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Operating and Reporting Segments
 3 Months Ended
Feb. 29, 2024
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)February 29, 2024
Assets:HomebuildingFinancial
Services		MultifamilyLennar
Other		Total
Cash and cash equivalents$4,950,128 233,846 27,091 2,700 5,213,765 
Restricted cash12,635 35,068 — — 47,703 
Receivables, net (1)897,371 304,716 82,605 — 1,284,692 
Inventory owned and consolidated inventory not owned19,374,070 — 568,689 — 19,942,759 
Loans held-for-sale (2)— 1,986,715 — — 1,986,715 
Investments in equity securities (3)— — — 294,246 294,246 
Investments available-for-sale (4)— — — 38,315 38,315 
Loans held-for-investment, net— 56,845 — — 56,845 
Investments held-to-maturity— 139,706 — — 139,706 
Deposits and pre-acquisition costs on real estate2,408,877 — 31,785 — 2,440,662 
Investments in unconsolidated entities1,206,564 — 586,438 289,691 2,082,693 
Goodwill3,442,359 189,699 — — 3,632,058 
Other assets1,473,563 109,847 82,671 124,959 1,791,040 
Total assets$33,765,567 3,056,442 1,379,279 749,911 38,951,199 
Liabilities:
Notes and other debts payable, net$2,830,332 1,564,290 — — 4,394,622 
Accounts payable, liabilities related to consolidated inventory not owned and other liabilities7,298,615 157,043 249,625 73,364 7,778,647 
Total liabilities$10,128,947 1,721,333 249,625 73,364 12,173,269 
(In thousands)November 30, 2023
Assets:HomebuildingFinancial
Services		MultifamilyLennar
Other		Total
Cash and cash equivalents$6,273,724 159,491 39,334 1,948 6,474,497 
Restricted cash13,481 82,960 — — 96,441 
Receivables, net (1)887,992 716,071 92,142 — 1,696,205 
Inventory owned and consolidated inventory not owned18,352,735 — 544,935 — 18,897,670 
Loans held-for-sale (2)— 2,086,809 — — 2,086,809 
Investments in equity securities (3)— — — 297,243 297,243 
Investments available-for-sale (4)— — — 37,953 37,953 
Loans held-for-investment, net— 55,463 — — 55,463 
Investments held-to-maturity— 140,676 — — 140,676 
Deposits and pre-acquisition costs on real estate2,002,154 — 32,063 — 2,034,217 
Investments in unconsolidated entities1,143,909 — 599,852 276,244 2,020,005 
Goodwill3,442,359 189,699 — — 3,632,058 
Other assets1,512,038 135,377 73,187 44,464 1,765,066 
Total assets$33,628,392 3,566,546 1,381,513 657,852 39,234,303 
Liabilities:
Notes and other debts payable, net$2,816,482 2,163,805 3,741 — 4,984,028 
Accounts payable, liabilities related to consolidated inventory not owned and other liabilities6,911,512 283,234 274,436 79,127 7,548,309 
Total liabilities$9,727,994 2,447,039 278,177 79,127 12,532,337 
(1)Receivables, net for Financial Services primarily related to loans sold to investors for which the Company had not yet been paid as of February 29, 2024 and November 30, 2023, respectively.
(2)Loans held-for-sale related to unsold residential and commercial loans carried at fair value.
(3)Investments in equity securities include investments of $123.1 million and $121.0 million without readily available fair values as of February 29, 2024 and November 30, 2023, respectively.
(4)Investments available-for-sale are carried at fair value with changes in fair value recorded as a component of accumulated other comprehensive income (loss) on the condensed consolidated balance sheet.
Financial information relating to the Company’s segments was as follows:
Three Months Ended
(In thousands)February 29, 2024February 28, 2023
Revenues:
Homebuilding$6,930,991 6,156,305 
Financial Services 249,720 182,981 
Multifamily129,677 143,523 
Lennar Other2,542 7,620 
$7,312,930 6,490,429 
Earnings (loss) before income taxes:
Homebuilding$1,028,796 906,839 
Financial Services131,296 78,737 
Multifamily(15,639)(21,601)
Lennar Other(39,548)(39,757)
Corporate and Unallocated (1)(174,119)(139,765)
$930,786 784,453 
(1)Corporate and unallocated consists primarily of corporate general and administrative expenses and charitable foundation contributions.
Homebuilding Segments
Information about homebuilding activities in states which are not economically similar to other states in the same geographic areas is grouped under “Homebuilding Other,” which is not considered a reportable segment.
Evaluation of segment performance is based primarily on operating earnings (loss) before income taxes. Operations of the Company’s Homebuilding segments primarily include the construction and sale of single-family attached and detached homes as well as the purchase, development and sale of residential land directly and through the Company’s unconsolidated entities. Operating earnings (loss) for the Homebuilding segments consist of revenues generated from the sales of homes and land, other revenues from management fees and forfeited deposits, equity in earnings (loss) from unconsolidated entities and other income (expense), net, less the cost of homes sold and land sold, and selling, general and administrative expenses incurred by the segment. Homebuilding Other also includes management of a fund that acquires single-family homes and holds them as rental properties.
