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 Report 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, 2021.

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 investigation 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 potential negative impact to our business of the ongoing coronavirus (“COVID-19”) pandemic, 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; 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 Form 10-K for the fiscal year ended November 30, 2021 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.

Outlook

We had excellent third quarter results as we continued to drive strong closings and performance, which continues to enhance our positioning in evolving market conditions. In addition to the well documented supply chain constraints and limited workforce slowing production, housing has now been considerably impacted by the more than doubling of mortgage rates over the past months, and therefore, the increase in monthly payment costs and reduction of affordability. The housing market has continued to weaken, as expected, in response to the Federal Reserve’s very rapid and aggressive reaction to inflation. Homebuilding finds itself, once again, at the forefront of all that is happening in the economy, and the Federal Reserve’s use of its interest rate tool to curtail inflation is having the desired effect on the “for sale” housing market. While the housing market is now adjusting, the Federal Reserve Chair’s recent increases in the fed funds rate, together with an articulated determination to do more, suggests even more challenges ahead.

While demand has cooled high pricing levels, there is still a housing shortage across the country, especially work force housing, and household formation has continued to rise. Additionally, buyers are still seeking shelter from inflationary pressures on rentals, as scarce rentals and increased demand from those who would otherwise purchase, drive and keep rents higher. To maintain sales momentum, we have offered mortgage buy down programs and increased sales incentives. We have adjusted prices in various communities to the levels that are necessary to maintain reasonable sales volumes. During the third quarter and early September, we had nine markets that continued to perform well, 22 markets where we have made significant price adjustments to regain sales momentum and seven markets which reflect a more significant market softening and correction.

We saw a three-day reduction in cycle time, the time it takes us to build a home, in the third quarter from the second quarter. Although this is minor, it shows that we and our suppliers are making progress controlling supply issues. Construction labor remains very tight as industry wide high levels of volume for second half deliveries moves through the various stages of construction. We expect to start seeing an easing in labor as the overall industry reduces the level of construction starts.

We continue to strategically acquire land, primarily through options. This continues our land-light strategy as our percentage of homesites controlled increased by August 31, 2022 to 63% from 53% in the prior year, while our years’ supply of land owned decreased to 2.9 years as compared to 3.3 years in the prior year. We continued to pay down debt without replacement. As a matter of careful capital allocation this quarter, given the current market conditions, we chose not to repurchase stock in favor of early retirement of debt, however we expect to continue to repurchase stock in the future as opportunities present themselves.

We are focused on our strategy going forward:

• We have adjusted prices in various communities to levels that should/are intended to enable us to maintain reasonable volume. We will continue to build even as prices adjust, in order to fill the shortfall and provide much needed workforce housing.

• We are working with our trade partners to right size our cost structure to current market conditions.

• We are being extremely selective on new land acquisitions and new communities. We have re-reviewed and re-underwritten land purchases in our pipeline to reflect current market conditions.

• In sync with selling homes, we will continue to improve our cost of doing business by focusing on and reducing SG&A expenses as a percentage of home sale revenues. We have seen quarter over quarter improvement in our SG&A over the past years and we expect to drive efficiencies through technology and process improvement to offset market adjustments where possible while we leverage our extraordinary management team across the country.

• We will maintain tight inventory control. As our growth rate is reduced and as cycle times revert to normal our inventory should shrink, which will generate sizable cash flow. Our commitment to match production to sales pace should ensure that we will not create standing inventory.

• We will continue to focus on our cash flow and bottom line to protect and enhance our already extraordinary balance sheet.

• In order to carry out our long-planned spin-off, we have formed a company to which we will transfer our subsidiaries that are engaged primarily in creating vehicles for investing in real estate related assets and we are well along the path that will enable us to distribute the stock of that company to our stockholders.

While the market is shifting and adjusting to a new, higher interest rate environment, we believe we are well positioned financially, organizationally and technologically to succeed in these conditions. We recognize that inflation continues to be a legitimate threat and important parts of the economy are slowing. We know that the Federal Reserve is determined to curtail inflation, and this will take some time. But we also believe we know how to adjust as the market changes, and we are making those adjustments. It continues to be difficult to provide the targeted guidance about our expected future performance that we historically offer given the uncertainty about market conditions, so we are providing very broad ranges to give some boundaries for each of the components of our fourth quarter. We expect our new orders for the fourth quarter of 2022 to be in the range of 14,000 to 15,500 homes, and we anticipate our fourth quarter deliveries to be in the range of 20,000 to 21,000 homes. We

expect gross margins to be in the range of 26.0% to 27.0%, and we expect our SG&A as a percentage of home sale revenues to be between 5.7% and 5.9%. We expect our fourth quarter ending community count to increase about 5% from the end of the third quarter, and we expect a further increase in 2023, although there are many factors that could cause the expected increase in community count not to occur.

As we look to the remainder of 2022, we recognize that there are challenges in the market to which we must pay careful attention. We expect that we will meet the challenges and that we will continue to adjust to maximize opportunity and drive us into an ever better future.

(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 and nine months ended August 31, 2022 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 $1.5 billion, or $5.03 per diluted share ($5.04 per basic share), in the third quarter of 2022, compared to net earnings attributable to Lennar of $1.4 billion, or $4.52 per diluted share ($4.52 per basic share), in the third quarter of 2021. Results included unrealized mark-to-market losses of $85.8 million, a $35.5 million one-time charge due to an increase in a litigation accrual related to a court judgment in the third quarter of 2022 and a $53.6 million benefit in income taxes primarily related to the resolution of an uncertain state tax position. Results for the third quarter of 2021 included unrealized mark-to-market gains of $493.7 million on our publicly traded technology investments. Excluding mark-to-market gains and losses on our publicly traded technology investments in both years and one-time items in the current year, the third quarter net earnings attributable to Lennar in 2022 were $1.5 billion, or $5.18 per diluted share, compared to the third quarter net earnings attributable to Lennar in 2021 of $1.0 billion, or $3.27 per diluted share.

