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

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and accompanying notes included under Item 1 of this Quarterly Report on Form 10-Q and our audited consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the fiscal year ended November 30, 2023.

Outlook

During the first quarter of fiscal 2024, we continued to execute our operating plan effectively, driving excellent operating results. We have never been better positioned, from balance sheet to execution to operating strategy, to address market conditions as they unfold for the remainder of 2024 and beyond.

Overall, the macroeconomic environment remains relatively strong for new homebuilders. There continues to be strong demand for housing, limited by the chronic housing shortage, which is particularly problematic for working-class families. Demand from that group remains robust if homes can be built at an attainable price point. Generally speaking, consumers are employed and are confident that they will remain employed and that their compensation is likely to rise. This is most often the foundation of a strong housing market.

Along with supply shortage, the additional limiting factor remains affordability. With higher interest rates and stubborn inflation, affordability continues to be tested as higher monthly payments make qualifying for a loan increasingly difficult. Inflation-driven higher cost-of-living expenses have made saving for a down payment increasingly difficult, and higher prices have begun to lead to increased personal and credit card debt. We have started to see early evidence of possible debt delinquency derailing some mortgage applications.

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

Against this backdrop, during our first quarter, we focused on, and were consistent in executing, our core operating strategy. We continued to migrate to a pure play manufacturing model across each of our 40 homebuilding divisions in order to reduce production costs while generating consistent cash flow. We are re-engineering our products for efficiency and volume in order to enhance our inventory turn and grow volume. We have also continued to migrate to a land light balance sheet in order to drive total shareholder return, return on inventory and return on equity.

We are operating under a model where we are starting homes at a pace designed to generate growth while we maximize logistics and efficiencies in order to benefit from reduced construction costs. Our trade partners are given visibility on our timing so they can be more efficient, and we pass their efficiencies on to our customers through more affordable products. Our trade partners find that they have consistent work with our production strategy, which leads to higher productivity and, therefore, to cost savings. We gain by driving volume when others pull back.

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

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

We recognize that the chronic housing shortage is a critical issue. Working-class housing is essential to the effective working of our cities across the country. We are working on using our strategies for production and cost efficiencies to build housing that is accessible to everyone. Land and impact fees are getting more expensive and labor costs have been rising. We can only reduce our costs by increasing productivity due to the efficiencies of our operations. We are building more consistent core products that are carefully value-engineered, and we are using our start pace to engineer our production cycle, which enables us to reduce our cycle time and, working with our trade partners, to build efficiencies in logistics and in the way we run our community production.

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

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

Our land light strategy has benefitted strongly from land banking arrangements. We have concerns about the durability of these arrangements. Availability of private equity participation in our land banking arrangements depends upon market conditions and can change significantly and quickly. Accordingly, we are considering a strategic spinoff that would provide a durable land strategy. By spinning off our own excess land in a taxable spinoff, we can create a permanent capital vehicle that will develop homesites and give us options to acquire them. Such a spinoff would distribute capital to our stockholders, reduce the inventory on our books, and provide permanent dependable capital for future land acquisitions.

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

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

We are anticipating 19,000 to 19,500 closings in the second quarter of 2024 with a margin of approximately 22.5%. We expect to deliver 80,000 homes this year with a little over a 23% margin. We also expect to repurchase in excess of $2 billion of our stock in fiscal 2024.

(1) Results of Operations

Overview

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

Our net earnings attributable to Lennar were $719.3 million, or $2.57 per diluted share, in the first quarter of 2024, compared to net earnings attributable to Lennar of $596.5 million, or $2.06 per diluted share, in the first quarter of 2023.

