Item 1. Financial Statements

Lennar Corporation and Subsidiaries

Condensed Consolidated Balance Sheets

(Dollars in thousands)

(Unaudited)

			February 29,						November 30,
			2024 (1)						2023 (1)
ASSETS
Homebuilding:
Cash and cash equivalents			$	4,950,128					6,273,724
Restricted cash			12,635						13,481
Receivables, net			897,371						887,992
Inventories:
Finished homes and construction in progress			11,092,036						10,455,666
Land and land under development			4,734,113						4,904,541
Inventory owned			15,826,149						15,360,207
Consolidated inventory not owned			3,547,921						2,992,528
Inventory owned and consolidated inventory not owned			19,374,070						18,352,735
Deposits and pre-acquisition costs on real estate			2,408,877						2,002,154
Investments in unconsolidated entities			1,206,564						1,143,909
Goodwill			3,442,359						3,442,359
Other assets			1,473,563						1,512,038
			33,765,567						33,628,392
Financial Services			3,056,442						3,566,546
Multifamily			1,379,279						1,381,513
Lennar Other			749,911						657,852
Total assets			38,951,199						39,234,303

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

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

As of November 30, 2023, total assets include $1.9 billion related to consolidated VIEs of which $22.8 million is included in Homebuilding cash and cash equivalents, $1.8 million in Homebuilding receivables, net, $18.3 million in Homebuilding finished homes and construction in progress, $628.0 million in Homebuilding land and land under development, $55.0 million in Homebuilding deposits and pre-acquisition costs on real estate, $1.2 billion in Homebuilding consolidated inventory not owned, $0.3 million in Homebuilding investments in unconsolidated entities, $23.0 million in Homebuilding other assets and $32.6 million in Multifamily 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 29,						November 30,
			2024 (2)						2023 (2)
LIABILITIES AND EQUITY
Homebuilding:
Accounts payable			$	1,565,464					1,631,401
Liabilities related to consolidated inventory not owned			3,043,888						2,540,894
Senior notes and other debts payable, net			2,830,332						2,816,482
Other liabilities			2,689,263						2,739,217
			10,128,947						9,727,994
Financial Services			1,721,333						2,447,039
Multifamily			249,625						278,177
Lennar Other			73,364						79,127
Total liabilities			12,173,269						12,532,337
Stockholders’ equity:
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			25,983						25,848
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			3,660						3,660
Additional paid-in capital			5,651,836						5,570,009
Retained earnings			22,949,315						22,369,368
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			(1,988,200)						(1,393,100)
Accumulated other comprehensive income			5,241						4,879
Total stockholders’ equity			26,647,835						26,580,664
Noncontrolling interests			130,095						121,302
Total equity			26,777,930						26,701,966
Total liabilities and equity			$	38,951,199					39,234,303

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

As of November 30, 2023, total liabilities include $1.2 billion related to consolidated VIEs as to which there was no recourse against the Company, of which $53.7 million is included in Homebuilding accounts payable, $1.1 billion in Homebuilding liabilities related to consolidated inventory not owned, $38.1 million in Homebuilding other liabilities, and $4.1 million in Multifamily 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						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
Total revenues			7,312,930						6,490,429
Costs and expenses:
Homebuilding			5,977,536						5,274,714
Financial Services			118,424						104,244
Multifamily			132,667						148,956
Lennar Other			9,088						6,476
Corporate general and administrative			157,321						126,106
Charitable foundation contribution			16,798						13,659
Total costs and expenses			6,411,834						5,674,155
Equity in losses from unconsolidated entities			(30,545)						(31,187)
Other income (expense), net and other gains (losses)			65,372						23,320
Lennar Other unrealized losses from technology investments			(5,137)						(23,954)
Earnings before income taxes			930,786						784,453
Provision for income taxes			(210,865)						(185,145)
Net earnings (including net earnings attributable to noncontrolling interests)			719,921						599,308
Less: Net earnings attributable to noncontrolling interests			587						2,774
Net earnings attributable to Lennar			$	719,334					596,534
Other comprehensive income, net of tax:
Net unrealized gain on securities available-for-sale			$	362					851
Total other comprehensive income, net of tax			$	362					851
Total comprehensive income attributable to Lennar			$	719,696					597,385
Total comprehensive income attributable to noncontrolling interests			$	587					2,774
Basic earnings per share			$	2.57					2.06
Diluted earnings per share			$	2.57					2.06