Financial information relating to our operations was as follows:

			Three Months Ended August 31, 2022
(In thousands)			Homebuilding						Financial Services						Multifamily						Lennar Other						Corporate						Total
Revenues:
Sales of homes			$	8,439,125					—						—						—						—						8,439,125
Sales of land			32,397						—						—						—						—						32,397
Other revenues			7,974						202,078						243,056						9,801						—						462,909
Total revenues			8,479,496						202,078						243,056						9,801						—						8,934,431
Costs and expenses:
Costs of homes sold			5,973,889						—						—						—						—						5,973,889
Costs of land sold			34,994						—						—						—						—						34,994
Selling, general and administrative expenses			485,854						—						—						—						—						485,854
Other costs and expenses			—						138,730						215,433						10,007						—						364,170
Total costs and expenses			6,494,737						138,730						215,433						10,007						—						6,858,907
Equity in earnings (loss) from unconsolidated entities, Multifamily other gain and Lennar Other other income (expense), net, and other gain (loss)			(14,652)						—						20,864						(31,935)						—						(25,723)
Homebuilding other expense, net			(6,883)						—						—						—						—						(6,883)
Lennar Other unrealized losses from technology investments			—						—						—						(85,839)						—						(85,839)
Operating earnings (loss)			$	1,963,224					63,348						48,487						(117,980)						—						1,957,079
Corporate general and administrative expenses			—						—						—						—						115,557						115,557
Charitable foundation contribution			—						—						—						—						17,248						17,248
Earnings (loss) before income taxes			$	1,963,224					63,348						48,487						(117,980)						(132,805)						1,824,274

			Three Months Ended August 31, 2021
(In thousands)			Homebuilding						Financial Services						Multifamily						Lennar Other						Corporate						Total
Revenues:
Sales of homes			$	6,505,708					—						—						—						—						6,505,708
Sales of land			45,055						—						—						—						—						45,055
Other revenues			7,746						206,973						167,921						8,000						—						390,640
Total revenues			6,558,509						206,973						167,921						8,000						—						6,941,403
Costs and expenses:
Costs of homes sold			4,732,403						—						—						—						—						4,732,403
Costs of land sold			39,378						—						—						—						—						39,378
Selling, general and administrative expenses			453,716						—						—						—						—						453,716
Other costs and expenses			—						94,890						174,410						9,010						—						278,310
Total costs and expenses			5,225,497						94,890						174,410						9,010						—						5,503,807
Equity in earnings (loss) from unconsolidated entities, Multifamily other loss and Lennar Other other income (expense), net, and other gain (loss)			2,391						—						(2,904)						(689)						—						(1,202)
Homebuilding other expense, net			(5,570)						—						—						—						—						(5,570)
Lennar Other unrealized gains from technology investments			—						—						—						493,671						—						493,671
Operating earnings (loss)			$	1,329,833					112,083						(9,393)						491,972						—						1,924,495
Corporate general and administrative expenses			—						—						—						—						94,942						94,942
Charitable foundation contribution			—						—						—						—						15,199						15,199
Earnings (loss) before income taxes			$	1,329,833					112,083						(9,393)						491,972						(110,141)						1,814,354

			Nine Months Ended August 31, 2022
(In thousands)			Homebuilding						Financial Services						Multifamily						Lennar Other						Corporate						Total
Revenues:
Sales of homes			$	22,124,565					—						—						—						—						22,124,565
Sales of land			63,888						—						—						—						—						63,888
Other revenues			21,230						578,945						686,436						21,579						—						1,308,190
Total revenues			22,209,683						578,945						686,436						21,579						—						23,496,643
Costs and expenses:
Costs of homes sold			15,769,536						—						—						—						—						15,769,536
Costs of land sold			71,365						—						—						—						—						71,365
Selling, general and administrative expenses			1,400,887						—						—						—						—						1,400,887
Other costs and expenses			—						320,871						654,322						23,650						—						998,843
Total costs and expenses			17,241,788						320,871						654,322						23,650						—						18,240,631
Equity in earnings (loss) from unconsolidated entities and Multifamily other gain and Lennar Other other income (expense), net, and other gain (loss)			(10,076)						—						22,468						(68,493)						—						(56,101)
Homebuilding other expense, net			(4,334)						—						—						—						—						(4,334)
Lennar Other unrealized losses from technology investments			—						—						—						(558,974)						—						(558,974)
Operating earnings (loss)			$	4,953,485					258,074						54,582						(629,538)						—						4,636,603
Corporate general and administrative expenses			—						—						—						—						334,425						334,425
Charitable foundation contribution			—						—						—						—						46,335						46,335
Earnings (loss) before income taxes			$	4,953,485					258,074						54,582						(629,538)						(380,760)						4,255,843

			Nine Months Ended August 31, 2021
(In thousands)			Homebuilding						Financial Services						Multifamily						Lennar Other						Corporate						Total
Revenues:
Sales of homes			$	17,377,353					—						—						—						—						17,377,353
Sales of land			131,483						—						—						—						—						131,483
Other revenues			20,770						669,789						476,837						20,884						—						1,188,280
Total revenues			17,529,606						669,789						476,837						20,884						—						18,697,116
Homebuilding costs and expenses:
Costs of homes sold			12,820,638						—						—						—						—						12,820,638
Costs of land sold			113,545						—						—						—						—						113,545
Selling, general and administrative			1,319,116						—						—						—						—						1,319,116
Other costs and expenses			—						290,179						474,389						18,994												783,562
Total costs and expenses			14,253,299						290,179						474,389						18,994						—						15,036,861
Equity in earnings (loss) from unconsolidated entities and Multifamily other gain and Lennar Other other income (expense), net, and other gain (loss) (1)			(3,862)						—						9,682						216,540						—						222,360
Homebuilding other income, net			3,043						—						—												—						3,043
Lennar Other unrealized gains from technology investments			—						—						—						690,791						—						690,791
Operating earnings			$	3,275,488					379,610						12,130						909,221						—						4,576,449
Corporate general and administrative expenses			—						—						—						—						296,190						296,190
Charitable foundation contribution			$	—					—						—						—						42,006						42,006
Earnings (loss) before income taxes			$	3,275,488					379,610						12,130						909,221						(338,196)						4,238,253

(1) During the nine months ended August 31, 2021, our Lennar Other segment realized a gain of $153 million on the sale of our residential solar business.