Financial information relating to our operations was as follows:

			Three Months Ended February 29, 2024
(In thousands)			Homebuilding						Financial Services						Multifamily						Lennar Other						Corporate						Total
Revenues:
Sales of homes			$	6,901,781					—						—						—						—						6,901,781
Sales of land			20,752						—						—						—						—						20,752
Other revenues			8,458						249,720						129,677						2,542						—						390,397
Total revenues			6,930,991						249,720						129,677						2,542						—						7,312,930
Costs and expenses:
Costs of homes sold			5,395,532						—						—						—						—						5,395,532
Costs of land sold			14,017						—						—						—						—						14,017
Selling, general and administrative expenses			567,987						—						—						—						—						567,987
Other costs and expenses			—						118,424						132,667						9,088						—						260,179
Total costs and expenses			5,977,536						118,424						132,667						9,088						—						6,237,715
Equity in earnings (losses) from unconsolidated entities			13,302						—						(12,606)						(31,241)						—						(30,545)
Other income (expense), net and other gains (losses)			62,039						—						(43)						3,376						—						65,372
Lennar Other unrealized losses from technology investments			—						—						—						(5,137)						—						(5,137)
Operating earnings (loss)			$	1,028,796					131,296						(15,639)						(39,548)						—						1,104,905
Corporate general and administrative expenses			—						—						—						—						157,321						157,321
Charitable foundation contribution			—						—						—						—						16,798						16,798
Earnings (loss) before income taxes			$	1,028,796					131,296						(15,639)						(39,548)						(174,119)						930,786

			Three Months Ended February 28, 2023
(In thousands)			Homebuilding						Financial Services						Multifamily						Lennar Other						Corporate						Total
Revenues:
Sales of homes			$	6,093,827					—						—						—						—						6,093,827
Sales of land			9,718						—						—						—						—						9,718
Other revenues			52,760						182,981						143,523						7,620						—						386,884
Total revenues			6,156,305						182,981						143,523						7,620						—						6,490,429
Costs and expenses:
Costs of homes sold			4,802,843						—						—						—						—						4,802,843
Costs of land sold			22,077						—						—						—						—						22,077
Selling, general and administrative expenses			449,794						—						—						—						—						449,794
Other costs and expenses			—						104,244						148,956						6,476						—						259,676
Total costs and expenses			5,274,714						104,244						148,956						6,476						—						5,534,390
Equity in earnings (losses) from unconsolidated entities			3,186						—						(16,483)						(17,890)						—						(31,187)
Other income (expense), net and other gains (losses)			22,062						—						315						943						—						23,320
Lennar Other unrealized losses from technology investments			—						—						—						(23,954)						—						(23,954)
Operating earnings (loss)			$	906,839					78,737						(21,601)						(39,757)						—						924,218
Corporate general and administrative expenses			—						—						—						—						126,106						126,106
Charitable foundation contribution			—						—						—						—						13,659						13,659
Earnings (loss) before income taxes			$	906,839					78,737						(21,601)						(39,757)						(139,765)						784,453

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

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

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

foot as we continued to focus on construction cost savings, which was partially offset by a decrease in average sales price and an increase in land costs.

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

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

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

Operating loss for the Multifamily segment was $15.5 million in the first quarter of 2024, compared to operating loss of $21.6 million in the first quarter of 2023. Operating loss for the Lennar Other segment was $39.5 million in the first quarter of 2024, compared to an operating loss of $41.2 million in the first quarter of 2023.

In the first quarter of 2024 and 2023, we had tax provisions of $210.9 million and $185.1 million, respectively, which resulted in an overall effective income tax rate of 22.7% and 23.7%, respectively. In the first quarter of 2024, our overall effective income tax rate was lower than last year, primarily due to excess tax benefits from share-based compensation.

