximum exposure for LMV ~~1 and LMV~~ II, in addition to the investment, also included the remaining combined equity commitment of ~~$14.2 million and $19.3~~$12.8 million as of both February ~~28, 2023~~29, 2024 and November 30, ~~2022, respectively,~~2023 for future expenditures related to the construction and development of its projects. Decrease in exposure for the three months ended February 28, 2023 is primarily due to the removal of LMV I as the Fund does not expect to call for equity in the future. As a result, LMV I is not a VIE as of February 28, 2023.

(3)As of both February ~~28, 2023~~29, 2024 and November 30, ~~2022,~~2023, the Company's maximum exposure to loss of the Financial Services segment was limited to its investment in the unconsolidated VIEs and related to the Financial Services' CMBS investments held-to-maturity.

(4)~~As of~~At February ~~28, 2023,~~29, 2024, the Company's maximum recourse exposure to loss of the Lennar Other segment was limited to its investments in the unconsolidated VIEs.

~~Lennar Corporation and Subsidiaries~~

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

The Company and its JV partners generally fund JVs as needed and in accordance with business plans to allow the entities to finance their activities. Because such JVs are expected to make future capital calls in order to continue to finance their activities, the entities are determined to be VIEs as of February ~~28, 2023~~29, 2024 in accordance with ASC 810 due to insufficient equity at risk. While these entities are VIEs, the Company has determined that the power to direct the activities of the VIEs that most significantly impact the VIEs’ economic performance is generally shared and the Company and its partners are not de-facto agents. While the Company generally manages the day-to-day operations of the VIEs, each of these VIEs has an executive committee made up of representatives from each partner. The members of the executive committee have equal votes and major decisions require unanimous consent and approval from all members. The Company does not have the unilateral ability to exercise participating voting rights without partner consent.

There are no liquidity arrangements or agreements to fund capital or purchase assets that could require the Company to provide financial support to the VIEs. Except for the unconsolidated VIEs discussed above, the Company and the other partners did not guarantee any debt of the other unconsolidated VIEs. While the Company has option contracts to purchase land from certain of its unconsolidated VIEs, the Company is not required to purchase the assets and could walk away from the contracts.

Option Contracts

The Company has access to land through option contracts, which generally enable it to control portions of properties owned by third parties (including land ~~funds) and unconsolidated entities~~banks) until the Company has determined whether to exercise the options.

The Company evaluates option contracts with third party land holding companies ~~in which the Company holds option contracts~~ for land to determine whether they are VIEs and, if so, whether the Company is the primary beneficiary of certain of these ~~land holding companies.~~option contracts. Although the Company does not have legal title to the optioned land, if the Company is deemed to be the primary beneficiary, orand makes a significant deposit or pre-acquisition cost investment for optioned land, or is otherwise economically compelled to takedown the optioned land it may need to consolidate the ~~associated~~ land ~~holding company.~~under option at the purchase price of the optioned land. Land under option with third party holding companies that the Company was economically compelled to takedown was $1.9 billion as of February 29, 2024 and is included in consolidated inventory not ~~owned which was consolidated as a result of the Company being deemed the primary beneficiary of land holding companies was immaterial as of February 28, 2023. Therefore, consolidated~~owned. Consolidated inventory not owned ~~as of February 28, 2023 primarily consists of~~related to land ~~related~~financing transactions,

Lennar Corporation and Subsidiaries

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

which are land sale transactions that did not meet the criteria for revenue recognition and derecognition of land by the Company as a result of the Company maintaining an option to repurchase the land in the ~~future.~~future, was $1.7 billion as of February 29, 2024.

During the three months ended February ~~28, 2023,~~29, 2024, consolidated inventory not owned ~~decreased~~increased by ~~$107.8~~$555.4 million with a corresponding ~~decrease~~increase to liabilities related to consolidated inventory not owned in the accompanying condensed consolidated balance sheet as of February ~~28, 2023.~~29, 2024. The ~~decrease~~increase was primarily due to ~~an increase in~~land financing transactions and the consolidation of homesites under option that the Company is economically compelled to takedown. These increases were partially offset by homesite ~~takedowns in the quarter.~~takedowns. To reflect the purchase price of the homesite takedowns, the Company had a net reclass related to option deposits from consolidated inventory not owned to finished homes and construction in progress in the accompanying condensed consolidated balance sheet as of February ~~28, 2023.~~29, 2024. The liabilities related to consolidated inventory not owned primarily represent the difference between the option exercise prices for the optioned land and the Company’s cash deposits.

The Company's exposure to losses on its option contracts with third parties and unconsolidated entities ~~were~~was as follows:

(Dollars in thousands)

February 28, 2023

November 30, 2022

(Dollars in thousands)

February 29, 2024

November 30, 2023

Non-refundable option deposits and pre-acquisition costs

1,992,028

1,990,946

Non-refundable option deposits included in consolidated inventory not owned

Letters of credit in lieu of cash deposits under certain land and option contracts

140,002

163,942

For the three months ended February 29, 2024, the Company purchased a significant portion of land from one land bank (the “Land Bank”). There were no amounts due to the Land Bank as of February 29, 2024, resulting from land purchases as the full purchase price of the land is typically paid to the Land Bank at closing when land is purchased by the Company. As of February 29, 2024, the total deposits and pre-acquisition costs on real estate relating to contracts with the Land Bank were $669.9 million. As of February 29, 2024, total consolidated inventory not owned and liabilities related to consolidated inventory not owned relating to contracts with the Land Bank were $886.2 million and $749.2 million, respectively.

The Company believes there are other land banks that could be substituted should the Land Bank become unavailable or non-competitive with respect to land banking of future land. Thus, the Company does not believe that the loss of the Company’s relationship with this Land Bank would have a material adverse effect on the Company’s business, financial condition or cash flows.

~~(11)~~(10)Commitments and Contingent Liabilities

The Company is party to various claims, legal actions and complaints relating to homes sold by the Company arising in the ordinary course of business. In the opinion of management, the disposition of these matters will not have a material adverse effect on the Company’s condensed consolidated financial statements. From time to time, the Company is also a party to various lawsuits involving purchases and sales of real property. These lawsuits often include claims regarding representations and warranties made in connection with the transfer of properties and disputes regarding the obligation to purchase or sell properties.

The Company does not believe that the ultimate resolution of these claims or lawsuits will have a material adverse effect on its business or financial position. However, the financial effect of litigation concerning purchases and sales of property may depend upon the value of the subject property, which may have changed from the time the agreement for purchase or sale was entered into.

Product Warranty


	Three Months Ended

(In thousands)	February 29, 2024		February 28, 2023
Warranty reserve, beginning of the period	$	414,796	418,017
Warranties issued	61,776		53,679
Adjustments to pre-existing warranties from changes in estimates (1)	(2,904)		(4,058)

Payments	(68,110)		(64,304)
Warranty reserve, end of period	$	405,558	403,334

(1)The adjustments to pre-existing warranties from changes in estimates during the three months ended February 29, 2024 and February 28, 2023 primarily related to specific claims in certain of the Company's homebuilding communities and other adjustments.

Lennar Corporation and Subsidiaries

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

Leases

The Company has entered into agreements to lease certain office facilities and equipment under operating leases. The Company recognizes lease expense for these leases on a straight-line basis over the lease term. Right-of-use ~~("ROU"~~(“ROU”) assets and

~~Lennar Corporation and Subsidiaries~~

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

lease liabilities are recorded on the balance sheet for all leases, except leases with an initial term of 12 months or less. Many of the Company's leases include options to renew. The exercise of lease renewal options is at the Company's option and therefore renewal option payments have not been included in the ROU assets or lease liabilities. The following table includes additional information about the Company's leases:


(Dollars in thousands)	(Dollars in thousands)	February 28, 2023		November 30, 2022	(Dollars in thousands)	February 29, 2024	November 30, 2023
Right-of-use assets	Right-of-use assets	$	143,457	149,966
Lease liabilities	Lease liabilities	152,157		158,832
Weighted-average remaining lease term (in years)	Weighted-average remaining lease term (in years)	7.8		7.9	Weighted-average remaining lease term (in years)	5.0	7.5
Weighted-average discount rate	Weighted-average discount rate	3.1%		3.0%	Weighted-average discount rate	3.8%	3.4%

The Company has entered into agreements to lease certain office facilities and equipment under operating leases. Future minimum payments under the noncancellable leases in effect at February ~~28, 2023~~29, 2024 were as follows:


(In thousands)	(In thousands)	Lease Payments		(In thousands)	Lease Payments
2023		$	25,877
2024	2024	28,766
2025	2025	24,298
2026	2026	18,948
2027	2027	16,130
2027 and thereafter		56,957
2028 and thereafter

Total future minimum lease payments (1)
Total future minimum lease payments (1)
Total future minimum lease payments (1)	Total future minimum lease payments (1)	$	170,976
Less: Interest (2)	Less: Interest (2)	18,819
Present value of lease liabilities (2)	Present value of lease liabilities (2)	$	152,157

(1)Total future minimum lease payments exclude variable lease costs of ~~$22.7~~$15.3 million and short-term lease costs of ~~$2.7~~$2.4 million.

(2)The Company's leases do not include a readily determinable implicit rate. As such, the Company has estimated the discount rate for these leases to determine the present value of lease payments at the lease commencement date or as of December 1, 2019, which was the effective date of ASU 2016-02. The Company recognized the lease liabilities on its condensed consolidated balance sheets within accounts payable and other liabilities of the respective segments.

The Company's rental expense on lease liabilities were as follows:

Three Months Ended

February 28,

Three Months Ended

(In thousands)

2023

2022

(In thousands)

February 29, 2024

February 28, 2023

Rental expense

26,904

25,641

In December 2023, the Company purchased its corporate headquarters building in which the Company had previously leased office space. This building contains approximately 213,200 square feet of office space, of which the Company leases approximately 53,000 square feet of unused office space to other tenants.

On occasion, the Company may sublease rented space which is no longer used for the Company's operations. For both the three months ended February 29, 2024 and February 28, 2023, ~~and 2022,~~ the Company had an immaterial amount of sublease income.

2425

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements concern expectations, beliefs, projections, plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. These forward-looking statements typically include the words “anticipate,” “believe,” “consider,” “estimate,” “expect,” “forecast,” “intend,” “objective,” “plan,” “predict,” “projection,” “seek,” “strategy,” “target,” “will,” “may” or other words of similar meaning. Some of them are opinions formed based upon general observations, anecdotal evidence and industry experience, but that are not supported by specific investigation or analysis.

These forward-looking statements reflect our current views about future events and are subject to risks, uncertainties and assumptions. We wish to caution readers that certain important factors may have affected and could in the future affect our actual results and could cause actual results to differ significantly from what is anticipated by our forward-looking statements. The most important factors that could cause actual results to differ materially from those anticipated by our forward-looking statements include, but are not limited to: slowdowns in real estate markets in regions where we have significant Homebuilding or Multifamily development activities or own a substantial number of single-family homes for rent; decreased demand for our homes, either for sale or for rent, or Multifamily rental apartments; the potential impact of inflation; the impact of increased cost of mortgage financing for homebuyers, increased interest rates or increased competition in the mortgage industry; supply shortages and increased costs related to construction materials and labor; cost increases related to real estate taxes and insurance; the effect of increased interest rates with regard to our funds' borrowings on the willingness of the funds to invest in new projects; reductions in the market value of the Company's investments in public companies; natural disasters or catastrophic events for which our insurance may not provide adequate coverage; our inability to successfully execute our strategies, including our land lighter strategy and our planned spin-off of certain businesses and assets; a decline in the value of the land and home inventories we maintain and resulting possible future write downs of the carrying value of our real estate assets; the forfeiture of deposits related to land purchase options we decide not to exercise; the potential negative impact to our business of public health issues, including the coronavirus (COVID-19) pandemic; possible unfavorable outcomes in legal proceedings; changes in general economic and financial conditions that reduce demand for our products and services, lower our profit margins or reduce our access to credit; our inability to acquire land at anticipated prices; the possibility that we will incur nonrecurring costs that affect earnings in one or more reporting periods; the possibility that the benefit from our increasing use of technology will not justify its cost; increased competition for home sales from other sellers of new and resale homes; becoming unable to pay down debt; government actions or other factors that might force us to terminate our program of repurchasing our stock; the failure of the participants in various joint ventures to honor their commitments; difficulty obtaining land-use entitlements or construction financing; new laws or regulatory changes that adversely affect the profitability of our businesses (including changes in tax laws or liabilities); our inability to refinance our debt on terms that are as favorable as our current arrangements; and changes in accounting conventions that adversely affect our reported earnings.