Three Months Ended August 31, 2022 versus Three Months Ended August 31, 2021

Revenues from home sales increased 30% in the third quarter of 2022 to $8.4 billion from $6.5 billion in the third quarter of 2021. Revenues were higher primarily due to a 13% increased in the number of home deliveries to 17,248 homes from 15,199 homes and a 15% increase in the average sales price to $491,000 from $428,000.

Gross margins on home sales were $2.5 billion, or 29.2%, in the third quarter of 2022, compared to $1.8 billion, or 27.3%, in the third quarter of 2021. During the third quarter of 2022, 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. Overall, gross margins improved year over year as land costs remained relatively flat while interest expense decreased as a result of our focus on reducing debt.

Selling, general and administrative expenses were $485.9 million in the third quarter of 2022, compared to $453.7 million in the third quarter of 2021. As a percentage of revenues from home sales, selling, general and administrative expenses improved to 5.8% in the third quarter of 2022, from 7.0% in the third quarter of 2021. This was the lowest percentage for any quarter in our history primarily due to a decrease in broker commissions and the benefits of our technology efforts.

Operating earnings for our Financial Services segment were $63.0 million in the third quarter of 2022. The operating earnings included a $35.5 million one-time charge due to an increase in a litigation accrual related to a court judgment. We are appealing this judgment since we believe there were clear errors of law made by the trial court. Excluding this one-time charge, operating earnings were $98.5 million, compared to operating earnings of $111.9 million in the third quarter of 2021.The decrease in operating earnings was primarily due to lower mortgage net margins driven by a more competitive mortgage market, partially offset by an increase in rate lock volume.

Operating earnings for our Multifamily segment were $48.5 million ($45.9 million net of noncontrolling interests) in the third quarter of 2022, compared to an operating loss of $9.4 million in the third quarter of 2021. Operating loss for our Lennar Other segment was $118.0 million in the third quarter of 2022, compared to operating earnings of $492.0 million in the third quarter of 2021. Lennar Other operating loss in the third quarter of 2022 was primarily due to mark-to-market losses on our publicly traded technology investments. Lennar Other operating earnings in the third quarter of 2021 were primarily due to mark-to-market gains on our publicly traded technology investments.

For the three months ended August 31, 2022 and 2021, the Company had a tax provision of $351.6 million and $405.1 million, respectively, which resulted in an overall effective income tax rate of 19.3% and 22.4%, respectively. The overall effective income tax rate was lower in the third quarter of 2022 primarily due to the resolution of an uncertain state tax position

and the retroactive reinstatement of the energy efficient home credits for 2022, resulting from the passage of the Inflation Reduction Act by Congress.

Nine Months Ended August 31, 2022 versus Nine Months Ended August 31, 2021

Revenues from home sales increased 27% in the nine months ended August 31, 2022 to $22.1 billion from $17.4 billion in the nine months ended August 31, 2021. Revenues were higher primarily due to a 10% increase in the number of home deliveries to 46,335 from 42,006 and a 16% increase in the average sales price to $479,000 from $414,000.

Gross margins on home sales were $6.4 billion, or 28.7%, in the nine months ended August 31, 2022, compared to $4.6 billion, or 26.2%, in the nine months ended August 31, 2021. During the nine months ended August 31, 2022, 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. Overall, gross margins improved year over year as land costs remained relatively flat while interest expense decreased as a result of our focus on reducing debt.

Selling, general and administrative expenses were $1.4 billion in the nine months ended August 31, 2022, compared to $1.3 billion in the nine months ended August 31, 2021. As a percentage of revenues from home sales, selling, general and administrative expenses improved to 6.3% in the nine months ended August 31, 2022, from 7.6% in the nine months ended August 31, 2021. The improvement was primarily due to a decrease in broker commissions and the benefits of our technology efforts.

Operating earnings for our Financial Services segment were $257.1 million in the nine months ended August 31, 2022. The operating earnings included a $35.5 million one-time charge due to an increase in a litigation accrual related to a court judgment. Excluding this one-time charge, operating earnings were $292.6 million, compared to operating earnings of $379.3 million in the nine months ended August 31, 2021. The decrease in operating earnings was primarily due to lower mortgage net margins driven by a more competitive mortgage market, partially offset by an increase in rate lock volume.

Operating earnings for our Multifamily segment were $54.6 million ($52.0 million net of noncontrolling interests) in the nine months ended August 31, 2022, compared to $12.1 million in the nine months ended August 31, 2021. Operating loss for our Lennar Other segment was $629.5 million in the nine months ended August 31, 2022, compared to operating earnings of $909.2 million in the nine months ended August 31, 2021. Lennar Other operating loss for the nine months ended August 31, 2022 was primarily due to mark-to-market losses on our publicly traded technology investments. Lennar Other operating earnings for the nine months ended August 31, 2021 was primarily due to mark-to-market unrealized gains on our publicly traded technology investments and the gain on the sale of our residential solar business.

For the nine months ended August 31, 2022 and 2021, we had a tax provision of $951.3 million and $975.4 million, respectively, which resulted in an overall effective income tax rate of 22.4% and 23.1%, respectively. The overall effective income tax rate was lower during the nine months ended August 31, 2022 primarily due to the resolution of an uncertain state tax position.

