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Operating and Reporting Segments
 6 Months Ended
May 31, 2021
Segment Reporting [Abstract]  
Operating and Reporting Segments 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)May 31, 2021
Assets:HomebuildingFinancial
Services		MultifamilyLennar
Other		Total
Cash and cash equivalents$2,581,583 130,528 22,395 3,074 2,737,580 
Restricted cash35,637 9,728 — — 45,365 
Receivables, net (1)353,910 422,117 111,802 — 887,829 
Inventories18,418,999 — 316,760 — 18,735,759 
Loans held-for-sale (2)— 1,015,438 — — 1,015,438 
Investments in equity securities (3)— — — 544,993 544,993 
Investments available-for-sale (4)— — — 41,563 41,563 
Loans held-for-investment, net— 77,680 — — 77,680 
Investments held-to-maturity— 162,919 — — 162,919 
Investments in unconsolidated entities1,010,256 — 691,330 379,236 2,080,822 
Goodwill3,442,359 189,699 — — 3,632,058 
Other assets1,030,681 58,565 66,983 104,992 1,261,221 
$26,873,425 2,066,674 1,209,270 1,073,858 31,223,227 
Liabilities:
Notes and other debts payable, net$5,894,342 928,185 — 1,906 6,824,433 
Other liabilities4,222,091 156,653 255,327 62,625 4,696,696 
$10,116,433 1,084,838 255,327 64,531 11,521,129 
(In thousands)November 30, 2020
Assets:HomebuildingFinancial
Services		MultifamilyLennar
Other		Total
Cash and cash equivalents$2,703,986 116,171 38,963 3,918 2,863,038 
Restricted cash15,211 54,481 — — 69,692 
Receivables, net (1)298,671 552,779 86,629 — 938,079 
Inventories16,925,228 — 249,920 — 17,175,148 
Loans held-for-sale (2)— 1,490,105 — — 1,490,105 
Investments in equity securities (3)— — — 68,771 68,771 
Investments available-for-sale (4)— — — 53,497 53,497 
Loans held-for-investment, net— 72,626 — — 72,626 
Investments held-to-maturity— 164,230 — — 164,230 
Investments in unconsolidated entities953,177 — 724,647 387,097 2,064,921 
Goodwill3,442,359 189,699 — — 3,632,058 
Other assets1,190,793 68,027 75,749 8,443 1,343,012 
$25,529,425 2,708,118 1,175,908 521,726 29,935,177 
Liabilities:
Notes and other debts payable, net$5,955,758 1,463,919 — 1,906 7,421,583 
Other liabilities3,969,893 180,329 252,911 11,060 4,414,193 
$9,925,651 1,644,248 252,911 12,966 11,835,776 
(1)Receivables, net for Financial Services primarily related to loans sold to investors for which the Company had not yet been paid.
(2)Loans held-for-sale related to unsold residential and commercial loans carried at fair value.
(3)Investments in equity securities include investments of $83.8 million and $61.6 million without readily available fair values as of May 31, 2021 and November 30, 2020, 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 May 31, 2021
(In thousands)HomebuildingFinancial ServicesMultifamilyLennar OtherCorporate and
unallocated		Total
Revenues$6,028,041 218,747 177,473 5,984 — 6,430,245 
Operating earnings (loss)1,112,475 121,320 22,397 (54,097)— 1,202,095 
Corporate general and administrative expenses— — — — 90,717 90,717 
Charitable foundation contribution— — — — 14,493 14,493 
Earnings (loss) before income taxes1,112,475 121,320 22,397 (54,097)(105,210)1,096,885 
Three Months Ended May 31, 2020
Revenues$4,949,484 196,263 123,117 18,509 — 5,287,373 
Operating earnings (loss)631,361 147,326 (638)(18,021)— 760,028 
Corporate general and administrative expenses— — — — 78,183 78,183 
Charitable foundation contribution— — — — 5,268 5,268 
Earnings (loss) before income taxes631,361 147,326 (638)(18,021)(83,451)676,577 
Six Months Ended May 31, 2021
(In thousands)HomebuildingFinancial ServicesMultifamilyLennar OtherCorporate and
unallocated		Total
Revenues
$10,971,097 462,816 308,916 12,884 — 11,755,713 
Operating earnings1,945,655 267,527 21,523 417,249 — 2,651,954 
Corporate general and administrative expenses
— — — — 201,248 201,248 
Charitable foundation contribution— — — — 26,807 26,807 
Earnings (loss) before income taxes1,945,655 267,527 21,523 417,249 (228,055)2,423,899 
Six Months Ended May 31, 2020
Revenues
$9,121,600 394,924 255,734 20,452 — 9,792,710 
Operating earnings (loss)1,091,759 194,643 1,147 (17,122)— 1,270,427 
Corporate general and administrative expenses
— — — — 160,817 160,817 
Charitable foundation contribution— — — — 9,481 9,481 
Earnings (loss) before income taxes1,091,759 194,643 1,147 (17,122)(170,298)1,100,129 
Homebuilding Segments
Information about homebuilding activities in states which are not economically similar to other states in the same geographic area 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.