Please see our Annual Report on Form 10-K for the fiscal year ended November 30, 2023 and our other filings with the SEC for a further discussion of these and other risks and uncertainties which could affect our future results. We undertake no obligation, other than those imposed by securities laws, to publicly revise any forward-looking statements to reflect events or circumstances after the date of those statements or to reflect the occurrence of anticipated or unanticipated events.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and accompanying notes included under Item 1 of this Quarterly Report on Form 10-Q and our audited consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for ~~our fiscal year ended November 30, 2022.~~

Some of the statements in this Management’s Discussion and Analysis of Financial Condition and Results of Operations, and elsewhere in this Quarterly Report on Form 10-Q, are "forward-looking statements," within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements typically include the words “anticipate,” “believe,” “consider,” “estimate,” “expect,” “forecast,” “intend,” “objective,” “plan,” “predict,” “projection,” “seek,” “strategy,” “target,” “will” or other words of similar meaning. Forward-looking statements contained herein may include opinions or beliefs regarding market conditions and similar matters. In many instances, those opinions and beliefs are based upon general observations by members of our management, anecdotal evidence and our experience in the conduct of our businesses, without specific investigations or analyses. Therefore, while they reflect our view of the industries and markets in which we are involved, they should not be viewed as reflecting verifiable views or views that are necessarily shared by all who are involved in those industries or markets. These statements concern expectations, beliefs, projections, plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts.

The forward-looking statements reflect our current views about future events and are subject to risks, uncertainties and assumptions. We wish to caution readers that certain important factors may have affected and could in the future affect our actual results and could cause actual results to differ significantly from what is anticipated by our forward-looking statements. The most important factors that could cause actual results to differ materially from those anticipated by our forward-looking statements include, but are not limited to: an extended slowdown in some or all of the real estate markets in which we have significant homebuilding activity, including a slowdown in either the market for single family homes or the multifamily rental market; changes in general economic and financial conditions that reduce demand for our products and services, lower our profit margins or reduce our access to credit; decreased demand for our homes or Multifamily rental properties; the impact of inflation or a higher interest rate environment; the effect of increased interest rates with regard to borrowings by the funds we manage on the willingness of those funds to invest in new projects; the effects of public health issues such as a major epidemic or pandemic that could have a negative impact on the economy and on our businesses; the duration, impact and severity of which is highly uncertain; supply shortages and increased costs related to construction materials and labor; cost increases related to real estate taxes and insurance; reduced availability or increased cost of mortgage financing for homebuyers; increased interest rates or increased competition in the mortgage industry; reductions in the market value of our investments in public companies; our inability to successfully execute our strategies, including our land lighter strategy and our strategy to monetize noncore assets; our inability to acquire land at anticipated prices; the possibility that we will incur nonrecurring costs that affect earnings in one or more reporting periods; increased competition for home sales from other sellers of new and resale homes; our inability to pay down debt; government actions or other factors that might force us to terminate our program of repurchasing our stock; a decline in the value of our land inventories and resulting write-downs of the carrying value of our real estate assets; the failure of the participants in various joint ventures to honor their commitments; difficulty obtaining land-use entitlements or construction financing; natural disasters and other unforeseen events for which our insurance does not provide adequate coverage; new laws or regulatory changes that adversely affect the profitability of our businesses; and our inability to refinance our debt on terms that are as favorable as our current arrangements.

~~Please see our Form 10-K for~~ the fiscal year ended November 30, 2022 and our other filings with the SEC for a further discussion of these and other risks and uncertainties which could affect our future results. We undertake no obligation, other than those imposed by securities laws, to publicly revise any forward-looking statements to reflect events or circumstances after the date of those statements or to reflect the occurrence of anticipated or unanticipated events.2023.

Outlook

~~In these extraordinarily difficult and volatile market conditions, the Lennar team has focused on our strategies, and we have executed with precision. We ended~~During the first quarter ~~with stronger-than-expected revenues and deliveries, strong profitability and cash flow, a fortified~~of fiscal 2024, we continued to execute our operating plan effectively, driving excellent operating results. We have never been better positioned, from balance sheet to execution to operating strategy, to address market conditions as they unfold for the remainder of 2024 and beyond.

Overall, the macroeconomic environment remains relatively strong ~~liquidity. Very~~for new homebuilders. There continues to be strong demand for housing, limited ~~new home inventory exists, existing home supply has fallen as existing homeowners hold on to extremely low mortgage rates, and multifamily production is very limited. This, combined with~~by the chronic housing ~~production shortfall over~~shortage, which is particularly problematic for working-class families. Demand from that group remains robust if homes can be built at an attainable price point. Generally speaking, consumers are employed and are confident that they will remain employed and that their compensation is likely to rise. This is most often the ~~past decade, leaves~~foundation of a strong housing market.

Along with supply shortage, the ~~industry in what we believe will be a fairly short duration correction without an inventory overhang to resolve.~~

The homebuilding industry has been experiencing strong headwinds and equally strong tailwinds. The headwinds have been defined by Federal Reserve-driven interest rate increases to combat high inflation. The tailwinds have been defined by housing shortages across the country resulting from production deficits over the past decade. While potential homebuyers remain challenged by affordability concerns, they are adjusting toadditional limiting factor remains affordability. With higher interest rates and ~~opting to purchase their homes. The housing supply shortage, especially workforce housing,~~stubborn inflation, affordability continues to ~~drive customers~~be tested as higher monthly payments make qualifying for a loan increasingly difficult. Inflation-driven higher cost-of-living expenses have made saving for a down payment increasingly difficult, and higher prices have begun to ~~stretch their wallet as~~lead to increased personal and credit card debt. We have started to see early evidence of possible debt delinquency derailing some mortgage applications.

Homebuilders have been uniquely able to capture demand by using incentives, including interest rate buy-downs, closing cost pickups and price reductions, to unlock affordability restraints and enable purchasers to buy homes.

Against this backdrop, during our first quarter, we focused on, and were consistent in executing, our core operating strategy. We continued to migrate to a pure play manufacturing model across each of our 40 homebuilding divisions in order to reduce production costs while generating consistent cash flow. We are re-engineering our products for efficiency and volume in order to enhance our inventory turn and grow volume. We have ~~worked~~also continued to ~~meet purchasers halfway. We believe the housing market is beginning~~migrate to ~~find~~ a ~~point of stabilization~~land light balance sheet in order to drive total shareholder return, return on inventory and ~~customers, both primary and institutional, are coming to grips with the new normal of higher but acceptable interest rates.~~return on equity.

We are ~~seeing the kind of volatility that~~operating under a model where we are starting homes at a pace designed to generate growth while we maximize logistics and efficiencies in order to benefit from reduced construction costs. Our trade partners are given visibility on our core operating strategy has been built to endure. With volume and production as constants, we use margin as our volatility shock absorber. If market conditions deteriorate, we compromise margin through price reductions and increased incentives, but we generate strong cash flow. If conditions improve, we improve margins and bottom line while also generating strong cash flow. Our primary focus is on cash flow.

~~We have remained steadfast in our adherence to the six core strategies we adopted when the Fed began its tightening program approximately one year ago~~timing so they can be more efficient, and we pass their efficiencies on to our customers through more affordable products. Our trade partners find that they have ~~added a seventh core~~consistent work with our production strategy,. which leads to higher productivity and, therefore, to cost savings. We gain by driving volume when others pull back.

•~~We will~~Our goal is even flow deliveries whereby starts continue to ~~utilize~~increase gradually quarter over quarter until we ultimately provide a consistent rate of deliveries throughout the year. A consistent level of starts maximizes the efficiencies for our ~~Dynamic Pricing Model~~trade partners. That in ~~conjunction~~turn attracts a larger trade base and, together with a normalized supply chain, has reduced the cycle time for us to build a home. Our average cycle time decreased in the first quarter by seven days from the fourth quarter of fiscal 2023 and was down 30% from the first quarter of fiscal 2023.

Driving our confidence to start homes at a pace that achieves maximum efficiency in the field is the Lennar machine. This is a combined program of digital marketing, ~~platform~~sales consultant engagement and dynamic pricing. If we build a home, we sell that home. We sell by digitally acquiring leads and referring the best of the leads to ~~focus on selling homes at market-clearing prices and drive volume~~our sales professionals. They nurture those leads while ~~building at a consistent pace~~our dynamic pricing model helps tailor pricing in real time to meet the ~~needs~~market in response to consumer desires, and market and competitive conditions. The dynamically adjusted pricing, using incentives or price alterations, automatically adjusts our margins up or down while we maintain production and sales pace.

We recognize that the chronic housing shortage is a critical issue. Working-class housing is essential to the effective working of ~~a supply-constrained~~our cities across the country. We are working on using our strategies for production and cost efficiencies to build housing ~~market.~~

•that is accessible to everyone. Land and impact fees are getting more expensive and labor costs have been rising. We ~~will work side-by-side~~can only reduce our costs by increasing productivity due to the efficiencies of our operations. We are building more consistent core products that are carefully value-engineered, and we are using our start pace to engineer our production cycle, which enables us to reduce our cycle time and, working with our trade partners, to ~~right-size our construction costs to current market conditions, while we re-establish cycle time at pre-supply chain crisis levels. We expect recently negotiated cost reductions to be reflected~~build efficiencies in ~~our reported numbers~~logistics and in ~~the back half of the year as cost reductions will improve lagging margins.~~

•We will continue to sharpen our attention on land and land acquisitions by relentlessly focusing on protecting cash and only purchasing land that delivers the next strong margin at today’s market pricing. We recognized early on that land would be expensive relative to reduced prices, and therefore, we reconsidered every land deal in our pipeline very early on and either walked from deposits or renegotiated terms and price to today’s market standards.

•We will manage our operating costs and reduce our S,G&A expense so that even at lower gross margins, we will drive a strong net margin. We have been improving our S,G&A leverage over the past years quarter-by-quarter to new record lows and many of those changes, though not all, are hardwired. Nevertheless, as average sales prices come down, the percentages won't hold without corresponding additional cuts. We also know that in more difficult times, there will be upward pressure on some of our sales, marketing and realtor costs in order to find purchasers and drive new sales.

•We will maintain tight inventory control. Inventory has remained flat as opposed to being lower year-over-year as one might expect, because of expanded cycle time due to the supply chain disruption. We expect to bring down our cycle time over the next few quarters. This will free up a significant amount of cash that currently is tied up in the increased inventory dollars related to homes under construction.

•We will continue to focus on our cash flow and bottom line to protect and enhance our already strong balance sheet. Although bottom line profitability will be compressed year-over-year as prices and margins are impacted in a correcting market, our balance sheet and our cash position will continue to improve. This will give us the flexibility to be opportunistic as market conditions stabilize as well as to undertake stock repurchases and debt reductions that improve total shareholder returns and return on equity.

•We have added an additional core strategy since last quarter-end. This is the strategy of continuous improvement throughout the company. We have created continuous improvement metrics for every leader in our company with a direct tie to performance measurement and bonus structure. We believe focusing on continuous improvement as a core strategy will help us continue to reach higher and drive harder to be the best version of ourselves.

We believe 2023 is going to be complicated and volatile as the Federal Reserve and Federal Government try to minimize the consequences of aggressive interest rate hikes. There is no way to anticipate with certainty what comes next, however, we have a plan to navigate the uncertainties of 2023 with a focus on maintaining volume, maximizing margin, managing inventories, driving cash flow, managing land ownership and land spend and further enhancing our balance sheet in spite of the challenging market conditions. While we're prepared for volatility and adversity along the way we ~~will~~run our community production.

We have intensified our focus on build-to-rent, both at community scale and in single-family-for-rent scattered home sale markets. We believe we can, and should, build additional production for professionally owned housing, but professional owners need cost efficiencies in today’s interest rate environment to make their rents attainable for families who aspire to a single-family lifestyle, but can’t yet afford a down payment or qualify for a mortgage. We don’t believe that professional investors compete with primary homeowners when they purchase homes for rental. Rather, we think those investors are filling a critical need for underserved families who seek to bridge their lifestyle while they build a down payment and credit score to ultimately achieve home ownership. We are also building our ~~core operating strategies as the way to perform as expected.~~multifamily product through off-balance sheet entities.