Homebuilding Segments

At August 31, 2022, 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 August 31, 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 (Loss) on Sales of Land						Other Revenue						Equity in Earnings (Loss) from Unconsolidated Entities						Other Income (Expense), net						Operating Earnings (Loss)
East			$	2,521,247					1,722,167						31.7		%				642,974						(1,618)						879						505						(259)						642,482
Central			1,566,610						1,191,833						23.9		%				271,939						625						429						215						(856)						272,351
Texas			1,138,901						789,121						30.7		%				279,148						105						342						—						(781)						278,814
West			3,208,713						2,262,658						29.5		%				790,072						(1,709)						1,036						2,137						(3,093)						788,443
Other (2)			3,654						8,110						(121.9)		%				(4,751)						—						5,288						(17,509)						(1,894)						(18,866)
Totals			$	8,439,125					5,973,889						29.2		%				1,979,382						(2,597)						7,974						(14,652)						(6,883)						1,963,224

			Three Months Ended August 31, 2021
			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			$	1,655,301					1,174,592						29.0		%				350,305						3,147						1,867						3,493						(1,917)						356,895
Central			1,262,540						974,843						22.8		%				196,103						95						589						526						(84)						197,229
Texas			818,869						570,228						30.4		%				184,267						1,835						365						7						(466)						186,008
West			2,764,857						2,004,108						27.5		%				603,721						600						1,600						4,263						(1,369)						608,815
Other (2)			4,141						8,632						(108.5)		%				(14,807)						—						3,325						(5,898)						(1,734)						(19,114)
Totals			$	6,505,708					4,732,403						27.3		%				1,319,589						5,677						7,746						2,391						(5,570)						1,329,833

			Nine Months Ended August 31, 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 (Loss) on Sales of Land						Other Revenue						Equity in Earnings (Loss) from Unconsolidated Entities						Other Income (Expense), net						Operating Earnings (Loss)
East			$	6,394,206					4,409,479						31.0		%				1,541,118						(7,911)						2,871						(1,512)						13,730						1,548,296
Central			3,956,302						3,044,277						23.1		%				629,206						2,244						889						646						(1,761)						631,224
Texas			3,038,064						2,110,824						30.5		%				722,023						2,976						839						—						(2,855)						722,983
West			8,718,178						6,180,948						29.1		%				2,080,936						(2,693)						2,595						4,844						(7,942)						2,077,740
Other (2)			17,815						24,008						(34.8)		%				(19,141)						(2,093)						14,036						(14,054)						(5,506)						(26,758)
Totals			$	22,124,565					15,769,536						28.7		%				4,954,142						(7,477)						21,230						(10,076)						(4,334)						4,953,485

			Nine Months Ended August 31, 2021
			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			$	4,553,941					3,278,463						28.0		%				899,817						9,558						5,053						2,942						11,435						928,805
Central			3,282,168						2,534,816						22.8		%				485,631						846						1,573						941						(691)						488,300
Texas			2,245,671						1,572,494						30.0		%				487,231						4,706						1,185						548						(1,962)						491,708
West			7,284,928						5,404,983						25.8		%				1,412,934						2,828						3,961						4,304						(695)						1,423,332
Other (2)			10,645						29,882						(180.7)		%				(48,014)						—						8,998						(12,597)						(5,044)						(56,657)
Totals			$	17,377,353					12,820,638						26.2		%				3,237,599						17,938						20,770						(3,862)						3,043						3,275,488

(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 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:

			Three Months Ended
			Homes												Dollar Value (In thousands)												Average Sales Price
			August 31,												August 31,												August 31,
			2022						2021						2022						2021						2022						2021
East			5,647						4,568						$	2,538,479					1,660,357						$	450,000					363,000
Central			3,501						3,211						1,566,610						1,262,540						447,000						393,000
Texas			3,447						2,747						1,138,901						818,869						330,000						298,000
West			4,649						4,669						3,208,713						2,764,856						690,000						592,000
Other			4						4						3,655						4,141						914,000						1,035,000
Total			17,248						15,199						$	8,456,358					6,510,763						$	491,000					428,000

Of the total homes delivered listed above, 46 homes with a dollar value of $17.2 million and an average sales price of $375,000 represent home deliveries from unconsolidated entities for the three months ended August 31, 2022, compared to 15 home deliveries with a dollar value of $5.1 million and an average sales price of $337,000 for the three months ended August 31, 2021.

			Nine Months Ended
			Homes												Dollar Value (In thousands)												Average Sales Price
			August 31,												August 31,												August 31,
			2022						2021						2022						2021						2022						2021
East			14,927						12,968						$	6,436,576					4,572,592						$	431,000					353,000
Central			8,966						8,391						3,956,302						3,282,168						441,000						391,000
Texas			9,272						7,843						3,038,064						2,245,671						328,000						286,000
West			13,151						12,793						8,718,178						7,284,927						663,000						569,000
Other			19						11						17,816						10,645						938,000						968,000
Total			46,335						42,006						$	22,166,936					17,396,003						$	479,000					414,000

Of the total homes delivered listed above, 115 homes with a dollar value of $42.4 million and an average sales price of $368,000 represent home deliveries from unconsolidated entities for the nine months ended August 31, 2022, compared to 58 home deliveries with a dollar value of $18.7 million and an average sales price of $322,000 for the nine months ended August 31, 2021.

Sales Incentives (1):

															Three Months Ended
									Average Sales Incentives Per Home Delivered												Sales Incentives as a % of Revenue
									August 31,												August 31,
															2022						2021						2022						2021
East															$	8,300					8,700						1.8		%				2.3		%
Central															7,500						6,600						1.6		%				1.7		%
Texas															19,200						9,200						5.5		%				3.0		%
West															15,600						5,100						2.2		%				0.8		%
Other															86,900						121,000						8.7		%				10.5		%
Total															$	12,300					7,300						2.5		%				1.7		%

															Nine Months Ended
									Average Sales Incentives Per Home Delivered												Sales Incentives as a % of Revenue
									August 31,												August 31,
															2022						2021						2022						2021
East															$	7,000					11,900						1.6		%				3.3		%
Central															6,600						9,300						1.5		%				2.3		%
Texas															15,200						9,000						4.4		%				3.1		%
West															10,200						6,800						1.5		%				1.2		%
Other															93,500						124,600						9.1		%				11.4		%
Total															$	9,500					9,300						1.9		%				2.2		%

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

New Orders (2):

			Three Months Ended
			Active Communities												Homes												Dollar Value (In thousands)												Average Sales Price
			August 31,												August 31,												August 31,												August 31,
			2022						2021						2022						2021						2022						2021						2022						2021
East			328						329						5,675						5,308						$	2,514,776					2,100,466						$	443,000					396,000
Central			296						281						3,033						3,189						1,348,226						1,352,814						445,000						424,000
Texas			217						233						2,577						3,203						776,156						988,644						301,000						309,000
West			345						350						3,077						4,571						2,015,897						3,006,501						655,000						658,000
Other			3						3						4						6						2,668						5,974						667,000						996,000
Total			1,189						1,196						14,366						16,277						$	6,657,723					7,454,399						$	463,000					458,000

Of the total homes listed above, 79 homes with a dollar value of $39.4 million and an average sales price of $499,000 represent homes in seven active communities from unconsolidated entities for the three months ended August 31, 2022, compared to 35 homes with a dollar value of $13.1 million and an average sales price of $375,000 in four active communities for the three months ended August 31, 2021.

