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Operating and Reporting Segments | 6 Months Ended
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May 31, 2023
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, 2023
Assets: | Homebuilding |  | Financial Services |  | Multifamily |  | Lennar Other |  | Total
Cash and cash equivalents | $ | 4,004,679 |  |  | 259,738 |  |  | 18,539 |  |  | 4,775 |  |  | 4,287,731 |
Restricted cash | 19,000 |  |  | 9,113 |  |  | — |  |  | — |  |  | 28,113 |
Receivables, net (1) | 619,720 |  |  | 354,548 |  |  | 115,865 |  |  | — |  |  | 1,090,133 |
Inventories | 21,686,820 |  |  | — |  |  | 479,812 |  |  | — |  |  | 22,166,632 |
Loans held-for-sale (2) | — |  |  | 1,175,280 |  |  | — |  |  | — |  |  | 1,175,280 |
Investments in equity securities (3) | — |  |  | — |  |  | — |  |  | 412,593 |  |  | 412,593 |
Investments available-for-sale (4) | — |  |  | — |  |  | — |  |  | 36,906 |  |  | 36,906 |
Loans held-for-investment, net | — |  |  | 36,717 |  |  | — |  |  | — |  |  | 36,717 |
Investments held-to-maturity | — |  |  | 141,360 |  |  | — |  |  | — |  |  | 141,360 |
Investments in unconsolidated entities | 1,137,189 |  |  | — |  |  | 629,649 |  |  | 292,086 |  |  | 2,058,924 |
Goodwill | 3,442,359 |  |  | 189,699 |  |  | — |  |  | — |  |  | 3,632,058 |
Other assets | 1,582,299 |  |  | 98,203 |  |  | 65,683 |  |  | 45,055 |  |  | 1,791,240 |
| $ | 32,492,066 |  |  | 2,264,658 |  |  | 1,309,548 |  |  | 791,415 |  |  | 36,857,687 |
Liabilities: |  |  |  |  |  |  |  |  |
Notes and other debts payable, net | $ | 3,852,258 |  |  | 1,157,040 |  |  | 16,912 |  |  | — |  |  | 5,026,210 |
Accounts payable and other liabilities | 6,148,439 |  |  | 154,888 |  |  | 281,611 |  |  | 85,420 |  |  | 6,670,358 |
| $ | 10,000,697 |  |  | 1,311,928 |  |  | 298,523 |  |  | 85,420 |  |  | 11,696,568 |
(In thousands) | November 30, 2022
Assets: | Homebuilding |  | Financial Services |  | Multifamily |  | Lennar Other |  | Total
Cash and cash equivalents | $ | 4,616,124 |  |  | 139,378 |  |  | 17,827 |  |  | 5,391 |  |  | 4,778,720 |
Restricted cash | 23,046 |  |  | 14,004 |  |  | — |  |  | — |  |  | 37,050 |
Receivables, net (1) | 673,980 |  |  | 826,163 |  |  | 114,134 |  |  | — |  |  | 1,614,277 |
Inventories | 21,432,011 |  |  | — |  |  | 430,442 |  |  | — |  |  | 21,862,453 |
Loans held-for-sale (2) | — |  |  | 1,776,311 |  |  | — |  |  | — |  |  | 1,776,311 |
Investments in equity securities (3) | — |  |  | — |  |  | — |  |  | 391,026 |  |  | 391,026 |
Investments available-for-sale (4) | — |  |  | — |  |  | — |  |  | 35,482 |  |  | 35,482 |
Loans held-for-investment, net | — |  |  | 45,636 |  |  | — |  |  | — |  |  | 45,636 |
Investments held-to-maturity | — |  |  | 143,251 |  |  | — |  |  | — |  |  | 143,251 |
Investments in unconsolidated entities | 1,173,164 |  |  | — |  |  | 648,126 |  |  | 316,523 |  |  | 2,137,813 |
Goodwill | 3,442,359 |  |  | 189,699 |  |  | — |  |  | — |  |  | 3,632,058 |
Other assets | 1,323,478 |  |  | 119,815 |  |  | 46,808 |  |  | 40,117 |  |  | 1,530,218 |
| $ | 32,684,162 |  |  | 3,254,257 |  |  | 1,257,337 |  |  | 788,539 |  |  | 37,984,295 |
Liabilities: |  |  |  |  |  |  |  |  |
Notes and other debts payable, net | $ | 4,047,294 |  |  | 2,135,093 |  |  | 16,749 |  |  | — |  |  | 6,199,136 |
Accounts payable and other liabilities | 6,931,352 |  |  | 218,811 |  |  | 296,735 |  |  | 97,894 |  |  | 7,544,792 |
| $ | 10,978,646 |  |  | 2,353,904 |  |  | 313,484 |  |  | 97,894 |  |  | 13,743,928 |
(1)Receivables, net for Financial Services primarily related to loans sold to investors for which the Company had not yet been paid as of May 31, 2023 and November 30, 2022, 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 $185.0 million and $178.0 million without readily available fair values as of both May 31, 2023 and November 30, 2022, 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 |  | Six Months Ended
| May 31, |  | May 31,
(In thousands) | 2023 |  | 2022 |  | 2023 |  | 2022
Revenues: |  |  |  |  |  |  |
Homebuilding | $ | 7,670,017 |  |  | 7,977,982 |  |  | 13,826,322 |  |  | 13,730,187 |
Financial Services | 222,979 |  |  | 200,166 |  |  | 405,960 |  |  | 376,867 |
Multifamily (1) | 151,744 |  |  | 176,021 |  |  | 295,267 |  |  | 443,380 |
Lennar Other | 411 |  |  | 4,527 |  |  | 8,031 |  |  | 11,778 |
| $ | 8,045,151 |  |  | 8,358,696 |  |  | 14,535,580 |  |  | 14,562,212 |
Earnings (loss) before income taxes: |  |  |  |  |  |  |
Homebuilding | $ | 1,214,409 |  |  | 1,880,411 |  |  | 2,121,248 |  |  | 2,990,261 |
Financial Services | 112,599 |  |  | 103,935 |  |  | 191,336 |  |  | 194,726 |
Multifamily | (8,162) |  |  | 668 |  |  | (29,763) |  |  | 6,095 |
Lennar Other | (18,399) |  |  | (108,424) |  |  | (58,156) |  |  | (511,558) |
