UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~August 31, 2021~~February 28, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from _______ To _______

Commission File Number: 1-11749

Lennar Corporation

(Exact name of registrant as specified in its charter)


Delaware						95-4337490
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

700 Northwest 107th Avenue, Miami, Florida 33172

(Address of principal executive offices) (Zip Code)

(305) 559-4000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, par value $.10	LEN	New York Stock Exchange
Class B Common Stock, par value $.10	LEN.B	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Emerging growth company

☐

Non-accelerated filer

Smaller reporting company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

Common stock outstanding as of ~~August 31, 2021:~~February 28, 2022:

Class A ~~271,852,156~~258,621,051

Class B ~~37,621,152~~36,869,152

LENNAR CORPORATION

FORM 10-Q

For the period ended ~~August 31, 2021~~February 28, 2022

Part I

Financial Information

Item 1.

Financial Statements

Condensed Consolidated Balance Sheets as of ~~August 31, 2021~~February 28, 2022 and November 30, ~~2020~~2021

Condensed Consolidated Statements of Operations and Comprehensive Income ~~(Loss)~~ for the three ~~and nine~~ months ended ~~August 31,~~February 28, 2022 and 2021 ~~and 2020~~

Condensed Consolidated Statements of Cash Flows for the three ~~and nine~~ months ended ~~August 31,~~February 28, 2022 and 2021 ~~and 2020~~

Notes to Condensed Consolidated Financial Statements

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

2624

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

4136

Item 4.

Controls and Procedures

Part II

Item 1.

Item 1A.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

Item 3 - 5.

Item 6.

Part I. Financial Information

Item 1. Financial Statements

Lennar Corporation and Subsidiaries

Condensed Consolidated Balance Sheets

(Dollars in thousands)

~~(unaudited)~~


						February 28,		November 30,
		August 31,		November 30,		2022 (1)		2021 (1)
		2021 (1)		2020 (1)		(Unaudited)
ASSETS	ASSETS				ASSETS
Homebuilding:	Homebuilding:				Homebuilding:
Cash and cash equivalents	Cash and cash equivalents	$	2,623,320	2,703,986	Cash and cash equivalents	$	1,366,597	2,735,213
Restricted cash	Restricted cash	21,519		15,211	Restricted cash	27,025		21,927
Receivables, net	Receivables, net	369,492		298,671	Receivables, net	456,185		490,278
Inventories:	Inventories:				Inventories:
Finished homes and construction in progress	Finished homes and construction in progress	10,891,592		8,593,399	Finished homes and construction in progress	11,587,394		10,446,139
Land and land under development	Land and land under development	7,210,032		7,495,262	Land and land under development	7,758,804		7,108,142
Consolidated inventory not owned	Consolidated inventory not owned	1,004,319		836,567	Consolidated inventory not owned	1,246,504		1,161,023
Total inventories	Total inventories	19,105,943		16,925,228	Total inventories	20,592,702		18,715,304
Investments in unconsolidated entities	Investments in unconsolidated entities	983,429		953,177	Investments in unconsolidated entities	1,066,256		972,084
Goodwill	Goodwill	3,442,359		3,442,359	Goodwill	3,442,359		3,442,359
Other assets	Other assets	1,034,691		1,190,793	Other assets	1,141,362		1,090,654
		27,580,753		25,529,425		28,092,486		27,467,819
Financial Services	Financial Services	2,282,873		2,708,118	Financial Services	2,183,333		2,964,367
Multifamily	Multifamily	1,226,692		1,175,908	Multifamily	1,250,570		1,311,747
Lennar Other	Lennar Other	1,653,872		521,726	Lennar Other	1,108,863		1,463,845
Total assets	Total assets	$	32,744,190	29,935,177	Total assets	$	32,635,252	33,207,778

(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, 2021,~~February 28, 2022, total assets include ~~$1.0~~$1.1 billion related to consolidated VIEs of which ~~$61.1~~$66.9 million is included in Homebuilding cash and cash equivalents, $0.3 million in Homebuilding receivables, net, $703.4 million in Homebuilding land and land under development, $218.3 million in Homebuilding consolidated inventory not owned, $1.1 million in Homebuilding investments in unconsolidated entities, $22.1 million in Homebuilding other assets and $59.4 million in Multifamily assets.

As of November 30, 2021, total assets include $1.1 billion related to consolidated VIEs of which $60.9 million is included in Homebuilding cash and cash equivalents, $4.4 million in Homebuilding receivables, net, $14.3 million in Homebuilding finished homes and construction in progress, ~~$623.9~~$697.1 million in Homebuilding land and land under development, ~~$284.7~~$239.2 million in Homebuilding consolidated inventory not owned, ~~$1.3~~$1.1 million in Homebuilding investments in unconsolidated entities, ~~$17.1~~$17.4 million in Homebuilding other assets and ~~$17.7 million in Multifamily assets.~~

As of November 30, 2020, total assets include $1.1 billion related to consolidated VIEs of which $32.1 million is included in Homebuilding cash and cash equivalents, $0.1 million in Homebuilding receivables, net, $14.2 million in Homebuilding finished homes and construction in progress, $486.8 million in Homebuilding land and land under development, $426.3 million in Homebuilding consolidated inventory not owned, $1.6 million in Homebuilding investments in unconsolidated entities, $120.6 million in Homebuilding other assets and $39.9$80.6 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)~~


						February 28,		November 30,
		August 31,		November 30,		2022 (2)		2021 (2)
		2021 (2)		2020 (2)		(Unaudited)
LIABILITIES AND EQUITY	LIABILITIES AND EQUITY				LIABILITIES AND EQUITY
Homebuilding:	Homebuilding:				Homebuilding:
Accounts payable	Accounts payable	$	1,230,577	1,037,338	Accounts payable	$	1,321,148	1,321,247
Liabilities related to consolidated inventory not owned	Liabilities related to consolidated inventory not owned	841,539		706,691	Liabilities related to consolidated inventory not owned	1,038,561		976,602
Senior notes and other debts payable, net	Senior notes and other debts payable, net	5,542,513		5,955,758	Senior notes and other debts payable, net	4,639,222		4,652,338
Other liabilities	Other liabilities	2,716,872		2,225,864	Other liabilities	3,022,840		2,920,055
		10,331,501		9,925,651		10,021,771		9,870,242
Financial Services	Financial Services	1,272,218		1,644,248	Financial Services	1,334,145		1,906,343
Multifamily	Multifamily	259,145		252,911	Multifamily	311,775		288,930
Lennar Other	Lennar Other	101,787		12,966	Lennar Other	120,129		145,981
Total liabilities	Total liabilities	11,964,651		11,835,776	Total liabilities	11,787,820		12,211,496
Stockholders’ equity:	Stockholders’ equity:				Stockholders’ equity:
Preferred stock	Preferred stock	—		—	Preferred stock	—		—
Class A common stock of $0.10 par value; Authorized: August 31, 2021 and November 30, 2020 - 400,000,000 shares; Issued: August 31, 2021 - 300,499,577 shares and November 30, 2020 - 298,942,836 shares		30,050		29,894
Class B common stock of $0.10 par value; Authorized: August 31, 2021 and November 30, 2020 - 90,000,000 shares; Issued: August 31, 2021 - 39,443,168 shares and November 30, 2020 - 39,443,168 shares		3,944		3,944
Class A common stock of $0.10 par value; Authorized: February 28, 2022 and November 30, 2021 - 400,000,000 shares; Issued: February 28, 2022 - 302,427,896 shares and November 30, 2021 - 300,500,075 shares					Class A common stock of $0.10 par value; Authorized: February 28, 2022 and November 30, 2021 - 400,000,000 shares; Issued: February 28, 2022 - 302,427,896 shares and November 30, 2021 - 300,500,075 shares	30,243		30,050
Class B common stock of $0.10 par value; Authorized: February 28, 2022 and November 30, 2021 - 90,000,000 shares; Issued: February 28, 2022 - 39,443,168 shares and November 30, 2021 - 39,443,168 shares					Class B common stock of $0.10 par value; Authorized: February 28, 2022 and November 30, 2021 - 90,000,000 shares; Issued: February 28, 2022 - 39,443,168 shares and November 30, 2021 - 39,443,168 shares	3,944		3,944
Additional paid-in capital	Additional paid-in capital	8,778,609		8,676,056	Additional paid-in capital	8,855,151		8,807,891
Retained earnings	Retained earnings	13,570,626		10,564,994	Retained earnings	15,078,788		14,685,329
Treasury stock, at cost; August 31, 2021 - 28,647,421 shares of Class A common stock and 1,822,016 shares of Class B common stock; November 30, 2020 - 23,864,589 shares of Class A common stock and 1,822,016 shares of Class B common stock		(1,731,741)		(1,279,227)
Accumulated other comprehensive loss		(1,300)		(805)
Treasury stock, at cost; February 28, 2022 - 43,806,845 shares of Class A common stock and 2,574,016 shares of Class B common stock; November 30, 2021 - 38,586,961 shares of Class A common stock and 1,922,016 shares of Class B common stock					Treasury stock, at cost; February 28, 2022 - 43,806,845 shares of Class A common stock and 2,574,016 shares of Class B common stock; November 30, 2021 - 38,586,961 shares of Class A common stock and 1,922,016 shares of Class B common stock	(3,290,748)		(2,709,448)
Accumulated other comprehensive income (loss)					Accumulated other comprehensive income (loss)	1,686		(1,341)
Total stockholders’ equity	Total stockholders’ equity	20,650,188		17,994,856	Total stockholders’ equity	20,679,064		20,816,425
Noncontrolling interests	Noncontrolling interests	129,351		104,545	Noncontrolling interests	168,368		179,857
Total equity	Total equity	20,779,539		18,099,401	Total equity	20,847,432		20,996,282
Total liabilities and equity	Total liabilities and equity	$	32,744,190	29,935,177	Total liabilities and equity	$	32,635,252	33,207,778

(2)Under certain provisions of ASC 810, the Company is required to separately disclose on its condensed consolidated balance sheets the assets owned by consolidated VIEs and liabilities of consolidated VIEs as to which neither Lennar Corporation, nor any of its subsidiaries, has any obligations.

As of ~~August 31, 2021,~~February 28, 2022, total liabilities include ~~$320.6~~$236.4 million related to consolidated VIEs as to which there was no recourse against the Company, of which ~~$25.4~~$23.8 million is included in Homebuilding accounts payable, ~~$232.8~~$182.7 million in Homebuilding liabilities related to consolidated inventory not owned, ~~$50.0~~$18.4 million in Homebuilding senior notes and other debts payable, ~~and $12.5~~$7.8 million in Homebuilding other liabilities and $3.8 million in Multifamily liabilities.

As of November 30, ~~2020,~~2021, total liabilities include ~~$528.5~~$258.5 million related to consolidated VIEs as to which there was no recourse against the Company, of which ~~$28.4~~$26.6 million is included in Homebuilding accounts payable, ~~$351.4~~$196.6 million in Homebuilding liabilities related to consolidated inventory not owned, ~~$129.1~~$20.1 million in Homebuilding senior notes and other debt payable, ~~$9.9~~$12.3 million in Homebuilding other liabilities and ~~$9.8~~$2.8 million in Multifamily liabilities.

See accompanying notes to condensed consolidated financial statements.

Lennar Corporation and Subsidiaries

Condensed Consolidated Statements of Operations and Comprehensive Income ~~(Loss)~~

(In thousands, except per share amounts)

~~(unaudited)~~(Unaudited)


		Three Months Ended			Nine Months Ended			Three Months Ended
		August 31,			August 31,			February 28,
		2021		2020	2021	2020		2022		2021
Revenues:	Revenues:						Revenues:
Homebuilding	Homebuilding	$	6,558,509	5,505,120	17,529,606	14,626,720	Homebuilding	$	5,752,205	4,943,056
Financial Services	Financial Services	206,973		237,068	669,789	631,992	Financial Services	176,701		244,069
Multifamily	Multifamily	167,921		115,170	476,837	370,904	Multifamily	267,359		131,443
Lennar Other	Lennar Other	8,000		12,896	20,884	33,348	Lennar Other	7,251		6,900
Total revenues	Total revenues	6,941,403		5,870,254	18,697,116	15,662,964	Total revenues	6,203,516		5,325,468
Costs and expenses:	Costs and expenses:						Costs and expenses:
Homebuilding	Homebuilding	5,225,497		4,673,158	14,253,299	12,684,295	Homebuilding	4,641,898		4,118,286
Financial Services	Financial Services	94,890		101,989	290,179	363,688	Financial Services	85,910		97,862
Multifamily	Multifamily	174,410		118,786	474,389	379,607	Multifamily	263,737		131,049
Lennar Other	Lennar Other	9,010		2,062	18,994	3,564	Lennar Other	5,407		4,252
Corporate general and administrative	Corporate general and administrative	94,942		85,998	296,190	246,815	Corporate general and administrative	113,661		110,531
Charitable foundation contribution	Charitable foundation contribution	15,199		6,663	42,006	16,144	Charitable foundation contribution	12,538		12,314
Total costs and expenses	Total costs and expenses	5,613,948		4,988,656	15,375,057	13,694,113	Total costs and expenses	5,123,151		4,474,294
Homebuilding equity in earnings (loss) from unconsolidated entities		2,391		(6,431)	(3,862)	(20,077)
Homebuilding equity in loss from unconsolidated entities							Homebuilding equity in loss from unconsolidated entities	(286)		(4,565)
Homebuilding other income (expense), net	Homebuilding other income (expense), net	(5,570)		(11,787)	3,043	(16,845)	Homebuilding other income (expense), net	(171)		12,975
Financial Services gain on deconsolidation		—		—	—	61,418

Multifamily equity in earnings (loss) from unconsolidated entities and other gain	Multifamily equity in earnings (loss) from unconsolidated entities and other gain	(2,904)		(1,532)	9,682	4,702	Multifamily equity in earnings (loss) from unconsolidated entities and other gain	1,805		(1,268)
Lennar Other realized and unrealized gain (loss)		495,202		—	847,377	—
Lennar Other equity in earnings (loss) from unconsolidated entities and other income (expense), net		(2,220)		(2,835)	59,954	(38,907)
Lennar Other unrealized gain (loss) from technology investments							Lennar Other unrealized gain (loss) from technology investments	(395,170)		469,745
Lennar Other equity in loss from unconsolidated entities and other expense, net, and other gain							Lennar Other equity in loss from unconsolidated entities and other expense, net, and other gain	(9,808)		(1,047)
Earnings before income taxes	Earnings before income taxes	1,814,354		859,013	4,238,253	1,959,142	Earnings before income taxes	676,735		1,327,014
Provision for income taxes	Provision for income taxes	(405,136)		(189,690)	(975,354)	(382,498)	Provision for income taxes	(167,420)		(310,105)
Net earnings (including net earnings (loss) attributable to noncontrolling interests)		1,409,218		669,323	3,262,899	1,576,644
Less: Net earnings (loss) attributable to noncontrolling interests		2,330		2,905	23,279	(5,632)
Net earnings (including net earnings attributable to noncontrolling interests)							Net earnings (including net earnings attributable to noncontrolling interests)	509,315		1,016,909
Less: Net earnings attributable to noncontrolling interests							Less: Net earnings attributable to noncontrolling interests	5,734		15,540
Net earnings attributable to Lennar	Net earnings attributable to Lennar	$	1,406,888	666,418	3,239,620	1,582,276	Net earnings attributable to Lennar	$	503,581	1,001,369
Other comprehensive income (loss), net of tax:	Other comprehensive income (loss), net of tax:						Other comprehensive income (loss), net of tax:
Net unrealized gain (loss) on securities available-for-sale	Net unrealized gain (loss) on securities available-for-sale	$	131	175	(495)	(209)	Net unrealized gain (loss) on securities available-for-sale	$	742	(942)
Reclassification adjustments for loss included in earnings, net of tax		—		—	—	(452)
Reclassification adjustments for gain included in earnings, net of tax							Reclassification adjustments for gain included in earnings, net of tax	2,285		—
Total other comprehensive income (loss), net of tax	Total other comprehensive income (loss), net of tax	$	131	175	(495)	(661)	Total other comprehensive income (loss), net of tax	$	3,027	(942)
Total comprehensive income attributable to Lennar	Total comprehensive income attributable to Lennar	$	1,407,019	666,593	3,239,125	1,581,615	Total comprehensive income attributable to Lennar	$	506,608	1,000,427
Total comprehensive income (loss) attributable to noncontrolling interests		$	2,330	2,905	23,279	(5,632)
Total comprehensive income attributable to noncontrolling interests							Total comprehensive income attributable to noncontrolling interests	$	5,734	15,540
Basic earnings per share	Basic earnings per share	$	4.52	2.13	10.37	5.05	Basic earnings per share	$	1.70	3.20
Diluted earnings per share	Diluted earnings per share	$	4.52	2.12	10.36	5.03	Diluted earnings per share	$	1.69	3.20

See accompanying notes to condensed consolidated financial statements.

Lennar Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(In thousands)

~~(unaudited)~~(Unaudited)


		Nine Months Ended				Three Months Ended
		August 31,				February 28,
		2021		2020		2022		2021
Cash flows from operating activities:	Cash flows from operating activities:				Cash flows from operating activities:
Net earnings (including net earnings (loss) attributable to noncontrolling interests)		$	3,262,899	1,576,644
Adjustments to reconcile net earnings to net cash provided by operating activities:
Net earnings (including net earnings attributable to noncontrolling interests)					Net earnings (including net earnings attributable to noncontrolling interests)	$	509,315	1,016,909
Adjustments to reconcile net earnings to net cash (used in) provided by operating activities:					Adjustments to reconcile net earnings to net cash (used in) provided by operating activities:
Depreciation and amortization	Depreciation and amortization	65,845		68,771	Depreciation and amortization	20,089		22,325
Amortization of discount/premium on debt, net	Amortization of discount/premium on debt, net	(6,257)		(18,632)	Amortization of discount/premium on debt, net	(490)		(2,361)
Equity in (earnings) loss from unconsolidated entities		(64,571)		50,971
Equity in loss from unconsolidated entities					Equity in loss from unconsolidated entities	9,752		7,897
Distributions of earnings from unconsolidated entities	Distributions of earnings from unconsolidated entities	40,552		39,036	Distributions of earnings from unconsolidated entities	4,822		4,234
Share-based compensation expense	Share-based compensation expense	105,386		83,799	Share-based compensation expense	81,457		48,818

Deferred income tax expense		288,259		124,906
Deferred income tax (benefit) expense					Deferred income tax (benefit) expense	(54,032)		114,917

Loans held-for-sale unrealized loss	Loans held-for-sale unrealized loss	26,156		—	Loans held-for-sale unrealized loss	27,387		35,021
Lennar Other unrealized/realized gain		(847,377)		—
Lennar Other unrealized (gain) loss from technology investments					Lennar Other unrealized (gain) loss from technology investments	395,170		(469,745)
Gain on sale of other assets and operating properties and equipment	Gain on sale of other assets and operating properties and equipment	(18,596)		(15,846)	Gain on sale of other assets and operating properties and equipment	—		(1,167)
Loss on consolidation		—		4,824
Gain on deconsolidation of previously consolidated entity		—		(61,418)

Gain on sale of interest in unconsolidated entity and other Multifamily gain	Gain on sale of interest in unconsolidated entity and other Multifamily gain	(1,167)		(4,661)	Gain on sale of interest in unconsolidated entity and other Multifamily gain	—		(19,184)
Gain on sale of Financial Services' portfolio/businesses		(2,528)		(5,014)

Valuation adjustments and write-offs of option deposits and pre-acquisition costs	Valuation adjustments and write-offs of option deposits and pre-acquisition costs	16,020		76,630	Valuation adjustments and write-offs of option deposits and pre-acquisition costs	11,509		635
Changes in assets and liabilities:	Changes in assets and liabilities:				Changes in assets and liabilities:

Decrease in receivables	Decrease in receivables	131,282		264,643	Decrease in receivables	380,502		45,649
(Increase) decrease in inventories, excluding valuation adjustments and write-offs of option deposits and pre-acquisition costs		(2,252,820)		113,429
Increase in inventories, excluding valuation adjustments and write-offs of option deposits and pre-acquisition costs					Increase in inventories, excluding valuation adjustments and write-offs of option deposits and pre-acquisition costs	(1,913,634)		(862,120)
Increase in other assets	Increase in other assets	(154,005)		(124,641)	Increase in other assets	(49,968)		(100,486)
Decrease in loans held-for-sale	Decrease in loans held-for-sale	209,262		557,757	Decrease in loans held-for-sale	409,435		360,582
Increase in accounts payable and other liabilities	Increase in accounts payable and other liabilities	514,007		165,646	Increase in accounts payable and other liabilities	96,455		183,584
Net cash provided by operating activities		1,312,347		2,896,844
Net cash (used in) provided by operating activities					Net cash (used in) provided by operating activities	(72,231)		385,508
Cash flows from investing activities:	Cash flows from investing activities:				Cash flows from investing activities:

Net additions of operating properties and equipment	Net additions of operating properties and equipment	(39,959)		(42,856)	Net additions of operating properties and equipment	(5,780)		(8,561)
Proceeds from the sale of operating properties and equipment, other assets	Proceeds from the sale of operating properties and equipment, other assets	36,882		33,096	Proceeds from the sale of operating properties and equipment, other assets	—		32,002

Investments in and contributions to unconsolidated entities	Investments in and contributions to unconsolidated entities	(354,588)		(412,474)	Investments in and contributions to unconsolidated entities	(138,909)		(224,112)
Distributions of capital from unconsolidated entities	Distributions of capital from unconsolidated entities	292,466		135,677	Distributions of capital from unconsolidated entities	173,561		83,241

Proceeds from sale of investment in consolidated joint venture		15,950		—

Proceeds from sale of commercial mortgage-backed securities bonds	Proceeds from sale of commercial mortgage-backed securities bonds	11,307		3,248	Proceeds from sale of commercial mortgage-backed securities bonds	9,191		11,307
Proceeds from sale of Financial Services' portfolio/business		3,327		14,978
Increase in Financial Services loans held-for-investment, net		13,249		2,427

Decrease in Financial Services loans held-for-investment, net					Decrease in Financial Services loans held-for-investment, net	11,431		3,777
Purchases of investment securities	Purchases of investment securities	(121,675)		(49,293)	Purchases of investment securities	(71,269)		—

Proceeds from maturities/sales of investment securities	Proceeds from maturities/sales of investment securities	11,861		46,091	Proceeds from maturities/sales of investment securities	1,783		8,994

Other receipts, net		12		1,639

Net cash used in investing activities	Net cash used in investing activities	$	(131,168)	(267,467)	Net cash used in investing activities	$	(19,992)	(93,352)

See accompanying notes to condensed consolidated financial statements.