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 29, 2024						February 28, 2023
Cash flows from operating activities:
Net earnings (including net earnings attributable to noncontrolling interests)			$	719,921					599,308
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization			27,139						20,305
Amortization of discount/premium and accretion on debt, net			39						(838)
Equity in loss from unconsolidated entities			30,545						31,187
Distributions of earnings from unconsolidated entities			8,422						4,623
Share-based compensation expense			87,680						86,558
Deferred income tax (benefit) expense			11,979						(81,940)
Loans held-for-sale unrealized loss			46,052						31,462
Lennar Other unrealized losses from technology investments and other (gains) losses			2,555						21,372
Gain on sale of other assets			(2,671)						—
Valuation adjustments and write-offs of option deposits and pre-acquisition costs on real estate, and other assets			6,609						25,846
Changes in assets and liabilities:
Decrease in receivables			379,102						602,757
Increase in inventories, excluding valuation adjustments			(285,023)						(156,229)
Increase in deposits and pre-acquisition costs on real estate			(410,936)						(21,476)
Decrease (increase) in other assets			19,061						(5,557)
Decrease in loans held-for-sale			53,797						511,807
Decrease in accounts payable and other liabilities			(326,404)						(690,980)
Net cash provided by operating activities			367,867						978,205
Cash flows from investing activities:
Net additions of operating properties and equipment			(72,925)						(5,423)
Proceeds from the sale of other assets			5,094						—
Investments in and contributions to unconsolidated entities			(117,593)						(57,281)
Distributions of capital from unconsolidated entities			35,330						23,993
Decrease in Financial Services loans held-for-investment			2,749						418
Purchases of investment securities			(2,063)						—
Proceeds from maturities/sales of investment securities			1,493						1,938
Net cash used in investing activities			$	(147,915)					(36,355)

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, 2023
Cash flows from financing activities:
Net repayments under warehouse facilities			$	(599,514)					(963,455)
Principal payments on notes payable and other borrowings			(3,750)						(26,621)
Proceeds from other borrowings			6,230						—
Proceeds from liabilities related to consolidated inventory not owned			67,650						70,369
Payments related to liabilities related to consolidated inventory not owned			(252,446)						(177,891)
Payments related to other liabilities, net			(16,922)						(1,257)
Receipts related to noncontrolling interests			5,796						2,497
Payments related to noncontrolling interests			(1,979)						(21,256)
Common stock:
Repurchases			(595,100)						(257,958)
Dividends			(139,387)						(107,891)
Net cash used in financing activities			(1,529,422)						(1,483,463)
Net decrease in cash and cash equivalents and restricted cash			(1,309,470)						(541,613)
Cash and cash equivalents and restricted cash at beginning of period			6,570,938						4,815,770
Cash and cash equivalents and restricted cash at end of period			$	5,261,468					4,274,157
Summary of cash and cash equivalents and restricted cash:
Homebuilding			$	4,950,128					4,057,956
Financial Services			233,846						163,000
Multifamily			27,091						15,075
Lennar Other			2,700						6,825
Homebuilding restricted cash			12,635						22,504
Financial Services restricted cash			35,068						8,797
			$	5,261,468					4,274,157
Supplemental disclosures of non-cash investing and financing activities:
Homebuilding and Multifamily:
Purchases of inventories, land under development and other assets financed by sellers			$	23,081					13,500

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”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange 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, 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, 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 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 29, 2024 and November 30, 2023 included $512.0 million and $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, the Company granted employees 1.2 million and 1.6 million of nonvested shares, respectively.