			Nine Months Ended
			Homes												Dollar Value (In thousands)												Average Sales Price
			August 31,												August 31,												August 31,
			2022						2021						2022						2021						2022						2021
East			16,558						15,473						$	7,401,602					5,788,506						$	447,000					374,000
Central			9,721						9,931						4,413,718						4,086,170						454,000						411,000
Texas			8,718						9,228						2,887,204						2,800,826						331,000						304,000
West			12,889						14,358						8,834,508						8,871,465						685,000						618,000
Other			19						14						16,499						14,095						868,000						1,007,000
Total			47,905						49,004						$	23,553,531					21,561,062						$	492,000					440,000

Of the total new orders listed above, 183 homes with a dollar value of $87.5 million and an average sales price of $478,000 represent new orders from unconsolidated entities for the nine months ended August 31, 2022, compared to 102 new orders with a dollar value of $36.7 million and an average sales price of $359,000 for the nine months ended August 31, 2021.

(2)Homes represent the number of new sales contracts executed with homebuyers, net of cancellations, during the three and nine months ended August 31, 2022 and 2021.

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

			Three Months Ended												Nine Months Ended
			August 31,												August 31,
			2022						2021						2022						2021
East			12		%				7		%				9		%				8		%
Central			15		%				7		%				9		%				6		%
Texas			33		%				17		%				24		%				17		%
West			31		%				10		%				18		%				9		%
Other			—		%				—		%				50		%				—		%
Total			21		%				10		%				14		%				9		%

Backlog:

			At
			Homes												Dollar Value (In thousands)												Average Sales Price
			August 31,												August 31,												August 31,
			2022						2021						2022						2021						2022						2021
East			9,903						8,518						$	4,538,997					3,526,849						$	458,000					414,000
Central			5,912						5,911						2,791,899						2,566,174						472,000						434,000
Texas			3,712						4,208						1,302,409						1,379,740						351,000						328,000
West			6,203						7,177						4,251,491						4,499,969						685,000						627,000
Other			4						5						2,626						5,298						656,000						1,060,000
Total			25,734						25,819						$	12,887,422					11,978,030						$	501,000					464,000

Of the total homes in backlog listed above, 147 homes with a backlog dollar value of $73.8 million and an average sales price of $502,000 represent the backlog from unconsolidated entities at August 31, 2022, compared to 82 homes with a backlog dollar value of $29.5 million and an average sales price of $359,000 at August 31, 2021. During the nine months ended August 31, 2022, we acquired 340 homes and 53 homes in backlog in the East and Central Homebuilding segments, respectively.

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 August 31, 2022 versus Three Months Ended August 31, 2021

Homebuilding East: Revenues from home sales increased in the third quarter of 2022 compared to the third quarter of 2021, primarily due to an increase in the number of home deliveries in all the states in the segment and an increase in the average sales price of homes delivered in all the states in the segment. The increase in the number of home deliveries 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 price appreciation year over year. In the third quarter of 2022, an increase in revenues per square foot was partially offset by an increase in costs per square foot primarily due to higher materials and labor costs. Overall, gross margin percentage on home deliveries improved year over year as the increase in the average sales price was more than the increase in land costs.

Homebuilding Central: Revenues from home sales increased in the third quarter of 2022 compared to the third quarter of 2021, primarily due to an increase in the number of home deliveries in all the states in the segment except in Georgia, Illinois and Maryland, and an increase in the average sales price of homes delivered in all the states in the segment. The increase in the number of home deliveries was primarily due to an increase in the number of deliveries per active community. The decrease in the number of home deliveries in Georgia, Illinois and Maryland 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. The increase in the average sales price of homes delivered was primarily due to price appreciation year over year. In the third quarter of 2022, an increase in revenues per square foot was partially offset by an increase in costs per square foot primarily due to higher materials and labor costs. Overall, gross margin percentage on home deliveries improved year over year as the increase in the average sales price was more than the increase in land costs.

Homebuilding Texas: Revenues from home sales increased in the third quarter of 2022 compared to the third quarter of 2021, primarily due to an increase in the number of home deliveries and an increase 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. The increase in the average sales price of homes delivered was primarily due to price appreciation year over year. In the third quarter of 2022, 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. Overall, gross margin percentage on home deliveries improved year over year as land costs remained relatively flat.

Homebuilding West: Revenues from home sales increased in the third quarter of 2022 compared to the third quarter of 2021, primarily due to an increase in the average sales price of homes delivered in all the states in the segment which was offset by a slight decrease in the number of home deliveries in Arizona, California, Nevada and Utah. The increase in the number of home deliveries was primarily due to an increase in the number of deliveries per active community. The decrease in the number of home deliveries in Arizona, California, Nevada and Utah 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. The increase in the average sales price of homes delivered was primarily due to price appreciation year over year. In the third quarter of 2022, an increase in revenues per square foot was partially offset by an increase in costs per square foot primarily due to higher materials and labor costs. Overall, gross margin percentage on home deliveries improved year over year as land costs remained relatively flat.

Nine Months Ended August 31, 2022 versus Nine Months Ended August 31, 2021

Homebuilding East: Revenues from home sales increased in the nine months ended August 31, 2022 compared to the nine months ended August 31, 2021, primarily due to an increase in the number of home deliveries and an increase in the average sales price of homes delivered in all the states in the segment. The increase in the number of home deliveries 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 price appreciation year over year. In the nine months ended August 31, 2022, an increase in revenues per square foot was partially offset by an increase in costs per square foot primarily due to higher materials and labor costs. Overall, gross margin percentage on home deliveries improved year over year as the increase in the average sales price was more than the increase in land costs.