Lennar Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows ~~(continued)~~(Continued)

(In thousands)

~~(unaudited)~~(Unaudited)


		Nine Months Ended				Three Months Ended
		August 31,				February 28,
		2021		2020		2022		2021
Cash flows from financing activities:	Cash flows from financing activities:				Cash flows from financing activities:

Net repayments under warehouse facilities	Net repayments under warehouse facilities	$	(357,472)	(789,339)	Net repayments under warehouse facilities	$	(528,667)	(500,849)

Redemption of senior notes		(299,999)		(313,000)

Principal payments on notes payable and other borrowings	Principal payments on notes payable and other borrowings	(165,403)		(550,256)	Principal payments on notes payable and other borrowings	(18,776)		(55,350)
Proceeds from other borrowings	Proceeds from other borrowings	13,973		70,032	Proceeds from other borrowings	—		8,903
Proceeds from liabilities related to consolidated inventory not owned	Proceeds from liabilities related to consolidated inventory not owned	441,177		—	Proceeds from liabilities related to consolidated inventory not owned	199,483		67,432

Payments related to consolidated inventory not owned	Payments related to consolidated inventory not owned	(238,273)		—	Payments related to consolidated inventory not owned	(166,100)		—
(Payments) proceeds related to other liabilities, net		(7,142)		6,559

Receipts related to noncontrolling interests	Receipts related to noncontrolling interests	18,575		175,565	Receipts related to noncontrolling interests	6,984		8,896
Payments related to noncontrolling interests	Payments related to noncontrolling interests	(20,859)		(29,450)	Payments related to noncontrolling interests	(59,388)		(11,397)

Common stock:	Common stock:				Common stock:

Repurchases	Repurchases	(452,508)		(318,989)	Repurchases	(581,300)		(69,480)
Dividends	Dividends	(233,988)		(117,112)	Dividends	(110,122)		(77,843)
Net cash used in financing activities	Net cash used in financing activities	$	(1,301,919)	(1,865,990)	Net cash used in financing activities	$	(1,257,886)	(629,688)
Net (decrease) increase in cash and cash equivalents and restricted cash		(120,740)		763,387
Net decrease in cash and cash equivalents and restricted cash					Net decrease in cash and cash equivalents and restricted cash	(1,350,109)		(337,532)
Cash and cash equivalents and restricted cash at beginning of period	Cash and cash equivalents and restricted cash at beginning of period	2,932,730		1,468,691	Cash and cash equivalents and restricted cash at beginning of period	2,955,683		2,932,730
Cash and cash equivalents and restricted cash at end of period	Cash and cash equivalents and restricted cash at end of period	$	2,811,990	2,232,078	Cash and cash equivalents and restricted cash at end of period	$	1,605,574	2,595,198
Summary of cash and cash equivalents and restricted cash:	Summary of cash and cash equivalents and restricted cash:				Summary of cash and cash equivalents and restricted cash:
Homebuilding	Homebuilding	$	2,623,320	1,966,796	Homebuilding	$	1,366,597	2,421,411
Financial Services	Financial Services	137,021		217,442	Financial Services	168,032		117,856
Multifamily	Multifamily	15,302		21,591	Multifamily	34,439		25,644
Lennar Other	Lennar Other	3,498		3,302	Lennar Other	2,757		3,888
Homebuilding restricted cash	Homebuilding restricted cash	21,519		11,959	Homebuilding restricted cash	27,025		17,878
Financial Services restricted cash	Financial Services restricted cash	11,330		10,988	Financial Services restricted cash	6,724		8,521
		$	2,811,990	2,232,078		$	1,605,574	2,595,198
Supplemental disclosures of non-cash investing and financing activities:	Supplemental disclosures of non-cash investing and financing activities:				Supplemental disclosures of non-cash investing and financing activities:
Homebuilding and Multifamily:	Homebuilding and Multifamily:				Homebuilding and Multifamily:
Purchases of inventories and other assets financed by sellers	Purchases of inventories and other assets financed by sellers	$	139,111	117,097	Purchases of inventories and other assets financed by sellers	$	6,150	68,978
Non-cash contributions to unconsolidated entities	Non-cash contributions to unconsolidated entities	20,423		13,859	Non-cash contributions to unconsolidated entities	124,864		—

Consolidation/deconsolidation of unconsolidated/consolidated entities, net:
Financial Services assets		$	—	217,565
Financial Services liabilities		—		(115,175)
Financial Services noncontrolling interests		—		(102,390)
Inventories		—		95,476

Operating properties and equipment and other assets		—		6,870

Investments in unconsolidated entities		—		(68,290)
Notes payable		—		(44,924)

Other liabilities		—		(1,455)
Noncontrolling interests		—		12,323

See accompanying notes to condensed consolidated financial statements.

Lennar Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements ~~(unaudited)~~(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 ~~instructions to Form 10-Q~~rules and ~~Article 10~~regulations of ~~Regulation S-X.~~the Securities and Exchange Commission. 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, ~~2020.~~2021. The basis of consolidation is unchanged from the disclosure in the Company's Notes to Consolidated Financial Statements section in its Form 10-K for the year ended November 30, ~~2020.~~2021. 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.

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, 2021~~February 28, 2022 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, 2021~~February 28, 2022 and November 30, ~~2020~~2021 included ~~$666.8~~$894.6 million and ~~$314.3~~$940.4 million,, respectively, of cash held in escrow. On average for the three months ended ~~August 31, 2021,~~February 28, 2022, cash was held in escrow for approximately two days.

Homebuilding Revenue Recognition

Homebuilding revenues and related profits from sales of homes are recognized at the time of the closing of a sale, when title to and possession of the property are transferred to the homebuyer. In order to promote sales of the homes, the Company may offer sales incentives to homebuyers. The types of incentives vary on a community-by-community basis and home-by-home basis. They include primarily price discounts on individual homes and financing incentives, all of which are reflected as a reduction of home sales revenues. For the three ~~days.~~months ended February 28, 2022 and 2021, sales incentives offered to homebuyers averaged $8,600 per home, or 1.9% as a percentage of home sales revenues, and $12,300 per home, or 3.0% as a percentage of home sales revenues, respectively.

Share-based Payments

During both the three months ended ~~August 31,~~February 28, 2022 and 2021, the Company granted employees an immaterial number of nonvested shares. During the three months ended August 31, 2020, the Company granted employees 0.9 million of nonvested shares. During the nine months ended August 31, 2021 and 2020, the Company granted employees 1.4 million ~~and 1.8 million~~ nonvested ~~shares, respectively.~~shares.

Recently Adopted ~~Accounting Pronouncements~~

~~In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") 2016-13,~~ ~~Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments~~ ("ASU 2016-13"). ASU 2016-13 significantly changes the impairment model for most financial assets and certain other instruments. ASU 2016-13 requires immediate recognition of estimated credit losses expected to occur over the remaining life of many financial assets, which generally results in earlier recognition of allowances for credit losses on loans and other financial instruments. ASU 2016-13 was effective for the Company's fiscal year beginning December 1, 2020. The adoption of ASU 2016-13 did not have a material impact on the Company's condensed consolidated financial statements.

~~In January 2017, the FASB issued ASU 2017-04,~~ ~~Intangibles - Goodwill and Other~~ ~~(Topic 350),~~ ~~Simplifying the Accounting for Goodwill Impairment~~ ("ASU 2017-04"). ASU 2017-04 removes the requirement to perform a hypothetical purchase price allocation to measure goodwill impairment. A goodwill impairment will now be the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. ASU 2017-04 was effective for the Company’s fiscal year beginning December 1, 2020. The adoption of ASU 2017-04 did not have a material impact on the Company's condensed consolidated financial statements.

~~New~~ Accounting Pronouncements

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes ("ASU 2019-12"). ASU 2019-12 ~~will be~~was effective for the Company’s fiscal year beginning December 1, 2021. The ~~Company is currently evaluating the impact the~~ adoption of ASU 2019-12 ~~will~~did not have a material impact on the Company's condensed consolidated financial statements.

Lennar Corporation and Subsidiaries

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

~~Reclassifications~~

Certain prior year amounts in the condensed consolidated financial statements have been reclassified to conform with the 2021 presentation. The Company reclassed the balance of its investment in Doma, formerly States Title, to which the Company sold the majority of the Financial Services segment's retail title agency business and title insurance underwriter in the first quarter of 2019, from the Financial Services segment to the Lennar Other segment in the condensed consolidated balance sheets for all periods presented. This was reclassed to be included in our strategic technology investments as the entity had announced that it would merge with a publicly traded special purpose acquisition company and during the three months ended August 31, 2021 completed the merger and became a publicly traded entity. In addition, the Company reflected its contributions to its charitable foundation in a new line on its condensed consolidated statements of operations for all periods presented. This was previously reflected in the Corporate general and administrative line. These reclassifications had no impact on the Company's total assets, total equity, revenues or net earnings in its condensed consolidated financial statements.

(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, 2021
Assets: Homebuilding Financial
Services Multifamily Lennar
Other Total
Cash and cash equivalents $ 2,623,320 137,021 15,302 3,498 2,779,141
Restricted cash 21,519 11,330 — — 32,849
Receivables, net (1) 369,492 408,367 96,649 — 874,508
Inventories 19,105,943 — 351,753 — 19,457,696
Loans held-for-sale (2) — 1,254,589 — — 1,254,589
Investments in equity securities (3) — — — 1,149,520 1,149,520
Investments available-for-sale (4) — — — 41,695 41,695
Loans held-for-investment, net — 61,283 — — 61,283
Investments held-to-maturity — 161,532 — — 161,532
Investments in unconsolidated entities 983,429 — 682,819 387,453 2,053,701
Goodwill 3,442,359 189,699 — — 3,632,058
Other assets 1,034,691 59,052 80,169 71,706 1,245,618
$ 27,580,753 2,282,873 1,226,692 1,653,872 32,744,190
Liabilities:
Notes and other debts payable, net $ 5,542,513 1,106,447 — 1,906 6,650,866
Other liabilities 4,788,988 165,771 259,145 99,881 5,313,785
$ 10,331,501 1,272,218 259,145 101,787 11,964,651


(In thousands)	February 28, 2022
Assets:	Homebuilding		Financial Services	Multifamily	Lennar Other	Total
Cash and cash equivalents	$	1,366,597	168,032	34,439	2,757	1,571,825
Restricted cash	27,025		6,724	—	—	33,749
Receivables, net (1)	456,185		358,866	101,334	—	916,385
Inventories	20,592,702		—	395,507	—	20,988,209
Loans held-for-sale (2)	—		1,199,603	—	—	1,199,603

Investments in equity securities (3)	—		—	—	670,980	670,980
Investments available-for-sale (4)	—		—	—	34,760	34,760
Loans held-for-investment, net	—		33,168	—	—	33,168
Investments held-to-maturity	—		156,587	—	—	156,587
Investments in unconsolidated entities	1,066,256		—	661,252	333,755	2,061,263
Goodwill	3,442,359		189,699	—	—	3,632,058
Other assets	1,141,362		70,654	58,038	66,611	1,336,665
	$	28,092,486	2,183,333	1,250,570	1,108,863	32,635,252
Liabilities:
Notes and other debts payable, net	$	4,639,222	1,197,360	16,930	—	5,853,512
Accounts payable and other liabilities	5,382,549		136,785	294,845	120,129	5,934,308
	$	10,021,771	1,334,145	311,775	120,129	11,787,820

Lennar Corporation and Subsidiaries

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


(In thousands)	(In thousands)	November 30, 2020						(In thousands)	November 30, 2021
Assets:	Assets:	Homebuilding		Financial Services	Multifamily	Lennar Other	Total	Assets:	Homebuilding		Financial Services	Multifamily	Lennar Other	Total
Cash and cash equivalents	Cash and cash equivalents	$	2,703,986	116,171	38,963	3,918	2,863,038	Cash and cash equivalents	$	2,735,213	167,021	16,850	2,660	2,921,744
Restricted cash	Restricted cash	15,211		54,481	—	—	69,692	Restricted cash	21,927		12,012	—	—	33,939
Receivables, net (1)	Receivables, net (1)	298,671		552,779	86,629	—	938,079	Receivables, net (1)	490,278		708,165	98,405	—	1,296,848
Inventories	Inventories	16,925,228		—	249,920	—	17,175,148	Inventories	18,715,304		—	454,093	—	19,169,397
Loans held-for-sale (2)	Loans held-for-sale (2)	—		1,490,105	—	—	1,490,105	Loans held-for-sale (2)	—		1,636,351	—	—	1,636,351

Investments in equity securities (3)	Investments in equity securities (3)	—		—	—	68,771	68,771	Investments in equity securities (3)	—		—	—	1,006,599	1,006,599
Investments available-for-sale (4)	Investments available-for-sale (4)	—		—	—	53,497	53,497	Investments available-for-sale (4)	—		—	—	41,654	41,654
Loans held-for-investment, net	Loans held-for-investment, net	—		72,626	—	—	72,626	Loans held-for-investment, net	—		44,582	—	—	44,582
Investments held-to-maturity	Investments held-to-maturity	—		164,230	—	—	164,230	Investments held-to-maturity	—		157,808	—	—	157,808
Investments in unconsolidated entities	Investments in unconsolidated entities	953,177		—	724,647	387,097	2,064,921	Investments in unconsolidated entities	972,084		—	654,029	346,270	1,972,383
Goodwill	Goodwill	3,442,359		189,699	—	—	3,632,058	Goodwill	3,442,359		189,699	—	—	3,632,058
Other assets	Other assets	1,190,793		68,027	75,749	8,443	1,343,012	Other assets	1,090,654		48,729	88,370	66,662	1,294,415
		$	25,529,425	2,708,118	1,175,908	521,726	29,935,177		$	27,467,819	2,964,367	1,311,747	1,463,845	33,207,778
Liabilities:	Liabilities:							Liabilities:
Notes and other debts payable, net	Notes and other debts payable, net	$	5,955,758	1,463,919	—	1,906	7,421,583	Notes and other debts payable, net	$	4,652,338	1,726,026	—	—	6,378,364
Other liabilities		3,969,893		180,329	252,911	11,060	4,414,193
Accounts payable and other liabilities								Accounts payable and other liabilities	5,217,904		180,317	288,930	145,981	5,833,132
		$	9,925,651	1,644,248	252,911	12,966	11,835,776		$	9,870,242	1,906,343	288,930	145,981	12,211,496

(1)Receivables, net for Financial Services primarily related to loans sold to investors for which the Company had not yet been ~~paid.~~paid as of February 28, 2022 and November 30, 2021, 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 ~~$63.9~~$168.2 million and ~~$61.6~~$100.1 million without readily available fair values as of ~~August 31, 2021~~February 28, 2022 and November 30, ~~2020,~~2021, 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 August 31, 2021
(In thousands) Homebuilding Financial Services Multifamily Lennar Other Corporate and
unallocated Total
Revenues $ 6,558,509 206,973 167,921 8,000 — 6,941,403
Operating earnings (loss) 1,329,833 112,083 (9,393) 491,972 — 1,924,495
Corporate general and administrative expenses — — — — 94,942 94,942
Charitable foundation contribution — — — — 15,199 15,199
Earnings (loss) before income taxes 1,329,833 112,083 (9,393) 491,972 (110,141) 1,814,354
Three Months Ended August 31, 2020
Revenues $ 5,505,120 237,068 115,170 12,896 — 5,870,254
Operating earnings (loss) 813,744 135,079 (5,148) 7,999 — 951,674
Corporate general and administrative expenses — — — — 85,998 85,998
Charitable foundation contribution — — — — 6,663 6,663
Earnings (loss) before income taxes 813,744 135,079 (5,148) 7,999 (92,661) 859,013

~~Lennar Corporation and Subsidiaries~~

~~Notes to Condensed Consolidated Financial Statements (unaudited) (Continued)~~


		Nine Months Ended August 31, 2021								Three Months Ended February 28, 2022
(In thousands)	(In thousands)	Homebuilding		Financial Services	Multifamily	Lennar Other	Corporate and unallocated	Total	(In thousands)	Homebuilding		Financial Services	Multifamily	Lennar Other	Corporate and unallocated	Total
Revenues		$	17,529,606	669,789	476,837	20,884	—	18,697,116
Operating earnings		3,275,488		379,610	12,130	909,221	—	4,576,449
Revenues (1)									Revenues (1)	$	5,752,205	176,701	267,359	7,251	—	6,203,516
Operating earnings (loss)									Operating earnings (loss)	1,109,850		90,791	5,427	(403,134)	—	802,934
Corporate general and administrative expenses	Corporate general and administrative expenses	—		—	—	—	296,190	296,190	Corporate general and administrative expenses	—		—	—	—	113,661	113,661
Charitable foundation contribution	Charitable foundation contribution	—		—	—	—	42,006	42,006	Charitable foundation contribution	—		—	—	—	12,538	12,538
Earnings before income taxes		3,275,488		379,610	12,130	909,221	(338,196)	4,238,253
Earnings (loss) before income taxes									Earnings (loss) before income taxes	1,109,850		90,791	5,427	(403,134)	(126,199)	676,735

		Nine Months Ended August 31, 2020								Three Months Ended February 28, 2021
Revenues	Revenues	$	14,626,720	631,992	370,904	33,348	—	15,662,964	Revenues	$	4,943,056	244,069	131,443	6,900	—	5,325,468
Operating earnings (loss) (1)		1,905,503		329,722	(4,001)	(9,123)	—	2,222,101
Operating earnings (loss)									Operating earnings (loss)	833,180		146,207	(874)	471,346	—	1,449,859
Corporate general and administrative expenses	Corporate general and administrative expenses	—		—	—	—	246,815	246,815	Corporate general and administrative expenses	—		—	—	—	110,531	110,531
Charitable foundation contribution	Charitable foundation contribution	—		—	—	—	16,144	16,144	Charitable foundation contribution	—		—	—	—	12,314	12,314
Earnings (loss) before income taxes	Earnings (loss) before income taxes	1,905,503		329,722	(4,001)	(9,123)	(262,959)	1,959,142	Earnings (loss) before income taxes	833,180		146,207	(874)	471,346	(122,845)	1,327,014

(1)~~Operating loss~~Revenues for ~~Lennar Other~~Multifamily for the ~~nine~~three months ended ~~August 31, 2020 included a $25.0~~February 28, 2022 includes $131.6 million ~~write-down~~ of ~~assets held by Rialto legacy funds because of the disruption in the capital markets as a result of COVID-19 and the economic shutdown.~~land sales to unconsolidated entities

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.

Lennar Corporation and Subsidiaries

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

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: Alabama, 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) East Central Texas West Other Corporate and Unallocated Total Homebuilding
August 31, 2021 $ 5,909,905 3,889,907 2,714,717 11,281,110 1,369,977 2,415,137 27,580,753
November 30, 2020 5,308,114 3,438,600 2,150,916 10,504,374 1,301,618 2,825,803 25,529,425



(In thousands)	East		Central	Texas	West	Other	Corporate and Unallocated	Total Homebuilding
February 28, 2022	$	6,552,930	3,939,627	3,240,006	11,854,213	1,414,532	1,091,178	28,092,486
November 30, 2021	5,854,057		3,782,847	2,801,192	11,171,741	1,443,163	2,414,819	27,467,819

Financial information relating to the Company’s homebuilding segments was as follows:
Three Months Ended August 31, 2021
(In thousands) East Central Texas West Other Total Homebuilding
Revenues $ 1,678,851 1,268,817 827,229 2,775,556 8,056 6,558,509
Operating earnings (loss) 356,895 197,229 186,008 608,815 (19,114) 1,329,833
Three Months Ended August 31, 2020
Revenues $ 1,478,659 1,063,621 747,934 2,212,211 2,695 5,505,120
Operating earnings (loss) 244,189 132,678 116,111 342,834 (22,068) 813,744

~~Lennar Corporation and Subsidiaries~~

~~Notes to Condensed Consolidated Financial Statements (unaudited) (Continued)~~


		Nine Months Ended August 31, 2021								Three Months Ended February 28, 2022
(In thousands)	(In thousands)	East		Central	Texas	West	Other	Total Homebuilding	(In thousands)	East		Central	Texas	West	Other	Total Homebuilding
Revenues	Revenues	$	4,602,560	3,294,842	2,270,566	7,338,906	22,732	17,529,606	Revenues	$	1,670,186	1,109,272	812,619	2,150,798	9,330	5,752,205
Operating earnings (loss)	Operating earnings (loss)	928,805		488,300	491,708	1,423,332	(56,657)	3,275,488	Operating earnings (loss)	351,995		152,078	171,312	441,448	(6,983)	1,109,850

		Nine Months Ended August 31, 2020								Three Months Ended February 28, 2021
Revenues	Revenues	$	3,908,421	2,839,415	1,933,918	5,920,804	24,162	14,626,720	Revenues	$	1,355,942	928,442	644,078	2,009,579	5,015	4,943,056
Operating earnings (loss)	Operating earnings (loss)	586,104		292,031	269,071	847,835	(89,538)	1,905,503	Operating earnings (loss)	262,083		132,023	129,643	321,706	(12,275)	833,180

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 ~~August 31, 2021,~~February 28, 2022, 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:
~~October 2021~~April 2022	$	~~200,000~~
~~December 2021~~	~~500,000~~
~~April 2022~~	100,000
July 2022	~~600,000~~400,000
October 2022	200,000
December 2022	500,000
Total - Residential facilities	$	~~1,400,000~~1,200,000
LMF Commercial facilities maturing
November ~~2021~~2022	$	100,000
December ~~2021 (1)~~2022	~~411,438~~400,000
July 2023	50,000

Total - LMF Commercial facilities	$	~~561,438~~550,000
Total	$	~~1,961,438~~1,750,000

~~(1)Includes $11.4 million warehouse repurchase facility used by LMF Commercial~~

Lennar Corporation and Subsidiaries

Notes to ~~finance the origination of floating rate accrual loans, which are reported as accrual loans within loans held-for-investment, net.~~Condensed Consolidated Financial Statements (Unaudited) (Continued)

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)	(In thousands)	August 31, 2021		November 30, 2020	(In thousands)	February 28, 2022		November 30, 2021
Borrowings under the residential facilities	Borrowings under the residential facilities	$	900,332	1,185,797	Borrowings under the residential facilities	$	1,021,791	1,482,258
Collateral under the residential facilities	Collateral under the residential facilities	934,345		1,231,619	Collateral under the residential facilities	1,059,876		1,539,641
Borrowings under the LMF Commercial facilities	Borrowings under the LMF Commercial facilities	54,990		124,617	Borrowings under the LMF Commercial facilities	29,247		96,294

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

~~Lennar Corporation and Subsidiaries~~

~~Notes to Condensed Consolidated Financial Statements (unaudited) (Continued)~~

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 Ended Nine Months Ended
August 31, August 31,
(In thousands) 2021 2020 2021 2020
Loan origination liabilities, beginning of period $ 9,454 10,880 7,569 9,364
Provision for losses 1,147 1,234 3,227 3,149
Payments/settlements (237) (24) (432) (423)
Loan origination liabilities, end of period $ 10,364 12,090 10,364 12,090


	Three Months Ended
	February 28,
(In thousands)	2022		2021
Loan origination liabilities, beginning of period	$	11,670	7,569
Provision for losses	966		966


Payments/settlements	(165)		(102)
Loan origination liabilities, end of period	$	12,471	8,433

LMF Commercial - loans held-for-sale

LMF Commercial originated commercial loans as follows:


		Three Months Ended			Nine Months Ended			Three Months Ended
		August 31,			August 31,			February 28,
(Dollars in thousands)	(Dollars in thousands)	2021		2020	2021	2020	(Dollars in thousands)	2022		2021
Originations (1)	Originations (1)	$	178,669	164,380	594,667	582,030	Originations (1)	$	264,845	219,500

Sold	Sold	226,357		164,874	665,062	622,251	Sold	178,082		282,965
Securitizations	Securitizations	1		1	4	4	Securitizations	1		2

(1)During both the three ~~and nine~~ months ended ~~August 31,~~February 28, 2022 and 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 ~~August 31, 2021~~February 28, 2022 and November 30, ~~2020,~~2021, 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 nine~~ months ended ~~August 31, 2021~~February 28, 2022 or ~~2020.~~2021. The Company has financing agreements to finance CMBS that have been purchased as investments by the Financial Services segment.

