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LENNAR CORP /NEW/ - Quarter Report: 2021 May (Form 10-Q)



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 May 31, 2021
or
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)
Delaware95-4337490
(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 classTrading Symbol(s)Name of each exchange on which registered
Class A Common Stock, par value $.10
LENNew York Stock Exchange
Class B Common Stock, par value $.10
LEN.BNew 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 filerRAccelerated 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 May 31, 2021:
Class A 274,694,829
Class B 37,621,152




LENNAR CORPORATION
FORM 10-Q
For the period ended May 31, 2021
Part I
Item 1.
Item 2.
Item 3.
Item 4.
Part II
Item 1.
Item 1A.
Item 2.
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)
May 31,November 30,
2021 (1)2020 (1)
ASSETS
Homebuilding:
Cash and cash equivalents$2,581,583 2,703,986 
Restricted cash35,637 15,211 
Receivables, net353,910 298,671 
Inventories:
Finished homes and construction in progress10,418,116 8,593,399 
Land and land under development7,090,880 7,495,262 
Consolidated inventory not owned910,003 836,567 
Total inventories18,418,999 16,925,228 
Investments in unconsolidated entities1,010,256953,177 
Goodwill3,442,3593,442,359 
Other assets1,030,6811,190,793 
26,873,425 25,529,425 
Financial Services2,066,6742,708,118 
Multifamily1,209,2701,175,908 
Lennar Other1,073,858 521,726 
Total assets$31,223,227 29,935,177 
(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 May 31, 2021, total assets include $940.6 million related to consolidated VIEs of which $39.0 million is included in Homebuilding cash and cash equivalents, $15.3 million in Homebuilding restricted cash, $14.3 million in Homebuilding finished homes and construction in progress, $564.7 million in Homebuilding land and land under development, $260.6 million in Homebuilding consolidated inventory not owned, $1.3 million in Homebuilding investments in unconsolidated entities, $27.2 million in Homebuilding other assets and $17.8 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 million in Multifamily assets.
See accompanying notes to condensed consolidated financial statements.
3

Lennar Corporation and Subsidiaries
Condensed Consolidated Balance Sheets (Continued)
(In thousands, except share amounts)
(unaudited)
May 31,November 30,
2021 (2)2020 (2)
LIABILITIES AND EQUITY
Homebuilding:
Accounts payable$1,171,358 1,037,338 
Liabilities related to consolidated inventory not owned769,225 706,691 
Senior notes and other debts payable, net5,894,342 5,955,758 
Other liabilities2,281,508 2,225,864 
10,116,433 9,925,651 
Financial Services1,084,838 1,644,248 
Multifamily255,327 252,911 
Lennar Other64,531 12,966 
Total liabilities11,521,129 11,835,776 
Stockholders’ equity:
Preferred stock— — 
Class A common stock of $0.10 par value; Authorized: May 31, 2021 and November 30, 2020 - 400,000,000 shares; Issued: May 31, 2021 - 300,486,193 shares and November 30, 2020 - 298,942,836 shares
30,049 29,894 
Class B common stock of $0.10 par value; Authorized: May 31, 2021 and November 30, 2020 - 90,000,000 shares; Issued: May 31, 2021 - 39,443,168 shares and November 30, 2020 - 39,443,168 shares
3,944 3,944 
Additional paid-in capital8,755,020 8,676,056 
Retained earnings12,241,400 10,564,994 
Treasury stock, at cost; May 31, 2021 - 25,791,364 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
(1,452,874)(1,279,227)
Accumulated other comprehensive loss(1,431)(805)
Total stockholders’ equity19,576,108 17,994,856 
Noncontrolling interests125,990 104,545 
Total equity19,702,098 18,099,401 
Total liabilities and equity$31,223,227 29,935,177 
(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 May 31, 2021, total liabilities include $340.1 million related to consolidated VIEs as to which there was no recourse against the Company, of which $24.4 million is included in Homebuilding accounts payable, $218.9 million in Homebuilding liabilities related to consolidated inventory not owned, $85.7 million in Homebuilding senior notes and other debts payable and $11.1 million in Homebuilding other liabilities.
As of November 30, 2020, total liabilities include $528.5 million related to consolidated VIEs as to which there was no recourse against the Company, of which $28.4 million is included in Homebuilding accounts payable, $351.4 million in Homebuilding liabilities related to consolidated inventory not owned, $129.1 million in Homebuilding senior notes and other debt payable, $9.9 million in Homebuilding other liabilities and $9.8 million in Multifamily liabilities.
See accompanying notes to condensed consolidated financial statements.
4

Lennar Corporation and Subsidiaries
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)
(In thousands, except per share amounts)
(unaudited)