Homebuilding Segments

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

Selected Financial and Operational Data

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

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

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

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

Summary of Homebuilding Data

Deliveries:

			First Quarter
			2024						2023						2024						2023						2024						2023
			Homes												Dollar Value (In thousands)												Average Sales Price
East			4,724						3,855						$	1,950,631					1,711,945						$	413,000					444,000
Central			3,560						2,740						1,395,644						1,201,395						392,000						438,000
Texas			4,263						3,421						1,070,159						1,016,973						251,000						297,000
West			4,238						3,642						2,521,491						2,194,022						595,000						602,000
Other			13						1						6,817						1,165						524,000						1,165,000
Total			16,798						13,659						$	6,944,742					6,125,500						$	413,000					448,000

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

Sales Incentives (1):

															First Quarter
															2024						2023						2024						2023
									Average Sales Incentives Per Home Delivered												Sales Incentives as a % of Revenue
East															$	46,800					30,300						10.2		%				6.4		%
Central															46,000						40,300						10.5		%				8.4		%
Texas															54,900						67,400						18.0		%				18.5		%
West															54,200						63,900						8.4		%				9.6		%
Other															89,300						85,000						14.6		%				6.8		%
Total															$	50,600					50,700						10.9		%				10.2		%

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

New Orders (2):

			First Quarter
			2024						2023						2024						2023						2024						2023						2024						2023
			Active Communities												Homes												Dollar Value (In thousands)												Average Sales Price
East			304						317						4,526						3,841						$	1,898,078					1,674,177						$	419,000					436,000
Central			320						322						4,274						2,741						1,718,536						1,147,817						402,000						419,000
Texas			233						219						4,431						3,142						1,119,999						879,456						253,000						280,000
West			368						356						4,927						4,465						2,996,239						2,708,326						608,000						607,000
Other			2						3						18						5						9,530						3,686						529,000						737,000
Total			1,227						1,217						18,176						14,194						$	7,742,382					6,413,462						$	426,000					452,000

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

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

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

			First Quarter
			2024						2023
East			16		%				24		%
Central			10		%				27		%
Texas			17		%				24		%
West			11		%				13		%
Other			5		%				17		%
Total			14		%				22		%

Backlog:

			First Quarter
			2024						2023						2024						2023						2024						2023
			Homes												Dollar Value (In thousands)												Average Sales Price
East			6,382						8,147						$	2,656,497					3,544,939						$	416,000					435,000
Central			3,877						4,570						1,698,509						2,039,469						438,000						446,000
Texas			2,063						2,418						525,781						699,567						255,000						289,000
West			3,940						4,263						2,547,090						2,740,782						646,000						643,000
Other			8						5						4,241						3,685						530,000						737,000
Total			16,270						19,403						$	7,432,118					9,028,442						$	457,000					465,000

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

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

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

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

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

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

active communities. The decrease in the average sales price of homes delivered was primarily due to pricing to market through an increased use of incentives. In the first quarter of 2024, a decrease in revenues per square foot was more than offset by a decrease in costs per square foot. Overall, gross margin percentage of home deliveries increased while land costs increased year over year.

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

Financial Services Segment

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

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

			Three Months Ended
(Dollars in thousands)			February 29, 2024						February 28, 2023
Dollar value of mortgages originated			$	4,111,000					3,154,000
Number of mortgages originated			11,500						8,500
Mortgage capture rate of Lennar homebuyers			85%						78%
Number of title and closing service transactions			17,800						14,200

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

Multifamily Segment

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

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

Balance Sheets
(In thousands)			February 29, 2024						November 30, 2023
Multifamily investments in unconsolidated entities			$	586,438					599,852
Lennar's net investment in Multifamily			1,121,372						1,095,218

Lennar Other Segment

Our Lennar Other segment includes fund investments we retained subsequent to our sale of the Rialto investment and asset management platform, as well as strategic investments in technology companies that are looking to improve the homebuilding and financial services industries to better serve homebuyers and homeowners and increase efficiencies. At February 29, 2024 and November 30, 2023, we had $749.9 million and $657.9 million, respectively, of assets in our Lennar Other segment, which included investments in unconsolidated entities of $289.7 million and $276.2 million, respectively. The investments in equity securities of 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”) are carried at market and will therefore change depending on the market value of our shareholdings in those entities on the last day of each quarter. All the investments are accounted for as investments in equity securities which are held at fair value and the changes in fair values are recognized through earnings. Details of these investments are included within Note 2 of the Notes to Condensed Consolidated Financial Statements. The following is a detail of Lennar Other unrealized losses from mark-to-market adjustments on our 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)