2627

We are refining our land strategy to dovetail with our production orientation. We are focusing on a just-in-time delivery program for land, just as we do for lumber, appliances and other products that are part of a home. We accomplish this both by negotiating option deals with landowners and developers and by using structured land bank strategies, often with entities that deploy private equity capital. Our land light strategy has generated consistent cash flow through the ups and downs of interest rate changes and has enhanced our balance sheet and our liquidity, even after we redeemed several billion dollars of debt, and repurchased a substantial amount of our stock, over the past years. In the first quarter of fiscal 2024, we increased our dividend to $2.00 per share per year and our Board authorized an increase to our stock repurchase program to enable us to repurchase up to an additional $5 billion in value of our outstanding Class A or Class B common stock.

Our land light strategy has benefitted strongly from land banking arrangements. We have concerns about the durability of these arrangements. Availability of private equity participation in our land banking arrangements depends upon market conditions and can change significantly and quickly. Accordingly, we are ~~not providing~~considering a strategic spinoff that would provide a durable land strategy. By spinning off our own excess land in a taxable spinoff, we can create a permanent capital vehicle that will develop homesites and give us options to acquire them. Such a spinoff would distribute capital to our stockholders, reduce the ~~targeted guidance about~~inventory on our books, and provide permanent dependable capital for future ~~performance~~land acquisitions.

We view the first quarter of fiscal 2024 as a strategic and operational success for our company. While market conditions remain challenging, demand is strong and there is a chronic housing supply shortage that needs to be filled. We will continue to drive production to meet that shortage. Also, if the Federal Reserve begins to cut interest rates, we ~~provided~~believe that pent-up demand will be activated, and we will be well-positioned and well-prepared to take advantage of it.

Perhaps most importantly, our very strong balance sheet affords us the ability to consider and execute upon thoughtful innovation for the future. We have the luxury of being able to continue to execute our strategic operating plan while we return capital to our stockholders through dividends and stock buybacks and also pursue a strategic distribution to our stockholders.

We are anticipating 19,000 to 19,500 closings in ~~the past. Instead, we are providing broad ranges to give some boundaries for various components of our expected results for~~ the second quarter of ~~2023 and full year 2023. We expect our new orders for the second quarter of 2023 to be in the range of 16,000 and 17,000. We expect our second quarter deliveries to be between 15,000 and 16,000 homes~~2024 with a ~~gross~~ margin ~~between 21.0% and 21.5%~~of approximately 22.5%. We expect to deliver 80,000 homes this year with a little over a 23% margin. We also expect to repurchase in excess of $2 billion of our S,G&A expenses as a percentage of home sale revenues will be between 7.2% and 7.4% but that percentage will adjust based on deliveries and homebuilding revenue. We expect our second quarter ending community count to be flat to slightly up year over year as we walked away from deals that would have produced new active communities, but no longer meet our margin expectations under current market conditions. Our second quarter average sales price should bestock in the range of $435,000 to $445,000 as we continue to price to market. Additionally, we are targeting delivery volume for the full year 2023 to be between 62,000 and 66,000 homes as we drive volume, pick up market share and build margins back up through reconciliation of construction and land costs while carefully managing S,G&A expenses.fiscal 2024.

(1) Results of Operations

Overview

We historically have experienced, and expect to continue to experience, variability in quarterly results. Our results of operations for the three months ended February ~~28, 2023~~29, 2024 are not necessarily indicative of the results to be expected for the full year. Our homebuilding business is seasonal in nature and generally reflects higher levels of new home order activity in our second and third fiscal quarters and increased deliveries in the second half of our fiscal year. However, a variety of factors can alter seasonal patterns.

Our net earnings attributable to Lennar were $719.3 million, or $2.57 per diluted share, in the first quarter of 2024, compared to net earnings attributable to Lennar of $596.5 million, or $2.06 per diluted share, in the first quarter of 2023, compared to net earnings attributable to Lennar of $503.6 million, or $1.69 per diluted share, in the first quarter of 2022. Excluding mark-to-market losses on technology investments in both years, first quarter net earnings attributable to Lennar in 2023 were $614.8 million or $2.12 per diluted share, compared to first quarter net earnings attributable to Lennar in 2022 of $800.2 million or $2.70 per diluted share.2023.

Financial information relating to our operations was as follows:


		Three Months Ended February 29, 2024
		Three Months Ended February 29, 2024
		Three Months Ended February 29, 2024

(In thousands)

(In thousands)

(In thousands)
Revenues:
Revenues:
Revenues:
Sales of homes
Sales of homes
Sales of homes
Sales of land
Sales of land
Sales of land
Other revenues
Other revenues
Other revenues
Total revenues
Total revenues
Total revenues
Costs and expenses:
Costs and expenses:
Costs and expenses:
Costs of homes sold
Costs of homes sold
Costs of homes sold
Costs of land sold
Costs of land sold
Costs of land sold
Selling, general and administrative expenses
Selling, general and administrative expenses
Selling, general and administrative expenses
Other costs and expenses
Other costs and expenses
Other costs and expenses
Total costs and expenses
Total costs and expenses
Total costs and expenses
Equity in earnings (losses) from unconsolidated entities
Equity in earnings (losses) from unconsolidated entities
Equity in earnings (losses) from unconsolidated entities
Other income (expense), net and other gains (losses)
Other income (expense), net and other gains (losses)
Other income (expense), net and other gains (losses)
Lennar Other unrealized losses from technology investments
Lennar Other unrealized losses from technology investments
Lennar Other unrealized losses from technology investments

		Three Months Ended February 28, 2023

(In thousands)		Homebuilding		Financial Services	Multifamily	Lennar Other	Corporate	Total
Revenues:
Sales of homes		$	6,093,827	—	—	—	—	6,093,827
Sales of land		9,718		—	—	—	—	9,718
Other revenues		52,760		182,981	143,523	7,620	—	386,884
Total revenues		6,156,305		182,981	143,523	7,620	—	6,490,429
Costs and expenses:
Costs of homes sold		4,802,843		—	—	—	—	4,802,843
Costs of land sold		22,077		—	—	—	—	22,077
Selling, general and administrative expenses		449,794		—	—	—	—	449,794
Other costs and expenses		—		104,244	148,956	6,476	—	259,676
Total costs and expenses		5,274,714		104,244	148,956	6,476	—	5,534,390
Equity in earnings (loss) from unconsolidated entities, Multifamily other gain and Lennar Other other expense, net, and other gain		3,186		—	(16,168)	(16,947)	—	(29,929)
Homebuilding other income, net		22,062		—	—	—	—	22,062
Lennar Other unrealized losses from technology investments		—		—	—	(23,954)	—	(23,954)
Operating earnings (loss)

Operating earnings (loss)

Operating earnings (loss)	Operating earnings (loss)	$	906,839	78,737	(21,601)	(39,757)	—	924,218
Corporate general and administrative expenses	Corporate general and administrative expenses	—		—	—	—	126,106	126,106
Corporate general and administrative expenses
Corporate general and administrative expenses
Charitable foundation contribution
Charitable foundation contribution
Charitable foundation contribution	Charitable foundation contribution	—		—	—	—	13,659	13,659
Earnings (loss) before income taxes	Earnings (loss) before income taxes	$	906,839	78,737	(21,601)	(39,757)	(139,765)	784,453
Earnings (loss) before income taxes
Earnings (loss) before income taxes

Three Months Ended February 28, 2022
(In thousands) Homebuilding Financial Services Multifamily Lennar Other Corporate Total
Revenues:
Sales of homes $ 5,721,757 — — — — 5,721,757
Sales of land 23,967 — — — — 23,967
Other revenues 6,481 176,701 267,359 7,251 — 457,792
Total revenues 5,752,205 176,701 267,359 7,251 — 6,203,516
Costs and expenses:
Costs of homes sold 4,184,864 — — — — 4,184,864
Costs of land sold 28,556 — — — — 28,556
Selling, general and administrative expenses 428,478 — — — — 428,478
Other costs and expenses — 85,910 263,737 5,407 — 355,054
Total costs and expenses 4,641,898 85,910 263,737 5,407 — 4,996,952
Equity in earnings (loss) from unconsolidated entities, Multifamily other loss and Lennar Other other income (expense), net, and other gain (loss) (286) — 1,805 (9,808) — (8,289)
Homebuilding other expense, net (171) — — — — (171)
Lennar Other unrealized gains from technology investments — — — (395,170) — (395,170)
Operating earnings (loss) $ 1,109,850 90,791 5,427 (403,134) — 802,934
Corporate general and administrative expenses — — — — 113,661 113,661
Charitable foundation contribution — — — — 12,538 12,538
Earnings (loss) before income taxes $ 1,109,850 90,791 5,427 (403,134) (126,199) 676,735


	Three Months Ended February 28, 2023

(In thousands)	Homebuilding		Financial Services	Multifamily	Lennar Other	Corporate	Total
Revenues:
Sales of homes	$	6,093,827	—	—	—	—	6,093,827
Sales of land	9,718		—	—	—	—	9,718
Other revenues	52,760		182,981	143,523	7,620	—	386,884
Total revenues	6,156,305		182,981	143,523	7,620	—	6,490,429
Costs and expenses:
Costs of homes sold	4,802,843		—	—	—	—	4,802,843
Costs of land sold	22,077		—	—	—	—	22,077
Selling, general and administrative expenses	449,794		—	—	—	—	449,794
Other costs and expenses	—		104,244	148,956	6,476	—	259,676
Total costs and expenses	5,274,714		104,244	148,956	6,476	—	5,534,390
Equity in earnings (losses) from unconsolidated entities	3,186		—	(16,483)	(17,890)	—	(31,187)
Other income (expense), net and other gains (losses)	22,062		—	315	943	—	23,320
Lennar Other unrealized losses from technology investments	—		—	—	(23,954)	—	(23,954)



Operating earnings (loss)	$	906,839	78,737	(21,601)	(39,757)	—	924,218
Corporate general and administrative expenses	—		—	—	—	126,106	126,106
Charitable foundation contribution	—		—	—	—	13,659	13,659
Earnings (loss) before income taxes	$	906,839	78,737	(21,601)	(39,757)	(139,765)	784,453

Three Months Ended February ~~28, 2023~~29, 2024 versus Three Months Ended February 28, ~~2022~~2023

Revenues from home sales increased 7%13% in the first quarter of ~~2023~~2024 to ~~$6.1~~$6.9 billion from ~~$5.7~~$6.1 billion in the first quarter of ~~2022.~~2023. Revenues were higher primarily due to a 9%23% increase in the number of home deliveries, partially offset by an 8% decrease in the average sales price of homes delivered. New home deliveries increased to ~~13,659 homes from 12,538~~16,798 homes in the first quarter of ~~2022.~~2024 from 13,659 homes in the first quarter of 2023. The average sales price of homes delivered was $413,000 in the first quarter of 2024, compared to $448,000 in the first quarter of ~~2023, compared to $457,000 in the first quarter of 2022.~~2023. The decrease in average sales price of homes delivered in the first quarter of ~~2023~~2024 compared to the same period last year was primarily due to pricing to market through an increased use of incentives and product ~~mix as a larger percentage of deliveries occurred in our Texas segment.~~mix.

Gross margins on home sales were $1.5 billion, or 21.8%, in the first quarter of 2024, compared to $1.3 billion, or 21.2%, in the first quarter of ~~2023, compared to $1.5 billion, or 26.9%, in the first quarter of 2022.~~2023. During the first quarter of ~~2023,~~2024, gross ~~margin decreased~~margins increased because ~~revenues~~of a decrease in costs per square

foot ~~were flat year over year~~ as we ~~priced homes~~continued to ~~market while costs per square foot increased primarily due to higher materials~~focus on construction cost savings, which was partially offset by a decrease in average sales price and ~~labor~~an increase in land costs. ~~In addition, land costs increased year over year.~~

Selling, general and administrative expenses were $568.0 million in the first quarter of 2024, compared to $449.8 million in the first quarter of ~~2023, compared to $428.5 million in the first quarter of 2022.~~2023. As a percentage of revenues from home sales, selling, general and administrative expenses ~~improved~~increased to 8.2% in the first quarter of 2024, from 7.4% in the first quarter of 2023, ~~from 7.5%~~primarily due to an increase in the ~~first quarter~~use of ~~2022 as we focused on improving~~brokers due to current market conditions and an increase in digital marketing and advertising costs to generate more direct sales.

During the three months ended February 29, 2024, our ~~leverage combined with the benefits~~homebuilding operating earnings included $58 million of ~~our technology efforts.~~interest income due to an increase in cash balances and higher interest rates.