Lennar Corporation and Subsidiaries

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

Details related to Financial Services' CMBS were as follows:


(Dollars in thousands)	(Dollars in thousands)	August 31, 2021			November 30, 2020		(Dollars in thousands)	February 28, 2022			November 30, 2021
Carrying value	Carrying value	$	161,532		164,230		Carrying value	$	156,587		157,808
Outstanding debt, net of debt issuance costs	Outstanding debt, net of debt issuance costs	151,124			153,505		Outstanding debt, net of debt issuance costs	146,322			147,474
Incurred interest rate	Incurred interest rate	3.4		%	3.4	%	Incurred interest rate	3.4		%	3.4	%


		August 31, 2021				February 28, 2022
Discount rates at purchase	Discount rates at purchase	6%	—	84%	Discount rates at purchase	6%	—	84%
Coupon rates	Coupon rates	2.0%	—	5.3%	Coupon rates	2.0%	—	5.3%
Distribution dates	Distribution dates	October 2027	—	December 2028	Distribution dates	October 2027	—	December 2028
Stated maturity dates	Stated maturity dates	October 2050	—	December 2051	Stated maturity dates	October 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 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 RialtoCapitalManagement ("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, 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.

~~During the nine months ended August 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~~ ~~$153.0 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~~has investments in Opendoor Technologies, Inc. ("Opendoor"), ~~Sunnova,~~ Hippo Holdings, Inc. ("Hippo"), Sunnova ("NOVA"), SmartRent, Inc. ("SmartRent") ~~and~~, Blend Labs, Inc. ("Blend") and Sonder ("SOND"), which are held at market and will therefore change depending on the value of the Company's share holdings in those entities on the last day of each quarter. The following is a detail of Lennar Other ~~realized and~~ unrealized gain (loss):


		Three Months Ended			Nine Months Ended			Three Months Ended
		August 31,			August 31,			February 28,
		2021		2020	2021	2020		2022		2021
Opendoor (OPEN) mark to market							Opendoor (OPEN) mark to market	$	(143,361)	469,745
Hippo (HIPO) mark to market	Hippo (HIPO) mark to market	$	324,855	—	324,855	—	Hippo (HIPO) mark to market	(124,457)		—
Sunnova (NOVA) mark to market							Sunnova (NOVA) mark to market	(75,041)		—
SmartRent (SMRT) mark to market	SmartRent (SMRT) mark to market	100,793		—	100,793	—	SmartRent (SMRT) mark to market	(44,363)		—
Opendoor (OPEN) mark to market		37,301		—	272,756	—
Sunnova (NOVA) mark to market		23,870		—	(14,465)	—

Blend Labs (BLND) mark to market	Blend Labs (BLND) mark to market	6,852		—	6,852	—	Blend Labs (BLND) mark to market	(7,442)		—
Gain on sale of solar business		1,531		—	153,006	—
Other realized gain		—		—	3,580	—
		$	495,202	—	847,377	—
Sonder (SOND) mark to market							Sonder (SOND) mark to market	(506)		—
								$	(395,170)	469,745

During the ~~nine months~~year ended ~~August 31,~~November 30, 2021,, Opendoor, Hippo, Sunnova, SmartRent and Blend began trading in the public markets and the Company began to mark to market the Company's shares of share holdings in the public entities. ~~The~~During the three months ended February 28, 2022, shares of Sonder began trading in the public markets and the Company began to mark to market ~~recognition was due to~~its share holding in the ~~entities in which the Company holds~~public entity. All the investments ~~going public and the loss of a contractual right to a board seat, where applicable, during the~~ ~~nine months ended August 31, 2021 and the investments~~ ~~now being~~are accounted for as investments in equity securities which are held at fair value and the changes in fair ~~value~~values are recognized through earnings. ~~As of November 30, 2020, the investments were included in the Company's investments in unconsolidated entities and were accounted for using the equity method.~~ In addition, ~~as previously noted,~~ Doma Holdings, Inc. ("Doma") went public during the ~~three months~~year ended ~~August 31,~~November 30, 2021. However, Doma 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 ~~August 31, 2021,~~February 28, 2022, the Company owns approximately ~~25%~~26% of Doma and the carrying amount of the Company's investment is ~~$62.4~~$43.9 million.

Lennar Corporation and Subsidiaries

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

(3)Investments in Unconsolidated Entities

Homebuilding Unconsolidated Entities

The investments in the Company's Homebuilding unconsolidated entities were as follows:


(In thousands)	(In thousands)	August 31, 2021		November 30, 2020	(In thousands)	February 28, 2022		November 30, 2021
Investments in unconsolidated entities (1) (2)	Investments in unconsolidated entities (1) (2)	$	983,429	953,177	Investments in unconsolidated entities (1) (2)	$	1,066,256	972,084
Underlying equity in unconsolidated entities' net assets (1)	Underlying equity in unconsolidated entities' net assets (1)	1,291,535		1,269,701	Underlying equity in unconsolidated entities' net assets (1)	1,405,719		1,301,719

(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 the FivePoint entity and deferring equity in earnings on land sales to the Company.

(2)Included in the Company's recorded investments in Homebuilding unconsolidated entities is the Company's 40% ownership of FivePoint. As of ~~August 31, 2021~~February 28, 2022 and November 30, ~~2020,~~2021, the carrying amount of the Company's investment was ~~$389.8~~$376.6 million and ~~$392.1~~$381.6 million, respectively.

As of February 28, 2022 and November 30, 2021, the Homebuilding segment's unconsolidated entities had non-recourse debt with completion guarantees of $205.0 million and $241.0 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

~~Lennar Corporation and Subsidiaries~~

~~Notes to Condensed Consolidated Financial Statements (unaudited) (Continued)~~

instances the amount of guaranteed debt of an unconsolidated entity is less than the value of the collateral securing it.

As of both February 28, 2022 and November 30, 2021, the fair values of the repayment guarantees, maintenance guarantees, and completion guarantees were not material. The Company believes that as of February 28, 2022, 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).

In the first quarter of 2021, the Company formed the Upward America Venture ("~~the Venture"~~Upward America")~~. The Venture~~, and is managing and participating in Upward America. Upward America is an investment fund that acquires ~~single family~~new single-family homes ~~for rent~~ in high growth markets across the United ~~States. The Venture~~States and rents them to people who will live in them. Upward America has raised equity ~~to get to a total commitment~~commitments totaling $1.6 billion, including $350 million of ~~$1.25 billion led~~equity commitments raised during the quarter ended February 28, 2022. The commitments are primarily from institutional investors, including $125 million committed by ~~institutional investors.~~Lennar. Including leverage, ~~the Venture~~Upward America will be positioned to acquire over $4.0 billion of new single family homes and townhomes from Lennar and potentially other homebuilders.

Multifamily Unconsolidated Entities

The unconsolidated entities 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 Multifamily unconsolidated entities, the Company (or entities related to them) has 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 Form 10-K for the year ended November 30, ~~2020.~~2021. As of both ~~August 31, 2021~~February 28, 2022 and November 30, ~~2020,~~2021, the fair value of the completion guarantees was immaterial. As of ~~August 31, 2021~~February 28, 2022 and November 30, ~~2020,~~2021, Multifamily segment's unconsolidated entities had non-recourse debt with completion guarantees of ~~$866.9~~$985.1 million and ~~$722.9~~$855.2 million, 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. 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. The details of the activity was as follows:


		Three Months Ended			Nine Months Ended			Three Months Ended
		August 31,			August 31,			February 28,
(In thousands)	(In thousands)	2021		2020	2021	2020	(In thousands)	2022		2021

General contractor services, net of deferrals	General contractor services, net of deferrals	$	138,038	101,103	402,328	299,468	General contractor services, net of deferrals	$	117,263	115,399
General contractor costs	General contractor costs	137,860		97,181	391,096	287,646	General contractor costs	113,233		110,453
Management fee income	Management fee income	13,822		14,067	42,881	42,464	Management fee income	13,127		14,871

Lennar Corporation and Subsidiaries

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

The Multifamily segment includes Multifamily Venture Fund I ("LMV I") and Multifamily Venture Fund II LP ("LMV II"), which are long-term multifamily development investment vehicles involved in the development, construction and property management of class-A multifamily assets. Details of each as of and during the ~~nine~~three months ended ~~August 31, 2021~~February 28, 2022 are included below:


		August 31, 2021				February 28, 2022
(In thousands)	(In thousands)	LMV I		LMV II	(In thousands)	LMV I		LMV II
Lennar's carrying value of investments	Lennar's carrying value of investments	$	274,093	333,778	Lennar's carrying value of investments	$	244,454	316,728
Equity commitments	Equity commitments	2,204,016		1,257,700	Equity commitments	2,204,016		1,257,700
Equity commitments called	Equity commitments called	2,148,090		1,196,418	Equity commitments called	2,150,135		1,204,235
Lennar's equity commitments	Lennar's equity commitments	504,016		381,000	Lennar's equity commitments	504,016		381,000
Lennar's equity commitments called	Lennar's equity commitments called	498,730		361,381	Lennar's equity commitments called	499,216		363,749
Lennar's remaining commitments	Lennar's remaining commitments	5,286		19,619	Lennar's remaining commitments	4,800		17,251
Distributions to Lennar during the nine months ended August 31, 2021		54,393		1,307
Distributions to Lennar during the three months ended February 28, 2022					Distributions to Lennar during the three months ended February 28, 2022	8,732		3,735

During the first quarter of 2022, the Multifamily segment completed the initial closing of a new Lennar Multifamily Fund (the "Fund") for the development, construction and property management of Class A multifamily assets across high growth metropolitan areas in the United States. The Multifamily segment expects the Fund to have almost $1 billion in equity and Lennar's ownership percentage in the Fund is expected to be 4%. The Company currently has a $10.3 million investment in the Fund. Additional dollars will be committed as opportunities are identified by the Fund.

Other Unconsolidated Entities

Lennar Other's unconsolidated entities includes 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, primarily managed by the Company's LENX subsidiary. ~~These strategic investments include the Company's investment in Doma, formerly known as States Title, which was reclassified from the Financial Services segment.~~

~~Lennar Corporation and Subsidiaries~~

~~Notes to Condensed Consolidated Financial Statements (unaudited) (Continued)~~

(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, 2021~~February 28, 2022 and ~~2020:~~2021:

Three Months Ended August 31, 2021
(In thousands) Total
Equity Class A
Common Stock Class B
Common Stock Additional
Paid - in Capital Treasury
Stock Accumulated Other Comprehensive Income (loss) Retained
Earnings Noncontrolling
Interests
Balance at May 31, 2021 $ 19,702,098 30,049 3,944 8,755,020 (1,452,874) (1,431) 12,241,400 125,990
Net earnings (including net earnings attributable to noncontrolling interests) 1,409,218 — — — — — 1,406,888 2,330
Employee stock and directors plans (32,426) 1 — 55 (32,482) — — —
Purchases of treasury stock (246,385) — — — (246,385) — — —
Amortization of restricted stock 24,752 — — 24,752 — — — —
Cash dividends (77,662) — — — — — (77,662) —
Receipts related to noncontrolling interests 4,670 — — — — — — 4,670
Payments related to noncontrolling interests (3,633) — — — — — — (3,633)
Non-cash purchase or activity of noncontrolling interests, net (1,224) — — (1,218) — — — (6)
Total other comprehensive income, net of tax 131 — — — — 131 — —
Balance at August 31, 2021 $ 20,779,539 30,050 3,944 8,778,609 (1,731,741) (1,300) 13,570,626 129,351


				Three Months Ended August 31, 2020										Three Months Ended February 28, 2022
(In thousands)	(In thousands)	Total Equity		Class A Common Stock	Class B Common Stock	Additional Paid - in Capital	Treasury Stock	Accumulated Other Comprehensive Income (loss)	Retained Earnings	Noncontrolling Interests	(In thousands)	Total Equity		Class A Common Stock	Class B Common Stock	Additional Paid - in Capital	Treasury Stock	Accumulated Other Comprehensive Income (loss)	Retained Earnings	Noncontrolling Interests
Balance at May 31, 2020		$	16,632,624	29,804	3,944	8,630,442	(1,253,863)	(338)	9,132,714	89,921
Balance at November 30, 2021											Balance at November 30, 2021	$	20,996,282	30,050	3,944	8,807,891	(2,709,448)	(1,341)	14,685,329	179,857
Net earnings (including net earnings attributable to noncontrolling interests)	Net earnings (including net earnings attributable to noncontrolling interests)	669,323		—	—	—	—	—	666,418	2,905	Net earnings (including net earnings attributable to noncontrolling interests)	509,315		—	—	—	—	—	503,581	5,734
Employee stock and directors plans	Employee stock and directors plans	(22,843)		90	—	(105)	(22,828)	—	—	—	Employee stock and directors plans	(54,886)		193	—	(140)	(54,939)	—	—	—

Purchases of treasury stock											Purchases of treasury stock	(526,361)		—	—	—	(526,361)	—	—	—

Amortization of restricted stock	Amortization of restricted stock	28,658		—	—	28,658	—	—	—	—	Amortization of restricted stock	81,457		—	—	81,457	—	—	—	—
Cash dividends	Cash dividends	(38,967)		—	—	—	—	—	(38,967)	—	Cash dividends	(110,122)		—	—	—	—	—	(110,122)	—

Receipts related to noncontrolling interests	Receipts related to noncontrolling interests	6,504		—	—	—	—	—	—	6,504	Receipts related to noncontrolling interests	6,984		—	—	—	—	—	—	6,984
Payments related to noncontrolling interests	Payments related to noncontrolling interests	(7,949)		—	—	—	—	—	—	(7,949)	Payments related to noncontrolling interests	(59,388)		—	—	—	—	—	—	(59,388)
Non-cash consolidations/deconsolidations, net		17,079		—	—	—	—	—	—	17,079
Non-cash purchase or activity of noncontrolling interests, net	Non-cash purchase or activity of noncontrolling interests, net	(4,259)		—	—	(4,041)	—	—	—	(218)	Non-cash purchase or activity of noncontrolling interests, net	1,124		—	—	(34,057)	—	—	—	35,181

Total other comprehensive loss, net of tax		175		—	—	—	—	175	—	—
Balance at August 31, 2020		$	17,280,345	29,894	3,944	8,654,954	(1,276,691)	(163)	9,760,165	108,242

Total other comprehensive income, net of tax											Total other comprehensive income, net of tax	3,027		—	—	—	—	3,027	—	—
Balance at February 28, 2022											Balance at February 28, 2022	$	20,847,432	30,243	3,944	8,855,151	(3,290,748)	1,686	15,078,788	168,368

1615

Lennar Corporation and Subsidiaries

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

Nine Months Ended August 31, 2021
(In thousands) Total
Equity Class A
Common Stock Class B
Common Stock Additional
Paid - in Capital Treasury
Stock Accumulated Other Comprehensive Loss Retained
Earnings Noncontrolling
Interests
Balance at November 30, 2020 $ 18,099,401 29,894 3,944 8,676,056 (1,279,227) (805) 10,564,994 104,545
Net earnings (including net earnings attributable to noncontrolling interests) 3,262,899 — — — — — 3,239,620 23,279
Employee stock and directors plans (63,242) 156 — 1,161 (64,559) — — —
Purchases of treasury stock (387,955) — — — (387,955) — — —
Amortization of restricted stock 105,846 — — 105,846 — — — —
Cash dividends (233,988) — — — — — (233,988) —
Receipts related to noncontrolling interests 18,575 — — — — — — 18,575
Payments related to noncontrolling interests (20,859) — — — — — — (20,859)
Non-cash purchase or activity of noncontrolling interests, net (643) — — (4,454) — — — 3,811
Total other comprehensive loss, net of tax (495) — — — — (495) — —
Balance at August 31, 2021 $ 20,779,539 30,050 3,944 8,778,609 (1,731,741) (1,300) 13,570,626 129,351


				Nine Months Ended August 31, 2020											Three Months Ended February 28, 2021
(In thousands)	(In thousands)	Total Equity		Class A Common Stock	Class B Common Stock	Additional Paid - in Capital	Treasury Stock	Accumulated Other Comprehensive Income (loss)		Retained Earnings	Noncontrolling Interests	(In thousands)	Total Equity		Class A Common Stock	Class B Common Stock	Additional Paid - in Capital	Treasury Stock	Accumulated Other Comprehensive Income (loss)	Retained Earnings	Noncontrolling Interests
Balance at November 30, 2019		$	16,033,830	29,712	3,944	8,578,219	(957,857)	498		8,295,001	84,313
Net earnings (including net loss attributable to noncontrolling interests)		1,576,644		—	—	—	—	—		1,582,276	(5,632)
Balance at November 30, 2020												Balance at November 30, 2020	$	18,099,401	29,894	3,944	8,676,056	(1,279,227)	(805)	10,564,994	104,545
Net earnings (including net earnings attributable to noncontrolling interests)												Net earnings (including net earnings attributable to noncontrolling interests)	1,016,909		—	—	—	—	—	1,001,369	15,540
Employee stock and directors plans	Employee stock and directors plans	(29,616)		182	—	521	(30,319)	—		—	—	Employee stock and directors plans	(26,279)		153	—	(59)	(26,373)	—	—	—
Purchases of treasury stock	Purchases of treasury stock	(288,515)		—	—	—	(288,515)	—		—	—	Purchases of treasury stock	(43,110)		—	—	—	(43,110)	—	—	—

Amortization of restricted stock	Amortization of restricted stock	83,799		—	—	83,799	—	—		—	—	Amortization of restricted stock	48,818		—	—	48,818	—	—	—	—
Cash dividends	Cash dividends	(117,112)		—	—	—	—	—	—	(117,112)	—	Cash dividends	(77,843)		—	—	—	—	—	(77,843)	—

Receipts related to noncontrolling interests	Receipts related to noncontrolling interests	175,565		—	—	—	—	—		—	175,565	Receipts related to noncontrolling interests	8,896		—	—	—	—	—	—	8,896
Payments related to noncontrolling interests	Payments related to noncontrolling interests	(29,450)		—	—	—	—	—		—	(29,450)	Payments related to noncontrolling interests	(11,397)		—	—	—	—	—	—	(11,397)
Non-cash consolidations/deconsolidations, net		(114,712)		—	—	—	—	—		—	(114,712)

Non-cash purchase or activity of noncontrolling interests, net	Non-cash purchase or activity of noncontrolling interests, net	(9,427)		—	—	(7,585)	—	—		—	(1,842)	Non-cash purchase or activity of noncontrolling interests, net	2,998		—	—	(623)	—	—	—	3,621

Total other comprehensive loss, net of tax	Total other comprehensive loss, net of tax	(661)		—	—	—	—	(661)		—	—	Total other comprehensive loss, net of tax	(942)		—	—	—	—	(942)	—	—
Balance at Aug 31, 2020		$	17,280,345	29,894	3,944	8,654,954	(1,276,691)	(163)		9,760,165	108,242
Balance at February 28, 2021												Balance at February 28, 2021	$	19,017,451	30,047	3,944	8,724,192	(1,348,710)	(1,747)	11,488,520	121,205

On September 29, 2021, the Company's Board of Directors declared a quarterly cash dividend of $0.25 per share on both its Class A and Class B common stock, payable on October 28, 2021 to holders of record at the close of business on October 14, 2021. On July 19, 2021,February 10, 2022, the Company paid cash dividends of ~~$0.25~~$0.375 per share on both its Class A and Class B common stock to holders of record at the close of business on ~~July 2, 2021,~~January 27, 2022, as declared by its Board of Directors on ~~June 18, 2021.~~January 12, 2022. The Company approved and paid cash dividends of ~~$0.125~~$0.250 per share for each of the ~~first three quarters of 2020 and $0.25 per share in the fourth quarter of 2020 and each of the first three~~four quarters of 2021 on both its Class A and Class B common stock.

In ~~January~~October 2021, the Company's Board of Directors authorized an increase to the Company's stock repurchase ofprogram to enable the Company to repurchase up to the lesser of an additional $1 billion in value ~~excluding commissions,~~ or 25 million in shares, of ~~the Company's~~its outstanding Class A ~~and~~or Class B common stock. As a result of prior authorizations being almost exhausted, in March 2022, the Company's Board of Directors approved an additional authorization for the Company to repurchase up to the lesser of $2 billion in value, or 30 million in shares, of its outstanding Class A or Class B common stock. The repurchase authorization has no expiration date. The following table represents the ~~repurchase~~repurchases of the Company's Class A and Class B common stocks under ~~this program and its predecessor~~the authorized repurchase programs for the three ~~and nine~~ months ended ~~August 31, 2021~~February 28, 2022 and ~~2020:~~2021:


																			Three Months Ended
		Three Months Ended								Nine Months Ended									February 28,
		August 31, 2021				August 31, 2020				August 31, 2021				August 31, 2020					2022				2021
(Dollars in thousands, except price per share)	(Dollars in thousands, except price per share)	Class A		Class B		Class A		Class B		Class A		Class B		Class A		Class B		(Dollars in thousands, except price per share)	Class A		Class B		Class A		Class B
Shares repurchased	Shares repurchased	2,500,000		—		—		—		4,010,000		—		4,250,000		115,000		Shares repurchased	4,616,000		652,000		510,000		—
Total purchase price	Total purchase price	$	246,335	$	—	$	—	$	—	$	387,875	$	—	$	282,274	$	6,155	Total purchase price	$	472,924	$	53,331	$	43,100	$	—
Average price per share	Average price per share	$	98.53	$	—	$	—	$	—	$	96.73	$	—	$	66.42	$	53.52	Average price per share	$	102.45	$	81.80	$	84.51	$	—

~~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					Three Months Ended
		August 31,				August 31,					February 28,
(Dollars in thousands)	(Dollars in thousands)	2021		2020		2021		2020		(Dollars in thousands)	2022		2021
Provision for income taxes	Provision for income taxes	$405,136		189,690		975,354		382,498		Provision for income taxes	$167,420		310,105
Effective tax rate (1)	Effective tax rate (1)	22.4	%	22.2	%	23.1	%	19.5	%	Effective tax rate (1)	25.0	%	23.6	%

(1)For both the three ~~and nine~~ months ended ~~August 31,~~February 28, 2022 and 2021, ~~and 2020,~~ the effective tax rate included state income tax expense and non-deductible executive compensation, partially offset by ~~new~~ energy efficient home and solar tax credits. The nine months ended August 31, 2020 also included benefits related to the years ended November 30, 2018 and 2019, due to Congress retroactively extending the new energy efficient home tax credit in December 2019.

(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

Lennar Corporation and Subsidiaries

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

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			Three Months Ended
		August 31,			August 31,			February 28,
(In thousands, except per share amounts)	(In thousands, except per share amounts)	2021		2020	2021	2020	(In thousands, except per share amounts)	2022		2021
Numerator:	Numerator:						Numerator:
Net earnings attributable to Lennar	Net earnings attributable to Lennar	$	1,406,888	666,418	3,239,620	1,582,276	Net earnings attributable to Lennar	$	503,581	1,001,369
Less: distributed earnings allocated to nonvested shares	Less: distributed earnings allocated to nonvested shares	776		324	2,182	1,014	Less: distributed earnings allocated to nonvested shares	780		630
Less: undistributed earnings allocated to nonvested shares	Less: undistributed earnings allocated to nonvested shares	15,918		7,474	38,329	17,433	Less: undistributed earnings allocated to nonvested shares	4,548		11,624
Numerator for basic earnings per share	Numerator for basic earnings per share	1,390,194		658,620	3,199,109	1,563,829	Numerator for basic earnings per share	498,253		989,115
Less: net amount attributable to Rialto's Carried Interest Incentive Plan (1)	Less: net amount attributable to Rialto's Carried Interest Incentive Plan (1)	785		3,606	2,907	6,928	Less: net amount attributable to Rialto's Carried Interest Incentive Plan (1)	1,798		553

Numerator for diluted earnings per share	Numerator for diluted earnings per share	$	1,389,409	655,014	3,196,202	1,556,901	Numerator for diluted earnings per share	$	496,455	988,562
Denominator:	Denominator:						Denominator:
Denominator for basic earnings per share - weighted average common shares outstanding	Denominator for basic earnings per share - weighted average common shares outstanding	307,296		308,889	308,403	309,492	Denominator for basic earnings per share - weighted average common shares outstanding	293,930		309,020
Effect of dilutive securities:
Shared based payments		—		1	—	1

Denominator for diluted earnings per share - weighted average common shares outstanding	Denominator for diluted earnings per share - weighted average common shares outstanding	307,296		308,890	308,403	309,493	Denominator for diluted earnings per share - weighted average common shares outstanding	293,930		309,020
Basic earnings per share	Basic earnings per share	$	4.52	2.13	10.37	5.05	Basic earnings per share	$	1.70	3.20
Diluted earnings per share	Diluted earnings per share	$	4.52	2.12	10.36	5.03	Diluted earnings per share	$	1.69	3.20

(1)The amounts presented relate to Rialto's Carried Interest Incentive Plan and represent the difference between the advanced tax distributions received from the Rialto funds included in the Lennar Other segment and the amount Lennar is assumed to own.