Recently Adopted Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09 (“ASU 2023-09”) Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 requires public companies to annually (1) disclose specific categories in the rate reconciliation and (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 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 15, 2024. The Company is currently evaluating ASU 2023-09 and does not expect it to have a material effect on the 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)

(In thousands)			November 30, 2023
Assets:			Homebuilding						Financial Services						Multifamily						Lennar Other						Total
Cash and cash equivalents			$	6,273,724					159,491						39,334						1,948						6,474,497
Restricted cash			13,481						82,960						—						—						96,441
Receivables, net (1)			887,992						716,071						92,142						—						1,696,205
Inventory owned and consolidated inventory not owned			18,352,735						—						544,935						—						18,897,670
Loans held-for-sale (2)			—						2,086,809						—						—						2,086,809
Investments in equity securities (3)			—						—						—						297,243						297,243
Investments available-for-sale (4)			—						—						—						37,953						37,953
Loans held-for-investment, net			—						55,463						—						—						55,463
Investments held-to-maturity			—						140,676						—						—						140,676
Deposits and pre-acquisition costs on real estate			2,002,154						—						32,063						—						2,034,217
Investments in unconsolidated entities			1,143,909						—						599,852						276,244						2,020,005
Goodwill			3,442,359						189,699						—						—						3,632,058
Other assets			1,512,038						135,377						73,187						44,464						1,765,066
Total assets			$	33,628,392					3,566,546						1,381,513						657,852						39,234,303
Liabilities:
Notes and other debts payable, net			$	2,816,482					2,163,805						3,741						—						4,984,028
Accounts payable, liabilities related to consolidated inventory not owned and other liabilities			6,911,512						283,234						274,436						79,127						7,548,309
Total liabilities			$	9,727,994					2,447,039						278,177						79,127						12,532,337

(1)Receivables, net for Financial Services primarily related to loans sold to investors for which the Company had not yet been paid as of February 29, 2024 and November 30, 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 $123.1 million and $121.0 million without readily available fair values as of February 29, 2024 and November 30, 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)

Homebuilding Segments

Information about homebuilding activities in states which are not economically similar to other states in the same geographic areas is grouped under “Homebuilding Other,” which is not considered a reportable segment.

Evaluation of segment performance is based primarily on operating earnings (loss) before income taxes. Operations of the Company’s Homebuilding segments primarily include the construction and sale of single-family attached and detached homes as well as the purchase, development and sale of residential land directly and through the Company’s unconsolidated entities. Operating earnings (loss) for the Homebuilding segments consist of revenues generated from the sales of homes and land, other revenues from management fees and forfeited deposits, equity in earnings (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 and Pennsylvania

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

Texas: Texas

West: Arizona, California, Colorado, Idaho, Nevada, Oregon, Utah and Washington

Other: Urban divisions and other homebuilding related investments primarily in California, including FivePoint Holdings, LLC (“FivePoint”)

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

			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
(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

Lennar Corporation and Subsidiaries

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

Financial Services

Operations of the Financial Services segment include mortgage financing, title and closing services primarily for buyers of the Company’s homes. They also include originating and selling into securitizations commercial mortgage loans through its LMF Commercial business. Financial Services’ operating earnings consist of revenues generated primarily from mortgage financing, title and closing services, and sales of property and casualty insurance, less the cost of such services and certain selling, general and administrative expenses incurred by the segment. The Financial Services segment operates generally in the same states as the Company’s homebuilding operations.

At February 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:

			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.

The Financial Services segment uses residential mortgage loan warehouse facilities to finance its residential lending activities until the mortgage loans are sold to investors and the proceeds are collected. The facilities are non-recourse to the Company and are expected to be renewed or replaced with other facilities when they mature. The LMF Commercial facilities finance LMF Commercial loan originations and securitization activities and were secured by up to 80% interests in the originated commercial loans financed.

Borrowings and collateral under the facilities were as follows:

(In thousands)			February 29, 2024						November 30, 2023
Borrowings under the residential facilities			$	1,344,468					2,020,187
Collateral under the residential facilities			1,395,837						2,097,020
Borrowings under the LMF Commercial facilities			89,555						12,525

If the facilities are not renewed or replaced, the borrowings under the lines of credit will be repaid by selling the mortgage loans held-for-sale to investors and by collecting receivables on loans sold but not yet paid for. Without the facilities, the Financial Services segment would have to use cash from operations and other funding sources to finance its lending activities.