Operating earnings for ~~our~~the Financial Services segment were ~~$78.7 million ($78.2 million net of noncontrolling interests) in the first quarter of 2023, compared to $90.5~~$130.6 million in the first quarter of ~~2022.~~2024, compared to $78.2 million in the first quarter of 2023. The ~~decrease~~increase in operating earnings was primarily due to a ~~lower~~higher profit per locked loan in our mortgage business as a result of ~~lower~~higher margins, and higher lock ~~volume.~~volume because of increased capture rate and Lennar deliveries. There was also an increase in profitability from our title business due to higher volume and productivity as a result of continued implementation of technology initiatives.

Operating loss for ~~our~~the Multifamily segment was $15.5 million in the first quarter of 2024, compared to operating loss of $21.6 million in the first quarter of ~~2023, compared to operating earnings of $5.4~~2023. Operating loss for the Lennar Other segment was $39.5 million in the first quarter of ~~2022. Operating loss for our Lennar Other segment was $39.8 million ($41.2 million net of noncontrolling interests) in the first quarter of 2023,~~2024, compared to an operating loss of ~~$403.1~~$41.2 million in the first quarter of ~~2022. Lennar Other operating loss in~~2023.

In the first quarter of ~~both~~2024 and 2023, ~~and 2022 was primarily due to unrealized mark-to-market losses on our publicly traded technology investments.~~

~~For the three months ended February 28, 2023 and 2022,~~ we had a tax ~~provision~~provisions of ~~$185.1~~$210.9 million and ~~$167.4~~$185.1 million, respectively, which resulted in an overall effective income tax rate of ~~23.7%~~22.7% and ~~25.0%~~23.7%, respectively. In the ~~three months ended February 28, 2023,~~first quarter of 2024, our overall effective income tax rate was lower than last year, primarily due to ~~the reinstatement of the new energy efficient home credit as a result of the enactment of the Inflation Reduction Act during the third quarter of 2022.~~excess tax benefits from share-based compensation.

Homebuilding Segments

At February ~~28, 2023,~~29, 2024, our reportable Homebuilding segments and Homebuilding Other are outlined in Note 2 of the Notes to Condensed Consolidated Financial Statements. The following tables set forth selected financial and operational information related to our homebuilding operations for the periods indicated:

Selected Financial and Operational Data
Three Months Ended February 28, 2023
Gross Margins Operating Earnings (Loss)
($ in thousands) Sales of Homes Revenue Costs of Sales of Homes Gross Margin % Net Margins on Sales of Homes (1) Gross Margins (Loss) on Sales of Land Other Revenue Equity in Earnings (Loss) from Unconsolidated Entities Other Income (Expense), net Operating Earnings (Loss)
East $ 1,858,048 1,331,478 28.3 % 373,632 (2,384) 20,163 3,248 29,537 424,196
Central 1,023,619 827,712 19.1 % 109,020 1,862 18,941 688 11 130,522
Texas 1,016,973 817,645 19.6 % 126,576 (2,051) 3,709 — (2,915) 125,319
West 2,194,022 1,823,087 16.9 % 238,477 (9,786) 5,904 (152) (3,943) 230,500
Other (2) 1,165 2,921 (150.7) % (6,515) — 4,043 (598) (628) (3,698)
Totals $ 6,093,827 4,802,843 21.2 % 841,190 (12,359) 52,760 3,186 22,062 906,839
Three Months Ended February 28, 2022
Gross Margins Operating Earnings (Loss)
($ in thousands) Sales of Homes Revenue Costs of Sales of Homes Gross Margin % Net Margins on Sales of Homes (1) Gross Margins on Sales of Land Other Revenue Equity in Earnings (Loss) from Unconsolidated Entities Other Income (Expense), net Operating Earnings (Loss)
East $ 1,662,991 1,176,553 29.3 % 351,554 (5,674) 797 (1,358) 6,676 351,995
Central 1,105,929 870,611 21.3 % 150,375 1,619 234 129 (279) 152,078
Texas 805,630 573,842 28.8 % 169,941 2,398 242 — (1,269) 171,312
West 2,142,204 1,557,737 27.3 % 444,524 (839) 881 136 (3,254) 441,448
Other (2) 5,003 6,121 (22.3) % (7,979) (2,093) 4,327 807 (2,045) (6,983)
Totals $ 5,721,757 4,184,864 26.9 % 1,108,415 (4,589) 6,481 (286) (171) 1,109,850


	Three Months Ended February 29, 2024
	Gross Margins					Operating Earnings (Loss)
($ in thousands)	Sales of Homes Revenue		Costs of Sales of Homes	Gross Margin %		Net Margins on Sales of Homes (1)	Gross Margins (Loss) on Sales of Land	Other Revenues	Equity in Earnings (Loss) from Unconsolidated Entities	Other Income, net	Operating Earnings (Loss)
East	$	1,907,670	1,382,768	27.5	%	345,715	5,263	2,386	7,097	16,420	376,881
Central	1,395,644		1,115,959	20.0	%	150,958	(421)	811	(19)	10,287	161,616
Texas	1,070,159		831,873	22.3	%	161,594	1,042	542	—	5,335	168,513
West	2,521,491		2,055,622	18.5	%	287,062	851	1,644	2,477	16,753	308,787
Other (2)	6,817		9,310	(36.6)	%	(7,067)	—	3,075	3,747	13,244	12,999
Totals	$	6,901,781	5,395,532	21.8	%	938,262	6,735	8,458	13,302	62,039	1,028,796


	Three Months Ended February 28, 2023
	Gross Margins					Operating Earnings (Loss)
($ in thousands)	Sales of Homes Revenue		Costs of Sales of Homes	Gross Margin %		Net Margins on Sales of Homes (1)	Gross Margins (Loss) on Sales of Land	Other Revenues	Equity in Earnings (Loss) from Unconsolidated Entities	Other Income (Expense), net	Operating Earnings (Loss)
East	$	1,680,272	1,194,254	28.9	%	348,196	(2,354)	19,804	3,248	29,538	398,432
Central	1,201,395		964,936	19.7	%	134,456	1,832	19,300	688	10	156,286
Texas	1,016,973		817,645	19.6	%	126,576	(2,051)	3,709	—	(2,915)	125,319
West	2,194,022		1,823,087	16.9	%	238,477	(9,786)	5,904	(152)	(3,943)	230,500
Other (2)	1,165		2,921	(150.7)	%	(6,515)	—	4,043	(598)	(628)	(3,698)
Totals	$	6,093,827	4,802,843	21.2	%	841,190	(12,359)	52,760	3,186	22,062	906,839

(1)Net margins on sales of homes include selling, general and administrative expenses.

(2)Negative gross and net margins were due to period costs ~~and~~and/or impairments in Urban divisions that impact costs of homes sold without sufficient sales of homes revenue to offset those costs.

Summary of Homebuilding Data

Deliveries:


	First Quarter															First Quarter
	2024									2024		2023	2024		2023		2024	2023
	Homes										Homes			Dollar Value (In thousands)			Average Sales Price

		Three Months Ended
East
		Homes		Dollar Value (In thousands)			Average Sales Price
		February 28,		February 28,			February 28,
East
		2023	2022	2023		2022	2023		2022
East	East	4,295	4,082	$	1,889,721	1,672,372	$	440,000	410,000
Central	Central	2,300	2,521	1,023,619		1,105,929	445,000		439,000
Texas	Texas	3,421	2,537	1,016,973		805,630	297,000		318,000
West	West	3,642	3,392	2,194,022		2,142,204	602,000		632,000
Other	Other	1	6	1,165		5,003	1,165,000		834,000
Total	Total	13,659	12,538	$	6,125,500	5,731,138	$	448,000	457,000

Of the total homes delivered listed above, 77 homes with a dollar value of $43.0 million and an average sales price of $558,000 represent home deliveries from unconsolidated entities for the three months ended February 29, 2024, compared to 63 ~~homes~~home deliveries with a dollar value of $31.7 million and an average sales price of $503,000 ~~represent home deliveries from unconsolidated entities~~ for the three months ended February 28, ~~2023, compared to 25 home deliveries with a dollar value of $9.4 million and an average sales price of $375,000 for the three months ended February 28, 2022.~~

2023.

Sales Incentives (1):


					First Quarter
					First Quarter
					First Quarter
				2024																			2024				2023			2024	2023
		Average Sales Incentives Per Home Delivered																Average Sales Incentives Per Home Delivered							Sales Incentives as a % of Revenue

					Three Months Ended
East
			Average Sales Incentives Per Home Delivered				Sales Incentives as a % of Revenue
			February 28,				February 28,
East
					2023		2022	2023		2022
East	East				$	32,400	6,700	6.9	%	1.6	%		$	46,800			30,300			30,300		10.2			10.2	%		6.4	%
Central	Central				38,400		7,100	8.0	%	1.6	%	Central			46,000				40,300		40,300			10.5		10.5	%		8.4	%
Texas	Texas				67,400		13,700	18.5	%	4.1	%	Texas			54,900				67,400		67,400			18.0		18.0	%		18.5	%
West	West				63,900		8,100	9.6	%	1.3	%	West			54,200				63,900		63,900			8.4		8.4	%		9.6	%
Other	Other				85,000		83,400	6.8	%	9.1	%	Other			89,300				85,000		85,000			14.6		14.6	%		6.8	%
Total	Total				$	50,700	8,600	10.2	%	1.9	%	Total			$	50,600			50,700		50,700			10.9		10.9	%		10.2	%

(1) Sales incentives relate to home deliveries during the period, excluding deliveries by unconsolidated entities.

New Orders (2):


	First Quarter																		First Quarter
	2024											2024		2023	2024		2023	2024		2023		2024	2023
	Active Communities												Active Communities			Homes		Dollar Value (In thousands)			Average Sales Price

		Three Months Ended
East
		Active Communities		Homes		Dollar Value (In thousands)			Average Sales Price
		February 28,		February 28,		February 28,			February 28,
East
		2023	2022	2023	2022	2023		2022	2023		2022
East	East	346	347	4,277	4,910	$	1,851,896	2,133,056	$	433,000	434,000
Central	Central	293	298	2,305	3,112	970,098		1,402,138	421,000		451,000
Texas	Texas	219	216	3,142	2,766	879,456		921,785	280,000		333,000
West	West	356	340	4,465	4,954	2,708,326		3,335,932	607,000		673,000
Other	Other	3	3	5	5	3,686		4,628	737,000		926,000
Total	Total	1,217	1,204	14,194	15,747	$	6,413,462	7,797,539	$	452,000	495,000

Of the total homes listed above, 46 homes with a dollar value of $25.2 million and an average sales price of $548,000 represent homes in six active communities from unconsolidated entities for the three months ended February 29, 2024, compared to 97 homes with a dollar value of $38.3 million and an average sales price of $394,000 ~~represent homes~~ in seven ~~active communities from unconsolidated entities for the three months ended February 28, 2023, compared to 44 homes with a dollar value of $17.3 million and an average sales price of $393,000 in four~~ active communities for the three months ended February 28, ~~2022.~~2023.

(2)Homes represent the number of new sales contracts executed with homebuyers, net of cancellations, during the three months ended February 29, 2024 and February 28, ~~2023 and 2022.~~2023.

3031

We experienced cancellation rates in our Homebuilding segments and Homebuilding ~~other~~Other as follows:


		First Quarter
		First Quarter
		First Quarter
		Three Months Ended
		2024
		February 28,
		2024
		2023		2022
		2024
East
East
East	East	23	%	7	%
Central	Central	29	%	7	%
Central
Central
Texas
Texas
Texas	Texas	24	%	19	%
West	West	13	%	10	%
West
West
Other
Other
Other	Other	17	%	79	%
Total	Total	22	%	10	%
Total
Total

Backlog:


		At
		First Quarter
		First Quarter
		First Quarter
	2024									2024		2023	2024		2023	2024	2023
	Homes										Homes			Dollar Value (In thousands)		Average Sales Price
		Homes		Dollar Value (In thousands)			Average Sales Price
		February 28,		February 28,			February 28,
East

East
		2023	2022	2023		2022	2023		2022
East	East	8,687	9,115	$	3,782,500	4,041,347	$	435,000	443,000
Central	Central	4,030	5,695	1,801,908		2,617,383	447,000		460,000
Texas	Texas	2,418	4,495	699,567		1,569,424	289,000		349,000
West	West	4,263	8,027	2,740,782		5,328,890	643,000		664,000
Other	Other	5	3	3,685		3,567	737,000		1,189,000
Total	Total	19,403	27,335	$	9,028,442	13,560,611	$	465,000	496,000

Of the total homes in backlog listed above, 116 homes with a backlog dollar value of $57.5 million and an average sales price of $495,000 represent the backlog from unconsolidated entities at February 29, 2024, compared to 200 homes with a backlog dollar value of $84.4 million and an average sales price of $422,000 ~~represent the backlog from unconsolidated entities~~ at February 28, ~~2023, compared to 98 homes with a backlog dollar value of $36.6 million and an average sales price of $373,000 at February 28, 2022.~~2023.