For both the three ~~and nine~~ months ended ~~August 31,~~February 28, 2022 and 2021, ~~and 2020,~~ there were no options to purchase shares of common stock that were outstanding and anti-dilutive.

~~Lennar Corporation and Subsidiaries~~

~~Notes to Condensed Consolidated Financial Statements (unaudited) (Continued)~~

(7)Homebuilding Senior Notes and Other Debts Payable

(Dollars in thousands) August 31, 2021 November 30, 2020
4.125% senior notes due 2022 (1) $ 599,619 598,876
5.375% senior notes due 2022 253,199 255,342
4.750% senior notes due 2022 573,570 572,724
4.875% senior notes due December 2023 398,147 397,347
4.500% senior notes due 2024 648,072 647,528
5.875% senior notes due 2024 439,978 443,484
4.750% senior notes due 2025 498,335 498,002
5.25% senior notes due 2026 405,800 406,709
5.00% senior notes due 2027 352,220 352,508
4.75% senior notes due 2027 895,322 894,760
6.25% senior notes due December 2021 — 305,221
Mortgage notes on land and other debt 478,251 583,257
$ 5,542,513 5,955,758

~~(1)Subsequent to August 31, 2021, the Company provided notice that it would redeem on October 15, 2021 its $600 million~~ ~~4.125%~~ ~~senior unsecured notes, which have a scheduled maturity of January 15, 2022.~~


(Dollars in thousands)	February 28, 2022		November 30, 2021

4.750% senior notes due 2022	$	574,110	573,840
4.875% senior notes due December 2023	398,544		398,345
4.500% senior notes due 2024	648,434		648,253
5.875% senior notes due 2024	437,641		438,810
4.750% senior notes due 2025	498,557		498,446
5.25% senior notes due 2026	405,194		405,497
5.00% senior notes due 2027	352,028		352,124
4.75% senior notes due 2027	895,697		895,510
Mortgage notes on land and other debt	429,017		441,513
	$	4,639,222	4,652,338

The carrying amounts of the senior notes in the table above are net of debt issuance costs of ~~$12.4~~$10.1 million and ~~$15.9~~$11.0 million as of ~~August 31, 2021~~February 28, 2022 and November 30, ~~2020,~~2021, respectively.

In June 2021, the Company redeemed $300 million aggregate principal amount of its 6.25% senior notes due December 2021. The redemption price, which was paid in cash, was 100% of the principal amount plus accrued unpaid interest.

As of ~~August 31, 2021~~February 28, 2022 the maximum available borrowings on the Company's unsecured revolving credit facility (the "Credit Facility") were ~~$2.5~~$2.5 billion and included a ~~$300~~$300 million accordion feature, subject to additional commitments, thus the maximum borrowings could be ~~$2.8~~$2.8 billionmaturing in 2024. The Credit Facility agreement (the "Credit Agreement") provides that up to $500 million in commitments may be used for letters of ~~credit~~.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 Form 10-K for the year ended November 30, ~~2020.~~2021. In addition to the Credit Facility, the Company has other letter of credit facilities with different financial institutions.

~~Procedures related to~~The Company's processes for posting performance ~~letters of credit,~~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 Form 10-K for the year ended November 30, ~~2020.~~2021. The Company's outstanding performance letters of credit and surety bonds are described below:

(In thousands) August 31, 2021 November 30, 2020
Performance letters of credit $ 874,820 752,096
Surety bonds 3,465,134 3,087,711
Anticipated future costs primarily for site improvements related to performance surety bonds 1,595,800 1,584,642

Lennar Corporation and Subsidiaries

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


(In thousands)	February 28, 2022		November 30, 2021
Performance letters of credit	$	1,007,295	924,584
Financial letters of credit	542,072		425,843
Surety bonds	3,660,958		3,553,047
Anticipated future costs primarily for site improvements related to performance surety bonds	1,739,779		1,690,861

The Company's senior notes are guaranteed by substantially all of the Company's 100% owned homebuilding subsidiaries and some of the Company's other subsidiaries. These guarantees are unchanged from the disclosure in the Company's Financial Condition and Capital Resources section in its Form 10-K for the year ended November 30, ~~2020.~~2021.

(8)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 are determined based on historical data and trends with respect to similar product types and geographical areas. The activity in

~~Lennar Corporation and Subsidiaries~~

~~Notes to Condensed Consolidated Financial Statements (unaudited) (Continued)~~

the Company’s warranty reserve, which ~~are~~is included in Homebuilding other liabilities, was as follows:


		Three Months Ended			Nine Months Ended			Three Months Ended
		August 31,			August 31,			February 28,
(In thousands)	(In thousands)	2021		2020	2021	2020	(In thousands)	2022		2021
Warranty reserve, beginning of the period	Warranty reserve, beginning of the period	$	361,741	301,462	341,765	294,138	Warranty reserve, beginning of the period	$	377,021	341,765
Warranties issued	Warranties issued	55,236		50,324	149,854	134,867	Warranties issued	49,192		42,928
Adjustments to pre-existing warranties from changes in estimates (1)	Adjustments to pre-existing warranties from changes in estimates (1)	8,288		3,640	27,048	17,251	Adjustments to pre-existing warranties from changes in estimates (1)	4,724		5,641

Payments	Payments	(50,290)		(36,677)	(143,692)	(127,507)	Payments	(56,791)		(42,234)
Warranty reserve, end of period	Warranty reserve, end of period	$	374,975	318,749	374,975	318,749	Warranty reserve, end of period	$	374,146	348,100

(1)The adjustments to pre-existing warranties from changes in estimates during the three ~~and nine~~ months ended ~~August 31,~~February 28, 2022 and 2021 ~~and August 31, 2020~~ primarily related to specific claims in certain of the Company's homebuilding communities and other adjustments.

(9)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, 2021~~February 28, 2022 and November 30, ~~2020,~~2021, 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, 2021			November 30, 2020				February 28, 2022			November 30, 2021
(In thousands)	(In thousands)	Fair Value Hierarchy	Carrying Amount		Fair Value	Carrying Amount	Fair Value	(In thousands)	Fair Value Hierarchy	Carrying Amount		Fair Value	Carrying Amount	Fair Value
ASSETS	ASSETS							ASSETS
Financial Services:	Financial Services:							Financial Services:
Loans held-for-investment, net	Loans held-for-investment, net	Level 3	$	61,283	61,332	72,626	70,808	Loans held-for-investment, net	Level 3	$	33,168	33,179	44,582	44,594
Investments held-to-maturity	Investments held-to-maturity	Level 3	161,532		192,510	164,230	196,047	Investments held-to-maturity	Level 3	156,587		175,538	157,808	184,495

LIABILITIES	LIABILITIES							LIABILITIES
Homebuilding senior notes and other debts payable, net	Homebuilding senior notes and other debts payable, net	Level 2	$	5,542,513	6,040,708	5,955,758	6,581,798	Homebuilding senior notes and other debts payable, net	Level 2	$	4,639,222	4,889,702	4,652,338	5,046,721
Financial Services notes and other debts payable, net	Financial Services notes and other debts payable, net	Level 2	1,106,447		1,107,301	1,463,919	1,464,850	Financial Services notes and other debts payable, net	Level 2	1,197,360		1,198,107	1,726,026	1,726,860

Lennar Other notes and other debts payable, net		Level 2	1,906		1,906	1,906	1,906

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 financial information. For notes and other debts 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.

Lennar ~~Other—The fair value for notes payable approximate their carrying value due~~Corporation and Subsidiaries

Notes to ~~variable interest pricing terms and the short-term nature of the borrowings.~~Condensed Consolidated Financial Statements (Unaudited) (Continued)

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.

~~Lennar Corporation and Subsidiaries~~

~~Notes to Condensed Consolidated Financial Statements (unaudited) (Continued)~~

The Company’s financial instruments measured at fair value on a recurring basis are summarized below:

Fair Value Hierarchy

Fair Value at

Fair Value Hierarchy

Fair Value at

(In thousands)

August 31, 2021

November 30, 2020

(In thousands)

February 28, 2022

November 30, 2021

Financial Services Assets:

Residential loans held-for-sale

Level 2

1,141,460

1,296,517

Residential loans held-for-sale

Level 2

1,113,808

1,636,283

LMF Commercial loans held-for-sale

Level 3

113,129

193,588

LMF Commercial loans held-for-sale

Level 3

85,795

Mortgage servicing rights

Level 3

2,382

2,113

Mortgage servicing rights

Level 3

2,793

2,492

Lennar Other:

Investments in equity securities

Level 1

1,085,571

—

Investments in equity securities

Level 1

502,755

906,539

Investments available-for-sale

Level 3

41,695

53,497

Investments available-for-sale

Level 3

34,760

41,654

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


		August 31, 2021		November 30, 2020		February 28, 2022			November 30, 2021

(In thousands)	(In thousands)	Aggregate Principal Balance		Change in Fair Value	Aggregate Principal Balance		Change in Fair Value	(In thousands)	Aggregate Principal Balance		Change in Fair Value	Aggregate Principal Balance	Change in Fair Value

Residential loans held-for-sale	Residential loans held-for-sale	$	1,103,647	37,813	1,232,548		63,969	Residential loans held-for-sale	$	1,091,676	22,132	1,586,764	49,519
LMF Commercial loans held-for-sale	LMF Commercial loans held-for-sale	116,010		(2,881)	194,362		(774)	LMF Commercial loans held-for-sale	86,385		(590)	—	68

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, 2021~~February 28, 2022 and November 30, ~~2020.~~2021. 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 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 Form 10-K for the year ended November 30, ~~2020.~~2021. 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:


Unobservable inputs	Unobservable inputs	As of August 31, 2021	As of November 30, 2020	Unobservable inputs	As of February 28, 2022	As of November 30, 2021

Mortgage prepayment rate	Mortgage prepayment rate	14%	18%	Mortgage prepayment rate	11%	13%
Discount rate	Discount rate	14%	12%	Discount rate	13%	13%
Delinquency rate	Delinquency rate	3%	4%	Delinquency rate	5%	4%

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 gain of(loss) from technology investments on the Company’s condensed consolidated statements of operations and comprehensive ~~income (loss).~~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

Lennar Corporation and Subsidiaries

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

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.

~~Lennar Corporation and Subsidiaries~~

~~Notes to Condensed Consolidated Financial Statements (unaudited) (Continued)~~

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			Three Months Ended
		August 31,			August 31,			February 28,
(In thousands)	(In thousands)	2021		2020	2021	2020	(In thousands)	2022		2021
Changes in fair value included in Financial Services revenues:	Changes in fair value included in Financial Services revenues:						Changes in fair value included in Financial Services revenues:
Loans held-for-sale	Loans held-for-sale	$	4,196	2,229	(26,156)	6	Loans held-for-sale	$	(27,387)	(35,021)
Mortgage loan commitments	Mortgage loan commitments	118		(4,534)	260	24,177	Mortgage loan commitments	13,797		(4,915)
Forward contracts	Forward contracts	1,649		(205)	11,934	(1,088)	Forward contracts	9,990		34,238

Changes in fair value included in Lennar Other realized and unrealized gain (loss):
Changes in fair value included in Lennar Other unrealized gain (loss) from technology investments:							Changes in fair value included in Lennar Other unrealized gain (loss) from technology investments:
Investments in equity securities	Investments in equity securities	$	493,671	—	690,791	—	Investments in equity securities	$	(395,170)	469,745
Changes in fair value included in other comprehensive loss, net of tax:
Changes in fair value included in other comprehensive gain (loss), net of tax:							Changes in fair value included in other comprehensive gain (loss), net of tax:
Lennar Other investments available-for-sale	Lennar Other investments available-for-sale	$	131	175	(495)	(209)	Lennar Other investments available-for-sale	$	742	(942)

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.

The following table represents 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, 2021 August 31, 2020
(In thousands) Mortgage servicing rights LMF Commercial loans held-for-sale Mortgage servicing rights LMF Commercial loans held-for-sale
Beginning balance $ 2,602 163,920 1,238 159,885
Purchases/loan originations 56 178,669 563 164,380
Sales/loan originations sold, including those not settled — (226,357) — (164,527)
Disposals/settlements (127) (4,092) (34) —
Changes in fair value (2) (149) 1,391 (411) (1,165)
Interest and principal paydowns — (402) — (1,542)
Ending balance $ 2,382 113,129 1,356 157,031


								Three Months Ended
		Nine Months Ended						February 28,
		August 31, 2021			August 31, 2020			2022			2021
(In thousands)	(In thousands)	Mortgage servicing rights		LMF Commercial loans held-for-sale	Mortgage servicing rights	LMF Commercial loans held-for-sale	(In thousands)	Mortgage servicing rights		LMF Commercial loans held-for-sale	Mortgage servicing rights	LMF Commercial loans held-for-sale
Beginning balance	Beginning balance	$	2,113	193,588	24,679	197,224	Beginning balance	$	2,492	68	2,113	193,588
Purchases/loan originations	Purchases/loan originations	499		599,465	1,917	582,030	Purchases/loan originations	82		264,845	424	219,500
Sales/loan originations sold, including those not settled	Sales/loan originations sold, including those not settled	—		(665,062)	—	(622,251)	Sales/loan originations sold, including those not settled	—		(178,082)	—	(282,965)
Disposals/settlements (1)		(1,222)		(11,392)	(10,231)	—
Changes in fair value (2)		992		(2,551)	(15,009)	2,102
Disposals/settlements							Disposals/settlements	(159)		—	(1,038)	—
Changes in fair value (1)							Changes in fair value (1)	378		(590)	—	(6,767)
Interest and principal paydowns	Interest and principal paydowns	—		(919)	—	(2,074)	Interest and principal paydowns	—		(446)	—	(208)
Ending balance	Ending balance	$	2,382	113,129	1,356	157,031	Ending balance	$	2,793	85,795	1,499	123,148

(1)~~The nine months ended August 31, 2020 include $7.5 million related to the sale of a servicing portfolio.~~

~~(2)~~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:

~~Lennar Corporation and Subsidiaries~~

~~Notes to Condensed Consolidated Financial Statements (unaudited) (Continued)~~

Three Months Ended
August 31, 2021 August 31, 2020
(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 (1) Level 3 $ 3,968 2,287 (1,681) 20,650 18,089 (2,561)
Land and land under development (1) Level 3 1,625 862 (763) 21,621 12,650 (8,971)


												Three Months Ended
			Nine Months Ended									February 28,
			August 31, 2021				August 31, 2020					2022				2021
(In thousands)	(In thousands)	Fair Value Hierarchy	Carrying Value		Fair Value	Total Losses, Net (1)	Carrying Value	Fair Value	Total Losses, Net (1)	(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:	Non-financial assets - Homebuilding:									Non-financial assets - Homebuilding:

Finished homes and construction in progress (1)		Level 3	$	25,752	11,015	(14,737)	162,459	138,493	(23,966)
Land and land under development (1)		Level 3	2,145		862	(1,283)	86,683	34,019	(52,664)
Finished homes and construction in progress										Finished homes and construction in progress	Level 3	$	15,358	13,841	(1,517)	442	—	(442)
Land and land under development										Land and land under development	Level 3	20,752		10,760	(9,992)	2,543	2,350	(193)

(1)Valuation adjustments were included in Homebuilding costs and expenses in the Company's condensed consolidated statements of operations and comprehensive ~~income (loss).~~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 Form 10-K for the year ended November 30, ~~2020.~~2021.

Lennar Corporation and Subsidiaries

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

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.

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 Form 10-K for the year ended November 30, ~~2020.~~2021. 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, 2021 1,192 8 1 $ 17,117 $ 11,849
August 31, 2020 1,194 28 14 76,115 40,364


			Communities with valuation adjustments
At or for the Three Months Ended	# of active communities	# of communities with potential indicator of impairment	# of communities	Fair Value (in thousands)		Valuation Adjustments (in thousands)

February 28, 2022	1,199	5	—	$	—	$	—
February 28, 2021	1,158	10	—	—		—

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,
2021 2020
Unobservable inputs Range
Average selling price $635,000 201,000 - 970,000
Absorption rate per quarter (homes) 11 3 - 15
Discount rate 20% 20%

(10)Variable Interest Entities

The Company evaluated the joint venture ("JV") agreements of its JV's that were formed or that had reconsideration events, such as changes in the governing documents or to debt arrangements during the ~~nine~~three months ended ~~August 31, 2021~~February 28, 2022 and based on the Company's evaluation, ~~during the nine months ended August 31, 2021, the Company consolidated~~there were two entities that ~~had a~~consolidated with total combined assets ~~and liabilities~~ of ~~$30.7~~$6.1 million and ~~$0.7 million, respectively.~~no outstanding liabilities. During the ~~nine~~three months ended ~~August 31, 2021,~~February 28, 2022, there were no VIEs that were deconsolidated.

The carrying amount of the Company's consolidated VIE's assets and non-recourse liabilities are disclosed in the footnote to the condensed consolidated balance sheets.

~~Lennar Corporation and Subsidiaries~~

~~Notes to Condensed Consolidated Financial Statements (unaudited) (Continued)~~

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 debts payable. The assets held by a VIE usually are 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 a VIE’s lenders. Other than debt guarantee agreements with a 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.

Unconsolidated VIEs

The Company’s recorded investments in VIEs that are unconsolidated and its estimated maximum exposure to loss were as follows:


		August 31, 2021			November 30, 2020			February 28, 2022			November 30, 2021
(In thousands)	(In thousands)	Investments in Unconsolidated VIEs		Lennar’s Maximum Exposure to Loss	Investments in Unconsolidated VIEs	Lennar’s Maximum Exposure to Loss	(In thousands)	Investments in Unconsolidated VIEs		Lennar’s Maximum Exposure to Loss	Investments in Unconsolidated VIEs	Lennar’s Maximum Exposure to Loss
Homebuilding (1)	Homebuilding (1)	$	101,371	241,484	89,654	89,828	Homebuilding (1)	$	195,232	327,897	107,323	301,619
Multifamily (2)	Multifamily (2)	611,676		645,606	619,540	717,271	Multifamily (2)	575,668		604,861	579,388	611,937
Financial Services(3)	Financial Services(3)	161,532		161,532	164,230	164,230	Financial Services(3)	156,587		156,587	157,808	157,808
Lennar Other ~~(3)~~(4)	Lennar Other ~~(3)~~(4)	9,751		9,751	76,023	130,177	Lennar Other ~~(3)~~(4)	13,077		13,077	12,680	12,680
		$	884,330	1,058,373	949,447	1,101,506		$	940,564	1,102,422	857,199	1,084,044

(1)As of ~~August 31, 2021~~February 28, 2022 and November 30, ~~2020,~~2021, the maximum exposure to loss of Homebuilding's investments in unconsolidated VIEs was limited to its investments in unconsolidated VIEs, except ~~as of August 31, 2021,~~ with regard to the Company's remaining $102.7 million commitment to fund capital in ~~the~~ Upward America, ~~Venture,~~and a ~~single family for rent platform. The increase was due~~$26.8 million short-term loan provided by the Company to ~~the Company's commitment to fund the~~ Upward ~~America Venture.~~America.

(2)As of ~~August 31, 2021~~February 28, 2022 and November 30, ~~2020,~~2021, the maximum exposure to loss of Multifamily's investments in unconsolidated VIEs was primarily limited to its investments in the unconsolidated VIEs, except with regard to the remaining equity commitment of ~~$24.9~~$22.1 million and ~~$88.1~~$23.1 million, respectively, to fund LMV I and LMV II for future expenditures related to the construction and development of its projects. The decrease was due to the funding of capital for LMV I and LMV II.

(3)As of ~~August 31,~~February 28, 2022 and November 30, 2021, the ~~decrease in investments in unconsolidated VIEs and~~ maximum exposure to loss of the Financial Services segment was limited to its investment in the unconsolidated entities VIEs and related to ~~an entity which had a reconsideration event due~~the Financial Services' CMBS investments held-to-maturity.

(4)As of February 28, 2022, the maximum recourse exposure to loss of the ~~payoff of a note receivable which caused~~Lennar Other segment was limited to its investments in the ~~entity~~unconsolidated VIEs.

Lennar Corporation and Subsidiaries

Notes to ~~no longer be considered a VIE.~~Condensed Consolidated Financial Statements (Unaudited) (Continued)

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 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 funds) and unconsolidated entities until the Company has determined whether to exercise the options.

The Company evaluates all option contracts 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 or makes a significant deposit for optioned land, it may need to consolidate the land under option at the purchase price of the optioned land.

During the ~~nine~~three months ended ~~August 31, 2021,~~February 28, 2022, consolidated inventory not owned increased by ~~$167.8~~$85.5 million with a corresponding increase to liabilities related to consolidated inventory not owned in the accompanying condensed consolidated balance sheet as of ~~August 31, 2021.~~February 28, 2022. The increase was primarily due to additions in the ~~nine~~three months ended ~~August 31, 2021~~February 28, 2022 as the Company focused on increasing its controlled homesites, partially offset by 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 land under development in the accompanying ~~condensed~~ consolidated balance sheet as of ~~August 31, 2021.~~February 28, 2022. 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.

~~Lennar Corporation and Subsidiaries~~

~~Notes to Condensed Consolidated Financial Statements (unaudited) (Continued)~~

The Company's exposure to losses on its option contracts with third parties and unconsolidated entities were as follows:


(Dollars in thousands)	(Dollars in thousands)	August 31, 2021		November 30, 2020	(Dollars in thousands)	February 28, 2022		November 30, 2021
Non-refundable option deposits and pre-acquisition costs	Non-refundable option deposits and pre-acquisition costs	$	1,079,078	414,154	Non-refundable option deposits and pre-acquisition costs	$	1,435,142	1,228,057
Letters of credit in lieu of cash deposits under certain land and option contracts	Letters of credit in lieu of cash deposits under certain land and option contracts	153,116		87,537	Letters of credit in lieu of cash deposits under certain land and option contracts	169,746		175,937

(11)Commitments and Contingent Liabilities

The Company is party to various claims, legal actions and complaints 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 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.

