Item 1. Financial Statements

Lennar Corporation and Subsidiaries

Condensed Consolidated Balance Sheets

(Dollars in thousands)

(Unaudited)

			August 31,						November 30,
			2024 (1)						2023 (1)
ASSETS
Homebuilding:
Cash and cash equivalents			$	4,037,405					6,273,724
Restricted cash			12,600						13,481
Receivables, net			995,417						887,992
Inventories:
Finished homes and construction in progress			11,373,606						10,455,666
Land and land under development			4,872,341						4,904,541
Inventory owned			16,245,947						15,360,207
Consolidated inventory not owned			3,842,592						2,992,528
Inventory owned and consolidated inventory not owned			20,088,539						18,352,735
Deposits and pre-acquisition costs on real estate			2,980,035						2,002,154
Investments in unconsolidated entities			1,309,622						1,143,909
Goodwill			3,442,359						3,442,359
Other assets			1,616,314						1,512,038
			34,482,291						33,628,392
Financial Services			3,093,873						3,566,546
Multifamily			1,310,555						1,381,513
Lennar Other			854,263						657,852
Total assets			$	39,740,982					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 August 31, 2024, total assets include $3.3 billion related to consolidated VIEs of which $68.8 million is included in Homebuilding cash and cash equivalents, $7.0 million in Homebuilding receivables, net, $6.7 million in Homebuilding finished homes and construction in progress, $625.1 million in Homebuilding land and land under development, $2.5 billion in Homebuilding consolidated inventory not owned, $67.3 million in Homebuilding deposits and pre-acquisition costs on real estate, $0.3 million in Homebuilding investments in unconsolidated entities, $41.0 million in Homebuilding other assets and $34.0 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, $1.2 billion in Homebuilding consolidated inventory not owned, $55.0 million in Homebuilding deposits and pre-acquisition costs on real estate, $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)

			August 31,						November 30,
			2024 (2)						2023 (2)
LIABILITIES AND EQUITY
Homebuilding:
Accounts payable			$	1,788,117					1,631,401
Liabilities related to consolidated inventory not owned			3,343,871						2,540,894
Senior notes and other debt payable, net			2,263,256						2,816,482
Other liabilities			2,727,342						2,739,217
			10,122,586						9,727,994
Financial Services			1,759,821						2,447,039
Multifamily			195,327						278,177
Lennar Other			105,540						79,127
Total liabilities			12,183,274						12,532,337
Commitments and contingent liabilities (See Note 10)
Stockholders’ equity:
Preferred stock			—						—
Class A common stock of $0.10 par value; Authorized: August 31, 2024 and November 30, 2023 - 400,000,000 shares; Issued: August 31, 2024 - 259,978,383 shares and November 30, 2023 - 258,475,012 shares			25,998						25,848
Class B common stock of $0.10 par value; Authorized: August 31, 2024 and November 30, 2023 - 90,000,000 shares; Issued: August 31, 2024 - 36,601,215 shares and November 30, 2023 - 36,601,215 shares			3,660						3,660
Additional paid-in capital			5,706,711						5,570,009
Retained earnings			24,791,519						22,369,368
Treasury stock, at cost; August 31, 2024 - 21,171,248 shares of Class A common stock and 4,163,503 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			(3,122,408)						(1,393,100)
Accumulated other comprehensive income			7,040						4,879
Total stockholders’ equity			27,412,520						26,580,664
Noncontrolling interests			145,188						121,302
Total equity			27,557,708						26,701,966
Total liabilities and equity			$	39,740,982					39,234,303

(2)As of August 31, 2024, total liabilities include $2.4 billion related to consolidated VIEs as to which there was no recourse against the Company, of which $80.0 million is included in Homebuilding accounts payable, $2.3 billion in Homebuilding liabilities related to consolidated inventory not owned, $6.0 million in Homebuilding senior notes and other debt payable, $46.5 million in Homebuilding other liabilities, and $1.0 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												Nine Months Ended
			August 31,												August 31,
			2024						2023						2024						2023
Revenues:
Homebuilding			$	9,045,692					8,318,615						24,357,742						22,144,937
Financial Services			273,270						266,206						804,713						672,166
Multifamily			93,443						137,394						322,620						432,661
Lennar Other			3,637						7,388						9,489						15,419
Total revenues			9,416,042						8,729,603						25,494,564						23,265,183
Costs and expenses:
Homebuilding			7,613,042						6,863,063						20,697,033						18,576,734
Financial Services			128,870						117,211						382,005						331,835
Multifamily			184,708						139,759						419,580						443,069
Lennar Other			17,176						6,155						53,105						19,426
Corporate general and administrative			164,672						114,144						478,975						365,002
Charitable foundation contribution			21,516						18,559						58,004						49,292
Total costs and expenses			8,129,984						7,258,891						22,088,702						19,785,358
Equity in earnings (losses) from unconsolidated entities			186,621						(23,989)						151,767						(104,931)
Other income, net and other gains			23,331						44,151						156,875						57,511
Lennar Other unrealized gains (losses) from technology investments			39,123						(15,713)						12,472						(14,170)
Earnings before income taxes			1,535,133						1,475,161						3,726,976						3,418,235
Provision for income taxes			(347,859)						(358,209)						(859,195)						(824,233)
Net earnings (including net earnings attributable to noncontrolling interests)			1,187,274						1,116,952						2,867,781						2,594,002
Less: Net earnings attributable to noncontrolling interests			24,600						7,956						31,462						16,778
Net earnings attributable to Lennar			$	1,162,674					1,108,996						2,836,319						2,577,224
Other comprehensive income, net of tax:
Net unrealized gains on securities available-for-sale			$	444					208						2,161						1,632
Total other comprehensive income, net of tax			$	444					208						2,161						1,632
Total comprehensive income attributable to Lennar			$	1,163,118					1,109,204						2,838,480						2,578,856
Total comprehensive income attributable to noncontrolling interests			$	24,600					7,956						31,462						16,778
Basic and diluted earnings per share			$	4.26					3.87						10.26						8.94