The Company’s reportable Homebuilding segments and all other homebuilding operations not required to be reported separately have homebuilding divisions located in:
East: Alabama, Florida, New Jersey and Pennsylvania
Central: Georgia, Illinois, Indiana, Maryland, Minnesota, North Carolina, South Carolina, Tennessee, and Virginia
Texas: Texas
West: Arizona, California, Colorado, Idaho, Nevada, Oregon, Utah and Washington
Other: Urban divisions and other homebuilding related investments primarily in California, including FivePoint Holdings, LLC (“FivePoint”)
The assets related to the Company’s homebuilding segments were as follows:
February 29, 2024November 30, 2023
(In thousands)
East$6,827,717 6,563,568 
Central4,737,106 4,511,496 
Texas3,632,938 3,337,280 
West 11,933,146 11,298,812 
Other1,544,543 1,511,541 
Corporate and Unallocated 5,090,117 6,405,695 
Total Homebuilding$33,765,567 33,628,392 
Financial information relating to the Company’s homebuilding segments was as follows:
Three Months Ended
(In thousands)February 29, 2024February 28, 2023
Revenues
East$1,922,797 1,697,843 
Central1,396,455 1,226,141 
Texas1,071,786 1,022,052 
West 2,530,061 2,205,061 
Other9,892 5,208 
$6,930,991 6,156,305 
Operating earnings (loss)
East$376,881 398,432 
Central161,616 156,286 
Texas168,513 125,319 
West308,787 230,500 
Other12,999 (3,698)
$1,028,796 906,839 
Financial Services
Operations of the Financial Services segment include mortgage financing, title and closing services primarily for buyers of the Company’s homes. They also include originating and selling into securitizations commercial mortgage loans through its LMF Commercial business. Financial Services’ operating earnings consist of revenues generated primarily from mortgage financing, title and closing services, and sales of property and casualty insurance, less the cost of such services and certain selling, general and administrative expenses incurred by the segment. The Financial Services segment operates generally in the same states as the Company’s homebuilding operations.
At February 29, 2024, the Financial Services segment had warehouse facilities which were all 364-day repurchase facilities and were used to fund residential mortgages or commercial mortgages for LMF Commercial as follows:
Maximum Aggregate Commitment
(In thousands)Committed AmountUncommitted AmountTotal
Residential facilities maturing:
March 2024 (1)$500,000 — 500,000 
April 2024250,000 250,000 500,000 
May 2024600,000 — 600,000 
June 2024100,000 100,000 200,000 
September 2024100,000 100,000 200,000 
Total residential facilities$1,550,000 450,000 2,000,000 
LMF commercial facilities maturing:
December 2024200,000 — 200,000 
January 2025100,000 — 100,000 
Total LMF commercial facilities$300,000 — 300,000 
Total$2,300,000 
(1)Subsequent to February 29, 2024, the maturity date was extended to June 2024.
The Financial Services segment uses residential mortgage loan warehouse facilities to finance its residential lending activities until the mortgage loans are sold to investors and the proceeds are collected. The facilities are non-recourse to the Company and are expected to be renewed or replaced with other facilities when they mature. The LMF Commercial facilities finance LMF Commercial loan originations and securitization activities and were secured by up to 80% interests in the originated commercial loans financed.
Borrowings and collateral under the facilities were as follows:
(In thousands)February 29, 2024November 30, 2023
Borrowings under the residential facilities$1,344,468 2,020,187 
Collateral under the residential facilities
1,395,837 2,097,020 
Borrowings under the LMF Commercial facilities
89,555 12,525 
If the facilities are not renewed or replaced, the borrowings under the lines of credit will be repaid by selling the mortgage loans held-for-sale to investors and by collecting receivables on loans sold but not yet paid for. Without the facilities, the Financial Services segment would have to use cash from operations and other funding sources to finance its lending activities.
Substantially all of the residential loans the Financial Services segment originates are sold within a short period in the secondary mortgage market on a servicing released, non-recourse basis. After the loans are sold, the Company retains potential liability for possible claims by purchasers that it breached certain limited industry-standard representations and warranties in the loan sale agreements. Purchasers sometimes try to defray losses by purporting to have found inaccuracies related to sellers’ representations and warranties in particular loan sale agreements. Mortgage investors could seek to have the Company buy back mortgage loans or compensate them for losses incurred on mortgage loans that the Company has sold based on claims that the Company breached its limited representations or warranties. The Company’s mortgage operations have established accruals for possible losses associated with mortgage loans previously originated and sold to investors. The Company establishes accruals for such possible losses based upon, among other things, an analysis of repurchase requests received, an estimate of potential repurchase claims not yet received and actual past repurchases and losses through the disposition of affected loans, as well as previous settlements. While the Company believes that it has adequately reserved for known losses and projected repurchase requests, given the volatility in the residential mortgage industry and the uncertainty regarding the ultimate resolution of these claims, if either actual repurchases or the losses incurred resolving those repurchases exceed the Company’s expectations, additional recourse expense may be incurred. The provision for loan losses was immaterial for both the three months ended
February 29, 2024 and February 28, 2023. Loan origination liabilities were $17.7 million and $17.6 million as of February 29, 2024 and November 30, 2023, respectively, and included in Financial Services’ liabilities in the Company's condensed consolidated balance sheets.