Backlog represents the number of homes under sales contracts. Homes are sold using sales contracts, which are generally accompanied by sales deposits. In some instances, purchasers are permitted to cancel sales if they fail to qualify for financing or under certain other circumstances. Various state and federal laws and regulations may sometimes give purchasers a right to cancel homes in backlog. We do not recognize revenue on homes under sales contracts until the sales are closed and title passes to the new homeowners.

Three Months Ended February ~~28, 2023~~29, 2024 versus Three Months Ended February 28, ~~2022~~2023

Homebuilding East: Revenues from home sales increased in the first quarter of ~~2023~~2024 compared to the first quarter of ~~2022,~~2023, primarily due to an increase in the number of home deliveries in all the states in the segment, which was partially offset by a decrease in the average sales price of homes delivered in all the states in the segment except in New Jersey. The increase in the number of home deliveries in Alabama, Florida, New Jersey and Pennsylvania was primarily due to an increase in the number of deliveries per active community. The decrease in the average sales price of homes delivered in Alabama, Florida and Pennsylvania was primarily due to pricing to market through an increased use of incentives and product mix. The increase in the average sales price of homes delivered in New Jersey was primarily due to product mix. In the first quarter of 2024, a decrease in revenues per square foot was partially offset by a decrease in costs per square foot, which resulted in a decrease in gross margin percentage of home deliveries. In addition, land costs increased year over year.

Homebuilding Central: Revenues from home sales increased in the first quarter of 2024 compared to the first quarter of 2023, primarily due to an increase in the number of home deliveries in all the states in the segment except in ~~New Jersey~~Georgia and ~~an increase~~Virginia, which was partially offset by a decrease in the average sales price of homes delivered in all the states in the ~~segment.~~segment except in Illinois. The increase in the number of home deliveries in Illinois, Indiana, Maryland, Minnesota, North Carolina, South Carolina and Tennessee was primarily due to an increase in the number of deliveries per active community. The increase in the average sales price of homes delivered was primarily due to product mix. In the first quarter of 2023, an increase in revenues per square foot was offset by an increase in costs per square foot primarily due to higher materials and labor costs, thus gross margin percentage of home deliveries decreased year over year.

~~Homebuilding Central:~~ Revenues from home sales decreased in the first quarter of 2023 compared to the first quarter of 2022, primarily due to a decrease in the number of home deliveries in all the states in the segment except in Illinois, Indiana, North Carolina and Tennessee while the average sales price of homes delivered increased in all the states in the segment except in North Carolina and Virginia. The decrease in the number of home deliveries in Georgia ~~Maryland, Minnesota~~ and Virginia was primarily due to a decrease in the number of deliveries per active community due to the timing of opening and closing of ~~communities as a result of supply chain disruptions.~~communities. The ~~increase~~decrease in the ~~number~~average sales price of ~~home deliveries~~homes delivered in ~~Illinois,~~Georgia, Indiana, Maryland, Minnesota, North Carolina, South Carolina, Tennessee and ~~Tennessee~~Virginia was primarily due to pricing to market through an ~~increase in the number~~increased use of ~~deliveries per active community.~~incentives and product mix. The increase in the average sales price of homes delivered in ~~all the states in the segment except in North Carolina and Virginia~~Illinois was primarily due to ~~product mix. The decrease in the average sales price of homes delivered in North Carolina and Virginia was primarily due to pricing to market and~~ product mix. In the first quarter of ~~2023,~~2024, a ~~slight increase~~decrease in revenues per square foot was partially offset by ~~an increase~~a decrease in costs per square ~~foot primarily due to higher materials and labor costs, thus~~foot. Overall, gross margin percentage of home deliveries ~~decreased~~remained flat while land costs increased year over year.

Homebuilding Texas: Revenues from home sales increased in the first quarter of ~~2023~~2024 compared to the first quarter of ~~2022,~~2023, primarily due to an increase in the number of home deliveries, which was partially offset by a decrease in the average sales price of homes delivered. The increase in the number of home deliveries was primarily due to an increase in the number of ~~deliveries per~~

active ~~community.~~communities. The decrease in the average sales price of homes delivered was primarily due to pricing to

~~market.~~ market through an increased use of incentives. In the first quarter of ~~2023,~~2024, a decrease in revenues per square foot ~~and an increase~~was more than offset by a decrease in costs per square ~~foot primarily due to higher materials and labor costs, resulted in a decrease in~~foot. Overall, gross margin percentage of home ~~deliveries.~~deliveries increased while land costs increased year over year.

Homebuilding West: Revenues from home sales increased in the first quarter of ~~2023~~2024 compared to the first quarter of ~~2022,~~2023, primarily due to an increase in the number of home deliveries in all the states in the segment, ~~except in Utah,~~ which was partially offset by a decrease in the average sales price of homes delivered in all the states in the segment except in ~~Utah~~California, Nevada and ~~Washington.~~Oregon. The increase in the number of home deliveries in ~~all the states in the segment except in~~Arizona, California, Colorado, Idaho, Nevada, Oregon, Utah and Washington was primarily due to an increase in the number of active communities and deliveries per active community. The decrease in the ~~number~~average sales price of ~~home deliveries~~homes delivered in Arizona, Colorado, Idaho, Utah and Washington was primarily due to ~~a decrease in the number~~pricing to market through an increased use of ~~deliveries per active community due to the timing of opening~~incentives and ~~closing of communities as a result of supply chain disruptions.~~product mix. The increase in the average sales price of homes delivered in ~~Utah~~California, Nevada and ~~Washington~~Oregon was primarily due to ~~product mix. The decrease in the average sales price of homes delivered in other states of the segment was primarily due to pricing to market and~~ product mix. In the first quarter of ~~2023, a decrease in~~2024, revenues per square foot increased and ~~an increase in~~ costs per square foot ~~primarily due to higher materials and labor costs, resulted in a decrease in~~decreased. Overall, gross margin percentage of home ~~deliveries.~~deliveries increased while land costs increased year over year.

Financial Services Segment

Our Financial Services reportable segment provides mortgage financing, title and closing services primarily for buyers of our homes. The segment also originates and sells into securitizations commercial mortgage loans through its LMF Commercial business. Our Financial Services segment sells substantially all of the residential loans it originates within a short period in the secondary mortgage market, the majority of which are sold on a servicing released, non-recourse basis. After the loans are sold, we retain potential liability for possible claims by purchasers that we breached certain limited industry-standard representations and warranties in the loan sale agreements.

The following table sets forth selected financial and operational information related to the residential mortgage and title activities of our Financial Services segment:

Three Months Ended

(Dollars in thousands)

February 28,

(Dollars in thousands)

2023

2022

Dollar value of mortgages originated

3,154,000

2,760,000

Dollar value of mortgages originated

Number of mortgages originated

8,500

7,400

Mortgage capture rate of Lennar homebuyers

78%

74%

Mortgage capture rate of Lennar homebuyers

Number of title and closing service transactions

14,200

13,700

Number of title and closing service transactions

At February ~~28, 2023~~29, 2024 and November 30, ~~2022,~~2023, the carrying value of Financial Services' commercial mortgage-backed securities ~~("CMBS")~~ was ~~$141.9~~$139.7 million and ~~$143.3~~$140.7 million, respectively. Details of these securities and related debt are within Note 2 of the Notes to Condensed Consolidated Financial Statements.

Multifamily Segment

We have been actively involved, primarily through unconsolidated funds and joint ventures, in the development, construction and property management of multifamily rental properties. Our Multifamily segment focuses on developing a geographically diversified portfolio of institutional quality multifamily rental properties in select U.S. markets.

The following table provides information related to our investment in the Multifamily segment:

Balance Sheets

(In thousands)

February 28, 2023

November 30, 2022

February 29, 2024

November 30, 2023

Multifamily investments in unconsolidated entities

635,499

648,126

Multifamily investments in unconsolidated entities

Lennar's net investment in Multifamily

975,420

935,961

3233

Lennar Other Segment

Our Lennar Other ~~primarily~~segment includes fund investments we retained subsequent to our sale of the Rialto investment and asset management platform, as well as strategic investments in technology companies ~~primarily managed by our LEN~~X ~~subsidiary,~~that are looking to improve the homebuilding and ~~fund interests we retained when we sold the~~ ~~RialtoCapitalManagement ("Rialto") asset~~financial services industries to better serve homebuyers and ~~investment management platform in 2018.~~homeowners and increase efficiencies. At February ~~28, 2023~~29, 2024 and November 30, ~~2022,~~2023, we had ~~$790.9~~$749.9 million and ~~$788.5~~$657.9 million, respectively, of assets in our Lennar Other segment, which included investments in unconsolidated entities of ~~$315.6~~$289.7 million and ~~$316.5~~$276.2 million, respectively. The investments in equity securities of Blend Labs, Inc. ("(“Blend ~~Labs"~~Labs”), Hippo Holdings, Inc. ~~("Hippo"~~(“Hippo”), Opendoor Technologies, Inc. ~~("Opendoor"~~(“Opendoor”), SmartRent, Inc. ~~("SmartRent"~~(“SmartRent”), Sonder Holdings, Inc. ~~("Sonder"~~(“Sonder”), and Sunnova Energy International, Inc. ~~("Sunnova"~~(“Sunnova”) are carried at market and will therefore change depending on the market value of our ~~share holdings~~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. Details of these investments are included within Note 2 of the Notes to Condensed Consolidated Financial Statements. The following is a detail of Lennar Other unrealized ~~gains (loss)~~losses from mark-to-market adjustments on our technology investments:

Three Months Ended

(In thousands)

February 28,

(In thousands)

2023

2022

Blend Labs (BLND)

586

(7,442)

Blend Labs (BLND)

Hippo (HIPO)

6,632

(124,457)

Opendoor (OPEN)

(7,691)

(143,361)

Opendoor (OPEN)

SmartRent (SMRT)

1,305

(44,363)

Sonder (SOND)

(320)

(506)

Sonder (SOND)

Sunnova (NOVA)

(24,466)

(75,041)

Lennar Other unrealized losses from technology investments

(23,954)

(395,170)

Lennar Other unrealized losses from technology investments

(2) Financial Condition and Capital Resources

At February ~~28, 2023,~~29, 2024, we had cash and cash equivalents and restricted cash related to our homebuilding, financial services, multifamily and other operations of ~~$4.3~~$5.3 billion, compared to ~~$4.8~~$6.6 billion at November 30, ~~2022~~2023 and ~~$1.6~~$4.3 billion at February 28, ~~2022.~~2023.

We finance all of our activities, including homebuilding, financial services, multifamily, other and general operating needs, primarily with cash generated from our operations, debt issuances and cash borrowed under our warehouse lines of credit and our unsecured revolving credit facility (the ~~"Credit Facility"~~“Credit Facility”). At February ~~28, 2023,~~29, 2024, we had ~~$4.1~~$5.0 billion of homebuilding cash and cash equivalents and no outstanding borrowings under our $2.6 billion revolving credit facility, thereby providing approximately ~~$6.7~~$7.6 billion of available capacity.

Operating Cash Flow Activities

During the three months ended February ~~28,~~29, 2024 and 2023, ~~and 2022,~~ cash provided by ~~(used in)~~ operating activities totaled $367.9 million and $978 million, respectively. During the three months ended February 29, 2024, cash provided by operating activities was impacted primarily by our net earnings, a decrease in loans held-for-sale of $54 million primarily related to the sale of loans originated by our Financial Services segment and ~~($72)~~a decrease in receivables of $379 million ~~respectively.~~ primarily related to a decrease in Financial Services receivables, net, which are loans sold to investors for which we have not yet been paid. This was partially offset by an increase in inventories due to strategic land purchases, land development and construction costs of $285 million, an increase in deposits and pre-acquisition costs on real estate of $411 million as we increased the percentage of controlled homesites, and a decrease in accounts payable and other liabilities of $326 million.

During the three months ended February 28, 2023, cash provided by operating activities was impacted primarily by our net earnings, a decrease in loans held-for-sale of $512 million primarily related to the sale of loans originated by our Financial Services segment and a decrease in receivables of $603 million primarily related to a decrease in Financial Services receivables, net, which are loans sold to investors for which we have not yet been paid. This was partially offset by an increase in inventories due to strategic land purchases, land development and construction costs of ~~$178~~$156 million and a decrease in accounts payable and other liabilities of $691 million.