See accompanying notes to condensed consolidated financial statements.

Lennar Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

			Nine Months Ended
			August 31,
			2024						2023
Cash flows from operating activities:
Net earnings (including net earnings attributable to noncontrolling interests)			$	2,867,781					2,594,002
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization			85,119						81,146
Amortization of discount/premium and accretion on debt, net			407						(2,194)
Equity in (earnings) loss from unconsolidated entities			(151,767)						104,931
Distributions of earnings from unconsolidated entities			34,108						33,714
Share-based compensation expense			154,094						139,616
Deferred income tax expense (benefit)			99,368						(102,322)
Gains on redemption/repurchases of senior notes			(825)						(6,878)
Loans held-for-sale unrealized (gains) losses			(1,617)						33,358
Lennar Other unrealized (gains) losses from technology investments and other (gains) losses			(35,189)						14,131
Gains on sale of operating properties and equipment and other assets			(15,428)						(3,064)
Valuation adjustments and write-offs of option deposits and pre-acquisition costs on real estate, and other assets			125,777						96,451
Changes in assets and liabilities:
(Increase) decrease in receivables			(24,170)						167,573
(Increase) decrease in inventories, excluding valuation adjustments			(707,702)						127,312
Increase in deposits and pre-acquisition costs on real estate			(984,843)						(134,883)
Increase in other assets			(84,751)						(104,794)
Decrease in loans held-for-sale			245,004						434,332
Decrease in accounts payable and other liabilities			(176,492)						(881,890)
Net cash provided by operating activities			1,428,874						2,590,541
Cash flows from investing activities:
Net additions of operating properties and equipment			(130,138)						(53,610)
Proceeds from the sale of operating properties and equipment and other assets			31,435						13,215
Investments in and contributions to unconsolidated entities			(311,904)						(152,530)
Distributions of capital from unconsolidated entities			236,527						69,960
(Increase) decrease in Financial Services loans held-for-investment			(2,479)						12,222
Purchases of investment securities			(4,519)						(8,000)
Proceeds from maturities/sales of investment securities			4,254						3,778
Net cash used in investing activities			$	(176,824)					(114,965)

See accompanying notes to condensed consolidated financial statements.

Lennar Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Continued)

(In thousands)

(Unaudited)

			Nine Months Ended
			August 31,
			2024						2023
Cash flows from financing activities:
Net repayments under warehouse facilities			$	(618,388)					(980,929)
Redemption/repurchases of senior notes			(553,865)						(633,059)
Principal payments on notes payable and other borrowings			(43,995)						(89,042)
Proceeds from liabilities related to consolidated inventory not owned			130,440						341,288
Proceeds from other borrowings			6,231						—
Payments related to liabilities related to consolidated inventory not owned			(255,753)						(597,477)
Payments related to other liabilities, net			(4,263)						(4,016)
Receipts related to noncontrolling interests			17,044						6,309
Payments related to noncontrolling interests			(45,819)						(43,418)
Common stock:
Repurchases			(1,729,308)						(841,611)
Dividends			(414,168)						(325,359)
Net cash used in financing activities			(3,511,844)						(3,167,314)
Net decrease in cash and cash equivalents and restricted cash			(2,259,794)						(691,738)
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			$	4,311,144					4,124,032
Summary of cash and cash equivalents and restricted cash:
Homebuilding			$	4,037,405					3,887,809
Financial Services			156,840						167,216
Multifamily			24,755						28,712
Lennar Other			33,662						5,344
Homebuilding restricted cash			12,600						16,201
Financial Services restricted cash			45,882						18,750
			$	4,311,144					4,124,032
Supplemental disclosures of non-cash investing and financing activities:
Homebuilding:
Purchases of inventories financed by sellers			$	34,245					13,500
Net non-cash contributions to unconsolidated entities			14,453						120

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, as amended ("Form 10-K"). 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 and nine months ended August 31, 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 August 31, 2024 and November 30, 2023 included $878.8 million and $594.8 million, respectively, of cash held in escrow for approximately two days.