Three Months EndedSix Months Ended
May 31,May 31,
2021202020212020
Revenues:
Homebuilding$6,028,041 4,949,484 10,971,097 9,121,600 
Financial Services218,747 196,263 462,816 394,924 
Multifamily177,473 123,117 308,916 255,734 
Lennar Other5,984 18,509 12,884 20,452 
Total revenues6,430,245 5,287,373 11,755,713 9,792,710 
Costs and expenses:
Homebuilding4,909,516 4,313,331 9,027,802 8,011,137 
Financial Services97,427 110,355 195,289 261,699 
Multifamily168,930 123,473 299,979 260,821 
Lennar Other5,732 (1,072)9,984 1,502 
Corporate general and administrative90,717 78,183 201,248 160,817 
Charitable foundation contribution14,493 5,268 26,807 9,481 
Total costs and expenses5,286,815 4,629,538 9,761,109 8,705,457 
Homebuilding equity in loss from unconsolidated entities(1,688)(9,100)(6,253)(13,646)
Homebuilding other income (expense), net(4,362)4,308 8,613 (5,058)
Financial Services gain on deconsolidation— 61,418 — 61,418 
Multifamily equity in earnings (loss) from unconsolidated entities and other gain13,854 (282)12,586 6,234 
Lennar Other realized and unrealized gain (loss)(117,570)— 352,175 — 
Lennar Other equity in earnings (loss) from unconsolidated entities and other income (expense), net63,221 (37,602)62,174 (36,072)
Earnings before income taxes1,096,885 676,577 2,423,899 1,100,129 
Provision for income taxes(260,113)(160,479)(570,218)(192,808)
Net earnings (including net earnings (loss) attributable to noncontrolling interests)836,772 516,098 1,853,681 907,321 
Less: Net earnings (loss) attributable to noncontrolling interests5,409 (1,308)20,949 (8,537)
Net earnings attributable to Lennar$831,363 517,406 1,832,732 915,858 
Other comprehensive income (loss), net of tax:
Net unrealized gain (loss) on securities available-for-sale$316 (338)(626)(384)
Reclassification adjustments for loss included in earnings, net of tax— (452)— (452)
Total other comprehensive income (loss), net of tax$316 (790)(626)(836)
Total comprehensive income attributable to Lennar$831,679 516,616 1,832,106 915,022 
Total comprehensive income (loss) attributable to noncontrolling interests$5,409 (1,308)20,949 (8,537)
Basic earnings per share$2.66 1.66 5.86 2.92 
Diluted earnings per share$2.65 1.65 5.85 2.91 




See accompanying notes to condensed consolidated financial statements.
5

Lennar Corporation and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(In thousands)
(unaudited)
Six Months Ended
May 31,
20212020
Cash flows from operating activities:
Net earnings (including net earnings (loss) attributable to noncontrolling interests)$1,853,681 907,321 
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization44,743 44,464 
Amortization of discount/premium and accretion on debt, net(4,718)(13,839)
Equity in (earnings) loss from unconsolidated entities(67,618)40,355 
Distributions of earnings from unconsolidated entities15,594 38,000 
Share-based compensation expense80,635 55,141 
Deferred income tax expense136,636 79,738 
Loans held-for-sale unrealized loss30,352 2,223 
Lennar Other unrealized/realized gain(352,175)— 
Gain on sale of other assets and operating properties and equipment(18,596)(13,126)
Gain on deconsolidation of previously consolidated entity— (61,418)
Gain on sale of interest in unconsolidated entity and other Multifamily gain(1,167)(4,661)
Gain on sale of Financial Services' portfolio/businesses
(2,528)(5,014)
Valuation adjustments and write-offs of option deposits and pre-acquisition costs
13,576 65,098 
Changes in assets and liabilities:
Decrease (increase) in receivables117,910 (7,758)
Increase in inventories, excluding valuation adjustments and write-offs of option deposits and pre-acquisition costs(1,576,420)(159,138)
Increase in other assets(180,914)(148,087)
Decrease in loans held-for-sale444,413 479,360 
Increase in accounts payable and other liabilities184,716 12,144 
Net cash provided by operating activities718,120 1,310,803 
Cash flows from investing activities:
Net additions of operating properties and equipment(24,362)(25,731)
Proceeds from the sale of operating properties and equipment, other assets32,002 29,727 
Investments in and contributions to unconsolidated entities(282,203)(302,784)
Distributions of capital from unconsolidated entities231,545 115,093 
Proceeds from sale of investment in consolidated joint venture15,950 — 
Proceeds from sale of commercial mortgage-backed securities bonds11,307 3,248 
Proceeds from sale of Financial Services' portfolio/business3,327 9,096 
(Increase) decrease in Financial Services loans held-for-investment, net(3,864)143 
Purchases of investment securities(43,698)(29,642)
Proceeds from maturities/sales of investment securities9,916 25,138 
Other receipts, net1,670 
Net cash used in investing activities$(50,072)(174,042)