(2) Financial Condition and Capital Resources

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

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

Operating Cash Flow Activities

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

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

Investing Cash Flow Activities

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

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

Financing Cash Flow Activities

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

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

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

(Dollars in thousands)			February 29, 2024						November 30, 2023						February 28, 2023
Homebuilding debt			$	2,830,332					2,816,482						4,033,335
Stockholders’ equity			26,647,835						26,580,664						24,418,255
Total capital			$	29,478,167					29,397,146						28,451,590
Homebuilding debt to total capital			9.6		%				9.6		%				14.2		%
Homebuilding debt			$	2,830,332					2,816,482						4,033,335
Less: Homebuilding cash and cash equivalents			4,950,128						6,273,724						4,057,956
Net Homebuilding debt			$	(2,119,796)					(3,457,242)						(24,621)
Net Homebuilding debt to total capital (1)			(8.6)		%				(15.0)		%				(0.1)		%

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

At February 29, 2024, Homebuilding debt to total capital was consistent with November 30, 2023, and was lower compared to February 28, 2023, 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, strategic transactions to accelerate our land light strategy or securities convertible into shares of common stock, and/or the pursuit of other financing alternatives. In connection with some of our non-homebuilding businesses, we are also considering other types of transactions such as sales, restructurings, joint ventures, spin-offs or initial public offerings as we continue to move back towards being a pure play homebuilding company.

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

			Three Months Ended
(Dollars in thousands)			February 29, 2024						February 28, 2023
Homebuilding average debt outstanding			$	2,839,363					$	4,054,756
Average interest rate			4.8%						4.9%
Interest incurred			$	36,511					49,577

The maximum available borrowings on our 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 our Financial Condition and Capital Resources section in our Annual Report on Form 10-K for the fiscal year ended November 30, 2023. In addition to the Credit Facility, we have other letter of credit facilities with different financial institutions.

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

(Dollars in thousands)			Covenant Level						Level Achieved as of February 29, 2024
Minimum net worth test			$	13,533,319					20,018,096
Maximum leverage ratio			65.0%						(7.2)%
Liquidity test			1.00						(7,610.00)

Financial Services Warehouse Facilities

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

Changes in Capital Structure

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

During the three months ended February 29, 2024, treasury shares increased by 3.6 million shares primarily due to our repurchase of 3.4 million shares of Class A and Class B common stock through our stock repurchase program.

On February 7, 2024, we paid a quarterly cash dividend of $0.50 per share on both of our Class A and Class B common stock to holders of record at the close of business on January 24, 2024, as declared by our Board of Directors on January 9, 2024. We approved and paid cash dividends of $0.375 per share for each of the four quarters of 2023 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 February 29, 2024 they were guaranteeing Lennar Corporation's letter of credit facilities and its Credit Facility, disclosed in Note 7 of the Notes to Condensed Consolidated Financial Statements. The guarantees are full, unconditional and joint and several and the guarantor subsidiaries are 100% directly or indirectly owned by Lennar Corporation. A subsidiary's guarantee of Lennar senior notes will be suspended at any time when it is not directly or indirectly guaranteeing at least $75 million principal amount of debt of Lennar Corporation (other than senior notes), and a subsidiary will be released from its guarantee and any other obligations it may have regarding the senior notes if all or substantially all its assets, or all of its capital stock, are sold or otherwise disposed.

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

(In thousands)			February 29, 2024						November 30, 2023
Due from non-guarantor subsidiaries			$	22,861,257					22,020,227
Equity method investments			1,035,847						986,508
Total assets			46,853,033						45,830,841
Total liabilities			9,581,215						9,181,456

			Three Months Ended
(In thousands)			February 29, 2024
Total revenues			$	6,858,418
Operating earnings			982,106
Earnings before income taxes			811,299
Net earnings attributable to Lennar			628,285

Off-Balance Sheet Arrangements

We regularly monitor the results of 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 investments. We believe that substantially all of the joint ventures were in compliance with applicable debt covenants at February 29, 2024.