Share-based Payments

During both the three months ended August 31, 2024 and 2023, the Company granted employees an immaterial number of nonvested shares. During the nine months ended August 31, 2024 and 2023, the Company granted employees 1.3 million and 2.0 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 its 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 prior year segment information in the condensed consolidated financial statements has been reclassified to conform with the 2024 presentation. This reclassification was for operational purposes and between segments and had no impact on the Company's total assets, total equity, revenue or net income in the 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)			August 31, 2024
Assets:			Homebuilding						Financial Services						Multifamily						Lennar Other						Total
Cash and cash equivalents			$	4,037,405					156,840						24,755						33,662						4,252,662
Restricted cash			12,600						45,882						—						—						58,482
Receivables, net (1)			995,417						546,868						65,136						—						1,607,421
Inventory owned and consolidated inventory not owned			20,088,539						—						551,970						—						20,640,509
Deposits and pre-acquisition costs on real estate			2,980,035						—						32,946						—						3,012,981
Investments in unconsolidated entities			1,309,622						—						544,635						351,174						2,205,431
Loans held-for-sale (2)			—						1,841,211						—						—						1,841,211
Investments in equity securities (3)			—						—						—						339,527						339,527
Investments available-for-sale (4)			—						—						—						40,090						40,090
Loans held-for-investment, net			—						63,995						—						—						63,995
Investments held-to-maturity			—						138,045						—						—						138,045
Goodwill			3,442,359						189,699						—						—						3,632,058
Other assets			1,616,314						111,333						91,113						89,810						1,908,570
Total assets			$	34,482,291					3,093,873						1,310,555						854,263						39,740,982
Liabilities:
Notes and other debt payable, net			$	2,263,256					1,545,416						—						—						3,808,672
Accounts payable, liabilities related to consolidated inventory not owned and other liabilities			7,859,330						214,405						195,327						105,540						8,374,602
Total liabilities			$	10,122,586					1,759,821						195,327						105,540						12,183,274

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
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
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
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 debt 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 August 31, 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 $147.5 million and $121.0 million without readily available fair values as of August 31, 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												Nine Months Ended
			August 31,												August 31,
(In thousands)			2024						2023						2024						2023
Revenues:
Homebuilding			$	9,045,692					8,318,615						24,357,742						22,144,937
Financial Services			273,270						266,206						804,713						672,166
Multifamily			93,443						137,394						322,620						432,661
Lennar Other			3,637						7,388						9,489						15,419
			$	9,416,042					8,729,603						25,494,564						23,265,183
Earnings (loss) before income taxes:
Homebuilding			$	1,477,918					1,493,820						3,846,869						3,615,068
Financial Services			144,400						148,995						422,708						340,331
Multifamily			78,908						(8,733)						42,795						(38,496)
Lennar Other			20,095						(26,218)						(48,417)						(84,374)
Corporate and Unallocated (1)			(186,188)						(132,703)						(536,979)						(414,294)
			$	1,535,133					1,475,161						3,726,976						3,418,235

(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:

			August 31,						November 30,
			2024						2023
(In thousands)
East			$	7,235,644					6,563,568
Central			5,393,664						4,511,496
Texas			4,052,427						3,337,280
West			12,046,350						11,298,812
Other			1,573,735						1,511,541
Corporate and Unallocated			4,180,471						6,405,695
Total Homebuilding			$	34,482,291					33,628,392

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

			Three Months Ended												Nine Months Ended
			August 31,												August 31,
(In thousands)			2024						2023						2024						2023
Revenues
East			$	2,138,235					2,195,413						6,263,276						6,012,553
Central			2,142,857						1,818,744						5,246,756						4,661,277
Texas			1,286,625						1,176,875						3,554,836						3,340,539
West			3,471,591						3,117,265						9,267,120						8,103,423
Other			6,384						10,318						25,754						27,145
			$	9,045,692					8,318,615						24,357,742						22,144,937
Operating earnings (loss)
East			$	402,182					514,309						1,204,713						1,386,208
Central			343,216						300,942						742,702						704,778
Texas			197,767						219,881						550,924						528,261
West			514,448						479,968						1,302,172						1,065,940
Other			20,305						(21,280)						46,358						(70,119)
			$	1,477,918					1,493,820						3,846,869						3,615,068