Homebuilding Central: Revenues from home sales increased in the nine months ended August 31, 2022 compared to the nine months ended August 31, 2021, primarily due to an increase in the number of home deliveries in all the states in the segment except in North Carolina and Virginia and an increase in the average sales price of homes delivered in all the states in the segment. The increase in the number of home deliveries was primarily due to an increase in the number of deliveries per

active community. The decrease in the number of home deliveries in North Carolina 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. The increase in the average sales price of homes delivered was primarily due to price appreciation year over year. In the nine months ended August 31, 2022, 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. Overall, gross margin percentage on home deliveries improved year over year as land costs remained relatively flat.

Homebuilding Texas: Revenues from home sales increased in the nine months ended August 31, 2022 compared to the nine months ended August 31, 2021, primarily due to an increase in the number of home deliveries and an increase 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. The increase in the average sales price of homes delivered was primarily due to price appreciation year over year. In the nine months ended August 31, 2022, 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. Overall, gross margin percentage on home deliveries improved year over year as land costs remained relatively flat.

Homebuilding West: Revenues from home sales increased in the nine months ended August 31, 2022 compared to the nine months ended August 31, 2021, primarily due to an increase in the number of home deliveries in all the states in the segment except in Arizona, Nevada and Utah, and an increase in the average sales price of homes delivered in all the states in the segment. The increase in the number of home deliveries was primarily due to an increase in the number of deliveries per active community. The decrease in the number of home deliveries in Arizona, Nevada and Utah 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. The increase in the average sales price of homes delivered was primarily due to price appreciation year over year. In the nine months ended August 31, 2022, an increase in revenues per square foot was partially offset by an increase in costs per square foot primarily due to higher materials and labor costs. Overall, gross margin percentage on home deliveries improved year over year as land costs remained flat.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												Nine Months Ended
			August 31,												August 31,
(Dollars in thousands)			2022						2021						2022						2021
Dollar value of mortgages originated			$	3,549,000					3,281,000						9,816,000						9,228,000
Number of mortgages originated			9,200						9,400						25,700						27,300
Mortgage capture rate of Lennar homebuyers			67		%				73		%				70		%				75		%
Number of title and closing service transactions			17,500						16,900						48,500						49,000

At August 31, 2022 and November 30, 2021, the carrying value of Financial Services' commercial mortgage-backed securities ("CMBS") was $151.0 million and $157.8 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 tables provide information related to our investment in the Multifamily segment:

Balance Sheets
(In thousands)			August 31, 2022						November 30, 2021
Multifamily investments in unconsolidated entities			$	631,513					654,029
Lennar's net investment in Multifamily			934,939						976,676

Statement of Operations			Three Months Ended												Nine Months Ended
			August 31,												August 31,
(Dollars in thousands)			2022						2021						2022						2021
Number of operating properties/investments sold through joint ventures			1						—						1						1
Lennar's share of gains on the sale of operating properties/investments			$	19,730					—						19,730						14,784

Lennar Other Segment

Lennar Other primarily includes strategic investments in technology companies, primarily managed by our LENX subsidiary, and fund interests we retained when we sold the Rialto Capital Management ("Rialto") asset and investment management platform in 2018. At August 31, 2022 and November 30, 2021, we had $917.7 million and $1.5 billion, respectively, of assets in our Lennar Other segment, which included investments in unconsolidated entities of $342.6 million and $346.3 million, respectively. The investments in equity securities of Blend Labs, Inc. ("Blend Labs"), Hippo Holdings, Inc. ("Hippo"), Opendoor, Inc. ("Opendoor"), SmartRent, Inc. ("SmartRent"), Sonder Holdings, Inc. ("Sonder"), and Sunnova Energy International, Inc. ("Sunnova") are carried at market and will therefore change depending on the market value of our share holdings in those entities on the last day of each quarter. The following is a detail of Lennar Other unrealized gains (losses) from technology investments:

			Three Months Ended												Nine Months Ended
			August 31,												August 31,
(In thousands)			2022						2021						2022						2021
Blend Labs (BLND) mark-to-market			$	(518)					6,852						(21,510)						6,852
Hippo (HIPO) mark-to-market			(32,933)						324,855						(195,336)						324,855
Opendoor (OPEN) mark-to-market			(54,391)						37,301						(218,751)						272,756
SmartRent (SMRT) mark-to-market			(23,118)						100,793						(71,431)						100,793
Sonder (SOND) mark-to-market			(168)						—						(2,300)						—
Sunnova (NOVA) mark-to-market			25,289						23,870						(49,646)						(14,465)
Lennar Other unrealized gains (losses) from technology investments			$	(85,839)					493,671						(558,974)						690,791

(2) Financial Condition and Capital Resources

At August 31, 2022, we had cash and cash equivalents and restricted cash related to our homebuilding, financial services, multifamily and other operations of $1.6 billion, compared to $3.0 billion at November 30, 2021 and $2.8 billion at August 31, 2021.

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"). At August 31, 2022, we had $1.3 billion of homebuilding cash and cash equivalents and no outstanding borrowings under our $2.575 billion revolving credit facility, thereby providing $3.9 billion of available capacity.

Operating Cash Flow Activities

During the nine months ended August 31, 2022 and 2021, cash provided by operating activities totaled $551.5 million and $1.3 billion, respectively. During the nine months ended August 31, 2022, cash provided by operating activities was impacted primarily by our net earnings, excluding Lennar Other unrealized mark-to-market losses on our publicly traded technology investments and other gain (loss) totaling $578.7 million, a decrease in loans held-for-sale of $319.0 million primarily related to the sale of loans originated by our Financial Services segment, an increase in accounts payable and other liabilities of $180.9 million. This was partially offset by an increase in inventories due to strategic land purchases, land development and construction costs of $3.9 billion and an increase in receivables of $164.4 million primarily related to an increase in Financial Services receivables, net, which are loans sold to investors for which we have not yet been paid.