Lennar Corporation and Subsidiaries

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

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. ~~ROU~~Right-of-use ("ROU") assets and ~~right-of-use~~ 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)	(Dollars in thousands)	August 31, 2021			November 30, 2020		(Dollars in thousands)	February 28, 2022			November 30, 2021
Right-of-use assets	Right-of-use assets	$	157,164		113,390		Right-of-use assets	$	152,066		155,616
Lease liabilities	Lease liabilities	165,095			122,836		Lease liabilities	161,208			163,513
Weighted-average remaining lease term (in years)	Weighted-average remaining lease term (in years)	8.3			2.6		Weighted-average remaining lease term (in years)	8.1			8.2
Weighted-average discount rate	Weighted-average discount rate	2.9		%	3.1	%	Weighted-average discount rate	2.9		%	2.8	%

Future minimum payments under the noncancellable leases in effect at ~~August 31, 2021~~February 28, 2022 were as follows:


(In thousands)	(In thousands)	Lease Payments		(In thousands)	Lease Payments
2021		$	7,982
2022	2022	34,360		2022	$	26,898
2023	2023	28,283		2023	30,481
2024	2024	23,113		2024	24,833
2025	2025	18,702		2025	20,269
2026 and thereafter		74,108
2026				2026	15,423
2027 and thereafter				2027 and thereafter	63,257
Total future minimum lease payments (1)	Total future minimum lease payments (1)	$	186,548	Total future minimum lease payments (1)	$	181,161
Less: Interest (2)	Less: Interest (2)	21,453		Less: Interest (2)	19,953
Present value of lease liabilities (2)	Present value of lease liabilities (2)	$	165,095	Present value of lease liabilities (2)	$	161,208

(1)Total future minimum lease payments exclude variable lease costs of ~~$26.2~~$19.3 million and short-term lease costs of ~~$2.1~~$2.4 million. This also does not include minimum lease payments for executed and legally enforceable leases that have not yet commenced. As of ~~August 31, 2021,~~February 28, 2022, the minimum lease payments for these leases that have not yet commenced were immaterial.

(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. As of ~~August 31, 2021,~~February 28, 2022, the weighted average remaining lease term and weighted average discount rate used in calculating the lease liabilities were ~~8.3~~8.1 years and 2.9%, respectively. The Company recognized the lease liabilities on its condensed consolidated balance sheets within accounts payable or other liabilities of the respective segments.

The Company's rental expense and payments on lease liabilities were as follows:


		Nine months ended				Three months ended
(In thousands)	(In thousands)	August 31, 2021		August 31, 2020	(In thousands)	February 28, 2022		February 28, 2021
Rental expense	Rental expense	$	63,232	62,554	Rental expense	$	25,641	20,707
Payment on lease liabilities	Payment on lease liabilities	22,174		40,359	Payment on lease liabilities	6,557		9,906

On occasion, the Company may sublease rented space which is no longer used for the Company's operations. For both the ~~nine~~three months ended ~~August 31,~~February 28, 2022 and 2021, ~~and 2020,~~ the Company had an immaterial amount of sublease income.

2523

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

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and accompanying notes included under Item 1 of this Report and our audited consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K, for our fiscal year ended November 30, ~~2020.~~2021.

Some of the statements in this Management’s Discussion and Analysis of Financial Condition and Results of Operations, and elsewhere in this Quarterly Report on Form 10-Q, are "forward-looking statements," within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements typically include the words “anticipate,” “believe,” “consider,” “estimate,” “expect,” “forecast,” “intend,” “objective,” “plan,” “predict,” “projection,” “seek,” “strategy,” “target,” “will” or other words of similar meaning. Forward-looking statements contained herein may include opinions or beliefs regarding market conditions and similar matters. In many instances, those opinions and beliefs are based upon general observations by members of our management, anecdotal evidence and our experience in the conduct of our businesses, without specific investigation or analyses. Therefore, while they reflect our view of the industries and markets in which we are involved, they should not be viewed as reflecting verifiable views or views that are necessarily shared by all who are involved in those industries or markets. These statements concern expectations, beliefs, projections, plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts.

The 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: the potential negative impact to our business of the ongoing coronavirus (“COVID-19”) pandemic, the duration, impact and severity of which is highly uncertain; continuation of supply shortages and increased costs related to construction materials and labor; cost increases related to real estate taxes and insurance; reduced availability or increased cost of mortgage financing for homebuyers; increased interest rates ~~and~~or increased competition in the mortgage industry; reductions in the market value of our investments in public companies; an extended slowdown in the real estate markets across the nation, including a slowdown in either the market for single family homes or the multifamily rental market; our inability to successfully execute our strategies, including our land lighter strategy and our strategy to monetize non-core assets; 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; decreased demand for our homes or Multifamily rental properties; increased competition for home sales from other sellers of new and resale homes; our inability to pay down debt; government actions or other factors that might force us to terminate our program of repurchasing our stock; a decline in the value of our land inventories and resulting write-downs of the carrying value of our real estate assets; the failure of the participants in various joint ventures to honor their commitments; difficulty obtaining land-use entitlements or construction financing; natural disasters and other unforeseen events for which our insurance does not provide adequate coverage; new laws or regulatory changes that adversely affect the profitability of our businesses; 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 Form 10-K for the fiscal year ended November 30, ~~2020~~2021 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.

2624

Outlook

The housing market remains ~~strong. Demand has been~~ strong ~~while~~in all of our major markets despite the geopolitical environment, rising interest rates and inflationary pressures. Buyers are seeking shelter and protection against escalating housing costs as rents increase. Owning a home with a fixed rate mortgage provides this protection. Additionally, the home is increasingly the control center or hub of our homebuyers' lives. While demand is strong, the supply of new and existing homes continues to be constrained. Our ability to deliver homes has remained constrained. New home construction cannot ramp up quickly enough to fill the void of the underproduction of homes for the past decade, and short supply is likely to remain for some time to come. Thebeen tested by supply chain challenges for both land and construction ~~is significantly stressed. Given supply chain challenges, we believe the industry will not be able~~related to ~~quickly remedy the supply shortage with increased production. Accordingly, we expect the market~~materials and labor. The time it takes us to remain in its current imbalance for an extended period of time. We remain focused on orderly, targeted growth, with our sales pace tightly matched with our pace of production, which enables price appreciation to offset future cost escalations to maximize margins. Even though home prices have moved much higher, overall affordability remains strong as interest rates are still lower than they were a year ago. Personal savings for deposits are strong and wages seem to be rising faster than monthly payments. Millennials are moving out of their parents’ homes and forming families, while apartment dwellers are finding a first-time single-family home.

The housing market is not only strong, but it is also going through some structural changes that will promote stability in the market, and extend housing benefits to the breadth of a diverse society. The iBuyer and single-family for rent participants are providing additional liquidity to the marketplace to purchase and sell homes, as they evolve and provide ever more frictionless transactions. They are also solving important industry problems that have needed solutions for a very long time. The iBuyers, led by Opendoor, are becoming more than justbuild a home ~~sale option. They are an ever more effective and instrumental convenience provider, as~~has increased by about eight weeks over the ~~coordination~~past year. Also, the cost of ~~a new home is being complicated by supply chain disruption. Additionally, the single-family for rent participants, including~~building homes has been increasing. To maintain our Upward America Venture, are also providing more liquidity while making a single-family home lifestyle accessible to more families. The solution to higher home prices causing affordability issues is building more housing and making a growing portion of that housing stock available to more families to rent if they cannot yet meet the requirements for home ownership. Professional ownership of homes enables renters to access a single-family lifestyle while they build the credentials to own. Better housing for families produces better outcomes for families and the industry is rewiring to provide those solutions.

~~The combined effects of this strong housing market along with structural changes, which~~margins, we are ~~in position~~not selling homes until we are ready to capitalize on through our strategic investments, puts Lennar in a position to continue to drive returns. We are focused on cash flow, debt reduction, stock buyback, land controlled versus owned, return on capital, and return on equity, and on innovative technologies. Whilebuild them, so we can factor cost increases into the sale prices. Although deliveries have been ~~carefully managing our supply chain,~~constrained by the supply chain ~~for both~~disruption, efficiency in our operations continues to drive strong bottom-line improvement and increased returns.

The lengthening of time it takes us to build homes requires that we have more of our cash invested in construction in process. We continue to strategically acquire land ~~and construction is significantly stressed. Accordingly,~~while increasing the homes we ~~expect~~control through options. We continue to make progress with our ~~community count at~~land-light strategy as our percentage of homesites controlled increased to 58% from 45% in the ~~end of the 2021 fiscal~~prior year, ~~will be up only approximately 7% versus the 10% we previously guided. In addition, we expect~~while our deliveries for the fourth quarter of 2021 will be approximately 18,000 versus the 19,000 to 21,000 we previously guided. We expect our gross margin to be about 28% and we expect our SG&A to be about 6.7% for the fourth quarter, though these amounts will move up or down a bit depending on the number of homes delivered. Our return on equity stands now at 21.9%, which is an 800 basis point improvement over last year. We have remained focused on our optioned versus owned land strategy. We ended the third quarter with a 3.3 yearsyears’ supply of land owned ~~compared~~stayed flat from the prior year at 3.4 years. We are also continuing to pay down debt as it comes due with the next tranche maturing in November 2022. We have also continued to repurchase our stock. Our Board recently approved a ~~3.8 years supply of land owned at~~$2 billion increase in our repurchase authorization.

In addition, we have made significant strategic investments through our LENX platform in new technology companies that are working on innovations that will reshape the ~~same time last year,~~way our company and our ~~homesites controlled percentage increased~~industry operates. They have led to ~~53%~~changes in our core business that have reduced our SG&A expenses. These investments are also the tip of the spear in implementing our industry leading sustainability initiatives from ~~35%~~solar on the rooftop to microgrid technology across communities, and from water conservation to sustainable cement. Our LENX strategy is setting the course for Lennar's sustainable future. Our income statement is impacted by unrealized mark-to-market gains and losses from LENX investments in companies that have gone public, but these are non-monetary, unrealized gains and losses, and they do not reflect the ~~prior year. Among other things, this has enabled us to reduce debt, such that~~state of the housing market or our ~~third quarter homebuilding debt-to-total capital ratio improved to 21.2%, from 29.5% in the prior year.~~operating performance.

We have also continued to work on the structural components and organization of our ~~spin~~proposed spin-off company as we focus on our strategy of becoming a pure-play homebuilding company. ~~The new company~~This SpinCo will be ~~configured as~~ an ~~independent and active~~asset light, asset management business that ~~raises third-party capital to support ongoing business verticals. As previously noted, two~~will have a limited balance sheet. Many of ~~these~~the assets targeted for SpinCo will be acquired by investor funds it manages and will be monetized in the form of assets under management. The three core verticals ~~have already raised third-party capital,~~ of ~~which our subsidiaries are active asset managers. Our multifamily platform has approximately $9 billion of gross capital under management and is raising its third fund now. Our growing~~SpinCo will be Multifamily, single family for rent ~~platform currently manages approximately $1.25 billion of equity already raised. Both~~and land strategies. Each of these ~~programs are neatly configured as independent, self-sustaining operations. Additionally, we~~verticals already have ~~a dynamic~~raised third-party capital and ~~growing independent land~~have active asset managers. The spin-off will enable us to generate higher returns on our assets and ~~land management business that has been refined and we have a growing technology investment business, LEN~~X~~, that is performing exceptionally well.~~ equity base.

We are ~~considering including them, or at least portions of our investments in them, in the spin-off.~~

~~In spite of the miss of deliveries and the supply chain disruption that is affecting us and the industry, we believe we have never been better positioned~~extremely well-positioned financially, organizationally, and technologically to thrive and grow in this evolving housing ~~market demand.~~market. We expect our deliveries for the second quarter of 2022 will be in the range of 16,000 to 16,300 homes. We expect to continue to produce strong gross margins for the second quarter of 2022 in the range of 28.0% to 28.25% and we expect our SG&A to be between 6.8% and 7.0% as we continue to focus on simplification, efficiencies and leveraging our overhead. We expect our community count to build throughout the year and are projecting to end 2022 with a low double-digit increase in community count year-over-year. We continue to see great land acquisition opportunities in our markets and are confident this pipeline will produce strong community count growth for the next several years. As we ~~begin to~~ look to the remainder of 2022, we ~~see continued strength~~expect our results to continue to strengthen throughout the year as our recently increased start pace results in ~~the market and double-digit growth in sales, starts,~~more deliveries and ~~community count for Lennar. The story remains that~~as we use our size and scale and our builder of choice relationships to help us navigate some of the supply is short and demand is strong. Some are concerned that demand is slowing as prices move higher and interest rates move. It feels to us that sales are slowing because many sales were made early and the industry is building through those sales slower than expected. We believe that home production has been constrained for a decade and we are making up the deficit now, which should keep the housing market thriving for some time to come.chain challenges.

(1) Results of Operations

Overview

We historically have experienced, and expect to continue to experience, variability in quarterly results. Our results of operations for the three ~~and nine~~ months ended ~~August 31, 2021~~February 28, 2022 are not necessarily indicative of the results to be expected for the full year. Our homebuilding business is seasonal in nature and generally reflects higher levels of new home order activity in our second and third fiscal quarters and increased deliveries in the second half of our fiscal year. However, a variety of factors can alter seasonal patterns.

Our net earnings attributable to Lennar were ~~$1.4 billion,~~$503.6 million, or ~~$4.52~~$1.69 per diluted share ($~~4.52~~1.70 per basic share), in the ~~third~~first quarter of ~~2021,~~2022, compared to net earnings attributable to Lennar of ~~$666.4 million,~~$1.0 billion, or ~~$2.12~~$3.20 per diluted share ($~~2.13~~3.20 per basic share), in the ~~third~~first quarter of ~~2020. Our~~2021. Results included unrealized mark-to-market losses of $395.2 million in the first quarter of 2022 and unrealized mark-to-market gains of $469.7 million in the first quarter of 2021 on our publicly traded technology investments. Excluding unrealized mark-to-market gains and losses in both years, net earnings attributable to Lennar were ~~$3.2 billion,~~$800.2 million or ~~$10.36~~$2.70 per diluted share ~~($10.37 per basic share),~~ in the ~~nine months ended August 31, 2021,~~first quarter of 2022, compared to net earnings ~~attributable to Lennar~~ of ~~$1.6 billion,~~$642.7 million, or ~~$5.03~~$2.04 per diluted share, ~~($5.05 per basic share),~~ in the ~~nine months ended August 31, 2020.~~first quarter of 2021.

Financial information relating to our operations was as follows:


		Three Months Ended August 31, 2021							Three Months Ended February 28, 2022

(In thousands)	(In thousands)	Homebuilding		Financial Services	Multifamily	Lennar Other	Corporate	Total		(In thousands)	Homebuilding		Financial Services	Multifamily	Lennar Other	Corporate	Total
Revenues:	Revenues:									Revenues:
Sales of homes	Sales of homes	$	6,505,708	—	—	—	—	6,505,708		Sales of homes	$	5,721,757	—	—	—	—	5,721,757
Sales of land	Sales of land	45,055		—	—	—	—	45,055		Sales of land	23,967		—	—	—	—	23,967
Other revenues(1)	Other revenues(1)	7,746		206,973	167,921	8,000	—	390,640		Other revenues(1)	6,481		176,701	267,359	7,251	—	457,792
Total revenues	Total revenues	6,558,509		206,973	167,921	8,000	—	6,941,403		Total revenues	5,752,205		176,701	267,359	7,251	—	6,203,516
Costs and expenses:	Costs and expenses:									Costs and expenses:
Costs of homes sold	Costs of homes sold	4,732,403		—	—	—	—	4,732,403		Costs of homes sold	4,184,864		—	—	—	—	4,184,864
Costs of land sold	Costs of land sold	39,378		—	—	—	—	39,378		Costs of land sold	28,556		—	—	—	—	28,556
Selling, general and administrative expenses	Selling, general and administrative expenses	453,716		—	—	—	—	453,716		Selling, general and administrative expenses	428,478		—	—	—	—	428,478
Other costs and expenses	Other costs and expenses	—		94,890	174,410	9,010	—	278,310		Other costs and expenses	—		85,910	263,737	5,407	—	355,054
Total costs and expenses	Total costs and expenses	5,225,497		94,890	174,410	9,010	—	5,503,807		Total costs and expenses	4,641,898		85,910	263,737	5,407	—	4,996,952
Equity in earnings (loss) from unconsolidated entities, Multifamily other gain (loss) and Lennar Other other income (expense), net		2,391		—	(2,904)	(2,220)	—	(2,733)
Equity in earnings (loss) from unconsolidated entities, Multifamily other gain and Lennar Other other income (expense), net, and other gain										Equity in earnings (loss) from unconsolidated entities, Multifamily other gain and Lennar Other other income (expense), net, and other gain	(286)		—	1,805	(9,808)	—	(8,289)
Other expense, net	Other expense, net	(5,570)		—	—	—	—	(5,570)		Other expense, net	(171)		—	—	—	—	(171)
Lennar Other realized and unrealized gain		—		—	—	495,202	—	495,202
Lennar Other unrealized loss from technology investments										Lennar Other unrealized loss from technology investments	—		—	—	(395,170)	—	(395,170)
Operating earnings (loss)	Operating earnings (loss)	$	1,329,833	112,083	(9,393)	491,972	—	1,924,495		Operating earnings (loss)	$	1,109,850	90,791	5,427	(403,134)	—	802,934
Corporate general and administrative expenses	Corporate general and administrative expenses	—		—	—	—	94,942	94,942		Corporate general and administrative expenses	—		—	—	—	113,661	113,661
Charitable foundation contribution	Charitable foundation contribution	—		—	—	—	15,199	15,199		Charitable foundation contribution	—		—	—	—	12,538	12,538
Earnings (loss) before income taxes	Earnings (loss) before income taxes	$	1,329,833	112,083	(9,393)	491,972	(110,141)	1,814,354		Earnings (loss) before income taxes	$	1,109,850	90,791	5,427	(403,134)	(126,199)	676,735

(1)

Other revenues in our Multifamily segment include land sales to unconsolidated entities of $131.6 million.


		Three Months Ended August 31, 2020							Three Months Ended February 28, 2021

(In thousands)	(In thousands)	Homebuilding		Financial Services	Multifamily	Lennar Other	Corporate	Total		(In thousands)	Homebuilding		Financial Services	Multifamily	Lennar Other	Corporate	Total
Revenues:	Revenues:									Revenues:
Sales of homes	Sales of homes	$	5,467,364	—	—	—	—	5,467,364		Sales of homes	$	4,890,914	—	—	—	—	4,890,914
Sales of land	Sales of land	34,323		—	—	—	—	34,323		Sales of land	47,643		—	—	—	—	47,643
Other revenues	Other revenues	3,433		237,068	115,170	12,896	—	368,567		Other revenues	4,499		244,069	131,443	6,900	—	386,911
Total revenues	Total revenues	5,505,120		237,068	115,170	12,896	—	5,870,254		Total revenues	4,943,056		244,069	131,443	6,900	—	5,325,468
Costs and expenses:	Costs and expenses:									Costs and expenses:
Costs of homes sold	Costs of homes sold	4,204,814		—	—	—	—	4,204,814		Costs of homes sold	3,666,862		—	—	—	—	3,666,862
Costs of land sold	Costs of land sold	32,395		—	—	—	—	32,395		Costs of land sold	41,188		—	—	—	—	41,188
Selling, general and administrative expenses	Selling, general and administrative expenses	435,949		—	—	—	—	435,949		Selling, general and administrative expenses	410,236		—	—	—	—	410,236
Other costs and expenses	Other costs and expenses	—		101,989	118,786	2,062	—	222,837		Other costs and expenses	—		97,862	131,049	4,252	—	233,163
Total costs and expenses	Total costs and expenses	4,673,158		101,989	118,786	2,062	—	4,895,995		Total costs and expenses	4,118,286		97,862	131,049	4,252	—	4,351,449
Equity in loss from unconsolidated entities		(6,431)		—	(1,532)	(2,835)	—	(10,798)
Other expense, net		(11,787)		—	—	—	—	(11,787)
Equity in loss from unconsolidated entities, Multifamily other gain and Lennar Other other expense, net										Equity in loss from unconsolidated entities, Multifamily other gain and Lennar Other other expense, net	(4,565)		—	(1,268)	(1,047)	—	(6,880)
Other income, net										Other income, net	12,975		—	—	—	—	12,975
Lennar Other unrealized gain from technology investments										Lennar Other unrealized gain from technology investments	—		—	—	469,745	—	469,745
Operating earnings (loss)	Operating earnings (loss)	$	813,744	135,079	(5,148)	7,999	—	951,674		Operating earnings (loss)	$	833,180	146,207	(874)	471,346	—	1,449,859
Corporate general and administrative expenses	Corporate general and administrative expenses	—		—	—	—	85,998	85,998		Corporate general and administrative expenses	—		—	—	—	110,531	110,531
Charitable foundation contribution	Charitable foundation contribution	—		—	—	—	6,663	6,663		Charitable foundation contribution	—		—	—	—	12,314	12,314
Earnings (loss) before income taxes	Earnings (loss) before income taxes	$	813,744	135,079	(5,148)	7,999	(92,661)	859,013		Earnings (loss) before income taxes	$	833,180	146,207	(874)	471,346	(122,845)	1,327,014

Nine Months Ended August 31, 2021
(In thousands) Homebuilding Financial Services Multifamily Lennar Other Corporate and unallocated Total
Revenues:
Sales of homes $ 17,377,353 — — — — 17,377,353
Sales of land 131,483 — — — — 131,483
Other revenues 20,770 669,789 476,837 20,884 — 1,188,280
Total revenues 17,529,606 669,789 476,837 20,884 — 18,697,116
Costs and expenses:
Costs of homes sold 12,820,638 — — — — 12,820,638
Costs of land sold 113,545 — — — — 113,545
Selling, general and administrative expenses 1,319,116 — — — — 1,319,116
Other costs and expenses — 290,179 474,389 18,994 — 783,562
Total costs and expenses 14,253,299 290,179 474,389 18,994 — 15,036,861
Equity in earnings (loss) from unconsolidated entities and Multifamily other gain (loss) and Lennar Other other income (expense), net (3,862) — 9,682 59,954 — 65,774
Other income, net 3,043 — — — — 3,043
Lennar Other realized and unrealized gain — — — 847,377 — 847,377
Operating earnings $ 3,275,488 379,610 12,130 909,221 — 4,576,449
Corporate general and administrative expenses — — — — 296,190 296,190
Charitable foundation contribution — — — — 42,006 42,006
Earnings (loss) before income taxes $ 3,275,488 379,610 12,130 909,221 (338,196) 4,238,253

Nine Months Ended August 31, 2020
(In thousands) Homebuilding Financial Services Multifamily Lennar Other Corporate and unallocated Total
Revenues:
Sales of homes $ 14,533,212 — — — — 14,533,212
Sales of land 81,023 — — — — 81,023
Other revenues 12,485 631,992 370,904 33,348 — 1,048,729
Total revenues 14,626,720 631,992 370,904 33,348 — 15,662,964
Costs and expenses:
Costs of homes sold 11,359,364 — — — — 11,359,364
Costs of land sold 102,899 — — — — 102,899
Selling, general and administrative expenses 1,222,032 — — — — 1,222,032
Other costs and expenses — 363,688 379,607 3,564 746,859
Total costs and expenses 12,684,295 363,688 379,607 3,564 — 13,431,154
Equity in earnings (loss) from unconsolidated entities and Multifamily other gain (20,077) — 4,702 (28,712) — (44,087)
Financial Services gain on deconsolidation — 61,418 — — — 61,418
Other expense, net (16,845) — — (10,195) — (27,040)
Operating earnings (loss) $ 1,905,503 329,722 (4,001) (9,123) — 2,222,101
Corporate general and administrative expenses — — — — 246,815 246,815
Charitable foundation contribution — — — — 16,144 16,144
Earnings (loss) before income taxes $ 1,905,503 329,722 (4,001) (9,123) (262,959) 1,959,142

Three Months Ended ~~August 31, 2021~~February 28, 2022 versus Three Months Ended ~~August 31, 2020~~February 28, 2021

Revenues from home sales increased ~~19%~~17% in the ~~third~~first quarter of ~~2021~~2022 to ~~$6.5~~$5.7 billion from ~~$5.5~~$4.9 billion in the ~~third~~first quarter of ~~2020.~~2021. Revenues were higher primarily due to a ~~10%~~2% increase in the number of home deliveries to 12,538 homes from 12,314 homes and ~~an 8%~~a 15% increase in the average sales ~~price. New home deliveries increased~~price to ~~15,199 homes in the third quarter of 2021~~$457,000 from ~~13,842 homes in the third quarter of 2020. The average sales price of homes delivered was $428,000 in the third quarter of 2021, compared to $396,000 in the third quarter of 2020.~~$398,000.