Substantially all of the residential loans the Financial Services segment originates are sold within a short period in the secondary mortgage market on a servicing released, non-recourse basis. After the loans are sold, the Company retains potential liability for possible claims by purchasers that it breached certain limited industry-standard representations and warranties in the loan sale agreements. Purchasers sometimes try to defray losses by purporting to have found inaccuracies related to sellers’ representations and warranties in particular loan sale agreements. Mortgage investors could seek to have the Company buy back mortgage loans or compensate them for losses incurred on mortgage loans that the Company has sold based on claims that the Company breached its limited representations or warranties. The Company’s mortgage operations have established accruals for possible losses associated with mortgage loans previously originated and sold to investors. The Company establishes accruals for such possible losses based upon, among other things, an analysis of repurchase requests received, an estimate of potential repurchase claims not yet received and actual past repurchases and losses through the disposition of affected loans, as well as previous settlements. While the Company believes that it has adequately reserved for known losses and projected repurchase requests, given the volatility in the residential mortgage industry and the uncertainty regarding the ultimate resolution of these claims, if either actual repurchases or the losses incurred resolving those repurchases exceed the Company’s expectations, additional recourse expense may be incurred. The provision for loan losses was immaterial for both the three months ended

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
(Dollars in thousands)			February 29, 2024						February 28, 2023
Originations (1)			$	140,825					79,480
Sold			26,950						77,200
Securitizations			2						1

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

Investments held-to-maturity

At February 29, 2024 and November 30, 2023, the Financial Services segment held commercial mortgage-backed securities (“CMBS”). These securities are classified as held-to-maturity based on the segment's intent and ability to hold the securities until maturity and changes in estimated cash flows are reviewed periodically to determine if an other-than-temporary impairment has occurred. Based on the segment’s assessment, no impairment charges were recorded during the three months ended February 29, 2024 and February 28, 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 29, 2024						November 30, 2023
Carrying value			$	139,706					140,676
Outstanding debt, net of debt issuance costs			130,267						131,093
Incurred interest rate			3.4%						3.4%

			February 29, 2024
Discount rates at purchase			6%			—			84%
Coupon rates			2.0%			—			5.3%
Distribution dates			October 2027			—			December 2028
Stated maturity dates			October 2050			—			December 2051

Multifamily

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

The Multifamily Segment (i) manages, and owns interests in, funds that are engaged in the development of multifamily residential communities with the intention of holding the newly constructed and occupied properties as income and fee generating assets, and (ii) manages, and owns interests in, joint ventures that are engaged in the development of multifamily residential communities, in most instances with the intention of selling them when they are built and substantially occupied. The multifamily business is a vertically integrated platform with capabilities spanning development, construction, property management, asset management, and capital markets. Revenues are generated from the sales of land, from construction activities, and 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”) 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.

Lennar Corporation and Subsidiaries

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

The Company has investments in Blend Labs, Inc. (“Blend Labs”), Hippo Holdings, Inc. (“Hippo”), Opendoor Technologies, Inc. (“Opendoor”), SmartRent, Inc. (“SmartRent”), Sonder Holdings, Inc. (“Sonder”) and Sunnova Energy International, Inc. (“Sunnova”), which are held at market and will therefore change depending on the value of the Company's shareholdings in those entities on the last day of each quarter. All the investments are accounted for as investments in equity securities which are held at fair value and the changes in fair values are recognized through earnings. The following is a detail of Lennar Other unrealized gains (losses) from mark-to-market adjustments on the Company's technology investments:

			Three Months Ended
(In thousands)			February 29, 2024						February 28, 2023
Blend Labs (BLND)			$	2,936					586
Hippo (HIPO)			16,449						6,632
Opendoor (OPEN)			1,315						(7,691)
SmartRent (SMRT)			(1,963)						1,305
Sonder (SOND)			51						(320)
Sunnova (NOVA)			(23,925)						(24,466)
Lennar Other unrealized losses from technology investments			$	(5,137)					(23,954)

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

**(3)**Investments in Unconsolidated Entities

Homebuilding Unconsolidated Entities

The investments in the Company's Homebuilding unconsolidated entities were as follows:

(In thousands)						February 29, 2024						November 30, 2023
Investments in unconsolidated entities (1) (2)						$	1,206,564					1,143,909
Underlying equity in unconsolidated entities' net assets (1)						1,473,819						1,436,239

(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 FivePoint.