See accompanying notes to condensed consolidated financial statements.
6

Lennar Corporation and Subsidiaries
Condensed Consolidated Statements of Cash Flows (continued)
(In thousands)
(unaudited)

Six Months Ended
May 31,
20212020
Cash flows from financing activities:
Net repayments under warehouse facilities$(535,734)(310,216)
Redemption of senior notes— (300,000)
Principal payments on notes payable and other borrowings(114,964)(174,382)
Proceeds from other borrowings13,973 59,139 
Proceeds from liabilities related to consolidated inventory not owned301,869 — 
Payments related to consolidated inventory not owned(149,686)— 
Proceeds related to other liabilities, net— 3,567 
Receipts related to noncontrolling interests13,905 169,061 
Payments related to noncontrolling interests(17,226)(21,501)
Common stock:
Repurchases(173,644)(296,093)
Dividends(156,326)(78,145)
Net cash used in financing activities$(817,833)(948,570)
Net (decrease) increase in cash and cash equivalents and restricted cash(149,785)188,191 
Cash and cash equivalents and restricted cash at beginning of period2,932,730 1,468,691 
Cash and cash equivalents and restricted cash at end of period$2,782,945 1,656,882 
Summary of cash and cash equivalents and restricted cash:
Homebuilding$2,581,583 1,398,682 
Financial Services130,528 224,229 
Multifamily22,395 13,061 
Lennar Other3,074 5,949 
Homebuilding restricted cash35,637 9,569 
Financial Services restricted cash9,728 5,392 
$2,782,945 1,656,882 
Supplemental disclosures of non-cash investing and financing activities:
Homebuilding and Multifamily:
Purchases of inventories and other assets financed by sellers$138,963 102,982 
Non-cash contributions to unconsolidated entities20,423 13,859 
Lennar Other (non-cash impacts from sale of solar platform):
Non-cash increase in investment in equity securities$127,094 — 
Non-cash increase in receivables64,683 — 
Non-cash increase in other liabilities(40,302)— 
Consolidation/deconsolidation of unconsolidated/consolidated entities, net:
Financial Services assets$— 217,565 
Financial Services liabilities— (115,175)
Financial Services noncontrolling interests— (102,390)
Inventories— (35,959)
Operating properties and equipment and other assets— 6,375 
Other liabilities— 182 
Noncontrolling interests— 29,402 

See accompanying notes to condensed consolidated financial statements.
7


Lennar Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements (unaudited)
(1)Basis of Presentation
Basis of Consolidation
The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information, the instructions to Form 10-Q and Article 10 of Regulation S-X. 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. 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. 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 six months ended May 31, 2021 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 May 31, 2021 and November 30, 2020 included $678.8 million and $314.3 million, respectively, of cash held in escrow. On average for the three months ended May 31, 2021, cash was held in escrow for approximately four days.
Share-based Payments
During both the three months ended May 31, 2021 and 2020, the Company granted employees an immaterial number of nonvested shares. During the six months ended May 31, 2021 and 2020, the Company granted employees 1.4 million and 0.9 million nonvested shares, respectively.
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 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 have on the Company's condensed consolidated financial statements.
8

Lennar Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements (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 has announced that it will merge with a publicly traded special purpose acquisition company. 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)May 31, 2021
Assets:HomebuildingFinancial
Services
MultifamilyLennar
Other
Total
Cash and cash equivalents$2,581,583 130,528 22,395 3,074 2,737,580 
Restricted cash35,637 9,728 — — 45,365 
Receivables, net (1)353,910 422,117 111,802 — 887,829 
Inventories18,418,999 — 316,760 — 18,735,759 
Loans held-for-sale (2)— 1,015,438 — — 1,015,438 
Investments in equity securities (3)— — — 544,993 544,993 
Investments available-for-sale (4)— — — 41,563 41,563 
Loans held-for-investment, net— 77,680 — — 77,680 
Investments held-to-maturity— 162,919 — — 162,919 
Investments in unconsolidated entities1,010,256 — 691,330 379,236 2,080,822 
Goodwill3,442,359 189,699 — — 3,632,058 
Other assets1,030,681 58,565 66,983 104,992 1,261,221 
$26,873,425 2,066,674 1,209,270 1,073,858 31,223,227 
Liabilities:
Notes and other debts payable, net$5,894,342 928,185 — 1,906 6,824,433 
Other liabilities4,222,091 156,653 255,327 62,625 4,696,696 
$10,116,433 1,084,838 255,327 64,531 11,521,129 
9