LMF Commercial - loans held-for-sale
LMF Commercial originated commercial loans as follows:
Three Months Ended
(Dollars in thousands)February 29, 2024February 28, 2023
Originations (1)$140,825 79,480 
Sold26,950 77,200 
Securitizations21
(1)During both the three months ended February 29, 2024 and February 28, 2023, the commercial loans originated were recorded as loans held-for-sale, which are held at fair value.
Investments held-to-maturity
At February 29, 2024 and November 30, 2023, the Financial Services segment held commercial mortgage-backed securities (“CMBS”). These securities are classified as held-to-maturity based on the segment's intent and ability to hold the securities until maturity and changes in estimated cash flows are reviewed periodically to determine if an other-than-temporary impairment has occurred. Based on the segment’s assessment, no impairment charges were recorded during the three months ended February 29, 2024 and February 28, 2023. The Company has financing agreements to finance CMBS that have been purchased as investments by the Financial Services segment.
Details related to Financial Services' CMBS were as follows:
(Dollars in thousands)February 29, 2024November 30, 2023
Carrying value$139,706 140,676 
Outstanding debt, net of debt issuance costs130,267 131,093 
Incurred interest rate3.4%3.4%
February 29, 2024
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 funds and joint ventures, in the development, construction and property management of multifamily rental properties. The Multifamily segment focuses on developing a geographically diversified portfolio of institutional quality multifamily rental properties in select U.S. markets.
The Multifamily Segment (i) manages, and owns interests in, funds that are engaged in the development of multifamily residential communities with the intention of holding the newly constructed and occupied properties as income and fee generating assets, and (ii) manages, and owns interests in, joint ventures that are engaged in the development of multifamily residential communities, in most instances with the intention of selling them when they are built and substantially occupied. The multifamily business is a vertically integrated platform with capabilities spanning development, construction, property management, asset management, and capital markets. Revenues are generated from the sales of land, from construction activities, and management and promote fees generated from joint ventures and other gains (which includes sales of buildings), less the cost of sales of land sold, expenses related to construction activities and general and administrative expenses. Operations of the Multifamily Segment also include equity in earnings (loss) from unconsolidated entities.
Lennar Other
Lennar Other primarily includes strategic investments in technology companies, primarily managed by the Company's LENX subsidiary, and fund interests the Company retained when it sold the Rialto Capital Management (“Rialto”) asset and investment management platform. Operations of the Lennar Other segment include operating earnings (loss) consisting of revenues generated primarily from the Company's share of carried interests in the Rialto fund investments, along with equity in earnings (loss) from the Rialto fund investments and technology investments, realized and unrealized gains (losses) from investments in equity securities and other income (expense), net from the remaining assets related to the Company's former Rialto segment.
The Company has investments in Blend Labs, Inc. (“Blend Labs”), Hippo Holdings, Inc. (“Hippo”), Opendoor Technologies, Inc. (“Opendoor”), SmartRent, Inc. (“SmartRent”), Sonder Holdings, Inc. (“Sonder”) and Sunnova Energy International, Inc. (“Sunnova”), which are held at market and will therefore change depending on the value of the Company's shareholdings in those entities on the last day of each quarter. All the investments are accounted for as investments in equity securities which are held at fair value and the changes in fair values are recognized through earnings. The following is a detail of Lennar Other unrealized gains (losses) from mark-to-market adjustments on the Company's technology investments:
Three Months Ended
(In thousands)February 29, 2024February 28, 2023
Blend Labs (BLND)$2,936 586 
Hippo (HIPO)16,449 6,632 
Opendoor (OPEN)1,315 (7,691)
SmartRent (SMRT)(1,963)1,305 
Sonder (SOND)51 (320)
Sunnova (NOVA)(23,925)(24,466)
Lennar Other unrealized losses from technology investments$(5,137)(23,954)
Doma Holdings, Inc. (“Doma”), which went public during the year ended November 30, 2021, is an investment that was accounted for under the equity method due to the Company's significant ownership interest of 25% of Doma which allowed the Company to exercise significant influence. As of February 29, 2024, the Company’s carrying value in Doma was zero as a result of allocated losses from Doma.