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

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

In 2021, the Company formed the Upward America Venture LP (“Upward 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 29, 2024 and November 30, 2023, the carrying amount of the Company's investment in Upward America was $11.2 million and $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) 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, 2023. As of both February 29, 2024 and November 30, 2023, the fair value of the completion guarantees was immaterial. As of February 29, 2024 and November 30, 2023, Multifamily segment's unconsolidated entities had non-recourse debt with completion guarantees of $1.1 billion and $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 29, 2024						February 28, 2023
General contractor services, net of deferrals			$	101,635					125,402
General contractor costs			95,688						120,733
Management fee income, net of deferrals			16,042						18,121

The Multifamily segment includes managing and investing in Multifamily Venture Fund I (“LMV I”), Multifamily Venture Fund II LP (“LMV II”) and Canada Pension Plan Investments Fund (the “CPPIB Fund”), which are long-term multifamily development investment vehicles 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 $1.0 billion in equity and Lennar's ownership percentage in the CPPIB Fund is 4%. As of February 29, 2024, the Company had a $23.1 million investment in the CPPIB Fund. Additional dollars will be committed as opportunities are identified by the CPPIB Fund.

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

			February 29, 2024
(In thousands)			LMV I						LMV II
Lennar's carrying value of investments			$	185,262					261,305
Equity commitments			2,204,016						1,257,700
Equity commitments called			2,154,328						1,218,619
Lennar's equity commitments			504,016						381,000
Lennar's equity commitments called			500,381						368,170
Lennar's remaining commitments (1)			3,635						12,830
Distributions to Lennar during the three months ended February 29, 2024			—						208

(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 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 totaled $142.2 million and $148.7 million as of February 29, 2024 and November 30, 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 $147.5 million and $127.5 million, as of February 29, 2024 and November 30, 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:

			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

On February 7, 2024, the Company paid a quarterly cash dividend of $0.50 per share for both of its Class A and Class B common stock to holders of record at the close of business on January 24, 2024, as declared by its Board of Directors on January 9, 2024. The Company approved and paid cash dividends of $0.375 per share for each of the four quarters of 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 sets forth the repurchases of the Company's Class A and Class B common stock under the authorized repurchase programs:

			Three Months Ended
			February 29, 2024												February 28, 2023
(Dollars in thousands, except price per share)			Class A						Class B						Class A						Class B
Shares repurchased			3,026,128						373,872						1,446,205						553,795
Total purchase price			$	454,788					$	51,637					$	143,068					$	46,105
Average price per share			$	150.29					$	138.11					$	98.93					$	83.25

**(5)**Income Taxes

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

			Three Months Ended
(Dollars in thousands)			February 29, 2024						February 28, 2023
Provision for income taxes			$210,865						185,145
Effective tax rate (1)			22.7%						23.7%

(1)In the three months ended February 29, 2024, the Company's overall effective income tax rate was lower than in the three months ended February 28, 2023, primarily due to excess tax benefits from share-based compensation. For both the three months ended February 29, 2024 and February 28, 2023, the effective tax rate included state income tax expense and non-deductible executive compensation, partially offset by energy efficient home and solar tax credits.