Corporate and Unallocated (2) | (141,826) |  |  | (121,756) |  |  | (281,591) |  |  | (247,955) |
| $ | 1,158,621 |  |  | 1,754,834 |  |  | 1,943,074 |  |  | 2,431,569 |
(1)Revenues for Multifamily for the six months ended May 31, 2022, included $147.8 million of land sales to unconsolidated entities. (2)Corporate and unallocated consists primarily of corporate general and administrative expenses and charitable foundation contributions. 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. 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, Pennsylvania and South Carolina Central: Georgia, Illinois, Indiana, Maryland, Minnesota, North 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:
| May 31, |  | November 30,
| 2023 |  | 2022
(In thousands) |  |  |
East | $ | 7,027,996 |  |  | 6,877,581 |
Central | 4,115,812 |  |  | 4,010,610 |
Texas | 3,522,252 |  |  | 3,742,663 |
West | 11,854,686 |  |  | 12,182,709 |
Other | 1,391,807 |  |  | 1,382,864 |
Corporate and Unallocated | 4,579,513 |  |  | 4,487,735 |
Total Homebuilding | $ | 32,492,066 |  |  | 32,684,162 |
Financial information relating to the Company’s homebuilding segments was as follows:
| Three Months Ended |  | Six Months Ended
| May 31, |  | May 31,
(In thousands) | 2023 |  | 2022 |  | 2023 |  | 2022
Revenues |  |  |  |  |  |  |
East | $ | 2,323,281 |  |  | 2,214,451 |  |  | 4,199,258 |  |  | 3,884,637 |
Central | 1,412,408 |  |  | 1,283,990 |  |  | 2,460,415 |  |  | 2,393,262 |
Texas | 1,141,612 |  |  | 1,095,500 |  |  | 2,163,664 |  |  | 1,908,119 |
West | 2,781,097 |  |  | 3,370,462 |  |  | 4,986,158 |  |  | 5,521,260 |
Other | 11,619 |  |  | 13,579 |  |  | 16,827 |  |  | 22,909 |
| $ | 7,670,017 |  |  | 7,977,982 |  |  | 13,826,322 |  |  | 13,730,187 |
Operating earnings (loss) |  |  |  |  |  |  |
East | $ | 505,923 |  |  | 553,819 |  |  | 930,119 |  |  | 905,814 |
Central | 215,076 |  |  | 206,795 |  |  | 345,598 |  |  | 358,873 |
Texas | 183,041 |  |  | 272,857 |  |  | 308,360 |  |  | 444,169 |
West | 355,472 |  |  | 847,849 |  |  | 585,972 |  |  | 1,289,297 |
Other | (45,103) |  |  | (909) |  |  | (48,801) |  |  | (7,892) |
| $ | 1,214,409 |  |  | 1,880,411 |  |  | 2,121,248 |  |  | 2,990,261 |
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 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, 2023, 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 2023 (1) | $ | 200,000 |
December 2023 | 500,000 |
April 2024 | 500,000 |
May 2024 | 600,000 |
Total residential facilities | $ | 1,800,000 |
LMF Commercial facilities maturing: |
July 2023 | $ | 50,000 |
November 2023 | 100,000 |
December 2023 | 400,000 |
Total LMF commercial facilities | $ | 550,000 |
Total | $ | 2,350,000 |
(1)Subsequent to May 31, 2023, the maturity date was extended to June 2024. The Financial Services segment uses residential mortgage loan warehouse facilities to finance its residential lending activities until the mortgage loans are sold to investors and the proceeds are collected. The facilities are non-recourse to the Company and are expected to be renewed or replaced with other facilities when they mature. The LMF Commercial facilities finance LMF Commercial loan originations and securitization activities and were secured by up to 80% interests in the originated commercial loans financed. Borrowings and collateral under the facilities were as follows:
(In thousands) | May 31, 2023 |  | November 30, 2022
Borrowings under the residential facilities | $ | 1,020,958 |  |  | 1,877,411 |
Collateral under the residential facilities | 1,054,138 |  |  | 1,950,155 |
Borrowings under the LMF Commercial facilities | 4,425 |  |  | 124,399 |
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 six months ended May 31, 2023 and 2022. Loan origination liabilities were $14.0 million and $11.8 million as of May 31, 2023 and November 30, 2022, 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 |  | Six Months Ended
| May 31, |  | May 31,
(Dollars in thousands) | 2023 |  | 2022 |  | 2023 |  | 2022
Originations (1) | $ | 84,590 |  |  | 143,650 |  |  | 164,070 |  |  | 408,495 |
Sold | 88,102 |  |  | 145,385 |  |  | 165,302 |  |  | 323,467 |
Securitizations | 2 |  | 1 |  | 3 |  |  | 2 |
(1)During both the three and six months ended May 31, 2023 and 2022, the commercial loans originated were recorded as loans held-for-sale, which are held at fair value. Investments held-to-maturity At May 31, 2023 and November 30, 2022, 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 either the three or six months ended May 31, 2023 or 2022. 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, 2023 |  | November 30, 2022
Carrying value | $ | 141,360 |  |  | 143,251 |
Outstanding debt, net of debt issuance costs | 131,656 |  |  | 133,283 |