During the three months ended February 28, 2022, cash used in operating activities was impacted primarily by an increase in inventories due to strategic land purchases, land development and construction costs of $1.9 billion and increase in other assets of $50 million. This was partially offset by our net earnings, excluding Lennar Other unrealized mark-to-market loss of $395 million on our publicly traded technology investments, a decrease in receivables of $381 million primarily related to a decrease in Financial Services' receivables, net, which are loans sold to investors for which we have not been paid. In addition, there was a decrease in loans held-for-sale of $409 million primarily related to the sale of loans originated by our Financial Services segment and an increase in accounts payable and other liabilities of $96 million.

Investing Cash Flow Activities

During the three months ended February ~~28,~~29, 2024 and 2023, ~~and 2022,~~ cash used in investing activities totaled $148 million and $36 million, respectively. During the three months ended February 29, 2024, our cash used in investing activities was primarily due to cash contributions of $118 million to unconsolidated entities, which included (1) $56 million to Homebuilding unconsolidated entities, (2) $54 million to Lennar other unconsolidated entities and ~~$20~~(3) $7 million ~~respectively.~~ to Multifamily unconsolidated entities. This was partially offset by distributions of capital from unconsolidated entities of $35 million, which primarily included (1) $23 million from Homebuilding unconsolidated entities, (2) $8 million from our Lennar Other unconsolidated entities and (3) $4 million from Multifamily entities.

During the three months ended February 28, 2023, our cash used in investing activities was primarily due to cash contributions of $57 million to unconsolidated entities, which included (1) $25 million to Homebuilding unconsolidated entities, (2) $25 million to Lennar ~~other~~Other unconsolidated entities, and (3) $7 million to Multifamily unconsolidated entities. This was partially offset by distributions of capital from unconsolidated entities of $24 million, which primarily included (1) $17 million from Homebuilding unconsolidated entities, and (2) $7 million from our Lennar Other unconsolidated entities.

Financing Cash Flow Activities

During both the three months ended February ~~28, 2022, our cash used in investing activities was primarily due to cash contributions of $139 million to unconsolidated entities, which included (1) $98 million to Homebuilding unconsolidated~~

~~entities, (2) $37 million to Lennar Other unconsolidated entities,~~29, 2024 and (3) $4 million to Multifamily unconsolidated entities. In addition, we also had $71 million of purchases of investment securities related to our publicly traded technology investments included in the Lennar Other segment. This was partially offset by distributions of capital from unconsolidated entities of $174 million, which primarily included (1) $119 million from Multifamily unconsolidated entities, (2) $17 million from Homebuilding unconsolidated entities, and (3) $38 million from our Lennar Other unconsolidated entities.

~~Financing Cash Flow Activities~~

~~During the~~ three months ended February 28, 2023, ~~and 2022,~~ cash used in financing activities totaled $1.5 billion, respectively. During the three months ended February 29, 2024, cash used in financing activities was primarily due to (1) $600 million of net repayments under our Financial Services' warehouse facilities; (2) $595 million in repurchases of our common stock, which included $512 million of repurchases under our repurchase program and ~~$1.3 billion, respectively.~~ $84 million of repurchases related to our equity compensation plan; (3) $139 million of dividend payments; and (4) $185 million of net payments from liabilities related to consolidated inventory not owned due to activity with land banks.

During the three months ended February 28, 2023, cash used in financing activities was primarily due to (1) $963 million of net repayments under our Financial Services' warehouse facilities; (2) $258 million of repurchases of our common stock, which included $191 million of repurchases under our repurchase program and $67 million of repurchases related to our equity compensation plan; (3) $108 million of dividend payments; and ~~(5)~~(4) $108 million of net payments ~~from liabilities related to consolidated inventory not owned due to activity with land banks.~~

During the three months ended February 28, 2022, cash used in financing activities was primarily due to (1) $528.7 million of net repayments under our Financial Services' warehouse facilities, which included the LMF Commercial warehouse repurchase facilities; (2) $581.3 million of repurchases of our common stock, which included $526.4 million of repurchases under our repurchase program and $54.9 million of repurchases related to our equity compensation plan; and (3) $110 million of dividend payments. These were partially offset by $33 million of net proceeds from liabilities related to consolidated inventory not owned due to activity with land banks.

Debt to total capital ratios are financial measures commonly used in the homebuilding industry and are presented to assist in understanding the leverage of our homebuilding operations. Homebuilding debt to total capital and net Homebuilding debt to total capital are calculated as follows:


(Dollars in thousands)	(Dollars in thousands)	February 28, 2023			November 30, 2022		February 28, 2022		(Dollars in thousands)	February 29, 2024		November 30, 2023		February 28, 2023
Homebuilding debt	Homebuilding debt	$	4,033,335		4,047,294		4,639,222
Stockholders’ equity	Stockholders’ equity	24,418,255			24,100,500		20,679,064
Total capital	Total capital	$	28,451,590		28,147,794		25,318,286
Homebuilding debt to total capital	Homebuilding debt to total capital	14.2		%	14.4	%	18.3	%	Homebuilding debt to total capital	9.6	%	9.6	%	14.2	%
Homebuilding debt	Homebuilding debt	$	4,033,335		4,047,294		4,639,222
Less: Homebuilding cash and cash equivalents	Less: Homebuilding cash and cash equivalents	4,057,956			4,616,124		1,366,597
Net Homebuilding debt	Net Homebuilding debt	$	(24,621)		(568,830)		3,272,625
Net Homebuilding debt to total capital (1)	Net Homebuilding debt to total capital (1)	(0.1)		%	(2.4)	%	13.7	%	Net Homebuilding debt to total capital (1)	(8.6)	%	(15.0)	%	(0.1)	%

(1)Net homebuilding debt to total capital is a non-GAAP financial measure defined as net homebuilding debt (homebuilding debt less homebuilding cash and cash equivalents) divided by total capital (net homebuilding debt plus stockholders' equity). We believe the ratio of net homebuilding debt to total capital is a relevant and a useful financial measure to investors in understanding the leverage employed in homebuilding operations. However, because net homebuilding debt to total capital is not calculated in accordance with GAAP, this financial measure should not be considered in isolation or as an alternative to financial measures prescribed by GAAP. Rather, this non-GAAP financial measure should be used to supplement our GAAP results.

At February ~~28, 2023,~~29, 2024, Homebuilding debt to total capital was consistent with November 30, 2023, and was lower compared to ~~both November 30, 2022 and~~ February 28, ~~2022,~~2023, primarily as a result of an increase in stockholders' equity due to net earnings and a decrease in ~~homebuilding~~Homebuilding debt due to debt paydowns, partially offset by share repurchases.

We are continually exploring various types of transactions to manage our leverage and liquidity positions, take advantage of market opportunities and increase our revenues and earnings. These transactions may include the issuance of additional indebtedness, the repurchase of our outstanding indebtedness, the repurchase of our common stock, the acquisition of homebuilders and other companies, the purchase or sale of assets or lines of business, the issuance of common stock, strategic transactions to accelerate our land light strategy or securities convertible into shares of common stock, and/or the pursuit of other financing alternatives. In connection with some of our non-homebuilding businesses, we are also considering other types of transactions such as sales, restructurings, joint ventures, spin-offs or initial public offerings as we continue to move back towards being a pure play homebuilding company.

Subject to market conditions, we intend to spin off our Multifamily and single family home for rent asset management businesses, together with some investment assets, by transferring them to a newly formed subsidiary, Quarterra Group, Inc. ("Quarterra"), and distributing the stock of that subsidiary to our stockholders. That will make us more of a pure homebuilding and financial services company. At this time, we have deferred this transaction due to current market conditions.

3435

Our Homebuilding senior notes and other debts payable as well as letters of credit and surety bonds are summarized within Note 7 of the Notes to Condensed Consolidated Financial Statements. Our Homebuilding average debt outstanding and the average rates of interest was as follows:


	Three Months Ended									Three Months Ended
		Three Months Ended
		February 28,
(Dollars in thousands)
(Dollars in thousands)
(Dollars in thousands)	(Dollars in thousands)	2023		2022		February 29, 2024		February 28, 2023
Homebuilding average debt outstanding	Homebuilding average debt outstanding	$	4,054,756	$	4,885,046
Average interest rate	Average interest rate	4.9%		4.7%		Average interest rate	4.8%		4.9%
Interest incurred	Interest incurred	$	49,577	59,933

The maximum available borrowings on our ~~unsecured revolving credit facility (the "Credit Facility")~~Credit Facility were as follows:


(In thousands)	February ~~28, 2023~~29, 2024
~~Commitment~~Commitments - maturing in April 2024	$	350,000
~~Commitment~~Commitments - maturing in May 2027	2,225,000
Total ~~commitment~~commitments	$	2,575,000
Accordion feature	425,000
Total maximum borrowings capacity	$	3,000,000

The proceeds available under the Credit Facility, which are subject to specified conditions for borrowing, may be used for working capital and general corporate purposes. The ~~credit agreement~~Credit Facility also provides that up to $500 million in commitments may be used for letters of credit. The maturity, debt covenants and details of the Credit Facility are unchanged from the disclosure in ~~the Company's~~our Financial Condition and Capital Resources section in ~~its~~our Annual Report on Form 10-K for the fiscal year ended November 30, ~~2022.~~2023. In addition to the Credit Facility, we have other letter of credit facilities with different financial institutions.

Under the agreement governing our Credit Facility, ~~agreement,~~ we are required to maintain a minimum consolidated tangible net worth, a maximum leverage ratio and either a liquidity or an interest coverage ratio. These ratios are calculated per the Credit Facility agreement, which involves adjustments to GAAP financial measures. We believe we were in compliance with our debt covenants as of February ~~28, 2023.~~29, 2024. The following summarizes our debt covenant requirements and our actual levels or ratios with respect to those covenants as calculated per the Credit Facility agreement as of February ~~28, 2023:~~29, 2024:

(Dollars in thousands)

Covenant Level

Level Achieved as of
February 28, 2023

(Dollars in thousands)

Covenant Level

Level Achieved as of
February 29, 2024

Minimum net worth test

12,314,416

18,093,690

Maximum leverage ratio

65.0%

1.8%

Maximum leverage ratio

65.0%

(7.2)%

Liquidity test

1.00

36.28

Financial Services Warehouse Facilities

Our 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 us and are expected to be renewed or replaced with other facilities when they mature. The LMF Commercial warehouse facilities finance LMF Commercial loan origination and securitization activities and were secured by up to 80% interests in the originated commercial loans financed. These facilities and the related borrowings and collateral are detailed in Note 2 of the Notes to Condensed Consolidated Financial Statements.

Changes in Capital Structure

In March 2022, our Board of Directors approved an authorization for us to repurchase up to the lesser of $2 billion in value, or 30 million in shares, of our outstanding Class A or Class B common stock. The repurchase authorization has no expiration date. This authorization was in addition to what was remaining of ~~the~~our October 2021 stock repurchase program. In January 2024, our Board of Directors authorized an increase to our stock repurchase program to enable us to repurchase up to an additional $5 billion in value of our outstanding Class A or Class B common stock. Repurchases are authorized to be made in open-market or private transactions. The repurchase authorization has no expiration date. The details of our Class A and Class B common stock repurchases under the authorized repurchase ~~programs~~program for the three months ended February 29, 2024 and February 28, 2023 ~~and 2022~~ are included in Note 4 of the Notes to Condensed Consolidated Financial Statements.

During the three months ended February ~~28, 2023,~~29, 2024, treasury shares increased ~~2.7~~by 3.6 million shares primarily due to our repurchase of 2.0 million shares of Class A and Class B common stock through our stock repurchase program. During the three months ended February 28, 2022, treasury shares increased 5.9 million shares primarily due to our repurchase of 5.33.4 million shares of Class A and Class B common stock through our stock repurchase program.

On February ~~10, 2023,~~7, 2024, we paid a quarterly cash ~~dividends~~dividend of ~~$0.375~~$0.50 per share on both of our Class A and Class B common stock to holders of record at the close of business on January ~~27, 2023,~~24, 2024, as declared by our Board of Directors on January ~~12, 2023.~~9, 2024. We approved and paid cash dividends of $0.375 per share for each of the four quarters of ~~2022~~2023 on both our Class A and Class B common stock.

3536

Based on our current financial condition and credit relationships, we believe that our operations and borrowing resources will provide for our current and long-term capital requirements at our anticipated levels of activity.

Supplemental Financial Information

Currently, certain of our 100% owned subsidiaries, which are primarily homebuilding subsidiaries, are guaranteeing all our senior notes. The guarantees are full and unconditional.