The Company’s reportable Homebuilding segments and all other homebuilding operations not required to be reported separately have homebuilding divisions located in:
East: Florida, New Jersey, Pennsylvania and South Carolina
Central: Georgia, Illinois, Indiana, Maryland, Minnesota, North Carolina 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:
(In thousands)EastCentralTexasWestOtherCorporate and UnallocatedTotal Homebuilding
May 31, 2021$5,749,998 3,713,952 2,510,950 11,131,940 1,326,516 2,440,069 26,873,425 
November 30, 20205,308,114 3,438,600 2,150,916 10,504,374 1,301,618 2,825,803 25,529,425 
Financial information relating to the Company’s homebuilding segments was as follows:
Three Months Ended May 31, 2021
(In thousands)EastCentralTexasWestOtherTotal Homebuilding
Revenues
$1,567,768 1,097,582 799,259 2,553,771 9,661 6,028,041 
Operating earnings (loss)
309,827 159,048 176,057 492,811 (25,268)1,112,475 
Three Months Ended May 31, 2020
Revenues
$1,277,431 986,284 712,756 1,959,823 13,190 4,949,484 
Operating earnings (loss)
192,887 103,904 99,887 280,094 (45,411)631,361 
Six Months Ended May 31, 2021
(In thousands)EastCentralTexasWestOtherTotal Homebuilding
Revenues
$2,923,710 2,026,024 1,443,337 4,563,350 14,676 10,971,097 
Operating earnings (loss)
571,910 291,071 305,700 814,517 (37,543)1,945,655 
Six Months Ended May 31, 2020
Revenues$2,429,763 1,775,794 1,185,984 3,708,592 21,467 9,121,600 
Operating earnings (loss)341,641 159,627 152,960 505,001 (67,470)1,091,759 
Financial Services
Operations of the Financial Services segment include primarily mortgage financing, title and closing services primarily for buyers of the Company’s homes. It also includes 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 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 May 31, 2021, the Financial Services warehouse facilities were all 364-day repurchase facilities and were used to fund residential mortgages or commercial mortgages for LMF Commercial as follows:
(In thousands)Maximum Aggregate Commitment
Residential facilities maturing:
June 2021 (1)$600,000 
July 2021200,000 
December 2021500,000 
April 2022100,000 
Total - Residential facilities
$1,400,000 
LMF Commercial facilities maturing
November 2021$100,000 
December 2021 (2)611,438 
Total - LMF Commercial facilities
$711,438 
Total
$2,111,438 
(1)Subsequent to May 31, 2021, the maturity due date was extended to July 2021.
(2)Includes $11.4 million warehouse repurchase facility used by LMF Commercial to finance the origination of floating rate accrual loans, which are reported as accrual loans within loans held-for-investment, net.
The Financial Services segment uses the residential 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 an 80% interest in the originated commercial loans financed.