Lennar Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements (unaudited) (Continued)

(In thousands)November 30, 2020
Assets:HomebuildingFinancial
Services
MultifamilyLennar
Other
Total
Cash and cash equivalents$2,703,986 116,171 38,963 3,918 2,863,038 
Restricted cash15,211 54,481 — — 69,692 
Receivables, net (1)298,671 552,779 86,629 — 938,079 
Inventories16,925,228 — 249,920 — 17,175,148 
Loans held-for-sale (2)— 1,490,105 — — 1,490,105 
Investments in equity securities (3)— — — 68,771 68,771 
Investments available-for-sale (4)— — — 53,497 53,497 
Loans held-for-investment, net— 72,626 — — 72,626 
Investments held-to-maturity— 164,230 — — 164,230 
Investments in unconsolidated entities953,177 — 724,647 387,097 2,064,921 
Goodwill3,442,359 189,699 — — 3,632,058 
Other assets1,190,793 68,027 75,749 8,443 1,343,012 
$25,529,425 2,708,118 1,175,908 521,726 29,935,177 
Liabilities:
Notes and other debts payable, net$5,955,758 1,463,919 — 1,906 7,421,583 
Other liabilities3,969,893 180,329 252,911 11,060 4,414,193 
$9,925,651 1,644,248 252,911 12,966 11,835,776 
(1)Receivables, net for Financial Services primarily related to loans sold to investors for which the Company had not yet been paid.
(2)Loans held-for-sale related to unsold residential and commercial loans carried at fair value.
(3)Investments in equity securities include investments of $83.8 million and $61.6 million without readily available fair values as of May 31, 2021 and November 30, 2020, respectively.
(4)Investments available-for-sale are carried at fair value with changes in fair value recorded as a component of accumulated other comprehensive income (loss) on the condensed consolidated balance sheet.
Financial information relating to the Company’s segments was as follows:
Three Months Ended May 31, 2021
(In thousands)HomebuildingFinancial ServicesMultifamilyLennar OtherCorporate and
unallocated
Total
Revenues$6,028,041 218,747 177,473 5,984 — 6,430,245 
Operating earnings (loss)1,112,475 121,320 22,397 (54,097)— 1,202,095 
Corporate general and administrative expenses— — — — 90,717 90,717 
Charitable foundation contribution— — — — 14,493 14,493 
Earnings (loss) before income taxes1,112,475 121,320 22,397 (54,097)(105,210)1,096,885 
Three Months Ended May 31, 2020
Revenues$4,949,484 196,263 123,117 18,509 — 5,287,373 
Operating earnings (loss)631,361 147,326 (638)(18,021)— 760,028 
Corporate general and administrative expenses— — — — 78,183 78,183 
Charitable foundation contribution— — — — 5,268 5,268 
Earnings (loss) before income taxes631,361 147,326 (638)(18,021)(83,451)676,577 

10

Lennar Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements (unaudited) (Continued)