Incurred interest rate | 3.4% |  | 3.4%
| May 31, 2023
Discount rates at purchase | 6% | — | 84%
Coupon rates | 2.0% | — | 5.3%
Distribution dates | October 2027 | — | December 2028
Stated maturity dates | October 2050 | — | December 2051
Multifamily The Company is actively involved, primarily through unconsolidated funds and joint ventures, in the development, construction and property management of multifamily rental properties. The Multifamily segment focuses on developing a geographically diversified portfolio of institutional quality multifamily rental properties in select U.S. markets. The Multifamily Segment (i) manages, and owns interests in, funds that are engaged in the development of multifamily residential communities with the intention of holding the newly constructed and occupied properties as income and fee generating assets, and (ii) manages, and owns interests in, joint ventures that are engaged in the development of multifamily residential communities, in most instances with the intention of selling them when they are built and substantially occupied. The multifamily business is a vertically integrated platform with capabilities spanning development, construction, property management, asset management, and capital markets. Revenues are generated from the sales of land, from construction activities, and management and promote fees generated from joint ventures and other gains (which includes sales of buildings), less the cost of sales of land sold, expenses related to construction activities and general and administrative expenses. Operations of the Multifamily Segment also include equity in earnings (loss) from unconsolidated entities. Lennar Other Lennar Other primarily includes strategic investments in technology companies, primarily managed by the Company's LEN X 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, Inc. ("Opendoor"), SmartRent, Inc. ("SmartRent"), Sonder Holdings, Inc. ("Sonder") and Sunnova Energy International, Inc. ("Sunnova"), which are held at market and will therefore change depending on the value of the Company's shareholdings in those entities on the last day of each quarter. All the investments are accounted for as investments in equity securities which are held at fair value and the changes in fair values are recognized through earnings. The following is a detail of Lennar Other unrealized gains (losses) from mark-to-market adjustments on the Company's technology investments:
| Three Months Ended |  | Six Months Ended
| May 31, |  | May 31,
(In thousands) | 2023 |  | 2022 |  | 2023 |  | 2022
Blend Labs (BLND) | $ | (1,332) |  |  | (13,550) |  |  | (746) |  |  | (20,992) |
Hippo (HIPO) | (4,399) |  |  | (37,946) |  |  | 2,233 |  |  | (162,403) |
Opendoor (OPEN) | 22,512 |  |  | (20,999) |  |  | 14,821 |  |  | (164,360) |
SmartRent (SMRT) | 8,621 |  |  | (3,950) |  |  | 9,926 |  |  | (48,313) |
Sonder (SOND) | (138) |  |  | (1,626) |  |  | (458) |  |  | (2,132) |
Sunnova (NOVA) | 233 |  |  | 106 |  |  | (24,233) |  |  | (74,935) |
Lennar Other unrealized gains (losses) from technology investments | $ | 25,497 |  |  | (77,965) |  |  | 1,543 |  |  | (473,135) |
Doma Holdings, Inc. ("Doma"), which went public during the year ended November 30, 2021, is an investment that continues to be accounted for under the equity method due to the Company's significant ownership interest which allows the Company to exercise significant influence. As of May 31, 2023, the Company owned approximately 25% of Doma

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 22 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-22 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 15 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-15 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 31 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-31 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 42 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-42 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 40 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-40 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//280/tableOfContent Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 26 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-26 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 34 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-34 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 41 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-41 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-21 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-21 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 + Details
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