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 August 31, 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:
September 2024 (1)			$	100,000					100,000						200,000
April 2025			250,000						250,000						500,000
June 2025			1,400,000						—						1,400,000
August 2025			75,000						75,000						150,000
August 2025			250,000						250,000						500,000
Total residential facilities			$	2,075,000					675,000						2,750,000
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															$	3,050,000

(1)Subsequent to August 31, 2024, the maturity date was extended to October 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)			August 31, 2024						November 30, 2023
Borrowings under the residential facilities			$	1,332,897					2,020,187
Collateral under the residential facilities			1,374,251						2,097,020
Borrowings under the LMF Commercial facilities			83,884						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 and nine months

Lennar Corporation and Subsidiaries

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

ended August 31, 2024 and 2023. Loan origination liabilities were $18.9 million and $17.6 million as of August 31, 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												Nine Months Ended
			August 31,												August 31,
(Dollars in thousands)			2024						2023						2024						2023
Originations (1)			$	236,665					161,308						449,000						325,378
Sold			145,325						100,562						301,610						265,864
Securitizations			4						3						9						6

(1)During both the three and nine months ended August 31, 2024 and 2023, the commercial loans originated were recorded as loans held-for-sale, which are held at fair value.

Investments held-to-maturity

At August 31, 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 or nine months ended August 31, 2024 and 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)			August 31, 2024						November 30, 2023
Carrying value			$	138,045					140,676
Outstanding debt, net of debt issuance costs			128,635						131,093
Incurred interest rate			3.4%						3.4%

			August 31, 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 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 and other gains, which includes sales of buildings and investments.

Lennar Corporation and Subsidiaries

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

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.

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 the carrying value of which will therefore change depending on the value of the Company's shareholdings in those entities on the last day of each quarter. All the investments are accounted for as investments in equity securities which are held at fair value and the changes in fair values are recognized through earnings. The following is a detail of Lennar Other unrealized gains (losses) from mark-to-market adjustments on the Company's technology investments:

			Three Months Ended												Nine Months Ended
			August 31,												August 31,
(In thousands)			2024						2023						2024						2023
Blend Labs (BLND)			$	2,270					386						5,921						(360)
Hippo (HIPO)			6,609						(17,166)						33,795						(14,933)
Opendoor (OPEN)			(564)						23,638						(16,156)						38,459
SmartRent (SMRT)			(5,634)						(1,707)						(12,206)						8,219
Sonder (SOND)			71						(91)						82						(549)
Sunnova (NOVA)			36,371						(20,773)						1,036						(45,006)
Lennar Other unrealized gains (losses) from technology investments			$	39,123					(15,713)						12,472						(14,170)

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 August 31, 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)						August 31, 2024						November 30, 2023
Investments in unconsolidated entities (1) (2)						$	1,309,622					1,143,909
Underlying equity in unconsolidated entities' net assets (1)						1,604,403						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 August 31, 2024 and November 30, 2023, the carrying amount of the Company's investment was $466.1 million and $422.2 million, respectively.

As of August 31, 2024 and November 30, 2023, the Homebuilding segment's unconsolidated entities had non-recourse debt with completion guarantees of $292.3 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 August 31, 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 August 31, 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

Lennar Corporation and Subsidiaries

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

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 could raise equity commitments totaling $1.0 billion. The commitments are primarily from institutional investors, including $78.1 million committed by Lennar. As of August 31, 2024 and November 30, 2023, the carrying amount of the Company's investment in Upward America was $20.5 million and $14.8 million, respectively.

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 the 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 August 31, 2024 and November 30, 2023, the fair value of the completion guarantees was immaterial. As of August 31, 2024 and November 30, 2023, the Multifamily segment's unconsolidated entities had non-recourse debt with completion guarantees of $904.2 million 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												Nine Months Ended
(In thousands)			August 31, 2024						August 31, 2023						August 31, 2024						August 31, 2023
General contractor services, net of deferrals			$	67,190					120,510						253,260						374,283
General contractor costs			63,774						114,371						239,458						357,168
Management fee income, net of deferrals			10,917						16,884						40,627						52,499

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 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 August 31, 2024, the Company had a $25.7 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 nine months ended August 31, 2024 are included below:

			August 31, 2024
(In thousands)			LMV I						LMV II
Lennar's carrying value of investments			$	160,339					239,166
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			147,305						11,206

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

As of November 30, 2023, there were 38 rental operation projects in LMV I. During the second half of fiscal 2024, the LMV I partners decided to liquidate and sell all of the individual rental operation projects of LMV I as the fund has come to the end of its contractual life. During the three months ended August 31, 2024, 27 LMV I rental operation projects were sold to various third-party buyers. The Company recognized a net gain of $179.0 million on the sale of these rental operation projects which was recorded as equity in earnings (losses) in the condensed consolidated statement of operations. As a result, the Company received net cash distributions of $147.3 million during the three months ended August 31, 2024.