Six Months Ended May 31, 2021
(In thousands)HomebuildingFinancial ServicesMultifamilyLennar OtherCorporate and
unallocated
Total
Revenues
$10,971,097 462,816 308,916 12,884 — 11,755,713 
Operating earnings1,945,655 267,527 21,523 417,249 — 2,651,954 
Corporate general and administrative expenses
— — — — 201,248 201,248 
Charitable foundation contribution— — — — 26,807 26,807 
Earnings (loss) before income taxes1,945,655 267,527 21,523 417,249 (228,055)2,423,899 
Six Months Ended May 31, 2020
Revenues
$9,121,600 394,924 255,734 20,452 — 9,792,710 
Operating earnings (loss)1,091,759 194,643 1,147 (17,122)— 1,270,427 
Corporate general and administrative expenses
— — — — 160,817 160,817 
Charitable foundation contribution— — — — 9,481 9,481 
Earnings (loss) before income taxes1,091,759 194,643 1,147 (17,122)(170,298)1,100,129 
Homebuilding Segments
Information about homebuilding activities in states which are not economically similar to other states in the same geographic area is grouped under "Homebuilding Other," which is not considered a reportable segment.
Evaluation of segment performance is based primarily on operating earnings (loss) before income taxes. Operations of the Company’s Homebuilding segments primarily include the construction and sale of single-family attached and detached homes as well as the purchase, development and sale of residential land directly and through the Company’s unconsolidated entities. Operating earnings (loss) for the Homebuilding segments consist of revenues generated from the sales of homes and land, other revenues from management fees and forfeited deposits, equity in earnings (loss) from unconsolidated entities and other income (expense), net, less the cost of homes sold and land sold, and selling, general and administrative expenses incurred by the segment.
The Company’s reportable Homebuilding segments and all other homebuilding operations not required to be reported separately have homebuilding divisions located in:
East: Florida, New Jersey, Pennsylvania and South Carolina
Central: Georgia, Illinois, Indiana, Maryland, Minnesota, North Carolina and Virginia
Texas: Texas
West: Arizona, California, Colorado, Idaho, Nevada, Oregon, Utah and Washington
Other: Urban divisions and other homebuilding related investments primarily in California, including FivePoint Holdings, LLC ("FivePoint")
The assets related to the Company’s homebuilding segments were as follows:
(In thousands)EastCentralTexasWestOtherCorporate and UnallocatedTotal Homebuilding
May 31, 2021$5,749,998 3,713,952 2,510,950 11,131,940 1,326,516 2,440,069 26,873,425 
November 30, 20205,308,114 3,438,600 2,150,916 10,504,374 1,301,618 2,825,803 25,529,425 
Financial information relating to the Company’s homebuilding segments was as follows:
Three Months Ended May 31, 2021
(In thousands)EastCentralTexasWestOtherTotal Homebuilding
Revenues
$1,567,768 1,097,582 799,259 2,553,771 9,661 6,028,041 
Operating earnings (loss)
309,827 159,048 176,057 492,811 (25,268)1,112,475 
Three Months Ended May 31, 2020
Revenues
$1,277,431 986,284 712,756 1,959,823 13,190 4,949,484 
Operating earnings (loss)
192,887 103,904 99,887 280,094 (45,411)631,361 
11

Lennar Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements (unaudited) (Continued)

Six Months Ended May 31, 2021
(In thousands)EastCentralTexasWestOtherTotal Homebuilding
Revenues
$2,923,710 2,026,024 1,443,337 4,563,350 14,676 10,971,097 
Operating earnings (loss)
571,910 291,071 305,700 814,517 (37,543)1,945,655 
Six Months Ended May 31, 2020
Revenues$2,429,763 1,775,794 1,185,984 3,708,592 21,467 9,121,600 
Operating earnings (loss)341,641 159,627 152,960 505,001 (67,470)1,091,759 
Financial Services
Operations of the Financial Services segment include primarily mortgage financing, title and closing services primarily for buyers of the Company’s homes. It also includes originating and selling into securitizations commercial mortgage loans through its LMF Commercial business. Financial Services’ operating earnings consist of revenues generated primarily from mortgage financing, title and closing services, and property and casualty insurance, less the cost of such services and certain selling, general and administrative expenses incurred by the segment. The Financial Services segment operates generally in the same states as the Company’s homebuilding operations.
At May 31, 2021, the Financial Services warehouse facilities were all 364-day repurchase facilities and were used to fund residential mortgages or commercial mortgages for LMF Commercial as follows:
(In thousands)Maximum Aggregate Commitment
Residential facilities maturing:
June 2021 (1)$600,000 
July 2021200,000 
December 2021500,000 
April 2022100,000 
Total - Residential facilities
$1,400,000 
LMF Commercial facilities maturing
November 2021$100,000 
December 2021 (2)611,438 
Total - LMF Commercial facilities
$711,438 
Total
$2,111,438 
(1)Subsequent to May 31, 2021, the maturity due date was extended to July 2021.
(2)Includes $11.4 million warehouse repurchase facility used by LMF Commercial to finance the origination of floating rate accrual loans, which are reported as accrual loans within loans held-for-investment, net.
The Financial Services segment uses the residential facilities to finance its residential lending activities until the mortgage loans are sold to investors and the proceeds are collected. The facilities are non-recourse to the Company and are expected to be renewed or replaced with other facilities when they mature. The LMF Commercial facilities finance LMF Commercial loan originations and securitization activities and were secured by up to an 80% interest in the originated commercial loans financed.
Borrowings and collateral under the facilities and their prior year predecessors were as follows:
(In thousands)May 31, 2021November 30, 2020
Borrowings under the residential facilities$671,541 1,185,797 
Collateral under the residential facilities
695,275 1,231,619 
Borrowings under the LMF Commercial facilities
104,247 124,617 
If the facilities are not renewed or replaced, the borrowings under the lines of credit will be repaid by selling the mortgage loans held-for-sale to investors and by collecting receivables on loans sold but not yet paid for. Without the facilities, the Financial Services segment would have to use cash from operations and other funding sources to finance its lending activities.
Substantially all of the residential loans the Financial Services segment originates are sold within a short period in the secondary mortgage market on a servicing released, non-recourse basis. After the loans are sold, the Company retains potential liability for possible claims by purchasers that it breached certain limited industry-standard representations and warranties in the loan sale agreements. Purchasers sometimes try to defray losses by purporting to have found inaccuracies related to sellers’ representations and warranties in particular loan sale agreements. Mortgage investors could seek to have the Company buy back mortgage loans or compensate them for losses incurred on mortgage loans that the Company has sold based on claims that the Company breached its limited representations or warranties. The Company’s mortgage operations have established accruals for
12