**(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”) is considered participating securities.

Basic and diluted earnings per share were calculated as follows:

			Three Months Ended
(In thousands, except per share amounts)			February 29, 2024						February 28, 2023
Numerator:
Net earnings attributable to Lennar			$	719,334					596,534
Less: distributed earnings allocated to nonvested shares			1,023						724
Less: undistributed earnings allocated to nonvested shares			5,877						5,895
Numerator for basic earnings per share			712,434						589,915
Less: net amount attributable to Rialto's Carried Interest Incentive Plan (1)			—						1,038
Numerator for diluted earnings per share			$	712,434					588,877
Denominator:
Denominator for basic earnings per share - weighted average common shares outstanding			276,946						286,074
Denominator for diluted earnings per share - weighted average common shares outstanding			276,946						286,074
Basic earnings per share			$	2.57					2.06
Diluted earnings per share			$	2.57					2.06

(1)The amount presented relate to Rialto's Carried Interest Incentive Plan and 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, 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)			February 29, 2024						November 30, 2023
4.50% senior notes due 2024			$	453,792					453,682
4.75% senior notes due 2025			499,447						499,336
5.25% senior notes due 2026			402,737						403,040
5.00% senior notes due 2027			351,261						351,357
4.75% senior notes due 2027			797,513						797,347
Mortgage notes on land and other debt			325,582						311,720
			$	2,830,332					2,816,482

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

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

(In thousands)						February 29, 2024
Commitments - maturing in April 2024						$	350,000
Commitments - maturing in May 2027						2,225,000
Total 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 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, 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, 2023. The Company's outstanding letters of credit and surety bonds are disclosed below:

(In thousands)						February 29, 2024						November 30, 2023
Performance letters of credit						$	1,526,220					1,404,541
Financial letters of credit						476,545						417,976
Surety bonds						4,596,432						4,508,428
Anticipated future costs primarily for site improvements related to performance surety bonds						2,588,531						2,499,680

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, 2023.

Lennar Corporation and Subsidiaries

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

**(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 29, 2024 and November 30, 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 29, 2024												November 30, 2023
(In thousands)			Fair Value Hierarchy						Carrying Amount						Fair Value						Carrying Amount						Fair Value
ASSETS
Financial Services:
Loans held-for-investment, net			Level 3						$	56,845					56,845						55,463						55,463
Investments held-to-maturity			Level 3						139,706						140,886						140,676						139,396
LIABILITIES
Homebuilding senior notes and other debts payable, net			Level 2						$	2,830,332					2,808,473						2,816,482						2,785,712
Financial Services notes and other debts payable, net			Level 2						1,564,290						1,564,710						2,163,805						2,164,441
Multifamily notes payable, net			Level 2						—						—						3,741						3,741

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
(In thousands)						February 29, 2024						November 30, 2023
Financial Services Assets:
Residential loans held-for-sale			Level 2						$	1,861,318					2,073,350
LMF Commercial loans held-for-sale			Level 3						125,397						13,459
Mortgage servicing rights			Level 3						3,475						3,440
Forward options			Level 1						4,319						5,937
Lennar Other Assets:
Investments in equity securities			Level 1						$	171,137					176,198
Investments available-for-sale			Level 3						38,315						37,953

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
(In thousands)			Aggregate Principal Balance												Change in Fair Value						Aggregate Principal Balance												Change in Fair Value
Residential loans held-for-sale			$	1,917,795											(56,477)						2,083,776												(10,426)
LMF Commercial loans held-for-sale			127,525												(2,128)						13,650												(191)

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 29, 2024 and November 30, 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, 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 November 30, 2023
Unobservable inputs
Mortgage prepayment rate			8%						8%
Discount rate			13%						13%
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 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 29, 2024						February 28, 2023
Changes in fair value included in Financial Services revenues:
Loans held-for-sale			$	(46,052)					(31,462)
Mortgage loan commitments			(30,655)						(48,844)
Forward contracts			101,846						91,509
Forward options			(344)						(852)
Changes in fair value included in Lennar Other unrealized losses from technology investments:
Investments in equity securities			$	(5,137)					(23,954)
Changes in fair value included in other comprehensive income, net of tax:
Lennar Other investments available-for-sale			$	362					851

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 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
			February 29, 2024												February 28, 2023
(In thousands)			Mortgage servicing rights						LMF Commercial loans held-for-sale						Mortgage servicing rights						LMF Commercial loans held-for-sale
Beginning balance			$	3,440					13,459						3,463						25,599
Purchases/loan originations			61						140,825						51						79,480
Sales/loan originations sold, including those not settled			—						(26,950)						—						(77,200)
Disposals/settlements			(26)						—						(63)						—
Changes in fair value (1)			—						(2,128)						(1)						(445)
Interest and principal paydowns			—						191						—						(1,599)
Ending balance			$	3,475					125,397						3,450						25,835