Lennar Corporation and Subsidiaries

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

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 $145.7 million and $148.7 million as of August 31, 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 $205.5 million and $127.5 million, as of August 31, 2024 and November 30, 2023, respectively. In addition, during the nine months ended August 31, 2024, there was a $46.5 million one-time realized gain in Lennar Other on the sale of a technology investment that was included in other income (expense), net and other gains (losses) on the Company’s condensed consolidated statements of operations and comprehensive income.

**(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 and nine months ended August 31, 2024 and 2023:

			Three Months Ended August 31, 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 May 31, 2024			$	27,015,753					25,996						3,660						5,674,733						(2,597,806)						6,596						23,764,695						137,879
Net earnings (including net earnings attributable to noncontrolling interests)			1,187,274						—						—						—						—						—						1,162,674						24,600
Employee stock and directors plans			10						2						—						70						(62)						—						—						—
Purchases of treasury stock			(524,540)						—						—						—						(524,540)						—						—						—
Amortization of restricted stock			31,908						—						—						31,908						—						—						—						—
Cash dividends			(135,850)						—						—						—						—						—						(135,850)						—
Receipts related to noncontrolling interests			2,322						—						—						—						—						—						—						2,322
Payments related to noncontrolling interests			(19,173)						—						—						—						—						—						—						(19,173)
Non-cash purchase or activity of noncontrolling interests, net			(440)						—						—						—						—						—						—						(440)
Total other comprehensive income, net of tax			444						—						—						—						—						444						—						—
Balance at August 31, 2024			$	27,557,708					25,998						3,660						5,706,711						(3,122,408)						7,040						24,791,519						145,188

			Three Months Ended August 31, 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 May 31, 2023			$	25,161,119					25,843						3,660						5,546,128						(675,686)						3,832						20,111,368						145,974
Net earnings (including net earnings attributable to noncontrolling interests)			1,116,952						—						—						—						—						—						1,108,996						7,956
Employee stock and directors plans			(8,552)						1						—						(620)						(7,933)						—						—						—
Purchases of treasury stock			(368,381)						—						—						—						(368,381)						—						—						—
Amortization of restricted stock			12,885						—						—						12,885						—						—						—						—
Cash dividends			(107,082)						—						—						—						—						—						(107,082)						—
Receipts related to noncontrolling interests			1,391						—						—						—						—						—						—						1,391
Payments related to noncontrolling interests			(22,795)						—						—						—						—						—						—						(22,795)
Non-cash purchase or activity of noncontrolling interests, net			2,797						—						—						3,400						—						—						—						(603)
Total other comprehensive income, net of tax			208						—						—						—						—						208						—						—
Balance at August 31, 2023			$	25,788,542					25,844						3,660						5,561,793						(1,052,000)						4,040						21,113,282						131,923

Lennar Corporation and Subsidiaries

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

			Nine Months Ended August 31, 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)			2,867,781						—						—						—						—						—						2,836,319						31,462
Employee stock and directors plans			(84,509)						150						—						1,282						(85,941)						—						—						—
Purchases of treasury stock			(1,643,367)						—						—						—						(1,643,367)						—						—						—
Amortization of restricted stock			154,094						—						—						154,094						—						—						—						—
Cash dividends			(414,168)						—						—						—						—						—			—			(414,168)						—
Receipts related to noncontrolling interests			17,044						—						—						—						—						—						—						17,044
Payments related to noncontrolling interests			(45,819)						—						—						—						—						—						—						(45,819)
Non-cash purchase or activity of noncontrolling interests, net			2,525						—						—						(18,674)						—						—						—						21,199
Total other comprehensive income, net of tax			2,161						—						—						—						—						2,161						—						—
Balance at August 31, 2024			$	27,557,708					25,998						3,660						5,706,711						(3,122,408)						7,040						24,791,519						145,188

			Nine Months Ended August 31, 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)			2,594,002						—						—						—						—						—						2,577,224						16,778
Employee stock and directors plans			(71,313)						236						—						822						(72,371)						—						—						—
Purchases of treasury stock			(769,240)						—						—						—						(769,240)						—						—						—
Amortization of restricted stock			139,616						—						—						139,616						—						—						—						—
Cash dividends			(325,359)						—						—						—						—						—			—			(325,359)						—
Receipts related to noncontrolling interests			6,309						—						—						—						—						—						—						6,309
Payments related to noncontrolling interests			(43,418)						—						—						—						—						—						—						(43,418)
Non-cash purchase or activity of noncontrolling interests, net			15,946						—						—						3,559						—						—						—						12,387
Total other comprehensive income, net of tax			1,632						—						—						—						—						1,632						—						—
Balance at August 31, 2023			$	25,788,542					25,844						3,660						5,561,793						(1,052,000)						4,040						21,113,282						131,923

On September 25, 2024, the Company's Board of Directors declared a quarterly cash dividend of $0.50 per share on both its Class A and Class B common stock, payable on October 24, 2024 to holders of record at the close of business on October 9, 2024. On July 19, 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 July 5, 2024, as declared by its Board of Directors on June 20, 2024. The Company approved and paid cash dividends of $0.375 per share for each of the four quarters of 2023 for both its Class A and Class B common stock.