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 EndedSix Months Ended
May 31,May 31,
(In thousands)2021202020212020
Loan origination liabilities, beginning of period$8,433 9,996 7,569 9,364 
Provision for losses1,114 1,139 2,080 1,915 
Payments/settlements(93)(255)(195)(399)
Loan origination liabilities, end of period$9,454 10,880 9,454 10,880 
LMF Commercial - loans held-for-sale
LMF Commercial originated commercial loans as follows:
Three Months EndedSix Months Ended
May 31,May 31,
(Dollars in thousands)2021202020212020
Originations (1)$196,498 5,400 415,998 417,650 
Sold155,740 142,938 438,705 457,377 
Securitizations11
(1)During both the three and six months ended May 31, 2021 and 2020 all the commercial loans originated were recorded as loans held-for-sale, which are held at fair value.
Investments held-to-maturity
At May 31, 2021 and November 30, 2020, the Financial Services segment held commercial mortgage-backed securities ("CMBS"). These securities are classified as held-to-maturity based on its intent and ability to hold the securities until maturity and changes in estimated cash flows are reviewed periodically to determine if an other-than-temporary impairment has occurred. Based on the segment’s assessment, no impairment charges were recorded during either the three or six months ended May 31, 2021 or 2020. The Company has financing agreements to finance CMBS that have been purchased as investments by the Financial Services segment.
Details related to Financial Services' CMBS were as follows:
(Dollars in thousands)May 31, 2021November 30, 2020
Carrying value$162,919 164,230 
Outstanding debt, net of debt issuance costs152,396 153,505 
Incurred interest rate3.4 %3.4 %
May 31, 2021
Discount rates at purchase6%84%
Coupon rates2.0%5.3%
Distribution datesOctober 2027December 2028
Stated maturity datesOctober 2050December 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.
13

Lennar Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements (unaudited) (Continued)

Lennar Other
Lennar Other primarily includes strategic investments in technology companies, primarily managed by the Company's LENX subsidiary, and fund interests the Company retained when it sold the Rialto asset and investment management platform. Operations of the Lennar Other segment include operating earnings (loss) consisting of revenues generated primarily from the Company's share of carried interests in the Rialto fund investments retained after the sale of Rialto's asset and investment management platform, along with equity in earnings (loss) from the Rialto fund investments and strategic technology investments, gains (losses) from investments in equity securities and other income (expense), net from the remaining assets related to the Company's former Rialto segment.
During the three months ended May 31, 2021, the Company completed the sale of the Company's residential solar business to Sunnova Energy International Inc. ("Sunnova") for shares in Sunnova. The Company recorded a gain of $151.5 million upon the closing of the sale. The calculation of the gain included the fair value of the 3.1 million shares in initial consideration received at closing and the fair value of potential shares to be received upon achievement of earnouts. The significant unobservable fair value assumptions used in the calculation were a terminal value multiple of 3 and a 15% discount rate. The fair value of the earnouts was also based on the probability of achieving full or partial earnouts.
The investments in Opendoor Technologies, Inc ("Opendoor") and Sunnova are held at market and will therefore change depending on the value of the Company's share holdings on the last day of each quarter. During the three months ended May 31, 2021, the Company's Lennar Other segment recorded a loss of $234.3 million and $38.3 million related to the mark to market of the Company's share holdings in Opendoor and Sunnova, respectively. During the six months ended May 31, 2021, Opendoor began trading on the Nasdaq stock market and the Company began to mark to market the Company's share holdings in the public entity. The mark to market recognition was due to the investment now being accounted for as an investment in equity securities which is held at fair value and the change in fair value is recognized through earnings. As of November 30, 2020, the investment in Opendoor was included in the Company's investments in unconsolidated entities and was accounted for using the equity method. In addition, as previously noted, several of the Company's other strategic technology investments have announced plans to go public either through an initial public offering or by merging with a publicly traded special purpose acquisition company.
(3)Investments in Unconsolidated Entities
Homebuilding Unconsolidated Entities
The investments in the Company's Homebuilding unconsolidated entities were as follows:
(In thousands)May 31, 2021November 30, 2020
Investments in unconsolidated entities (1) (2)$1,010,256 953,177 
Underlying equity in unconsolidated entities' net assets (1)1,320,015 1,269,701 
(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 May 31, 2021 and November 30, 2020, the carrying amount of the Company's investment was $387.0 million and $392.1 million, respectively.
The Company has an immaterial amount of recourse exposure to debt of the Homebuilding unconsolidated entities in which it has investments. While the Company sometimes guarantees debt of unconsolidated entities, in most instances the Company’s partners have also guaranteed that debt and are required to contribute their shares of any payments. In most instances the amount of guaranteed debt of an unconsolidated entity is less than the value of the collateral securing it.
In the first quarter of 2021, the Company formed the Upward America Venture ("the Venture"). The Venture will acquire single family homes for rent in high growth markets across the United States. The Venture raised equity to get to a total commitment of $1.25 billion led by institutional investors. Including leverage, the Venture 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. As of both May 31, 2021 and November 30, 2020, the fair value of the completion guarantees was immaterial. As of May 31, 2021 and November 30, 2020, Multifamily segment's unconsolidated entities had non-recourse debt with completion guarantees of $748.4 million and $722.9 million, respectively.
14