The indentures governing our senior notes require that, if any of our 100% owned subsidiaries, other than our finance company subsidiaries and foreign subsidiaries, directly or indirectly guarantee at least $75 million principal amount of debt of Lennar Corporation (other than senior notes), those subsidiaries must also guarantee Lennar Corporation’s obligations with regard to its senior notes. Included in the following tables as part of “Obligors” together with Lennar Corporation are subsidiary entities that are not finance company subsidiaries or foreign subsidiaries and were guaranteeing the senior notes because at February ~~28, 2023~~29, 2024 they were guaranteeing Lennar Corporation's letter of credit facilities and its Credit Facility, disclosed in Note 7 of the Notes to Condensed Consolidated Financial Statements. The guarantees are full, unconditional and joint and several and the guarantor subsidiaries are 100% directly or indirectly owned by Lennar Corporation. A subsidiary's guarantee of Lennar senior notes will be suspended at any time when it is not directly or indirectly guaranteeing at least $75 million principal amount of debt of Lennar Corporation (other than senior notes), and a subsidiary will be released from its guarantee and any other obligations it may have regarding the senior notes if all or substantially all its assets, or all of its capital stock, are sold or otherwise disposed.

Supplemental information for the Obligors, which excludes non-guarantor subsidiaries and intercompany transactions, at February ~~28, 2023~~29, 2024 is included in the following tables. Intercompany balances and transactions within the Obligors have been eliminated and amounts attributable to the Obligors' investment in consolidated subsidiaries that have not issued or guaranteed the senior notes have been excluded. Amounts due from and transactions with nonobligor subsidiaries and related parties are separately disclosed:

(In thousands)

February 28, 2023

November 30, 2022

(In thousands)

Due from non-guarantor subsidiaries

18,605,868

17,959,091

Equity method investments

1,096,347

1,090,831

Equity method investments

Total assets

41,171,388

40,929,435

Total liabilities

9,839,178

10,455,359

Total liabilities


	Three Months Ended
(In thousands)	February ~~28, 2023~~29, 2024
Total revenues	$	~~6,070,975~~6,858,418
Operating earnings	~~884,867~~982,106
Earnings before income taxes	~~748,210~~811,299
Net earnings attributable to Lennar	~~570,569~~628,285

Off-Balance Sheet Arrangements

We regularly monitor the results of ~~both~~ our Homebuilding, Multifamily and Lennar Other unconsolidated joint ventures and any trends that may affect their future liquidity or results of operations. We also monitor the performance of joint ventures in which we have investments on a regular basis to assess compliance with debt covenants. For those joint ventures not in compliance with the debt covenants, we evaluate and assess possible impairment of our ~~investment.~~investments. We believe that substantially all of the joint ventures were in compliance with applicable debt covenants at February ~~28, 2023.~~29, 2024.

Homebuilding: Investments in Unconsolidated Entities

As of February ~~28, 2023,~~29, 2024, we had equity investments in 4847 active ~~homebuilding~~Homebuilding and land unconsolidated entities (of which 45 had recourse debt, 15 had non-recourse debt and 2927 had no debt) ~~compared to~~and 48 active ~~homebuilding~~Homebuilding and land unconsolidated entities at November 30, ~~2022.~~2023. Historically, we have invested in unconsolidated entities that acquired and developed land (1) for our homebuilding operations or for sale to third parties or (2) for the construction of homes for sale to third-party homebuyers. Through these entities, we have primarily sought to reduce and share our risk by limiting the amount of our capital invested in land, while obtaining access to potential future homesites and allowing us to participate in strategic ventures. The use of these entities also, in some instances, has enabled us to acquire land to which we could not otherwise obtain access, or could not obtain access on as favorable terms, without the participation of a strategic partner. Participants in these joint ventures have been land owners/developers, other homebuilders and financial or strategic partners. Joint ventures with land owners/developers have given us access to homesites owned or controlled by our partners. Joint ventures with other homebuilders have provided us with the ability to bid jointly with our partners for large land parcels. Joint ventures with financial partners have allowed us to combine our homebuilding expertise with access to our partners’ capital. Joint ventures with strategic partners have allowed us to combine our homebuilding expertise with the specific expertise (e.g. commercial or infill experience) of our

3637

~~infill experience) of our~~ partners. Each joint venture is governed by an executive committee consisting of members from the partners. Details regarding these investments, balances and debt are included in Note 3 of the Notes to Condensed Consolidated Financial Statements.

The following table summarizes the principal maturities of our Homebuilding unconsolidated entities ~~("JVs"~~(“JVs”) debt as per current debt arrangements as of February ~~28, 2023.~~29, 2024. It does not represent estimates of future cash payments that will be made to reduce debt balances. Many JV loans have extension options in the loan agreements that would allow the loans to be extended into future years.


		Principal Maturities of Unconsolidated JVs by Period
		Principal Maturities of Unconsolidated JVs by Period
		Principal Maturities of Unconsolidated JVs by Period
(In thousands)									(In thousands)	Total JV Debt	2024	2025	2026	Thereafter	Other

		Principal Maturities of Unconsolidated JVs by Period
(In thousands)		Total JV Debt		2023	2024	2025	Thereafter	Other

Bank debt without recourse to Lennar

Bank debt without recourse to Lennar

Bank debt without recourse to Lennar	Bank debt without recourse to Lennar	$	1,390,220	156,069	393,883	726,236	114,032	—
Land seller and other debt without recourse to Lennar	Land seller and other debt without recourse to Lennar	10,442		—	—	—	10,442	—
Maximum recourse debt exposure to Lennar	Maximum recourse debt exposure to Lennar	10,529		—	—	—	10,529	—
Debt issuance costs	Debt issuance costs	(18,496)		—	—	—	—	(18,496)
Total	Total	$	1,392,695	156,069	393,883	726,236	135,003	(18,496)

We own an approximately 40% interest in FivePoint Holdings, LLC., a NYSE listed company, and companies it manages, which own three large multi-use properties in California.

We manage, and have an investment in, Upward America Fund, which purchases single family homes and operates them as rental properties.

Multifamily: Investments in Unconsolidated Entities

At February ~~28, 2023,~~29, 2024, Multifamily had equity investments in 2321 active unconsolidated entities that are engaged in multifamily residential developments (of which 18 had non-recourse debt and 53 had no debt)~~, compared to 23~~ and 22 active unconsolidated entities at November 30, ~~2022.~~2023. We invest in unconsolidated entities that acquire and develop land to construct multifamily rental properties. Through these entities, we are focusing on developing a geographically diversified portfolio of institutional quality multifamily rental properties in select U.S. markets. Initially, we participated in building multifamily developments and selling them soon after they were completed. Participants in these joint ventures have been financial partners. Joint ventures with financial partners have allowed us to combine our development and construction expertise with access to our partners’ capital. Each joint venture is governed by an operating agreement that provides significant substantive participating voting rights on major decisions to our partners.

The Multifamily segment includes LMV I, LMV II and Canada Pension Plan Investments Fund, which are long-term multifamily development investment vehicles involved in the development, construction and property management of class-A multifamily assets. Details of each as of and during the three months ended February ~~28, 2023~~29, 2024 are included in Note 3 of the Notes to Condensed Consolidated Financial Statements.

The following table summarizes the principal maturities of our Multifamily unconsolidated entities debt as per current debt arrangements as of February ~~28, 2023.~~29, 2024. It does not represent estimates of future cash payments that will be made to reduce debt balances.


		Principal Maturities of Unconsolidated JVs by Period
		Principal Maturities of Unconsolidated JVs by Period
		Principal Maturities of Unconsolidated JVs by Period
		Principal Maturities of Unconsolidated JVs by Period
(In thousands)	(In thousands)	Total JV Debt		2023	2024	2025	Thereafter	Other	(In thousands)	Total JV Debt	2024	2025	2026	Thereafter	Other

Debt without recourse to Lennar	Debt without recourse to Lennar	$	4,504,618	1,073,145	1,271,368	1,128,171	1,031,934	—

Debt without recourse to Lennar

Debt without recourse to Lennar
Debt issuance costs	Debt issuance costs	(24,886)		—	—	—	—	(24,886)
Total	Total	$	4,479,732	1,073,145	1,271,368	1,128,171	1,031,934	(24,886)

Lennar Other: Investments in Unconsolidated Entities

As part of the sale of the Rialto investment and asset management platform, ~~in 2018,~~ we retained ~~our ability~~the right to receive a portion of payments with regard to carried interests if certain funds meet specified performance thresholds. We periodically receive advance distributions related to the carried interests in order to cover income tax obligations resulting from allocations of taxable income to the carried interests. These distributions are not subject to clawbacks but reduce future carried interest payments to which we become entitled from the applicable funds and were recorded as ~~revenues.~~equity in earnings (loss) in the condensed consolidated statement of operations. Our investment in the Rialto funds ~~and investment vehicles~~ totaled ~~$177.7~~$142.2 million and ~~$185.1~~$148.7 million as of February ~~28, 2023~~29, 2024 and November 30, ~~2022,~~2023, respectively.

As of February ~~28, 2023~~29, 2024 and November 30, ~~2022,~~2023, we had strategic technology investments in unconsolidated entities of ~~$137.9~~$147.5 million and ~~$131.5~~$127.5 million, ~~respectively.~~respectively, accounted for under the equity method of accounting. Our strategic technology investments through our LENX business help to enhance the homebuying and home ownership experience, and help us stay at the forefront of homebuilding innovation. Details regarding these investments are included in Note 3 of the Notes to Condensed Consolidated Financial Statements.

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Option Contracts

We often obtain access to land through option contracts, which generally enable us to control portions of properties owned by third parties (including land ~~funds)~~banks) and unconsolidated entities until we have determined whether to exercise the options. Since fiscal year 2020, we have been increasing the percentage of our total homesites that we control through option contracts rather than own.

The table below indicates the number of ~~homesites owned (excluding homes in inventory) and~~ homesites to which we had access through option contracts with third parties and unconsolidated JVs (i.e., controlled homesites) and homesites owned (excluding homes in inventory):
Years of
February 28, 2023 Controlled Homesites Owned Homesites Total Homesites Supply Owned (1)
East 85,271 38,542 123,813
Central 38,662 27,475 66,137
Texas 74,548 29,650 104,198
West 59,472 27,402 86,874
Other 5,758 1,891 7,649
Total homesites 263,711 124,960 388,671 1.9
% of total homesites 68 % 32 %
Years of
February 28, 2022 Controlled Homesites Owned Homesites Total Homesites Supply Owned (1)
East 97,731 46,949 144,680
Central 34,465 34,503 68,968
Texas 78,031 37,790 115,821
West 62,889 39,447 102,336
Other 5,758 1,891 7,649
Total homesites 278,874 160,580 439,454 2.7
% of total homesites 63 % 37 %


				Years of
February 29, 2024	Controlled Homesites	Owned Homesites	Total Homesites	Supply Owned (1)
East	84,250	20,868	105,118
Central	69,280	31,125	100,405
Texas	94,065	19,789	113,854
West	70,746	22,784	93,530
Other	4,828	1,891	6,719
Total homesites	323,169	96,457	419,626	1.3
% of total homesites	77%	23%


				Years of
February 28, 2023	Controlled Homesites	Owned Homesites	Total Homesites	Supply Owned (1)
East	74,797	28,376	103,173
Central	49,136	37,641	86,777
Texas	74,548	29,650	104,198
West	59,472	27,402	86,874
Other	5,758	1,891	7,649
Total homesites	263,711	124,960	388,671	1.9
% of total homesites	68%	32%

(1)Based on trailing twelve months of home deliveries.

Details on option contracts and related consolidated inventory not owned and exposure are included in Note 109 of the Notes to Condensed Consolidated Financial Statements.

Contractual Obligations and Commercial Commitments

Our contractual obligations and commercial commitments have not changed materially from those reported in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended November 30, ~~2022. There were no outstanding~~2023, except for a decrease of $600 million in borrowings under ~~our Credit Facility as of February 28, 2023.~~the Financial Services' warehouse repurchase facilities.

(3) Recently Adopted Accounting Pronouncements

See Note 1 of the Notes to Condensed Consolidated Financial Statements included under Item 1 of this Quarterly Report on Form 10-Q for a discussion of recently adopted accounting pronouncements.