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. At August 31, 2024, we have a remaining authorization to repurchase $3.9 billion in value of our Class A or B common stock. 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 August 31,																								Nine Months Ended August 31,
			2024												2023												2024												2023
(Dollars in thousands, except price per share amounts)			Class A						Class B						Class A						Class B						Class A						Class B						Class A						Class B
Shares repurchased			2,892,320						462,906						2,305,300						694,700						9,311,923						1,243,303						5,021,186						1,978,814
Total purchase price			$	447,845					$	71,434					$	287,024					$	78,855					$	1,445,909					$	182,641					$	568,892					$	193,970
Average price per share			$	154.84					$	154.32					$	124.51					$	113.51					$	155.27					$	146.90					$	113.30					$	98.02

Lennar Corporation and Subsidiaries

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

**(5)**Income Taxes

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

			Three Months Ended												Nine Months Ended
			August 31,												August 31,
(Dollars in thousands)			2024						2023						2024						2023
Provision for income taxes			$347,859						358,209						859,195						824,233
Effective tax rate (1)			23.0%						24.4%						23.2		%				24.2		%

(1)For both the three and nine months ended August 31, 2024 and 2023, the effective tax rate included state income tax expense and non-deductible executive compensation, partially offset by tax credits. The reduction in the effective tax rate from prior year for both the three and nine months ended August 31, 2024 is primarily due to additional tax credits recognized during the three months ended August 31, 2024.

**(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												Nine Months Ended
			August 31,												August 31,
(In thousands, except per share amounts)			2024						2023						2024						2023
Numerator:
Net earnings attributable to Lennar			$	1,162,674					1,108,996						2,836,319						2,577,224
Less: distributed earnings allocated to nonvested shares			635						672						4,351						4,968
Less: undistributed earnings allocated to nonvested shares			10,257						12,549						24,177						28,252
Numerator for basic and diluted earnings per share			1,151,782						1,095,775						2,807,791						2,544,004
Denominator:
Denominator for basic and diluted earnings per share - weighted average common shares outstanding			270,164						282,854						273,604						284,612
Basic and diluted earnings per share			$	4.26					3.87						10.26						8.94

For both the three and nine months ended August 31, 2024 and August 31, 2023, there were no options to purchase shares of common stock that were outstanding and anti-dilutive.

**(7)**Homebuilding Senior Notes and Other Debt Payable

(Dollars in thousands)			August 31, 2024						November 30, 2023
4.75% senior notes due 2025			$	499,668					499,336
5.25% senior notes due 2026			402,128						403,040
5.00% senior notes due 2027			351,070						351,357
4.75% senior notes due 2027 (1)			698,287						797,347
4.50% senior notes due 2024			—						453,682
Mortgage notes on land and other debt			312,103						311,720
			$	2,263,256					2,816,482

(1)During the nine months ended August 31, 2024, the Company repurchased $100 million aggregate principal amount of senior notes due November 2027, through open market repurchases.

The carrying amounts of the senior notes in the table above are net of debt issuance costs of $2.6 million and $4.2 million as of August 31, 2024 and November 30, 2023, respectively.

Lennar Corporation and Subsidiaries

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

During the nine months ended August 31, 2024, the Company redeemed $454 million aggregate principal amount of its 4.50% senior notes due April 2024. The redemption price, which was paid in cash, was 100% of the principal amount outstanding.

In April 2024, $350 million of the Company's unsecured revolving credit facility matured.

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

(In thousands)						August 31, 2024
Commitments - maturing in May 2027						$	2,225,000
Accordion feature						425,000
Total maximum borrowings capacity						$	2,650,000

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)						August 31, 2024						November 30, 2023
Performance letters of credit						$	1,606,070					1,404,541
Financial letters of credit						566,598						417,976
Surety bonds						4,989,709						4,508,428
Anticipated future costs primarily for site improvements related to performance surety bonds						2,782,727						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.

**(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 August 31, 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.