Lennar Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements (unaudited) (Continued)

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 EndedSix Months Ended
May 31,May 31,
(In thousands)2021202020212020
General contractor services, net of deferrals$148,891 104,471 264,290 198,365 
General contractor costs142,783 100,284 253,236 190,465 
Management fee income14,188 14,574 29,059 28,397 
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 six months ended May 31, 2021 are included below:
May 31, 2021
(In thousands)LMV ILMV II
Lennar's carrying value of investments$291,018 330,037 
Equity commitments2,204,016 1,257,700 
Equity commitments called2,142,446 1,168,546 
Lennar's equity commitments504,016 381,000 
Lennar's equity commitments called497,413 352,934 
Lennar's remaining commitments 6,603 28,066 
Distributions to Lennar during the six months ended May 31, 202140,581 1,165 
Lennar Other Unconsolidated Entities
Lennar Other's unconsolidated entities includes fund investments the Company retained when it sold the Rialto assets and investment management platform, 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.
(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 six months ended May 31, 2021 and 2020:
Three Months Ended May 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 February 28, 2021$19,017,451 30,047 3,944 8,724,192 (1,348,710)(1,747)11,488,520 121,205 
Net earnings (including net earnings attributable to noncontrolling interests)836,772 — — — — — 831,363 5,409 
Employee stock and directors plans
(4,537)— 1,165 (5,704)— — — 
Purchases of treasury stock(98,460)— — — (98,460)— — — 
Amortization of restricted stock
32,276 — — 32,276 — — — — 
Cash dividends(78,483)— — — — — — (78,483)— 
Receipts related to noncontrolling interests
5,009 — — — — — — 5,009 
Payments related to noncontrolling interests
(5,829)— — — — — — (5,829)
Non-cash purchase or activity of noncontrolling interests, net(2,417)— — (2,613)— — — 196 
Total other comprehensive income, net of tax316 — — — — 316 — — 
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 
15

Lennar Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements (unaudited) (Continued)

Three Months Ended May 31, 2020
(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 February 29, 2020$16,193,377 29,802 3,944 8,609,944 (1,253,756)452 8,654,213 148,778 
Net earnings (including net loss attributable to noncontrolling interests)
516,098 — — — — — 517,406 (1,308)
Employee stock and directors plans
651 — 756 (107)— — — 
Amortization of restricted stock
23,286 — — 23,286 — — — — 
Cash dividends(38,905)— — — — — — (38,905)— 
Receipts related to noncontrolling interests
80,148 — — — — — — 80,148 
Payments related to noncontrolling interests
(4,767)— — — — — — (4,767)
Non-cash consolidations/deconsolidations, net(131,306)— — — — — — (131,306)
Non-cash purchase or activity of noncontrolling interests, net(5,168)— — (3,544)— — — (1,624)
Total other comprehensive loss, net of tax(790)— — — — (790)— — 
Balance at May 31, 2020$16,632,624 29,804 3,944 8,630,442 (1,253,863)(338)9,132,714 89,921 
Six Months Ended May 31, 2021
(In thousands)Total
Equity
Class A
Common Stock
Class B
Common Stock
Additional
Paid - in Capital
Treasury
Stock
Accumulated Other Comprehensive LossRetained
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)
1,853,681 — — — — — 1,832,732 20,949 
Employee stock and directors plans
(30,816)155 — 1,106 (32,077)— — — 
Purchases of treasury stock
(141,570)— — — (141,570)— — — 
Amortization of restricted stock
81,094 — — 81,094 — — — — 
Cash dividends(156,326)— — — — — (156,326)— 
Receipts related to noncontrolling interests
13,905 — — — — — — 13,905 
Payments related to noncontrolling interests
(17,226)— — — — — — (17,226)
Non-cash purchase or activity of noncontrolling interests, net581 — — (3,236)— — — 3,817 
Total other comprehensive loss, net of tax(626)— — — — (626)— — 
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 
Six Months Ended May 31, 2020
(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)
907,321 — — — — — 915,858 (8,537)
Employee stock and directors plans
(6,773)92 — 626 (7,491)— — — 
Purchases of treasury stock(288,515)— — — (288,515)— — — 
Amortization of restricted stock
55,141 — — 55,141 — — — — 
Cash dividends(78,145)— — — — — — (78,145)— 
Receipts related to noncontrolling interests
169,061 — — — — — — 169,061 
Payments related to noncontrolling interests
(21,501)— — — — — — (21,501)
Non-cash consolidations/deconsolidations, net(131,791)— — — — — — (131,791)
Non-cash purchase or activity of noncontrolling interests, net(5,168)— — (3,544)— — — (1,624)
Total other comprehensive loss, net of tax(836)— — — — (836)— — 
Balance at May 31, 2020$16,632,624 29,804 3,944 8,630,442 (1,253,863)(338)9,132,714 89,921 
16