During the nine months ended August 31, 2021, cash provided by operating activities was impacted primarily by our net earnings, net of Lennar Other unrealized mark-to-market gains on our publicly traded technology investments and other gain (loss) of $848.5 million primarily due to mark-to-market gains on strategic investments that went public during the nine months ended August 31, 2021, (Blend Labs, Hippo, Opendoor, SmartRent and Sunnova) and the sale of our solar business to Sunnova. In addition there was a decrease in loans held-for-sale of $209.3 million primarily related to the sale of loans originated by our Financial Services segment, an increase in accounts payable and other liabilities of $514.0 million, and a decrease in receivables of $131.3 million, partially offset by an increase in inventories due to strategic land purchases, land development and construction costs of $2.3 billion.

Investing Cash Flow Activities

During the nine months ended August 31, 2022 and 2021, cash used in investing activities totaled $131.5 million and $131.2 million, respectively. During the nine months ended August 31, 2022, our cash used in investing activities was primarily due to cash contributions of $396.7 million to unconsolidated entities, which included (1) $276.3 million to Homebuilding unconsolidated entities (2) $100.7 million to Lennar Other unconsolidated entities and (3) $19.8 million to Multifamily unconsolidated entities. In addition, we had $93.8 million of purchases of investment securities related to strategic technology investments included in the Lennar Other segment. This was partially offset by distributions of capital from unconsolidated entities of $331.8 million, which primarily included (1) $229.7 million from Multifamily unconsolidated entities, (2) $46.5 million from Homebuilding unconsolidated entities, and (3) $55.6 million from our Lennar Other unconsolidated entities.

During the nine months ended August 31, 2021, our cash used in investing activities was primarily due to cash contributions of $354.6 million to unconsolidated entities, which included (1) $164.0 million to Homebuilding unconsolidated entities, (2) $66.8 million to Multifamily unconsolidated entities, and (3) $123.8 million to the strategic technology investments included in the Lennar Other segment. This was partially offset by distributions of capital from unconsolidated entities of $292.5 million, which primarily included (1) $159.3 million from Homebuilding unconsolidated entities, (2) $107.2 million from Multifamily unconsolidated entities, and (3) $26.0 million from the unconsolidated Rialto real estate funds included in our Lennar Other segment.

Financing Cash Flow Activities

During the nine months ended August 31, 2022 and 2021, cash used in financing activities totaled $1.8 billion and $1.3 billion, respectively. During the nine months ended August 31, 2022, cash used in financing activities was primarily due to (1) the early redemption of $575 million aggregate principal amount of our 4.75% senior notes due November 2022, (2) $238.1 million of net repayments under our Financial Services' warehouse facilities; (3) $918.7 million of repurchases of our common stock, which included $847.1 million of repurchases under our repurchase program and $71.6 million of repurchases related to our equity compensation plan; and (4) $329.7 million of dividend payments. These were partially offset by $327.8 million of net proceeds from liabilities related to consolidated inventory not owned due to activity with land banks.

During the nine months ended August 31, 2021, cash used in financing activities was primarily impacted by (1) $357.5 million of net repayments under our Financial Services' warehouse facilities, which included the LMF Commercial warehouse repurchase facilities; (2) the redemption of $300 million aggregate principal amount of our senior notes; (3) $234 million of dividend payments; and (4) repurchases of our common stock for $452.5 million, which included $388.0 million of repurchases under our repurchase program and $64.6 million of repurchases related to our equity compensation plan. These were partially offset by $441.2 million of proceeds from liabilities related to consolidated inventory not owned due to land sales to 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)			August 31, 2022						November 30, 2021						August 31, 2021
Homebuilding debt			$	4,057,496					4,652,338						5,542,513
Stockholders’ equity			22,977,278						20,816,425						20,650,188
Total capital			$	27,034,774					25,468,763						26,192,701
Homebuilding debt to total capital			15.0		%				18.3		%				21.2		%
Homebuilding debt			$	4,057,496					4,652,338						5,542,513
Less: Homebuilding cash and cash equivalents			1,309,364						2,735,213						2,623,320
Net Homebuilding debt			$	2,748,132					1,917,125						2,919,193
Net Homebuilding debt to total capital (1)			10.7		%				8.4		%				12.4		%

(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 August 31, 2022, Homebuilding debt to total capital was lower compared to both November 30, 2021 and August 31, 2021, primarily as a result of an increase in stockholders' equity due to net earnings and a decrease in 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 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.

We have announced an intention to spin-off to our stockholders our asset management businesses (Lennar Multifamily and Lennar Single Family Rental) and some of our other non-core assets.

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:

			Nine Months Ended
			August 31,
(Dollars in thousands)			2022						2021
Homebuilding average debt outstanding			$	4,921,656					$	5,848,865
Average interest rate			4.7		%				4.9		%
Interest incurred			$	180,869					210,575

In May 2022, we amended the credit agreement governing our unsecured revolving credit facility (the “Credit Facility") which increased the commitment from $2.5 billion to $2.575 billion and extended the maturity to May 2027, except for $350 million which matures in April 2024. The Credit Facility has a $425 million accordion feature, subject to additional commitments, thus the maximum borrowings are $3.0 billion. 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 also provides that up to $500 million in commitments may be used for letters of credit. Under 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 August 31, 2022. 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 August 31, 2022:

(Dollars in thousands)			Covenant Level						Level Achieved as of August 31, 2022
Minimum net worth test			$	11,649,110					16,539,387
Maximum leverage ratio			65.0		%				15.7		%
Liquidity test			1.00						15.7

Financial Services Warehouse Facilities

Our Financial Services segment uses the residential 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 facilities finance LMF Commercial loan origination and securitization activities and were secured by up to an 80% interest 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 October 2021, the Board of Directors authorized an increase to our stock repurchase program to enable us to repurchase up to the lesser of an additional $1 billion in value, or 25 million in shares, of our outstanding Class A or Class B common stock. As a result of prior authorizations being almost exhausted, in March 2022, our Board of Directors approved an additional 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. The details of our Class A and Class B common stock repurchases under the authorized repurchase programs for the three and nine months ended August 31, 2022 and 2021 are included in Note 4 of the Notes to Condensed Consolidated Financial Statements.