(4) Critical Accounting Policies

~~We believe that there~~There have been no significant changes to our critical accounting policies during the three months ended February ~~28, 2023~~29, 2024 as compared to those we disclosed in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the fiscal year ended November 30, ~~2022.~~2023.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risks related to fluctuations in interest rates on our investments, debt obligations, loans held-for-sale and loans held-for-investment. We utilize forward commitments and option contracts to mitigate the risks associated with our mortgage loan portfolio. Since November 30, 2023, there have been no material changes in market risk exposures associated with interest rate risk.

As of February ~~28, 2023,~~29, 2024, we had no outstanding borrowings under our Credit Facility.

As of February ~~28, 2023,~~29, 2024, our borrowings under Financial Services' warehouse repurchase facilities totaled ~~$1.0~~$1.3 billion under residential facilities and ~~$11.4~~$89.6 million under LMF Commercial facilities.

Information Regarding Interest Rate Sensitivity

Principal (Notional) Amount by

Expected Maturity and Average Interest Rate

February ~~28, 2023~~29, 2024


		Nine Months Ending November 30,			Years Ending November 30,														Fair Value at February 28,
	Nine Months Ending November 30,																					Nine Months Ending November 30,		Years Ending November 30,							Fair Value at February 29,
(Dollars in millions)	(Dollars in millions)	2023			2024		2025		2026		2027		2028		Thereafter		Total		2023	(Dollars in millions)	2024		2025		2026	2027	2028	2029	Thereafter	Total		2024
LIABILITIES:	LIABILITIES:
Homebuilding:	Homebuilding:
Homebuilding:
Homebuilding:
Senior Notes and other debts payable:	Senior Notes and other debts payable:
Senior Notes and other debts payable:
Senior Notes and other debts payable:
Fixed rate
Fixed rate
Fixed rate	Fixed rate	$	73.7		1,506.1		679.2		448.2		1,275.7		4.0		38.9		4,025.8		3,958.6
Average interest rate	Average interest rate	2.8		%	5.0	%	4.7	%	5.2	%	4.8	%	3.0	%	6.6	%	4.9	%	—

Financial Services:	Financial Services:

Financial Services:

Financial Services:
Notes and other debts payable:
Notes and other debts payable:
Notes and other debts payable:	Notes and other debts payable:
Fixed rate	Fixed rate	$	—		—		—		—		—		—		132.0		132.0		132.6
Average interest rate		—			—		—		—		—		—		3.4	%	3.4	%	—
Variable rate		$	1,039.6		—		—		—		—		—		—		1,039.6		1,039.7
Average interest rate		6.4		%	—		—		—		—		—		—		6.4	%	—
Multifamily:
Notes payable:
Fixed rate
Fixed rate	Fixed rate	$	13.5		—		—		—		—		—		—		13.5		13.5
Average interest rate	Average interest rate	0.0		%	—		—		—		—		—		—		0.0	%	—
Variable rate	Variable rate	$	—		3.3		—		—		—		—		—		3.3		3.3
Average interest rate	Average interest rate	—			3.6	%	—		—		—		—		—		3.6	%	—

For additional information regarding our market risk refer to Item 7A. Quantitative and Qualitative Disclosures About Market Risk in our Annual Report on Form 10-K for the fiscal year ended November 30, ~~2022.~~2023.

Item 4. Controls and Procedures

~~Each of~~Our Executive Chairman and Co-Chief Executive Officer, our Co-Chief Executive ~~Officers~~Officer and ~~Co-Presidents ("Co-CEOs"~~President (together, “Co-CEOs”) and our Chief Financial Officer (“CFO”) participated in an evaluation by our management of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this ~~report.~~Quarterly Report on Form 10-Q. Based on their participation in that evaluation, our Co-CEOs and CFO concluded that our disclosure controls and procedures were effective as of February ~~28, 2023~~29, 2024 to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and to ensure that information required to be disclosed in our reports filed or furnished under the Securities Exchange Act of 1934, as amended, is accumulated and communicated to our management, including both of our Co-CEOs and our CFO, as appropriate, to allow timely decisions regarding required disclosures.

Both of our Co-CEOs and our CFO also participated in an evaluation by our management of any changes in our internal control over financial reporting that occurred during the quarter ended February ~~28, 2023.~~29, 2024. That evaluation did not identify any changes that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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Part II. Other Information

Item 1. Legal Proceedings

We are party to various claims and lawsuits relating to homes we sold which arise in the ordinary course of business, but we do not consider the volume of our claims and lawsuits unusual given the number of homes we deliver and the fact that the lawsuits often relate to homes delivered several years before the lawsuits are commenced. Although the specific allegations in the lawsuits differ, they most commonly involve claims that we failed to construct homes in particular communities in accordance with plans and specifications or applicable construction codes and seek reimbursement for sums allegedly needed to remedy the alleged deficiencies, assert contract issues or relate to personal injuries. Lawsuits of these types are common within the homebuilding industry. We are a plaintiff in a number of cases in which we seek contribution from our subcontractors for home repair costs. The costs incurred by us in construction defect lawsuits may be offset by warranty reserves, our third-party insurers, subcontractor insurers or indemnity contributions from subcontractors. From time to time, we are also a party to lawsuits involving purchases and sales of real property. These lawsuits often include claims regarding representations and warranties made in connection with the transfer of the property and disputes regarding the obligation to purchase or sell the property. From time-to-time, we also receive notices from environmental agencies or other regulators regarding alleged violations of environmental or other laws. We typically settle ~~these~~all of the foregoing matters before they reach litigation for amounts that are not material to us.

We do not believe that the ultimate resolution of these claims or lawsuits will have a material adverse effect on our business or financial position. However, the financial effect of litigation concerning purchases and sales of property may depend upon the value of the subject property, which may have changed from the time the agreement for purchase or sale was entered into.

Item 1A. Risk Factors

Our business is subject to a variety of risks and uncertainties. These risks are described elsewhere in this Quarterly Report on Form 10-Q, including in Management’s Discussion and Analysis of Financial Condition and Results of Operations above, or in our other filings with the SEC, including Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended November 30, 2023. There have been no material changes in our risk factors from those disclosed in ~~our Annual Report on Form 10-K for the year ended November 30, 2022,~~those reports, other than the impact of inflation and increased interest rates, which are discussed in ~~the~~ Management’s Discussion and Analysis of Financial Condition and Results of Operations above.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table provides information about our repurchases of common stock during the three months ended February ~~28, 2023:~~29, 2024:

Period: Total Number of Shares Purchased (1) Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) Maximum Number of Shares that may yet be Purchased under the Plans or Programs (2)
December 1 to December 31, 2022 100,170 $ 87.05 100,000 25,504,347
January 1 to January 31, 2023 887,999 $ 91.53 887,999 24,616,348
February 1 to February 28, 2023 1,656,738 $ 98.17 1,012,001 23,604,347


Period:	Total Number of Shares Purchased (1)	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)	Maximum Number of Shares that may yet be Purchased under the Plans or Programs (2)
December 1 to December 31, 2023	124,966	$	145.52	123,877	15,480,470
January 1 to January 31, 2024	2,074,719	$	147.74	1,902,014	13,578,456
February 1 to February 29, 2024	1,747,777	$	151.78	1,374,109	12,204,347

(1)Includes shares of Class A common stock withheld by us to cover withholding taxes due, at the election of certain holders of nonvested shares, with market value approximating the amount of withholding taxes due.

(2)In March 2022, our Board of Directors approved an authorization for us to repurchase up to the lesser of $2 billion in value, or 30 million in shares, of our outstanding Class A or Class B common stock. The repurchase authorization has no expiration date. This authorization was in addition to what was remaining of ~~the~~our October 2021 stock repurchase program. In January 2024, our Board of Directors authorized an increase to our stock repurchase program to enable us to repurchase up to an additional $5 billion in value of our outstanding Class A or Class B common stock. Repurchases are authorized to be made in open-market or private transactions. The repurchase authorization has no expiration date.

Items 3 - 5.4. Not Applicable

Item 5. Other Information

On February 9, 2024, Jeff J. McCall, Executive Vice President, entered into a trading plan designed to satisfy the affirmative defense of Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the “Plan”). The Plan provided for sales of up to 30,000 shares of our common stock beginning on May 10, 2024 until December 10, 2024 or once all of the shares have been sold. The trading plan was adopted in accordance with our insider trading policy. Actual sale transactions will be disclosed publicly in filings with the SEC in accordance with applicable securities laws, rules and regulations.

Item 6. Exhibits


10.1*10.1	* **	2023 Award ~~Agreements~~Agreement under the Company’s 2016 Incentive Compensation Plan, as amended, for ~~Mr. Miller, Mr. Beckwitt, Mr. Jaffe, Ms. Bessette, Mr. McCall and Mr. Sustana – Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, dated February 28, 2023.~~David Collins.
10.2*10.2	* **	Amended 2023 Award Agreement under the Company’s 2016 Incentive Compensation Plan, as amended, for David Collins.
10.3	* **	2024 Award Agreement under the Company’s 2016 Incentive Compensation Plan, as amended, for Stuart Miller.
10.4	* **	2024 Award Agreement under the Company’s 2016 Incentive Compensation Plan, as amended, for Jonathan M. Jaffe.
10.5	* **	2024 Award Agreement under the Company’s 2016 Incentive Compensation Plan, as amended, for Diane Bessette.
10.6	* **	2024 Award Agreement under the Company’s 2016 Incentive Compensation Plan, as amended, for Jeff McCall.
10.7	* **	2024 Award Agreement under the Company’s 2016 Incentive Compensation Plan, as amended, for Mark Sustana.
10.8	* **	2024 Award Agreement under the Company’s 2016 Incentive Compensation Plan, as amended, for David Collins.
10.9	* **	Form of ~~2023~~2024 Award Agreement under the Company’s 2016 Equity Incentive Plan for ~~Mr.~~Stuart Miller, ~~Mr. Beckwitt, Mr.~~Jonathan M. Jaffe, ~~Ms.~~Diane Bessette and ~~Mr. McCall – Incorporated by reference to Exhibit 10.1 of theCompany’s Current Report on Form 8-K, dated February 28, 2023.~~Jeff McCall.
31.1*31.1	**	Rule 13a-14(a) certification by ~~Rick Beckwitt.~~Stuart Miller.
31.2*31.2	**	Rule 13a-14(a) certification by Jonathan M. Jaffe.
31.3*31.3	**	Rule 13a-14(a) certification by Diane Bessette.
32.	***	Section 1350 certifications by ~~Rick Beckwitt,~~Stuart Miller, Jonathan M. Jaffe, and Diane Bessette.
101.	**	The following financial statements from Lennar Corporation's Quarterly Report on Form 10-Q for the quarter ended February ~~28, 2023,~~29, 2024, filed on ~~April 4, 2023,~~March 29, 2024, were formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations and Comprehensive Income, (iii) Condensed Consolidated Statements of Cash Flows and (iv) the Notes to Condensed Consolidated Financial Statements.
104***104		Cover Page Interactive Data File (formatted as iXBRL and contained in Exhibit 101).

*Management contract or compensatory plan or ~~arrangement~~arrangement.

** Filed herewith.

*** ~~Included in Exhibit 101.~~

Furnished herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		Lennar Corporation
		(Registrant)

Date:	~~April 4, 2023~~March 29, 2024	/s/ Diane Bessette
		Diane Bessette
		Vice President, Chief Financial Officer and Treasurer

Date:	~~April 4, 2023~~March 29, 2024	/s/ David Collins
		David Collins
		Vice President and Controller

4244


			Three Months Ended February 28, 2022
(In thousands)	Total Equity		Class A Common Stock	Class B Common Stock	Additional Paid - in Capital	Treasury Stock	Accumulated Other Comprehensive Income (Loss)	Retained Earnings	Noncontrolling Interests
Balance at November 30, 2021	$	20,996,282	30,050	3,944	8,807,891	(2,709,448)	(1,341)	14,685,329	179,857
Net earnings (including net earnings attributable to noncontrolling interests)	509,315		—	—	—	—	—	503,581	5,734
Employee stock and directors plans	(54,886)		193	—	(140)	(54,939)	—	—	—
Purchases of treasury stock	(526,361)		—	—	—	(526,361)	—	—	—




Amortization of restricted stock	81,457		—	—	81,457	—	—	—	—
Cash dividends	(110,122)		—	—	—	—	—	(110,122)	—

Receipts related to noncontrolling interests	6,984		—	—	—	—	—	—	6,984
Payments related to noncontrolling interests	(59,388)		—	—	—	—	—	—	(59,388)

Non-cash purchase or activity of noncontrolling interests, net	1,124		—	—	(34,057)	—	—	—	35,181


Total other comprehensive income, net of tax	3,027		—	—	—	—	3,027	—	—
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