									August 31, 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						$	63,995					64,172						55,463						55,463
Investments held-to-maturity			Level 3						138,045						141,500						140,676						139,396
LIABILITIES
Homebuilding senior notes and other debt payable, net			Level 2						$	2,263,256					2,272,515						2,816,482						2,785,712
Financial Services notes and other debt payable, net			Level 2						1,545,416						1,545,806						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

Lennar Corporation and Subsidiaries

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

financial information. For notes and other debt 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)						August 31, 2024						November 30, 2023
Financial Services Assets:
Residential loans held-for-sale			Level 2						$	1,690,344					2,073,350
LMF Commercial loans held-for-sale			Level 3						150,867						13,459
Mortgage servicing rights			Level 3						3,366						3,440
Forward options			Level 1						6,058						5,937
Lennar Other Assets:
Investments in equity securities			Level 1						$	192,069					176,198
Investments available-for-sale			Level 3						40,090						37,953

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

			August 31, 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			$	1,699,152											(8,808)						2,083,776												(10,426)
LMF Commercial loans held-for-sale			151,540												(673)						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 August 31, 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:

Lennar Corporation and Subsidiaries

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

			As of August 31, 2024						As of November 30, 2023
Unobservable inputs:
Mortgage prepayment rate			9%						8%
Discount rate			13%						13%
Delinquency rate			11%						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.

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												Nine Months Ended
			August 31,												August 31,
(In thousands)			2024						2023						2024						2023
Changes in fair value included in Financial Services revenues:
Loans held-for-sale			$	30,482					(9,795)						1,617						(33,358)
Mortgage loan commitments			22,400						18,139						(9,702)						(16,922)
Forward contracts			(31,664)						(9,379)						41,209						63,323
Forward options			2,687						(485)						1,633						(1,437)
Changes in fair value included in Lennar Other unrealized gains (losses) from technology investments:
Investments in equity securities			$	39,123					(15,713)						12,472						(14,170)
Changes in fair value included in other comprehensive income, net of tax:
Lennar Other investments available-for-sale			$	444					208						2,161						1,632

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.

Lennar Corporation and Subsidiaries

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

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 August 31,
			2024												2023
(In thousands)			Mortgage servicing rights						LMF Commercial loans held-for-sale						Mortgage servicing rights						LMF Commercial loans held-for-sale
Beginning balance			$	3,652					66,715						3,398						22,754
Purchases/loan originations			174						236,665						34						161,308
Sales/loan originations sold, including those not settled			—						(145,325)						—						(100,562)
Disposals/settlements			(122)						(9,500)						(94)						(45,667)
Changes in fair value (1)			(338)						2,312						78						(535)
Interest and principal paydowns			—						—						—						(3)
Ending balance			$	3,366					150,867						3,416						37,295

			Nine Months Ended August 31,
			2024												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			406						449,000						155						325,378
Sales/loan originations sold, including those not settled			—						(301,610)						—						(265,864)
Disposals/settlements			(193)						(9,500)						(237)						(45,667)
Changes in fair value (1)			(287)						(673)						35						(547)
Interest and principal paydowns			—						191						—						(1,604)
Ending balance			$	3,366					150,867						3,416						37,295

(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 August 31,
									2024																		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						$	120,811					111,776						(9,035)						67,006						57,801						(9,205)
Land and land under development (2)			Level 3						—						—						—						25,160						24,612						(548)
Deposits and pre-acquisition costs on real estate (3)			Level 3						206						—						(206)						1,580						—						(1,580)
Non-financial assets - Multifamily:
Land and land under development (4)			Level 3						$	139,980					49,970						(90,010)						—						—						—

									Nine Months Ended August 31,
									2024																		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						$	313,120					280,761						(32,359)						250,822						216,703						(34,119)
Land and land under development (2)			Level 3						—						—						—						50,895						48,315						(2,580)
Deposits and pre-acquisition costs on real estate (3)			Level 3						3,408						—						(3,408)						18,710						—						(18,710)
Investments in unconsolidated entities (5)			Level 3						—						—						—						78,834						37,792						(41,042)
Non-financial assets - Multifamily:
Land and land under development (4)			Level 3						$	139,980					49,970						(90,010)						—						—						—

Lennar Corporation and Subsidiaries

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

(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.

(3)Forfeited deposits and write-off of pre-acquisition costs on real estate were included in Homebuilding costs and expenses in the Company's condensed consolidated statements of operations and comprehensive income.

(4)Valuation adjustments for land and land under development were included in Multifamily costs and expenses.

(5)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.

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 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 Nine Months Ended			# of active communities						# of communities with potential indicator of impairment																		# of communities																		Fair Value (in thousands)						Valuation Adjustments (in thousands)
August 31, 2024			1,283						24																		4																		$	25,769					$	15,263
August 31, 2023			1,247						21																		6																		53,211						18,844

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:

			Nine Months Ended August 31,
			2024												2023
Unobservable inputs			Range												Range
Average selling price (1)			$178,000			—			282,000						371,000			—			850,000
Absorption rate per quarter (homes)			10			—			15						3			—			26
Discount rate			20%												20%

(1)Represents the projected average selling price on future deliveries for communities in which the Company recorded valuation adjustments during both the nine months ended August 31, 2024 and 2023.