Borrowings and collateral under the facilities and their prior year predecessors were as follows:
(In thousands)May 31, 2021November 30, 2020
Borrowings under the residential facilities$671,541 1,185,797 
Collateral under the residential facilities
695,275 1,231,619 
Borrowings under the LMF Commercial facilities
104,247 124,617 
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. Loan origination liabilities are included in Financial Services’ liabilities in the Company's condensed consolidated balance sheets. The activity in the Company’s loan origination liabilities was as follows:
Three Months EndedSix Months Ended
May 31,May 31,
(In thousands)2021202020212020
Loan origination liabilities, beginning of period$8,433 9,996 7,569 9,364 
Provision for losses1,114 1,139 2,080 1,915 
Payments/settlements(93)(255)(195)(399)
Loan origination liabilities, end of period$9,454 10,880 9,454 10,880 
LMF Commercial - loans held-for-sale
LMF Commercial originated commercial loans as follows:
Three Months EndedSix Months Ended
May 31,May 31,
(Dollars in thousands)2021202020212020
Originations (1)$196,498 5,400 415,998 417,650 
Sold155,740 142,938 438,705 457,377 
Securitizations113 3 
(1)During both the three and six months ended May 31, 2021 and 2020 all the commercial loans originated were recorded as loans held-for-sale, which are held at fair value.
Investments held-to-maturity
At May 31, 2021 and November 30, 2020, the Financial Services segment held commercial mortgage-backed securities ("CMBS"). These securities are classified as held-to-maturity based on its intent and ability to hold the securities until maturity and changes in estimated cash flows are reviewed periodically to determine if an other-than-temporary impairment has occurred. Based on the segment’s assessment, no impairment charges were recorded during either the three or six months ended May 31, 2021 or 2020. 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)May 31, 2021November 30, 2020
Carrying value$162,919 164,230 
Outstanding debt, net of debt issuance costs152,396 153,505 
Incurred interest rate3.4 %3.4 %
May 31, 2021
Discount rates at purchase6%—84%
Coupon rates2.0%—5.3%
Distribution datesOctober 2027—December 2028
Stated maturity datesOctober 2050—December 2051
Multifamily
The Company is actively involved, primarily through unconsolidated entities, 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.
Operations of the Multifamily segment include revenues generated from the sales of land, revenue from construction activities, and management and promote fees generated from joint ventures and equity in earnings (loss) from unconsolidated entities and other gains (which includes sales of buildings), less the cost of sales of land sold, expenses related to construction activities and general and administrative expenses.
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 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 retained after the sale of Rialto's asset and investment management platform, along with equity in earnings (loss) from the Rialto fund investments and strategic technology investments, gains (losses) from investments in equity securities and other income (expense), net from the remaining assets related to the Company's former Rialto segment.
During the three months ended May 31, 2021, the Company completed the sale of the Company's residential solar business to Sunnova Energy International Inc. ("Sunnova") for shares in Sunnova. The Company recorded a gain of $151.5 million upon the closing of the sale. The calculation of the gain included the fair value of the 3.1 million shares in initial consideration received at closing and the fair value of potential shares to be received upon achievement of earnouts. The significant unobservable fair value assumptions used in the calculation were a terminal value multiple of 3 and a 15% discount rate. The fair value of the earnouts was also based on the probability of achieving full or partial earnouts.
The investments in Opendoor Technologies, Inc ("Opendoor") and Sunnova are held at market and will therefore change depending on the value of the Company's share holdings on the last day of each quarter. During the three months ended May 31, 2021, the Company's Lennar Other segment recorded a loss of $234.3 million and $38.3 million related to the mark to market of the Company's share holdings in Opendoor and Sunnova, respectively. During the six months ended May 31, 2021, Opendoor began trading on the Nasdaq stock market and the Company began to mark to market the Company's share holdings in the public entity. The mark to market recognition was due to the investment now being accounted for as an investment in equity securities which is held at fair value and the change in fair value is recognized through earnings. As of November 30, 2020, the investment in Opendoor was included in the Company's investments in unconsolidated entities and was accounted for using the equity method.