During the nine months ended August 31, 2022, treasury stock decreased due to our retirement of 46.7 million and 2.8 million treasury shares of Class A and Class B common stock, respectively, as authorized by our Board of Directors. The retirement of Class A and Class B common stock in treasury resulted in a reclass between treasury shares and additional paid-in capital within stockholders' equity. During the nine months ended August 31, 2022, this decrease in treasury shares was partially offset by our repurchase of 8.2 million and 1.1 million shares of Class A and Class B common stock, respectively, through our stock repurchase program. During the nine months ended August 31, 2021, treasury shares increased due to our repurchase of 4.8 million shares of Class A and Class B common stock primarily due to our repurchase of 4.0 million shares of Class A and Class B common stock through our stock repurchase program.

On September 28, 2022, our Board of Directors declared a quarterly cash dividend of $0.375 per share on both our Class A and Class B common stock, payable on October 27, 2022 to holders of record at the close of business on October 13, 2022. On July 21, 2022, we paid cash dividends of $0.375 per share on both our Class A and Class B common stock to holders of record at the close of business on July 7, 2022, as declared by our Board of Directors on June 22, 2022. We approved and paid cash dividends of $0.250 per share for each of the four quarters of 2021 on both our Class A and Class B common stock.

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 August 31, 2022 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 August 31, 2022 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)			August 31, 2022						November 30, 2021
Due from non-guarantor subsidiaries			$	16,424,764					4,187,044
Equity method investments			1,121,599						937,920
Total assets			37,688,242						30,750,296
Total liabilities			9,573,612						9,631,796

			Nine Months Ended
(In thousands)			August 31, 2022
Total revenues			$	21,452,414
Operating earnings			4,784,234
Earnings before income taxes			4,407,765
Net earnings attributable to Lennar			3,417,581

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. We believe all of the joint ventures were in compliance with applicable debt covenants at August 31, 2022.

Homebuilding: Investments in Unconsolidated Entities

As of August 31, 2022, we had equity investments in 47 active homebuilding and land unconsolidated entities (of which 2 had recourse debt, 14 had non-recourse debt and 31 had no debt) compared to 41 active homebuilding and land unconsolidated entities at November 30, 2021. 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 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") debt as per current debt arrangements as of August 31, 2022. 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
(In thousands)									Total JV Debt						2022						2023						2024						Thereafter						Other
Debt without recourse to Lennar									$	1,227,241					55,983						115,345						374,095						681,818						—
Land seller and other debt without recourse to Lennar									12,392						—						—						—						12,392						—
Maximum recourse debt exposure to Lennar									7,793						—						—						—						7,793						—
Debt issuance costs									(13,609)						—						—						—						—						(13,609)
Total									$	1,233,817					55,983						115,345						374,095						702,003						(13,609)

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 August 31, 2022, Multifamily had equity investments in 24 active unconsolidated entities that are engaged in multifamily residential developments (of which 14 had non-recourse debt and 10 had no debt), compared to 17 active unconsolidated entities at November 30, 2021. 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 a new Multifamily 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 nine months ended August 31, 2022 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 August 31, 2022. It does not represent estimates of future cash payments that will be made to reduce debt balances.

									Principal Maturities of Unconsolidated JVs by Period
(In thousands)									Total JV Debt						2022						2023						2024						Thereafter						Other
Debt without recourse to Lennar									$	4,215,826					286,725						1,040,552						1,045,328						1,843,221						—
Debt issuance costs									(28,497)						—						—						—						—						(28,497)
Total									$	4,187,329					286,725						1,040,552						1,045,328						1,843,221						(28,497)

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 to receive a portion of payments with regard to carried interests if 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. Our investment in the Rialto funds and investment vehicles totaled $193.8 million and $200.6 million as of August 31, 2022 and November 30, 2021, respectively.

As of August 31, 2022 and November 30, 2021, we had strategic technology investments in unconsolidated entities of $148.9 million and $145.6 million, respectively. 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.

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) and unconsolidated entities until we have determined whether to exercise the options.

The table below indicates the number of homesites owned and homesites to which we had access through option contracts with third parties ("optioned") and unconsolidated JVs (i.e., controlled homesites):

																																	Years of
August 31, 2022															Controlled Homesites						Owned Homesites						Total Homesites						Supply Owned (1)
East															104,754						53,093						157,847
Central															41,538						40,141						81,679
Texas															87,868						41,929						129,797
West															67,070						46,995						114,065
Other															5,758						2,024						7,782
Total homesites															306,988						184,182						491,170						2.9
% of total homesites															63		%				37		%

																																	Years of
August 31, 2021															Controlled Homesites						Owned Homesites						Total Homesites						Supply Owned (1)
East															74,056						54,069						128,125
Central															27,772						42,407						70,179
Texas															53,434						40,274						93,708
West															50,867						51,587						102,454
Other															10,251						2,056						12,307
Total homesites															216,380						190,393						406,773						3.3
% of total homesites															53		%				47		%

(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 10 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, 2021. There were no outstanding borrowings under our Credit Facility as of August 31, 2022.

(3) Recently Adopted Accounting Pronouncements

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

(4) Critical Accounting Policies

We believe that there have been no significant changes to our critical accounting policies during the nine months ended August 31, 2022 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 year ended November 30, 2021. While our critical accounting policies have not significantly changed during the nine months ended August 31, 2022, the following provides additional disclosures about our revenue recognition accounting policy.

Revenue Recognition

Homebuilding revenues and related profits from sales of homes are recognized at the time of the closing of a sale, when title to and possession of the property are transferred to the homebuyer. We typically offer sales incentives to homebuyers that consist primarily of price discounts on individual homes, financing incentives and optional upgrades (such as upgraded appliances, cabinetry and flooring) without charge. These incentives are accounted for as a reduction in the sales price of the homes. The optional upgrades may be the only sales incentive offered for a particular home, or they may be offered collectively with a discount on the base price of the home. The cost we include for the optional upgrades is included in our cost of home

sales. Because the upgrades are provided without additional charge, no revenue is recognized related to the upgrade(s). See Note 1 of the Notes to Condensed Consolidated Financial Statements.