Gross margin on home sales were ~~$1.8~~$1.5 billion, or ~~27.3%~~26.9%, in the ~~third~~first quarter of ~~2021,~~2022, compared to ~~$1.3~~$1.2 billion, or ~~23.1%~~25.0%, in the ~~third~~first quarter of ~~2020. The~~2021. During the first quarter of 2022, an increase in revenues per square foot was offset by an increase in

costs per square foot primarily due to higher lumber costs. Overall, gross ~~margin percentage on home sales increased primarily~~margins improved year over year as land costs remained relatively flat while interest expense decreased as a result of ~~price appreciation as the increase in revenue per square foot outpaced the increase in cost per square foot.~~our focus on reducing debt.

Selling, general and administrative expenses were ~~$453.7~~$428.5 million in the ~~third~~first quarter of ~~2021,~~2022, compared to ~~$435.9~~$410.2 million in the ~~third~~first quarter of ~~2020.~~2021. As a percentage of revenues from home sales, selling, general and administrative expenses improved to ~~7.0%~~7.5% in the ~~third~~first quarter of ~~2021, from 8.0% in the third quarter of 2020. This was the lowest percentage for a quarter in our history primarily due to a decrease in broker commissions and benefits of our technology efforts.~~

Operating earnings for our Financial Services segment were $111.9 million in the third quarter of 2021, compared to $135.1 million in the third quarter of 2020. The decrease in operating earnings was primarily due to lower mortgage net margins driven by an increase in competition. This was partially offset by an increase in title operating earnings due to higher volume and an increase in profit per transaction derived from technology initiatives.

Operating loss for our Multifamily segment was $9.4 million in the third quarter of 2021, compared to $5.1 million in the third quarter of 2020. Operating earnings for our Lennar Other segment was $492.0 million in the third quarter of 2021, compared to $8.0 million in the third quarter of 2020. In the third quarter of 2021, we recorded mark to market gains on our investments in newly public companies (Hippo, SmartRent and Blend) of $433 million and on our current investments (Opendoor and Sunnova) of $61 million.

~~Nine Months Ended August 31, 2021 versus Nine Months Ended August 31, 2020~~

Revenues from home sales increased 20% in the nine months ended August 31, 2021 to $17.4 billion from $14.5 billion in the nine months ended August 31, 2020. Revenues were higher primarily due to a 14% increase in the number of home deliveries and a 5% increase in the average sales price. New home deliveries increased to 42,006 homes in the nine months ended August 31, 2021 from 36,835 homes in the nine months ended August 31, 2020. The average sales price of homes

~~delivered was $414,000 in the nine months ended August 31, 2021, compared to $395,000 in the nine months ended August 31, 2020.~~

Gross margin on home sales were $4.6 billion, or 26.2%, in the nine months ended August 31, 2021, compared to $3.2 billion or 21.8%, in the nine months ended August 31, 2020. The gross margin percentage on home sales increased primarily as a result of price appreciation as the increase in revenue per square foot outpaced the increase in cost per square foot. Gross margin on land sales in the nine months ended August 31, 2021 was $17.9 million, compared to a loss of $21.9 million in the nine months ended August 31, 2020. The loss in the nine months ended August 31, 2020 was primarily due to a write-off of costs in the second quarter of 2020 as a result of Lennar not moving forward with a naval base development in Concord, California, northeast of San Francisco.

Selling, general and administrative expenses were $1.3 billion in the nine months ended August 31, 2021, compared to $1.2 billion in the nine months ended August 31, 2020. As a percentage of revenues from home sales, selling, general and administrative expenses improved to 7.6% in the nine months ended August 31, 2021,2022, from 8.4% in the ~~nine months ended August 31, 2020. The~~first quarter of 2021. This improvement was primarily due to a decrease in broker commissions and benefits of our technology efforts.

Operating earnings for our Financial Services segment were ~~$379.3~~$90.8 million in the ~~nine months ended August 31, 2021,~~first quarter of 2022, compared to ~~$343.8~~$146.2 million in the ~~nine months ended August 31, 2020 (which included $329.7 million operating earnings and an add back~~first quarter of ~~$14.1 million net loss attributable to noncontrolling interests).~~2021. The ~~nine months ended August 31, 2020 included a $61.4 million gain on the deconsolidation of a previously consolidated entity. Excluding this gain, the improvement~~decrease in operating earnings was primarily due to ~~an increase in volume and margin in the~~lower mortgage ~~and title businesses.~~net margins driven by a more competitive mortgage market.

Operating earnings for our Multifamily segment were ~~$12.1~~$5.4 million in the ~~nine months ended August 31, 2021,~~first quarter of 2022, compared to an operating loss of ~~$4.0~~$0.9 million in the ~~nine months ended August 31, 2020.~~ first quarter of 2021.

Operating ~~earnings~~loss for our Lennar Other segment ~~were $909.2~~was $403.1 million in the ~~nine months ended August 31, 2021,~~first quarter of 2022, compared to an operating ~~loss~~earnings of ~~$9.1~~$471.3 million in the ~~nine months ended August 31, 2020. The~~first quarter of 2021. Lennar Other operating loss in the first quarter of 2022 and Lennar Other operating earnings ~~for~~in the ~~nine months ended August 31,~~first quarter of 2021 was ~~primarily~~ due to ~~mark to market~~unrealized mark-to-market losses and gains, respectively, on ~~strategic investments that went public during the nine months ended August 31, 2021 (Opendoor, Hippo, SmartRent and Blend) and the sale of~~ our ~~solar business to Sunnova.~~publicly traded technology investments.

Homebuilding Segments

At ~~August 31, 2021,~~February 28, 2022, our reportable Homebuilding segments and Homebuilding Other are outlined in Note 2 of the Notes to Condensed Consolidated Financial Statements. The following tables set forth selected financial and operational information related to our homebuilding operations for the periods indicated:

Selected Financial and Operational Data
Three Months Ended August 31, 2021
Gross Margins Operating Earnings (Loss)
($ in thousands) Sales of Homes Revenue Costs of Sales of Homes Gross Margin % Net Margins on Sales of Homes (1) Gross Margins on Sales of Land Other Revenue Equity in Earnings (Loss) from Unconsolidated Entities Other Income (Expense), net Operating Earnings (Loss)
East $ 1,655,301 1,174,592 29.0 % 350,305 3,147 1,867 3,493 (1,917) 356,895
Central 1,262,540 974,843 22.8 % 196,103 95 589 526 (84) 197,229
Texas 818,869 570,228 30.4 % 184,267 1,835 365 7 (466) 186,008
West 2,764,857 2,004,108 27.5 % 603,721 600 1,600 4,263 (1,369) 608,815
Other (2) 4,141 8,632 (108.5) % (14,807) — 3,325 (5,898) (1,734) (19,114)
Totals $ 6,505,708 4,732,403 27.3 % 1,319,589 5,677 7,746 2,391 (5,570) 1,329,833
Three Months Ended August 31, 2020
Gross Margins Operating Earnings (Loss)
($ in thousands) Sales of Homes Revenue Costs of Sales of Homes Gross Margin % Net Margins on Sales of Homes (1) Gross Margins (Loss) on Sales of Land Other Revenue Equity in Earnings (Loss) from Unconsolidated Entities Other Income (Expense), net Operating Earnings (Loss)
East $ 1,477,273 1,112,035 24.7 % 241,904 (103) 638 897 853 244,189
Central 1,062,799 842,764 20.7 % 134,395 (57) 1,341 70 (3,071) 132,678
Texas 719,467 538,480 25.2 % 114,954 2,016 203 242 (1,304) 116,111
West 2,205,235 1,706,530 22.6 % 343,353 72 1,145 48 (1,784) 342,834
Other (2) 2,590 5,005 (93.2) % (8,005) — 106 (7,688) (6,481) (22,068)
Totals $ 5,467,364 4,204,814 23.1 % 826,601 1,928 3,433 (6,431) (11,787) 813,744
Nine Months Ended August 31, 2021
Gross Margins Operating Earnings (Loss)
(In thousands) Sales of Homes Revenue Costs of Sales of Homes Gross Margin % Net Margins on Sales of Homes (1) Gross Margins on Sales of Land Other Revenue Equity in Earnings (Loss) from Unconsolidated Entities Other Income (Expense), net Operating Earnings (Loss)
East $ 4,553,941 3,278,463 28.0 % 899,817 9,558 5,053 2,942 11,435 928,805
Central 3,282,168 2,534,816 22.8 % 485,631 846 1,573 941 (691) 488,300
Texas 2,245,671 1,572,494 30.0 % 487,231 4,706 1,185 548 (1,962) 491,708
West 7,284,928 5,404,983 25.8 % 1,412,934 2,828 3,961 4,304 (695) 1,423,332
Other (2) 10,645 29,882 (180.7) % (48,014) — 8,998 (12,597) (5,044) (56,657)
Totals $ 17,377,353 12,820,638 26.2 % 3,237,599 17,938 20,770 (3,862) 3,043 3,275,488
Nine Months Ended August 31, 2020
Gross Margins Operating Earnings (Loss)
(In thousands) Sales of Homes Revenue Costs of Sales of Homes Gross Margin % Net Margins on Sales of Homes (1) Gross Margins on Sales of Land Other Revenue Equity in Earnings (Loss) from Unconsolidated Entities Other Income (Expense), net Operating Earnings (Loss)
East $ 3,904,268 2,971,929 23.9 % 581,923 (1,681) 3,913 1,474 475 586,104
Central 2,833,745 2,300,783 18.8 % 291,672 (703) 2,209 642 (1,789) 292,031
Texas 1,877,374 1,428,758 23.9 % 266,647 5,213 970 446 (4,205) 269,071
West 5,894,183 4,619,334 21.6 % 841,369 (1,267) 4,873 3,948 (1,088) 847,835
Other (2) 23,642 38,560 (63.1) % (29,795) (23,438) 520 (26,587) (10,238) (89,538)
Totals $ 14,533,212 11,359,364 21.8 % 1,951,816 (21,876) 12,485 (20,077) (16,845) 1,905,503


	Three Months Ended February 28, 2022
	Gross Margins					Operating Earnings (Loss)
($ in thousands)	Sales of Homes Revenue		Costs of Sales of Homes	Gross Margin %		Net Margins on Sales of Homes (1)	Gross Margins (Loss) on Sales of Land	Other Revenue	Equity in Earnings (Loss) from Unconsolidated Entities	Other Income (Expense), net	Operating Earnings (Loss)
East	$	1,662,991	1,176,553	29.3	%	351,554	(5,674)	797	(1,358)	6,676	351,995
Central	1,105,929		870,611	21.3	%	150,375	1,619	234	129	(279)	152,078
Texas	805,630		573,842	28.8	%	169,941	2,398	242	—	(1,269)	171,312
West	2,142,204		1,557,737	27.3	%	444,524	(839)	881	136	(3,254)	441,448
Other (2)	5,003		6,121	(22.3)	%	(7,979)	(2,093)	4,327	807	(2,045)	(6,983)
Totals	$	5,721,757	4,184,864	26.9	%	1,108,415	(4,589)	6,481	(286)	(171)	1,109,850


	Three Months Ended February 28, 2021
	Gross Margins					Operating Earnings (Loss)
($ in thousands)	Sales of Homes Revenue		Costs of Sales of Homes	Gross Margin %		Net Margins on Sales of Homes (1)	Gross Margins (Loss) on Sales of Land	Other Revenue	Equity in Earnings (Loss) from Unconsolidated Entities	Other Income (Expense), net	Operating Earnings (Loss)
East	$	1,347,610	988,862	26.6	%	241,534	5,076	1,418	(492)	14,547	262,083
Central	926,438		713,546	23.0	%	132,099	(23)	405	98	(556)	132,023
Texas	636,411		451,198	29.1	%	129,161	1,034	258	154	(964)	129,643
West	1,976,808		1,507,727	23.7	%	317,990	368	1,050	962	1,336	321,706
Other (2)	3,647		5,529	(51.6)	%	(6,968)	—	1,368	(5,287)	(1,388)	(12,275)
Totals	$	4,890,914	3,666,862	25.0	%	813,816	6,455	4,499	(4,565)	12,975	833,180

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

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

Summary of Homebuilding Data

Deliveries:


		Three Months Ended									Three Months Ended
		Homes		Dollar Value (In thousands)			Average Sales Price				Homes		Dollar Value (In thousands)			Average Sales Price
		August 31,		August 31,			August 31,				February 28,		February 28,			February 28,
		2021	2020	2021		2020	2021		2020		2022	2021	2022		2021	2022		2021
East	East	4,568	4,309	$	1,660,357	1,488,022	$	363,000	345,000	East	4,082	3,920	$	1,672,372	1,351,301	$	410,000	345,000
Central	Central	3,211	2,767	1,262,540		1,062,799	393,000		384,000	Central	2,521	2,419	1,105,929		926,438	439,000		383,000
Texas	Texas	2,747	2,598	818,869		719,467	298,000		277,000	Texas	2,537	2,349	805,630		636,411	318,000		271,000
West	West	4,669	4,165	2,764,856		2,205,235	592,000		529,000	West	3,392	3,622	2,142,204		1,976,808	632,000		546,000
Other	Other	4	3	4,141		2,590	1,035,000		863,000	Other	6	4	5,003		3,647	834,000		912,000
Total	Total	15,199	13,842	$	6,510,763	5,478,113	$	428,000	396,000	Total	12,538	12,314	$	5,731,138	4,894,605	$	457,000	398,000

Of the total homes delivered listed above, 1525 homes with a dollar value of ~~$5.1~~$9.4 million and an average sales price of ~~$337,000~~$375,000 represent home deliveries from unconsolidated entities for the three months ended ~~August 31, 2021,~~February 28, 2022, compared to 3312 home deliveries with a dollar value of ~~$10.7~~$3.7 million and an average sales price of ~~$326,000~~$308,000 for the three months ended ~~August 31, 2020.~~February 28, 2021.

Nine Months Ended
Homes
Dollar Value (In thousands)
Average Sales Price
August 31, August 31, August 31,
2021 2020 2021 2020 2021 2020
East 12,968 11,511 $ 4,572,592 3,924,289 $ 353,000 341,000
Central 8,391 7,389 3,282,168 2,833,745 391,000 384,000
Texas 7,843 6,637 2,245,671 1,877,374 286,000 283,000
West 12,793 11,273 7,284,927 5,894,183 569,000 523,000
Other 11 25 10,645 23,642 968,000 946,000
Total 42,006 36,835 $ 17,396,003 14,553,233 $ 414,000 395,000

New Orders (1):


	Three Months Ended
	Active Communities		Homes		Dollar Value (In thousands)			Average Sales Price
	February 28,		February 28,		February 28,			February 28,
	2022	2021	2022	2021	2022		2021	2022		2021
East	347	340	4,910	4,814	$	2,133,056	1,700,112	$	434,000	353,000
Central	298	274	3,112	3,326	1,402,138		1,333,626	451,000		401,000
Texas	216	218	2,766	2,775	921,785		812,169	333,000		293,000
West	340	327	4,954	4,652	3,335,932		2,692,395	673,000		579,000
Other	3	3	5	3	4,628		2,974	926,000		991,000
Total	1,204	1,162	15,747	15,570	$	7,797,539	6,541,276	$	495,000	420,000

Of the total homes ~~delivered~~ listed above, 5844 homes with a dollar value of ~~$18.7~~$17.3 million and an average sales price of $322,000 represent home deliveries from unconsolidated entities for the nine months ended August 31, 2021, compared to 60 home deliveries with a dollar value of $20.0 million and an average sales price of $334,000 for the nine months ended August 31, 2020.

~~New Orders (1):~~

Three Months Ended
Active Communities Homes
Dollar Value (In thousands)
Average Sales Price
August 31, August 31, August 31, August 31,
2021 2020 2021 2020 2021 2020 2021 2020
East 329 340 5,308 4,655 $ 2,100,466 1,631,349 $ 396,000 350,000
Central 281 297 3,189 3,375 1,352,814 1,298,792 424,000 385,000
Texas 233 217 3,203 2,746 988,644 743,553 309,000 271,000
West 350 341 4,571 4,786 3,006,501 2,580,328 658,000 539,000
Other 3 3 6 2 5,974 1,452 996,000 726,000
Total 1,196 1,198 16,277 15,564 $ 7,454,399 6,255,474 $ 458,000 402,000

~~Of the total homes listed above, 35 homes with a dollar value of $13.1 million and an average sales price of $375,000~~$393,000 represent homes in ~~four~~five active communities from unconsolidated entities for the three months ended ~~August 31, 2021,~~February 28, 2022, compared to 3435 homes with a dollar value of ~~$9.7~~$11.6 million and an average sales price of ~~$286,000~~$332,000 in four active communities for the three months ended ~~August 31, 2020.~~February 28, 2021.

(1)Homes represent the number of new sales contracts executed with homebuyers, net of cancellations, during the three ~~and nine~~ months ended ~~August 31, 2021~~February 28, 2022 and ~~August 31, 2020.~~2021.

Nine Months Ended
Homes
Dollar Value (In thousands)
Average Sales Price
August 31, August 31, August 31,
2021 2020 2021 2020 2021 2020
East 15,473 12,512 $ 5,788,506 4,266,221 $ 374,000 341,000
Central 9,931 8,741 4,086,170 3,341,959 411,000 382,000
Texas 9,228 7,327 2,800,826 1,986,770 304,000 271,000
West 14,358 12,359 8,871,465 6,508,509 618,000 527,000
Other 14 16 14,095 15,189 1,007,000 949,000
Total 49,004 40,955 $ 21,561,062 16,118,648 $ 440,000 394,000

Of the total homes listed above, 102 homes with a dollar value of $36.7 million and an average sales price of $359,000 represent homes from unconsolidated entities for the nine months ended August 31, 2021, compared to 85 homes with a dollar value of $26.8 million and an average sales price of $316,000 for the nine months ended August 31, 2020.

Backlog:


		At									At
		Homes		Dollar Value (In thousands)			Average Sales Price				Homes		Dollar Value (In thousands)			Average Sales Price
		August 31,		August 31,			August 31,				February 28,		February 28,			February 28,
		2021	2020	2021		2020	2021		2020		2022	2021	2022		2021	2022		2021
East	East	8,518	6,691	$	3,526,849	2,368,300	$	414,000	354,000	East	9,115	6,907	$	4,041,347	2,659,746	$	443,000	385,000
Central	Central	5,911	4,502	2,566,174		1,752,180	434,000		389,000	Central	5,695	5,278	2,617,383		2,169,360	460,000		411,000
Texas	Texas	4,208	2,860	1,379,740		822,734	328,000		288,000	Texas	4,495	3,249	1,569,424		1,000,342	349,000		308,000
West	West	7,177	5,644	4,499,969		2,922,743	627,000		518,000	West	8,027	6,642	5,328,890		3,629,018	664,000		546,000
Other	Other	5	—	5,298		—	1,060,000		—	Other	3	1	3,567		1,175	1,189,000		1,175,000
Total	Total	25,819	19,697	$	11,978,030	7,865,957	$	464,000	399,000	Total	27,335	22,077	$	13,560,611	9,459,641	$	496,000	428,000

Of the total homes in backlog listed above, 8298 homes with a backlog dollar value of ~~$29.5~~$36.6 million and an average sales price of ~~$359,000~~$373,000 represent the backlog from unconsolidated entities at ~~August 31, 2021,~~February 28, 2022, compared to 5661 homes with a backlog dollar value of ~~$17.0~~$19.4 million and an average sales price of ~~$303,000~~$318,000 at ~~August 31, 2020.~~February 28, 2021. During the three months ended February 28, 2022, we acquired 355 homes in backlog in the East Homebuilding segment.

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

Three Months Ended ~~August 31, 2021~~February 28, 2022 versus Three Months Ended ~~August 31, 2020~~February 28, 2021

Homebuilding East: Revenues from home sales increased in the ~~third~~first quarter of ~~2021~~2022 compared to the ~~third~~first quarter of ~~2020,~~2021, primarily due to an increase in the number of home deliveries in all the states ofin the segment except in ~~Pennsylvania~~Florida and an increase in the average sales price of homes delivered in all the states of the ~~segment except in New Jersey.~~segment. The increase in the number of home deliveries was primarily ~~due to higher demand as~~driven by an increase in the number of ~~deliveries per~~ active ~~community increased.~~communities. The decrease in the number of home deliveries in ~~Pennsylvania~~Florida was primarily due to a decrease in the number of active communities due to the timing of opening and closing of ~~communities.~~communities as a result of supply chain disruptions. The increase in the average sales price of homes delivered was

primarily due to favorable market conditions. ~~The decrease in the average sales price of homes delivered in New Jersey was primarily driven by a change in product mix due to a higher percentage of deliveries in lower-priced communities.~~ Gross margin percentage on home deliveries in the ~~third~~first quarter of ~~2021~~2022 increased compared to the same period last year primarily due to price appreciation as the increase in ~~revenue~~revenues per square foot of homes delivered outpaced the increase in ~~cost~~costs per square ~~foot.~~foot.

Homebuilding Central: Revenues from home sales increased in the ~~third~~first quarter of ~~2021~~2022 compared to the ~~third~~first quarter of ~~2020,~~2021, primarily due to an increase in the number of home deliveries in all the states ofin the segment except in ~~Minnesota,~~North Carolina, and an increase in the average sales price of homes delivered in all the states of the ~~segment except in Virginia and Tennessee.~~segment. The increase in the number of home deliveries was primarily ~~due to higher demand as the number of deliveries per~~driven by an increase in active ~~community increased.~~communities. The decrease in the number of home deliveries in ~~Minnesota~~North Carolina was primarily due to a decrease in the number of ~~communities~~deliveries per active community due to the timing of opening and closing of ~~communities.~~communities as a result of supply chain disruptions. The increase in the average sales price of homes delivered was primarily due to favorable market conditions. The decrease in the average sales price of homes delivered in Virginia and Tennessee was primarily driven by a change in product mix due to a higher percentage of deliveries in lower-priced communities. Gross margin percentage on home deliveries in the ~~third~~first quarter of ~~2021 increased~~2022 decreased compared to the same period last year primarily due to ~~price appreciation as~~ the increase in ~~revenue~~costs per square foot of homes delivered ~~outpaced~~outpacing the increase in ~~cost~~revenues per square ~~foot.~~foot driven by higher lumber costs.

Homebuilding Texas: Revenues from home sales increased in the ~~third~~first quarter of ~~2021~~2022 compared to the ~~third~~first quarter of ~~2020,~~2021, primarily due to an increase in the number of home deliveries and an increase in the average sales price of homes delivered. The increase in the number of home deliveries was primarily ~~due to higher demand as the number of~~driven by an increase in deliveries per active community ~~increased.~~over the same period last year. The increase in the average sales price of homes delivered was primarily due to favorable market conditions. Gross margin percentage on home deliveries in the ~~third~~first quarter of ~~2021 increased~~2022 decreased compared to the same period last year primarily due to ~~price appreciation as~~ the increase in ~~revenue~~costs per square foot ofin homes delivered ~~outpaced~~outpacing the increase in ~~cost~~revenues per square ~~foot.~~foot driven by higher lumber costs and a change in product mix.