Homebuilding: Investments in Unconsolidated Entities

As of February 29, 2024, we had equity investments in 47 active Homebuilding and land unconsolidated entities (of which 5 had recourse debt, 15 had non-recourse debt and 27 had no debt) and 48 active Homebuilding and land unconsolidated entities at November 30, 2023. Historically, we have invested in unconsolidated entities that acquired and developed land (1) for our homebuilding operations or for sale to third parties or (2) for the construction of homes for sale to third-party homebuyers. Through these entities, we have primarily sought to reduce and share our risk by limiting the amount of our capital invested in land, while obtaining access to potential future homesites and allowing us to participate in strategic ventures. The use of these entities also, in some instances, has enabled us to acquire land to which we could not otherwise obtain access, or could not obtain access on as favorable terms, without the participation of a strategic partner. Participants in these joint ventures have been land owners/developers, other homebuilders and financial or strategic partners. Joint ventures with land owners/developers have given us access to homesites owned or controlled by our partners. Joint ventures with other homebuilders have provided us with the ability to bid jointly with our partners for large land parcels. Joint ventures with financial partners have allowed us to combine our homebuilding expertise with access to our partners’ capital. Joint ventures with strategic partners have allowed us to combine our homebuilding expertise with the specific expertise (e.g. commercial or infill experience) of our

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 February 29, 2024. It does not represent estimates of future cash payments that will be made to reduce debt balances. Many JV loans have extension options in the loan agreements that would allow the loans to be extended into future years.

									Principal Maturities of Unconsolidated JVs by Period
(In thousands)									Total JV Debt						2024						2025						2026						Thereafter						Other
Bank debt without recourse to Lennar									$	1,394,163					434,055						788,632						139,566						31,910						—
Land seller and other debt without recourse to Lennar									5,820						—						—						—						5,820						—
Maximum recourse debt exposure to Lennar									41,995						—						—						10,085						31,910						—
Debt issuance costs									(9,997)						—						—						—						—						(9,997)
Total									$	1,431,981					434,055						788,632						149,651						69,640						(9,997)

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

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

Multifamily: Investments in Unconsolidated Entities

At February 29, 2024, Multifamily had equity investments in 21 active unconsolidated entities that are engaged in multifamily residential developments (of which 18 had non-recourse debt and 3 had no debt) and 22 active unconsolidated entities at November 30, 2023. We invest in unconsolidated entities that acquire and develop land to construct multifamily rental properties. Through these entities, we are focusing on developing a geographically diversified portfolio of institutional quality multifamily rental properties in select U.S. markets. Initially, we participated in building multifamily developments and selling them soon after they were completed. Participants in these joint ventures have been financial partners. Joint ventures with financial partners have allowed us to combine our development and construction expertise with access to our partners’ capital. Each joint venture is governed by an operating agreement that provides significant substantive participating voting rights on major decisions to our partners.

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

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

									Principal Maturities of Unconsolidated JVs by Period
(In thousands)									Total JV Debt						2024						2025						2026						Thereafter						Other
Debt without recourse to Lennar									$	4,935,017					1,492,157						1,696,416						942,895						803,549						—
Debt issuance costs									(20,942)						—						—						—						—						(20,942)
Total									$	4,914,075					1,492,157						1,696,416						942,895						803,549						(20,942)

Lennar Other: Investments in Unconsolidated Entities

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

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

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 banks) and unconsolidated entities until we have determined whether to exercise the options. Since fiscal year 2020, we have been increasing the percentage of our total homesites that we control through option contracts rather than own.

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

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

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

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

Details on option contracts and related consolidated inventory not owned and exposure are included in Note 9 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, 2023, except for a decrease of $600 million in borrowings under the Financial Services' warehouse repurchase facilities.

(3) Recently Adopted Accounting Pronouncements

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

(4) Critical Accounting Policies

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