(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 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)
Non-financial assets - Homebuilding:
Finished homes and construction in progress (2)			Level 3						$	71,756					68,017						(3,739)						164,544						158,237						(6,307)
Land and land under development (2)			Level 3						2,870						—						(2,870)						39,616						23,142						(16,474)
Investments in unconsolidated entities (3)			Level 3						—						—						—						3,065						—						(3,065)

(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 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)

of Significant Accounting Policies in its Annual Report on Form 10-K for the year ended November 30, 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)
February 29, 2024			1,227						31																		2																		$	4,863					$	(1,521)
February 28, 2023			1,210						27																		—																		—						—

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.

**(9)**Variable Interest Entities

During the three months ended February 29, 2024, the Company evaluated the joint venture (“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”) that were consolidated or deconsolidated during the three months ended February 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 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, 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 29, 2024												November 30, 2023
(In thousands)			Investments in Unconsolidated VIEs						Lennar’s Maximum Exposure to Loss						Investments in Unconsolidated VIEs						Lennar’s Maximum Exposure to Loss
Homebuilding (1)			$	706,374					826,038						659,224						787,226
Multifamily (2)			388,109						406,710						384,718						402,735
Financial Services (3)			139,706						139,706						140,676						140,676
Lennar Other (4)			74,019						74,019						56,009						56,009
			$	1,308,208					1,446,473						1,240,627						1,386,646

(1)As of February 29, 2024 and November 30, 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 commitment to fund capital in Upward America of $68.8 million and $69.8 million, respectively. In addition, as of February 29, 2024 and November 30, 2023, there was recourse debt of a VIE of $42.0 million and $42.1 million, respectively.

(2)As of February 29, 2024 and November 30, 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 II, in addition to the investment, also included the remaining combined equity commitment of $12.8 million as of both February 29, 2024 and November 30, 2023 for future expenditures related to the construction and development of its projects.

(3)As of both February 29, 2024 and November 30, 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)At February 29, 2024, the Company's maximum recourse exposure to loss of the Lennar Other segment was limited to its investments in the unconsolidated VIEs.

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 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 banks) until the Company has determined whether to exercise the options.

The Company evaluates option contracts with third party land holding companies for land to determine whether they are VIEs and, if so, whether the Company is the primary beneficiary of certain of these option contracts. Although the Company does not have legal title to the optioned land, if the Company is deemed to be the primary beneficiary, and 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 land 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. Consolidated inventory not owned related to land 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, was $1.7 billion as of February 29, 2024.

During the three months ended February 29, 2024, consolidated inventory not owned increased by $555.4 million with a corresponding increase to liabilities related to consolidated inventory not owned in the accompanying condensed consolidated balance sheet as of February 29, 2024. The increase was primarily due to 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. 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 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 was as follows:

(Dollars in thousands)			February 29, 2024						November 30, 2023
Non-refundable option deposits and pre-acquisition costs			$	2,325,346					1,949,219
Non-refundable option deposits included in consolidated inventory not owned			504,033						451,632
Letters of credit in lieu of cash deposits under certain land and option contracts			226,816						198,920

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.

**(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

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
(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”) assets and 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)			February 29, 2024						November 30, 2023
Right-of-use assets			$	104,784					145,812
Lease liabilities			112,671						154,271
Weighted-average remaining lease term (in years)			5.0						7.5
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 29, 2024 were as follows:

(In thousands)			Lease Payments
2024			$	22,939
2025			27,790
2026			22,092
2027			17,418
2028 and thereafter			34,262
Total future minimum lease payments (1)			$	124,501
Less: Interest (2)			11,830
Present value of lease liabilities (2)			$	112,671

(1)Total future minimum lease payments exclude variable lease costs of $15.3 million and short-term lease costs of $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
(In thousands)			February 29, 2024						February 28, 2023
Rental expense			$	26,217					26,904

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, the Company had an immaterial amount of sublease income.

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.