Homebuilding West: Revenues from home sales increased in the ~~third~~first quarter of 2022 compared to the first quarter of 2021, ~~compared to the third quarter of 2020,~~ primarily due to ~~an increase in the number of home deliveries in all the states of the segment except in Colorado and Oregon and~~ an increase in the average sales price of homes delivered in all the states of the ~~segment. The increase~~segment, partially offset by a decrease in the number of home deliveries in the segment, primarily in Arizona, Colorado and Nevada. The increase in the average sales price of homes delivered was primarily due to ~~higher demand as the number of deliveries per active community increased during the quarter.~~favorable market conditions. The decrease in the number of home deliveries in Arizona, Colorado, and ~~Oregon~~Nevada was primarily due to a decrease in the number of deliveries per active community due to the timing of opening and closing of ~~communities. The increase in the average sales price~~communities as a result of ~~homes delivered was primarily due to favorable market conditions.~~supply chain disruptions. Gross margin percentage on home deliveries in the ~~third~~first quarter of ~~2021~~2022 increased compared to the same period last year primarily due to price appreciation as the increase in ~~revenue~~revenues per square foot of homes delivered outpaced the increase in ~~cost~~costs per square foot.

~~Nine Months Ended August 31, 2021 versus Nine Months Ended August 31, 2020~~

~~Homebuilding East:~~

Revenues from home sales increased in the nine months ended August 31, 2021 compared to the nine months ended August 31, 2020, primarily due to an increase in the number of home deliveries in all the states of the segment except in Pennsylvania and an increase in the average sales price of homes delivered in all the states of the segment except in New Jersey. The increase in the number of home deliveries was primarily due to higher demand as the number of deliveries per active community increased. The decrease in the number of home deliveries in Pennsylvania was primarily due to a decrease in the number of communities due to the timing of opening and closing of communities. The increase in the average sales price of homes delivered was primarily due to favorable market conditions. The decrease in the average sales price of homes delivered in New Jersey was primarily driven by a change in product mix due to a higher percentage of deliveries in lower-priced communities. Gross margin percentage on home deliveries in the nine months ended August 31, 2021 increased compared to the same period last year primarily due to price appreciation as the increase in revenue per square foot of homes delivered outpaced the increase in cost per square foot.

~~Homebuilding Central:~~ Revenues from home sales increased in the nine months ended August 31, 2021 compared to the nine months ended August 31, 2020, primarily due to an increase in the number of home deliveries in all the states of the segment except in Virginia, and an increase in the average sales price of homes delivered in all the states of the segment except in Virginia and Tennessee. The increase in the number of home deliveries was primarily due to higher demand as the number of deliveries per active community increased. The decrease in the number of home deliveries in Virginia was primarily due to a decrease in the number of communities due to the timing of opening and closing of communities. The increase in the average sales price of homes delivered was primarily due to favorable market conditions. The decrease in the average sales price of homes delivered in Virginia and Tennessee was primarily driven by a change in product mix due to a higher percentage of deliveries in lower-priced communities. Gross margin percentage on home deliveries in the nine months ended August 31, 2021 increased compared to the same period last year primarily due to price appreciation as the increase in revenue per square foot of homes delivered outpaced the increase in cost per square foot.

~~Homebuilding Texas:~~ Revenues from home sales increased in the nine months ended August 31, 2021 compared to the nine months ended August 31, 2020, primarily due to an increase in the number of home deliveries and an increase in the average sales price of homes delivered. The increase in the number of deliveries was primarily due to higher demand as the number of deliveries per active community increased. The increase in average sales price of homes delivered was primarily due to favorable market conditions. Gross margin percentage on home deliveries in the nine months ended August 31, 2021 increased compared to the same period last year primarily due to price appreciation as the increase in revenue per square foot of homes delivered outpaced the increase in cost per square foot.

~~Homebuilding West:~~ Revenues from home sales increased in the nine months ended August 31, 2021 compared to the nine months ended August 31, 2020, primarily due to an increase in the number of home deliveries in all states of the segment except in Colorado and an increase in the average sales price of homes delivered in all the states of the segment. The increase in the number of home deliveries in all states of the segment was primarily due to higher demand as the number of deliveries per active community increased during the quarter. The increase in the average sales price of homes delivered was primarily due to favorable market conditions. Gross margin percentage on home deliveries in the nine months ended August 31, 2021 increased compared to the same period last year primarily due to price appreciation as the increase in revenue per square foot of homes delivered outpaced the increase in cost per square foot.

Financial Services Segment

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

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


		Three Months Ended					Nine Months Ended					Three Months Ended
		August 31,					August 31,					February 28,
(Dollars in thousands)	(Dollars in thousands)	2021			2020		2021		2020		(Dollars in thousands)	2022			2021
Dollar value of mortgages originated	Dollar value of mortgages originated	$	3,281,000		3,529,000		9,228,000		9,007,000		Dollar value of mortgages originated	$	2,760,000		2,761,000
Number of mortgages originated	Number of mortgages originated	9,400			10,800		27,300		27,800		Number of mortgages originated	7,400			8,400
Mortgage capture rate of Lennar homebuyers	Mortgage capture rate of Lennar homebuyers	73		%	82	%	75	%	80	%	Mortgage capture rate of Lennar homebuyers	74		%	76	%
Number of title and closing service transactions	Number of title and closing service transactions	16,900			16,400		49,000		42,000		Number of title and closing service transactions	13,700			15,000

At ~~August 31, 2021~~February 28, 2022 and November 30, ~~2020,~~2021, the carrying value of Financial Services' commercial mortgage-backed securities ("CMBS") was ~~$161.5~~$156.6 million and ~~$164.2~~$157.8 million, respectively. Details of these securities and related debt are within Note 2 of the Notes to Condensed Consolidated Financial Statements.

Multifamily Segment

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

Originally, our Multifamily segment focused on building multifamily properties and selling them shortly after they were completed. However, more recently we have focused on creating and participating in ventures that build multifamily properties with the intention of retaining them after they are completed.

The following tables provide information related to our investment in the Multifamily segment:

Balance Sheets
(In thousands) August 31, 2021 November 30, 2020
Multifamily investments in unconsolidated entities $ 682,819 724,647
Lennar's net investment in Multifamily 950,636 906,632

Statements of Operations Three Months Ended Nine Months Ended
August 31, August 31,
(Dollars in thousands) 2021 2020 2021 2020
Number of operating properties/investments sold through joint ventures — — 1 2
Lennar's share of gains on the sale of operating properties/investments $ — — 14,784 3,001


Balance Sheets
(In thousands)	February 28, 2022		November 30, 2021


Multifamily investments in unconsolidated entities	$	661,252	654,029
Lennar's net investment in Multifamily	897,683		976,676

Lennar Other Segment

Lennar Other primarily includes strategic investments in technology companies, primarily managed by our LENX subsidiary, and fund interests we retained when we sold the RialtoCapitalManagement ("Rialto") asset and investment management platform in 2018. At ~~August 31, 2021~~February 28, 2022 and November 30, ~~2020,~~2021, we had ~~$1.7~~$1.1 billion and ~~$521.7 million,~~$1.5 billion, respectively, of assets in our Lennar Other segment, which included investments in unconsolidated entities of ~~$387.5~~$333.8 million and ~~$387.1~~$346.3 million, respectively. The ~~increase~~investments in ~~assets during the nine months ended August 31, 2021 was due to an increase in~~equity securities of Opendoor Technologies, Inc. ("Opendoor"), Hippo Holdings, Inc. ("Hippo"), Sunnova ("NOVA"), SmartRent, Inc. ("SmartRent"), Blend Labs, Inc. ("Blend") and Sonder ("SOND") are held at market and will therefore change depending on the value of our ~~strategic technology investments, primarily managed by our LEN~~X ~~subsidiary. This increase was largely related to our strategic investments~~share holdings in ~~Hippo, SmartRent, Opendoor and Sunnova. During~~those entities on the ~~nine months ended August 31, 2021, we completed the sale~~last day of ~~our residential solar business to Sunnova for shares in the entity.~~each quarter. The following is a detail of Lennar Other ~~realized and~~ unrealized gain (loss):


		Three Months Ended			Nine Months Ended			Three Months Ended
		August 31,			August 31,			February 28,
(In thousands)	(In thousands)	2021		2020	2021	2020	(In thousands)	2022		2021
Opendoor (OPEN) mark to market							Opendoor (OPEN) mark to market	$	(143,361)	469,745
Hippo (HIPO) mark to market	Hippo (HIPO) mark to market	$	324,855	—	324,855	—	Hippo (HIPO) mark to market	(124,457)		—
Sunnova (NOVA) mark to market							Sunnova (NOVA) mark to market	(75,041)		—
SmartRent (SMRT) mark to market	SmartRent (SMRT) mark to market	100,793		—	100,793	—	SmartRent (SMRT) mark to market	(44,363)		—
Opendoor (OPEN) mark to market		37,301		—	272,756	—
Sunnova (NOVA) mark to market		23,870		—	(14,465)	—
Blend Labs (BLND) mark to market	Blend Labs (BLND) mark to market	6,852		—	6,852	—	Blend Labs (BLND) mark to market	(7,442)		—
Gain on sale of solar business		1,531		—	153,006	—
Other realized gain		—		—	3,580	—

Sonder (SOND) mark to market							Sonder (SOND) mark to market	(506)		—
		$	495,202	—	847,377	—		$	(395,170)	469,745

(2) Financial Condition and Capital Resources

At ~~August 31, 2021,~~February 28, 2022, we had cash and cash equivalents and restricted cash related to our homebuilding, financial services, multifamily and other operations of ~~$2.8~~$1.6 billion, compared to ~~$2.9~~$3.0 billion at November 30, ~~2020~~2021 and ~~$2.2~~$2.6 billion at ~~August 31, 2020.~~February 28, 2021.

We finance all of our activities, including homebuilding, financial services, multifamily, other and general operating needs, primarily with cash generated from our operations, debt issuances and cash borrowed under our warehouse lines of credit and our unsecured revolving credit facility (the "Credit Facility"). At February 28, 2022, we had $1.4 billion of homebuilding cash and cash equivalents and no outstanding borrowings under our $2.5 billion revolving credit facility, thereby providing $3.9 billion of available capacity.

Operating Cash Flow Activities

During the ~~nine~~three months ended ~~August 31,~~February 28, 2022 and 2021, ~~and 2020,~~ cash (used in) provided by operating activities totaled ~~$1.3 billion~~($72) million and ~~$2.9 billion,~~$386 million, respectively. During the ~~nine~~three months ended ~~August 31, 2021,~~February 28, 2022, cash ~~provided by~~used in operating activities was impacted primarily by our net earnings, net of Lennar Other unrealized/realized gain of $847.4 million primarily due to mark to market gains on strategic investments that went public during the nine months ended August 31, 2021, (Opendoor, Sunnova, Hippo, SmartRent and Blend) and the sale of our solar business to Sunnova. In addition there was a decrease in loans held-for-sale of $209.3 million primarily related to the sale of loans originated by our Financial Services segment, an increase in accounts payable and other liabilities of $514.0 million, and a decrease in receivables of $131.3 million, partially offset by an increase in inventories due to strategic land purchases, land development and construction costs of ~~$2.3 billion.~~$1.9 billion and increase in other assets of $50 million. This was partially offset by our net earnings, gross of Lennar Other unrealized mark-to-market loss of $395 million on strategic technology investments, a decrease in receivables of $381 million primarily related to a decrease in Financial Services' receivables, net, which are loans sold to investors for which we have not been paid. In addition, there was a decrease in loans held-for-sale of $409 million primarily related to the sale of loans originated by our Financial Services segment and an increase in accounts payable and other liabilities of $96 million.

During the ~~nine~~three months ended ~~August 31, 2020,~~February 28, 2021, cash provided by operating activities was impacted primarily by our net earnings net of the unrealized mark-to-market gain of $470 million related to our Opendoor strategic investment, a decrease in loans held-for-sale of ~~$557.8~~$361 million primarily related to the sale of loans originated by our Financial Services ~~a decrease in receivables of $264.6 million and an increase in accounts payable and other liabilities of $165.6 million,~~segment, partially offset by an increase in ~~other assets~~inventories due to strategic land purchases, and land development and construction costs of ~~$124.6~~$862 million.

Investing Cash Flow Activities

During the ~~nine~~three months ended ~~August 31,~~February 28, 2022 and 2021, ~~and 2020,~~ cash used in investing activities totaled ~~$131.2~~$20 million and ~~$267.5~~$93 million, respectively. During the ~~nine~~three months ended ~~August 31,~~February 28, 2022, our cash used in investing activities was primarily due to cash contributions of $139 million to unconsolidated entities, which included (1) $98 million to Homebuilding unconsolidated entities (2) $37 million to Lennar Other unconsolidated entities and (3) $4 million to Multifamily unconsolidated entities. In addition, we also had $71 million of purchases of investment securities related to strategic technology investments included in the Lennar Other segment. This was partially offset by distributions of capital from unconsolidated entities of $174 million, which primarily included (1) $119 million from Multifamily unconsolidated entities, (2) $17 million from Homebuilding unconsolidated entities, and (3) $38 million from our Lennar Other unconsolidated entities.

During the three months ended February 28, 2021, our cash used in investing activities was primarily due to cash contributions of ~~$354.6~~$224 million to unconsolidated entities, which included (1) ~~$164.0~~$148 million to Homebuilding unconsolidated entities, (2) ~~$66.8~~$38 million to Multifamily unconsolidated entities, and (3) ~~$123.8~~$38 million to the strategic technology investments included in the Lennar Other segment. This was partially offset by distributions of capital from unconsolidated entities of ~~$292.5~~$83 million, which primarily included (1) ~~$159.3 million from Homebuilding unconsolidated entities, (2) $107.2~~$53 million from Multifamily unconsolidated entities, (2) $20 million from Homebuilding unconsolidated entities; and (3) ~~$26.0~~$11 million from the unconsolidated Rialto real estate funds included in our Lennar Other segment.

During the nine months ended August 31, 2020, our cash used in investing activities was primarily due to cash contributions of $412.5 million to unconsolidated entities and deconsolidation of a previously consolidated entity, which included (1) $86.9 million to Homebuilding unconsolidated entities, (2) $122.7 million to Multifamily unconsolidated entities, (3) $50.3 million to the strategic technology investments included in the Lennar Other segment; and (4) the derecognition of $152.5 million of cash as of the date of deconsolidation of a previously consolidated Financial Services entity. This was partially offset by distributions of capital from unconsolidated entities of $135.7 million, which primarily included (1) $58.3 million from Homebuilding unconsolidated entities, (2) $39.1 million from the unconsolidated Rialto real estate funds included in our Lennar Other segment; and (3) $38.3 million from Multifamily unconsolidated entities.

Financing Cash Flow Activities

During the ~~nine~~three months ended ~~August 31,~~February 28, 2022 and 2021, ~~and 2020,~~ cash used in financing activities totaled $1.3 billion and ~~$1.9 billion,~~$630 million, respectively. During the ~~nine~~three months ended ~~August 31, 2021,~~February 28, 2022, cash used in financing activities was primarily ~~impacted by~~due to (1) ~~$357.5~~$529 million of net repayments under our Financial Services' warehouse facilities, which included the LMF Commercial warehouse repurchase facilities; (2) ~~the redemption of $300.0 million aggregate principal amount of our senior notes; (3) $234.0~~$581 million of ~~dividend payments; and (4)~~ repurchases of our common stock, ~~for $452.5 million,~~ which included ~~$388.0~~$526 million of repurchases under our repurchase program and ~~$64.6~~$55 million of repurchases related to our equity compensation ~~plan.~~plan; and (3) $110 million of dividend payments. These were partially offset by ~~$441.2~~$33 million of net proceeds from liabilities related to consolidated inventory not owned due to ~~land sales to~~activity with land banks.

During the ~~nine~~three months ended ~~August 31, 2020,~~February 28, 2021, cash used in financing activities was primarily impacted by (1) ~~$789.3~~$501 million of net repayments under our Financial Services' warehouse facilities, which included the LMF Commercial warehouse repurchase facilities; (2) ~~$550.3~~$78 million of ~~principal payments on notes payable~~dividend payments; and ~~other borrowings;~~ (3) ~~the redemption~~$69 million of ~~$313.0 million aggregate principal amount of our senior notes; and (4)~~ repurchases of our common stock, ~~for $319.0 million,~~ which included ~~$288.5~~$43 million of repurchases under our repurchase program and ~~$30.3~~$26 million of repurchases related to our equity compensation plan. These were partially offset by ~~$175.6~~$67 million of ~~receipts~~proceeds from liabilities related to ~~noncontrolling interests.~~consolidated inventory not owned due to land sales to a land bank.

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


(Dollars in thousands)	(Dollars in thousands)	August 31, 2021			November 30, 2020		August 31, 2020		(Dollars in thousands)	February 28, 2022			November 30, 2021		February 28, 2021
Homebuilding debt	Homebuilding debt	$	5,542,513		5,955,758		7,180,274		Homebuilding debt	$	4,639,222		4,652,338		5,976,168
Stockholders’ equity	Stockholders’ equity	20,650,188			17,994,856		17,172,103		Stockholders’ equity	20,679,064			20,816,425		18,896,246
Total capital	Total capital	$	26,192,701		23,950,614		24,352,377		Total capital	$	25,318,286		25,468,763		24,872,414
Homebuilding debt to total capital	Homebuilding debt to total capital	21.2		%	24.9	%	29.5	%	Homebuilding debt to total capital	18.3		%	18.3	%	24.0	%
Homebuilding debt	Homebuilding debt	$	5,542,513		5,955,758		7,180,274		Homebuilding debt	$	4,639,222		4,652,338		5,976,168
Less: Homebuilding cash and cash equivalents	Less: Homebuilding cash and cash equivalents	2,623,320			2,703,986		1,966,796		Less: Homebuilding cash and cash equivalents	1,366,597			2,735,213		2,421,411
Net Homebuilding debt	Net Homebuilding debt	$	2,919,193		3,251,772		5,213,478		Net Homebuilding debt	$	3,272,625		1,917,125		3,554,757
Net Homebuilding debt to total capital (1)	Net Homebuilding debt to total capital (1)	12.4		%	15.3	%	23.3	%	Net Homebuilding debt to total capital (1)	13.7		%	8.4	%	15.8	%

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

At ~~August 31, 2021,~~February 28, 2022, Homebuilding debt to total capital was consistent compared to November 30, 2021. At February 28, 2022, Homebuilding debt to total capital was lower compared to ~~November 30, 2020 and August 31, 2020,~~February 28, 2021, primarily as a result of a decrease in Homebuilding debt due to debt pay downs and an increase in stockholders' equity due to net ~~earnings.~~

earnings, partially offset by share repurchases.

We are continually exploring various types of transactions to manage our leverage and liquidity positions, take advantage of market opportunities and increase our revenues and earnings. These transactions may include the issuance of additional indebtedness, the repurchase of our outstanding indebtedness, the repurchase of our common stock, the acquisition of homebuilders and other companies, the purchase or sale of assets or lines of business, the issuance of common stock or securities convertible into shares of common stock, and/or the pursuit of other financing alternatives. In connection with some of our non-homebuilding businesses, we are also considering other types of transactions such as sales, restructurings, joint ventures, spin-offs or initial public offerings as we continue to move back towards being a pure play homebuilding company.

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

Nine Months Ended
August 31,
(Dollars in thousands) 2021 2020
Homebuilding average debt outstanding $ 5,848,865 $ 7,896,372
Average interest rate 4.9 % 4.9 %
Interest incurred $ 210,575 $ 272,347

~~Subsequent to August 31, 2021, we provided notice that we would redeem on October 15, 2021 our $600 million 4.125% senior unsecured notes, which have a scheduled maturity of January 15, 2022.~~


	Three Months Ended
	February 28,
(Dollars in thousands)	2022			2021
Homebuilding average debt outstanding	$	4,885,046		$	5,973,432
Average interest rate	4.7		%	4.9		%
Interest incurred	59,933			71,064

As of ~~August 31, 2021, the maximum borrowings on our~~February 28, 2022, we had a Credit Facility ~~were~~with potential borrowings of $2.5 billion ~~and~~maturing in 2024, that included a $300 million accordion feature, subject to additional commitments, thus the maximum potential borrowings could be $2.8 billion maturing in 2024. The Credit Facility agreement (the "Credit Agreement") provides that up to $500 million in commitments may be used for letters of credit. Under the Credit Agreement, we are subject to debt covenants. The maturity, details and debt covenants of the Credit Facility are unchanged from the disclosure in the Financial Condition and Capital Resources section of our Form 10-K for the year ended November 30, ~~2020.~~2021. The following summarizes our debt covenant requirements and our actual levels or ratios with respect to those covenants as calculated per the Credit Agreement as of ~~August 31, 2021:~~February 28, 2022:


(Dollars in thousands)	(Dollars in thousands)	Covenant Level			Level Achieved as of August 31, 2021		(Dollars in thousands)	Covenant Level			Level Achieved as of February 28, 2022
Minimum net worth test	Minimum net worth test	$	9,781,069		13,563,839		Minimum net worth test	$	10,795,613		14,108,931
Maximum leverage ratio	Maximum leverage ratio	65.0		%	17.0	%	Maximum leverage ratio	65.0		%	20.0	%
Liquidity test	Liquidity test	1.00			9.78		Liquidity test	1.00			5.09

Financial Services Warehouse Facilities

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

Changes in Capital Structure

In ~~January~~October 2021, ~~our~~the Board of Directors authorized ~~the~~an increase to our stock repurchase ofprogram to enable us to repurchase up to the lesser of ~~$1.0~~an additional $1 billion in value, or 25 million in shares, of our outstanding Class A ~~and~~or Class B common stock. As a result of prior authorizations being almost exhausted, in March 2022, our Board of Directors approved an additional authorization for us to repurchase up to the lesser of $2 billion in value, or 30 million in shares, of our outstanding Class A or Class B common stock. The repurchase authorization ~~replaced a January 2019 authorization and~~ has no expiration date. The details of our Class A and Class B common stock repurchases under ~~this program~~the authorized repurchase programs for ~~both~~ the three ~~and nine~~ months ended ~~August 31,~~February 28, 2022 and 2021 ~~and 2020~~ are included in Note 4 of the Notes to Condensed Consolidated Financial Statements.

During the ~~nine~~three months ended ~~August 31, 2021,~~February 28, 2022, treasury stock increased due to our repurchase of ~~4.8~~5.9 million shares of Class A and Class B common stock due primarily to our repurchase of ~~4.0~~5.3 million shares of Class A and Class B common stock through our stock repurchase program. During the ~~nine~~three months ended ~~August 31, 2020,~~February 28, 2021, treasury stock increased due to our repurchase of ~~4.4~~0.8 million shares of Class A and Class B common stock due primarily to our repurchase of 0.5 million shares of Class A and Class B common stock through our stock repurchase program.

On September 29, 2021, our Board of Directors declared a quarterly cash dividend of $0.25 per share on both our Class A and Class B common stock, payable on October 28, 2021 to holders of record at the close of business on October 14, 2021. On July 19, 2021,February 10, 2022, we paid cash dividends of ~~$0.25~~$0.375 per share on both our Class A and Class B common stock to holders of record at the close of business on ~~July 2, 2021,~~January 27, 2022, as declared by our Board of Directors on ~~June 18, 2021.~~January 12, 2022. We approved and paid cash dividends of ~~$0.125~~$0.250 per share for each of the ~~first three quarters of 2020 and $0.25 per share in the fourth quarter of 2020 and each of the first three~~four quarters of 2021 on both our Class A and Class B common stock.

Based on our current financial condition and credit relationships, we believe that our operations and borrowing resources will provide for our current and long-term capital requirements at our anticipated levels of activity.