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 and nine months ended August 31, 2024, the Company evaluated the fair value of its investments in unconsolidated entities using a cash flow analysis and concluded that the investments had an immaterial amount of other-than-temporary impairment. During the nine months ended August 31, 2023, the Company estimated the fair value of an investment in an unconsolidated entity using a cash flow analysis with a 15% discount rate and concluded that the investment had an other-than-temporary impairment of $36.8 million included in Homebuilding other income (expense), net in the Company's condensed consolidated statements of operation and comprehensive income.

Lennar Corporation and Subsidiaries

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

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 nine months ended August 31, 2024, the Company evaluated the joint venture (“JV”) agreements of its JVs 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 nine months ended August 31, 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.

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 debt 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:

			August 31, 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)			$	782,772					854,782						659,224						787,226
Multifamily (2)			132,897						136,702						384,718						402,735
Financial Services (3)			138,045						138,045						140,676						140,676
Lennar Other (4)			125,232						125,232						56,009						56,009
			$	1,178,946					1,254,761						1,240,627						1,386,646

(1)As of August 31, 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 $20.7 million and $69.8 million, respectively. In addition, as of August 31, 2024 and November 30, 2023, there was recourse debt of VIEs of $44.2 million and $42.1 million, respectively.

(2)As of August 31, 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 November 30, 2023, for expenditures related to the construction and development of its projects. The decrease in exposure as of August 31, 2024 is primarily due to the removal of LMV II as the Fund does not expect to call for equity in the future. As a result, LMV II is not a VIE as of August 31, 2024.

(3)As of both August 31, 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)As of both August 31, 2024 and November 30, 2023, the Company's maximum recourse exposure to loss of the Lennar Other segment was limited to its investments in the unconsolidated VIEs. The increase in exposure was due to the Company entering into a new JV which is a VIE and its continued contributions to 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 August 31, 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

Lennar Corporation and Subsidiaries

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

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 $2.5 billion as of August 31, 2024 and is included in consolidated inventory not owned. Consolidated inventory not owned related to land financing transactions, 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 $1.4 billion as of August 31, 2024.

During the nine months ended August 31, 2024, consolidated inventory not owned increased by $850.1 million with a corresponding increase to liabilities related to consolidated inventory not owned in the accompanying condensed consolidated balance sheet as of August 31, 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 August 31, 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)			August 31, 2024						November 30, 2023
Non-refundable option deposits and pre-acquisition costs			$	2,890,534					1,949,219
Non-refundable option deposits included in consolidated inventory not owned			498,721						451,632
Letters of credit in lieu of cash deposits under certain land and option contracts			307,678						198,920

For the nine months ended August 31, 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 August 31, 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 August 31, 2024, the total deposits and pre-acquisition costs on real estate relating to contracts with the Land Bank were $820.7 million. As of August 31, 2024, total consolidated inventory not owned and liabilities related to consolidated inventory not owned relating to contracts with the Land Bank were $768.1 million and $644.9 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

Lennar Corporation and Subsidiaries

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

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												Nine Months Ended
			August 31,												August 31,
(In thousands)			2024						2023						2024						2023
Warranty reserve, beginning of the period			$	403,448					415,154						414,796						418,017
Warranties issued			76,653						75,024						211,001						195,924
Adjustments to pre-existing warranties from changes in estimates			18,768						(8,568)						15,483						1,620
Payments			(76,589)						(80,279)						(219,000)						(214,230)
Warranty reserve, end of period			$	422,280					401,331						422,280						401,331

(1)The adjustments to pre-existing warranties from changes in estimates during the three and nine months ended August 31, 2024 and 2023 primarily related to specific claims in certain of the Company's homebuilding communities and other adjustments.

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)			August 31, 2024						November 30, 2023
Right-of-use assets			$	223,614					145,812
Lease liabilities			232,694						154,271
Weighted-average remaining lease term (in years)			4.2						7.5
Weighted-average discount rate			5.0%						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 August 31, 2024 were as follows:

(In thousands)			Lease Payments
2024			$	24,059
2025			80,057
2026			49,630
2027			32,833
2028 and thereafter			72,043
Total future minimum lease payments (1)			$	258,622
Less: Interest (2)			25,928
Present value of lease liabilities (2)			$	232,694

(1)Total future minimum lease payments exclude variable lease costs of $25.6 million and short-term lease costs of $1.9 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:

			Nine Months Ended August 31,
(In thousands)			2024						2023
Rental expense			$	82,512					78,053

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 other rented space which is no longer used for the Company's operations. For both the nine months ended August 31, 2024 and 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 light strategy and our planned spin-off; 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 such as a major epidemic or pandemic that could have a negative impact on the economy and on our businesses; 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, filed with the Securities and Exchange Commission (the “SEC”) on January 26, 2024, as amended by our Annual Report on Form 10-K/A filed with the SEC on April 25, 2024, 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.