Supplemental Financial Information

Currently, substantially all of our 100% owned homebuilding subsidiaries are guaranteeing all our senior notes. The guarantees are full and unconditional.

The indentures governing our senior notes require that, if any of our 100% owned subsidiaries, other than our finance company subsidiaries and foreign subsidiaries, directly or indirectly guarantee at least $75 million principal amount of debt of Lennar Corporation (other than senior notes), those subsidiaries must also guarantee Lennar Corporation’s obligations with regard to its senior notes. Included in the following tables as part of “Obligors” together with Lennar Corporation are subsidiary entities that are not finance company subsidiaries or foreign subsidiaries and were guaranteeing the senior notes because at ~~August 31, 2021~~February 28, 2022 they were guaranteeing Lennar Corporation's letter of credit facilities and its Credit Facility, disclosed in Note 7 of the Notes to Condensed Consolidated Financial Statements. The guarantees are full, unconditional and joint and several and the guarantor subsidiaries are 100% directly or indirectly owned by Lennar Corporation. A subsidiary's guarantee of Lennar senior notes will be suspended at any time when it is not directly or indirectly guaranteeing at least $75 million principal amount of debt of Lennar Corporation (other than senior notes), and a subsidiary will be released from its guarantee and any other obligations it may have regarding the senior notes if all or substantially all its assets, or all of its capital stock, are sold or otherwise disposed.

Supplemental information for the Obligors, which excludes non-guarantor subsidiaries and intercompany transactions, at ~~August 31, 2021~~February 28, 2022 is included in the following tables. Intercompany balances and transactions within the Obligors have been eliminated and amounts attributable to the ~~Obligor’s~~Obligors' investment in consolidated subsidiaries that have not issued or guaranteed the senior notes have been excluded. Amounts due from and transactions with nonobligor subsidiaries and related parties are separately disclosed:


(In thousands)	(In thousands)	August 31, 2021		November 30, 2020	(In thousands)	February 28, 2022		November 30, 2021
Due from non-guarantor subsidiaries	Due from non-guarantor subsidiaries	$	4,154,085	2,655,503	Due from non-guarantor subsidiaries	$	3,787,207	4,187,044
Equity method investments	Equity method investments	963,859		951,579	Equity method investments	1,020,844		937,920
Total assets	Total assets	31,009,452		27,695,067	Total assets	30,892,854		30,750,296
Total liabilities	Total liabilities	10,079,001		9,599,718	Total liabilities	9,771,178		9,631,796


	~~Nine~~Three Months Ended
(In thousands)	~~August 31, 2021~~February 28, 2022
Total revenues	$	~~17,650,640~~5,780,929
Operating earnings	~~3,366,200~~1,125,631
Earnings before income taxes	~~3,031,800~~999,432
Net earnings attributable to Lennar	~~2,335,695~~750,047

Off-Balance Sheet Arrangements

Homebuilding: Investments in Unconsolidated Entities

As of ~~August 31, 2021,~~February 28, 2022, we had equity investments in 4043 active homebuilding and land unconsolidated entities (of which three had recourse debt, 1113 had non-recourse debt and 2627 had no debt) compared to 3841 active homebuilding and land unconsolidated entities at November 30, ~~2020.~~2021. Historically, we have invested in unconsolidated entities that acquired and developed land (1) for our homebuilding operations or for sale to third parties or (2) for the construction of homes for sale to third-party homebuyers. Through these entities, we have primarily sought to reduce and share our risk by limiting the amount of our capital invested in land, while obtaining access to potential future homesites and allowing us to participate in strategic ventures. The use of these entities also, in some instances, has enabled us to acquire land to which we could not otherwise obtain access, or could not obtain access on as favorable terms, without the participation of a strategic partner. Participants in these joint ventures have been land owners/developers, other homebuilders and financial or strategic partners. Joint ventures with land owners/developers have given us access to homesites owned or controlled by our partners. Joint ventures with other homebuilders have provided us with the ability to bid jointly with our partners for large land parcels. Joint ventures with financial partners have allowed us to combine our homebuilding expertise with access to our partners’ capital. Joint ventures with strategic partners have allowed us to combine our homebuilding expertise with the specific expertise (e.g. commercial or infill experience) of our partners. Each joint venture is governed by an executive committee consisting of members from the

partners. Details regarding these investments, balances and debt are included in Note 3 of the Notes to Condensed Consolidated Financial Statements.

The following table summarizes the principal maturities of our Homebuilding unconsolidated entities ("JVs") debt as per current debt arrangements as of ~~August 31, 2021 and it~~February 28, 2022. It does not represent estimates of future cash payments that will be made to reduce debt balances. Many JV loans have extension options in the loan agreements that would allow the loans to be extended into future years.


		Principal Maturities of Unconsolidated JVs by Period								Principal Maturities of Unconsolidated JVs by Period
(In thousands)	(In thousands)	Total JV Debt		2021	2022	2023	Thereafter	Other	(In thousands)	Total JV Debt		2022	2023	2024	Thereafter	Other

Debt without recourse to Lennar	Debt without recourse to Lennar	$	1,199,582	—	256,958	65,591	877,033	—	Debt without recourse to Lennar	$	1,243,980	94,040	89,756	405,030	655,154	—
Land seller and CDD and other debt		5,837		—	—	—	—	5,837
Land seller and other debt									Land seller and other debt	4,606		—	—	—	—	4,606
Maximum recourse debt exposure to Lennar	Maximum recourse debt exposure to Lennar	3,599		—	3,599	—	—	—	Maximum recourse debt exposure to Lennar	2,564		—	—	—	2,564	—
Debt issuance costs	Debt issuance costs	(13,089)		—	—	—	—	(13,089)	Debt issuance costs	(14,249)		—	—	—	—	(14,249)
Total	Total	$	1,195,929	—	260,557	65,591	877,033	(7,252)	Total	$	1,236,901	94,040	89,756	405,030	657,718	(9,643)

Multifamily: Investments in Unconsolidated Entities

At ~~August 31, 2021,~~February 28, 2022, Multifamily had equity investments in 1820 unconsolidated entities that are engaged in multifamily residential developments (of which 1112 had non-recourse debt and ~~seven~~eight had no debt), compared to 2217 unconsolidated entities at November 30, ~~2020.~~2021. We invest in unconsolidated entities that acquire and develop land to construct multifamily rental properties. Through these entities, we are focusing on developing a geographically diversified portfolio of institutional quality multifamily rental properties in select U.S. markets. Initially, we participated in building multifamily developments and selling them soon after they were completed. Recently, however, we have been focused on developing properties with the intention of retaining them. Participants in these joint ventures have been financial partners. Joint ventures with financial partners have allowed us to combine our development and construction expertise with access to our partners’ capital. Each joint venture is governed by an operating agreement that provides significant substantive participating voting rights on major decisions to our partners.

The Multifamily segment includes LMV I, ~~and~~ LMV II and a new Multifamily Fund, which are long-term multifamily development investment vehicles involved in the development, construction and property management of class-A multifamily assets. Details of each as of and during the ~~nine~~three months ended ~~August 31, 2021~~February 28, 2022 are included in Note 3 of the Notes to Condensed Consolidated Financial Statements.

We regularly monitor the results of both our Homebuilding and Multifamily unconsolidated joint ventures and any trends that may affect their future liquidity or results of operations. We also monitor the performance of joint ventures in which we have investments on a regular basis to assess compliance with debt covenants. For those joint ventures not in compliance with the debt covenants, we evaluate and assess possible impairment of our investment. We believe all of the joint ventures were in compliance with applicable debt covenants at ~~August 31, 2021.~~February 28, 2022.

The following table summarizes the principal maturities of our Multifamily unconsolidated entities debt as per current debt arrangements as of ~~August 31, 2021 and it~~February 28, 2022. It does not represent estimates of future cash payments that will be made to reduce debt balances.


		Principal Maturities of Unconsolidated JVs by Period								Principal Maturities of Unconsolidated JVs by Period
(In thousands)	(In thousands)	Total JV Debt		2021	2022	2023	Thereafter	Other	(In thousands)	Total JV Debt		2022	2023	2024	Thereafter	Other

Debt without recourse to Lennar	Debt without recourse to Lennar	$	3,167,395	234,288	494,173	896,485	1,542,449	—	Debt without recourse to Lennar	$	3,732,893	497,658	1,082,363	815,588	1,337,284	—
Debt issuance costs	Debt issuance costs	(24,839)		—	—	—	—	(24,839)	Debt issuance costs	(25,235)		—	—	—	—	(25,235)
Total	Total	$	3,142,556	234,288	494,173	896,485	1,542,449	(24,839)	Total	$	3,707,658	497,658	1,082,363	815,588	1,337,284	(25,235)

Lennar Other: Investments in Unconsolidated Entities

As part of the sale of the Rialto investment and asset management platform in 2018, we retained our ability to receive a portion of payments with regard to carried interests if funds meet specified performance thresholds. We periodically receive advance distributions related to the carried interests in order to cover income tax obligations resulting from allocations of taxable income to the carried interests. These distributions are not subject to clawbacks but will reduce future carried interest payments to which we become entitled from the applicable funds and have been recorded as revenues.

As of ~~August 31, 2021~~February 28, 2022 and November 30, ~~2020,~~2021, we had strategic technology investments in unconsolidated entities of ~~$187.6~~$140.2 million and ~~$196.7~~$145.6 million, respectively.

Option Contracts

We often obtain access to land through option contracts, which generally enable us to control portions of properties owned by third parties (including land funds) and unconsolidated entities until we have determined whether to exercise the options.

The table below indicates the number of homesites owned and homesites to which we had access through option contracts with third parties ("optioned") or unconsolidated JVs (i.e., controlled homesites):
Controlled Homesites Years of
August 31, 2021 Optioned JVs Total Owned Homesites Total Homesites Supply Owned (1)
East 74,056 — 74,056 54,069 128,125
Central 27,772 — 27,772 42,407 70,179
Texas 53,434 — 53,434 40,274 93,708
West 50,867 — 50,867 51,587 102,454
Other 3,657 6,594 10,251 2,056 12,307
Total homesites 209,786 6,594 216,380 190,393 406,773 3.3
% of total homesites 53 % 47 %
Controlled Homesites Years of
August 31, 2020 Optioned JVs Total Owned Homesites Total Homesites Supply Owned (1)
East 30,683 12,718 43,401 62,256 105,657
Central 14,504 122 14,626 42,785 57,411
Texas 25,556 — 25,556 35,560 61,116
West 14,911 2,854 17,765 59,475 77,240
Other 1,137 7,544 8,681 2,068 10,749
Total homesites 86,791 23,238 110,029 202,144 312,173 3.8
% of total homesites 35 % 65 %


	Controlled Homesites							Years of
February 28, 2022	Optioned	JVs	Total		Owned Homesites		Total Homesites	Supply Owned (1)
East	97,731	—	97,731		59,254		156,985
Central	34,465	—	34,465		41,388		75,853
Texas	78,031	—	78,031		46,193		124,224
West	62,889	—	62,889		53,356		116,245
Other	—	5,758	5,758		2,037		7,795
Total homesites	273,116	5,758	278,874		202,228		481,102	3.4
% of total homesites			58	%	42	%


	Controlled Homesites							Years of
February 28, 2021	Optioned	JVs	Total		Owned Homesites		Total Homesites	Supply Owned (1)
East	42,722	3,931	46,653		57,526		104,179
Central	19,932	100	20,032		41,886		61,918
Texas	31,525	—	31,525		37,034		68,559
West	45,352	3,444	48,796		49,996		98,792
Other	41	7,318	7,359		2,238		9,597
Total homesites	139,572	14,793	154,365		188,680		343,045	3.4
% of total homesites			45	%	55	%

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

Details on option contracts and related consolidated inventory not owned and exposure are included in Note 10 of the Notes to Condensed Consolidated Financial Statements.

Contractual Obligations and Commercial Commitments

Our contractual obligations and commercial commitments have not changed materially from those reported in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended November 30, ~~2020.~~2021. There were no outstanding borrowings under our Credit Facility as of ~~August 31, 2021.~~February 28, 2022.

(3) ~~New~~Recently Adopted Accounting Pronouncements

See Note 1 of the Notes to Condensed Consolidated Financial Statements included under Item 1 of this Report for a discussion of ~~new~~recently adopted accounting ~~pronouncements applicable to our company.~~pronouncements.

(4) Critical Accounting Policies

We believe that there have been no significant changes to our critical accounting policies during the ~~nine~~three months ended ~~August 31, 2021~~February 28, 2022 as compared to those we disclosed in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K, for the year ended November 30, ~~2020.~~2021. While our critical accounting policies have not changed in any significant way during the three months ended February 28, 2022, the following provides additional disclosures about our revenue recognition accounting policy.

Revenue Recognition

Homebuilding revenues and related profits from sales of homes are recognized at the time of the closing of a sale, when title to and possession of the property are transferred to the homebuyer. We typically offer sales incentives to homebuyers that consist primarily of price discounts on individual homes, financing incentives and optional upgrades (such as upgraded appliances, cabinetry and flooring) without charge. These incentives are accounted for as a reduction in the sales price of the homes. The optional upgrades may be the only sales incentive offered for a particular home, or they may be offered collectively with a discount on the base price of the home. The cost we include for the optional upgrades is included in our cost of home sales. Because the upgrades are provided without additional charge, no revenue is recognized related to the upgrade(s). See Note 1 of the Notes to Condensed Consolidated Financial Statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risks related to fluctuations in interest rates on our investments, debt obligations, loans held-for-sale and loans held-for-investment. We utilize forward commitments and option contracts to mitigate the risks associated with our mortgage loan portfolio.

As of ~~August 31, 2021,~~February 28, 2022, we had no outstanding borrowings under our Credit Facility.

As of ~~August 31, 2021,~~February 28, 2022, our borrowings under Financial Services' warehouse repurchase facilities totaled ~~$900.3 million~~$1.0 billion under residential facilities and ~~$55.0~~$29.2 million under LMF Commercial facilities.

Information Regarding Interest Rate Sensitivity

Principal (Notional) Amount by

Expected Maturity and Average Interest Rate

~~August 31, 2021~~February 28, 2022


		Three Months Ending November 30,			Years Ending November 30,														Fair Value at Aug 31,		Nine Months Ending November 30,			Years Ending November 30,														Fair Value at February 28,
(Dollars in millions)	(Dollars in millions)	2021			2022		2023		2024		2025		2026		Thereafter		Total		2021	(Dollars in millions)	2022			2023		2024		2025		2026		2027		Thereafter		Total		2022
LIABILITIES:	LIABILITIES:																			LIABILITIES:
Homebuilding:	Homebuilding:																			Homebuilding:
Senior Notes and other debts payable:	Senior Notes and other debts payable:																			Senior Notes and other debts payable:
Fixed rate	Fixed rate	$	19.9		1,559.0		99.5		1,560.5		591.8		402.9		1,294.6		5,528.2		6,040.7	Fixed rate	$	674.8		126.8		1,531.6		593.1		404.5		1,254.5		43.7		4,629.0		4,889.7
Average interest rate	Average interest rate	4.2		%	4.5	%	4.2	%	5.0	%	4.8	%	5.2	%	4.9	%	4.8	%	—	Average interest rate	4.5		%	4.2	%	5.0	%	4.8	%	5.2	%	4.8	%	6.2	%	4.9	%	—

Financial Services:	Financial Services:																			Financial Services:
Notes and other debts payable:	Notes and other debts payable:																			Notes and other debts payable:
Fixed rate	Fixed rate	$	—		—		—		—		—		—		151.1		151.1		152.0	Fixed rate	$	—		—		—		—		—		—		146.3		146.3		147.1
Average interest rate	Average interest rate	—			—		—		—		—		—		3.4	%	3.4	%	—	Average interest rate	—			—		—		—		—		—		3.4	%	3.4	%	—
Variable rate	Variable rate	$	939.5		11.4		4.4		—		—		—		—		955.3		955.3	Variable rate	$	1,046.8		—		4.2		—		—		—		—		1,051.0		1,051.0
Average interest rate	Average interest rate	2.1		%	2.2	%	2.3	%	—		—		—		—		2.1	%	—	Average interest rate	2.1		%	—		2.4	%	—		—		—		—		2.1	%	—

Lennar Other:
Notes and other debts payable:
Fixed rate		$	1.9		—		—		—		—		—		—		1.9		1.9
Average interest rate		3.0		%	—		—		—		—		—		—		3.0	%	—

For additional information regarding our market risk refer to Item 7A. Quantitative and Qualitative Disclosures About Market Risk in our Annual Report on Form 10-K for the year ended November 30, ~~2020.~~2021.

Item 4. Controls and Procedures

Each of our Co-Chief Executive Officers and Co-Presidents ("Co-CEOs") and our Chief Financial Officer participated in an evaluation by our management of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on their participation in that evaluation, our Co-CEOs and CFO concluded that our disclosure controls and procedures were effective as of ~~August 31, 2021~~February 28, 2022 to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and to ensure that information required to be disclosed in our reports filed or furnished under the Securities Exchange Act of 1934, as amended, is accumulated and communicated to our management, including both of our Co-CEOs and our CFO, as appropriate, to allow timely decisions regarding required disclosures.

Both of our Co-CEOs and our CFO also participated in an evaluation by our management of any changes in our internal control over financial reporting that occurred during the quarter ended ~~August 31, 2021.~~February 28, 2022. That evaluation did not identify any changes that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Part II. Other Information

Item 1. Legal Proceedings

We are party to various claims and lawsuits which arise in the ordinary course of business, but we do not consider the volume of our claims and lawsuits unusual given the number of homes we deliver and the fact that the lawsuits often relate to homes delivered several years before the lawsuits are commenced. Although the specific allegations in the lawsuits differ, they most commonly involve claims that we failed to construct homes in particular communities in accordance with plans and specifications or applicable construction codes and seek reimbursement for sums allegedly needed to remedy the alleged deficiencies, assert contract issues or relate to personal injuries. Lawsuits of these types are common within the homebuilding industry. We are a plaintiff in a number of cases in which we seek contribution from our subcontractors for home repair costs. The costs incurred by us in construction defect lawsuits may be offset by warranty reserves, our third-party insurers,

subcontractor insurers or indemnity contributions from subcontractors. From time to time, we are also a party to lawsuits involving purchases and sales of real property. These lawsuits often include claims regarding representations and warranties made in connection with the transfer of the property and disputes regarding the obligation to purchase or sell the property. From time-to-time, we also receive notices from environmental agencies or other regulators regarding alleged violations of environmental or other laws. We typically settle these matters before they reach litigation for amounts that are not material to us.

We do not believe that the ultimate resolution of these claims or lawsuits will have a material adverse effect on our business or financial position.

Item 1A. Risk Factors

There have been no material changes in our risk factors from those disclosed in our Annual Report on Form 10-K for the year ended November 30, ~~2020.~~2021.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table provides information about our repurchases of common stock during the three months ended ~~August 31, 2021:~~February 28, 2022:

Period: Total Number of Shares Purchased (1) Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) Maximum Number of Shares that may yet be Purchased under the Plans or Programs (2)
June 1 to June 30, 2021 390,000 $ 97.33 390,000 23,100,000
July 1 to July 31, 2021 1,794,778 $ 97.62 1,794,778 21,305,222
August 1 to August 31, 2021 635,739 $ 103.17 315,222 20,990,000


Period:	Total Number of Shares Purchased (1)	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)	Maximum Number of Shares that may yet be Purchased under the Plans or Programs (2)
December 1 to December 31, 2021	551,364	$	108.31	551,364	20,857,596
January 1 to January 31, 2022	4,352,900	$	100.65	4,352,900	16,504,696
February 1 to February 28, 2022	962,047	$	86.65	363,736	16,140,960

(1)Includes shares of Class A common stock withheld by us to cover withholding taxes due, at the election of certain holders of nonvested shares, with market value approximating the amount of withholding taxes due.

(2)In ~~January~~October 2021, ~~our~~the Board of Directors authorized aan increase to our stock repurchase program ~~which replaced a January 2019 stock~~to enable us to repurchase ~~program, under which we are authorized to purchase~~ up to the lesser of ~~$1.0~~an additional $1 billion in value, ~~excluding commission,~~ or 25 million in shares, of our outstanding Class A or Class B common stock. ~~This~~As a result of prior authorizations being almost exhausted, in March 2022, our Board of Directors approved an additional authorization for us to repurchase up to the lesser of $2 billion in value, or 30 million in shares, of our outstanding Class A or Class B common stock. The repurchase authorization has no ~~expiration.~~expiration date.

Items 3 - 5. Not Applicable

Item 6. Exhibits


10.1***			Lennar Corporation 2016 Incentive Compensation Plan, as Amended and Restated effective January 12, 2022 - Incorporated by reference to Exhibit 10.2 of the Company’s Annual Report on Form 10-K for the fiscal year ended November 30, 2021.
10.2***			2022 Award Agreements under the Company’s 2016 Incentive Compensation Plan, as amended, for Mr. Miller, Mr. Beckwitt, Mr. Jaffe, Ms. Bessette, Mr. McCall and Mr. Sustana - Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, dated February 28, 2022.
10.3***			Form of 2022 Award Agreement under the Company’s 2016 Equity Incentive Plan for Mr. Miller, Mr. Beckwitt, Mr. Jaffe, Ms. Bessette and Mr. McCall - Incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K, dated February 28, 2022.
31.1*			Rule 13a-14(a) certification by Rick Beckwitt.
31.2*			Rule 13a-14(a) certification by Jonathan M. Jaffe.
31.3*			Rule 13a-14(a) certification by Diane Bessette.
32.*			Section 1350 certifications by Rick Beckwitt, Jonathan M. Jaffe, and Diane Bessette.
101.*			The following financial statements from Lennar Corporation's Quarterly Report on Form 10-Q for the quarter ended ~~August 31, 2021,~~February 28, 2022, filed on ~~October~~April 1, ~~2021,~~2022, were formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations and Comprehensive Income, ~~(Loss),~~ (iii) Condensed Consolidated Statements of Cash Flows and (iv) the Notes to Condensed Consolidated Financial Statements.
101.INS*			iXBRL Instance Document.
101.SCH*			iXBRL Taxonomy Extension Schema Document.
101.CAL*			iXBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*			iXBRL Taxonomy Extension Definition.
101.LAB*			iXBRL Taxonomy Extension Label Linkbase Document.
101.PRE*			iXBRL Taxonomy Presentation Linkbase Document.
104**			The cover page from Lennar Corporation's Quarterly Report on Form 10-Q for the quarter ended ~~August 31, 2021~~February 28, 2022 was formatted in iXBRL.

* Filed herewith.

** Included in Exhibit 101.

*** Management contract or compensatory plan or arrangement.

4238

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		Lennar Corporation
		(Registrant)

Date:	~~October~~April 1, ~~2021~~2022	/s/ Diane Bessette
		Diane Bessette
		Vice President, Chief Financial Officer and Treasurer

Date:	~~October~~April 1, ~~2021~~2022	/s/ David Collins
		David Collins
		Vice President and Controller

4339


			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, 2021	1,192	8	1	$	17,117	$	11,849
August 31, 2020	1,194	28	14	76,115		40,364


	Nine Months Ended August 31,

	2021	2020
Unobservable inputs		Range
Average selling price	$635,000		201,000	-	970,000
Absorption rate per quarter (homes)	11		3	-	15
Discount rate	20%	20%


Statements of Operations	Three Months Ended			Nine Months Ended
	August 31,			August 31,
(Dollars in thousands)	2021		2020	2021	2020


Number of operating properties/investments sold through joint ventures	—		—	1	2
Lennar's share of gains on the sale of operating properties/investments	$	—	—	14,784	3,001