Lennar Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements (unaudited) (Continued)

On June 18, 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 July 19, 2021 to holders of record at the close of business on July 2, 2021. On May 5, 2021, the Company paid cash dividends of $0.25 per share on both its Class A and Class B common stock to holders of record at the close of business on April 21, 2021, as declared by its Board of Directors on April 7, 2021. The Company approved and paid cash dividends of $0.125 per share for each of the first three quarters of 2020 and $0.25 per share in the fourth quarter of 2020 and first two quarter of 2021 on both its Class A and Class B common stock.
In January 2021, the Company's Board of Directors authorized the repurchase of up to the lesser of $1 billion in value, excluding commissions, or 25 million in shares, of the Company's outstanding Class A and Class B common stock. The repurchase has no expiration date. The following table represents the repurchase of the Company's Class A and Class B common stocks under this program and its predecessor for the three and six months ended May 31, 2021 and 2020:
Three Months EndedSix Months Ended
May 31, 2021May 31, 2020May 31, 2021May 31, 2020
(Dollars in thousands, except price per share)Class AClass BClass AClass BClass AClass BClass AClass B
Shares repurchased1,000,000 — — — 1,510,000 — 4,250,000 115,000 
Principal$98,440 $— $— $— $141,540 $— $282,274 $6,155 
Average price per share$98.44 $— $— $— $93.73 $— $66.42 $53.52 
(5)Income Taxes
The provision for income taxes and effective tax rate were as follows:
Three Months EndedSix Months Ended
May 31,May 31,
(Dollars in thousands)2021202020212020
Provision for income taxes$260,113 160,479 570,218 192,808 
Effective tax rate (1)23.8 %23.7 %23.7 %17.4 %
(1)For the three and six months ended May 31, 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 six months ended May 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 participation rights in undistributed earnings. The Company’s restricted common stock ("nonvested shares") is considered participating securities.
17

Lennar Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements (unaudited) (Continued)

Basic and diluted earnings per share were calculated as follows:
Three Months EndedSix Months Ended
May 31,May 31,
(In thousands, except per share amounts)2021202020212020
Numerator:
Net earnings attributable to Lennar$831,363 517,406 1,832,732 915,858 
Less: distributed earnings allocated to nonvested shares776 357 1,406 690 
Less: undistributed earnings allocated to nonvested shares10,308 5,931 22,026 9,962 
Numerator for basic earnings per share820,279 511,118 1,809,300 905,206 
Less: net amount attributable to Rialto's Carried Interest Incentive Plan (1)1,569 3,322 2,122 3,322 
Numerator for diluted earnings per share$818,710 507,796 1,807,178 901,884 
Denominator:
Denominator for basic earnings per share - weighted average common shares outstanding308,893 308,373 308,957 309,793 
Effect of dilutive securities:
Shared based payments— — — 
Denominator for diluted earnings per share - weighted average common shares outstanding308,893 308,373 308,957 309,794 
Basic earnings per share$2.66 1.66 5.86 2.92 
Diluted earnings per share$2.65 1.65 5.85 2.91 
(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 six months ended May 31, 2021 and May 31, 2020, there were no options to purchase shares of common stock that were outstanding and anti-dilutive.
(7)Homebuilding Senior Notes and Other Debts Payable
(Dollars in thousands)May 31, 2021November 30, 2020
6.25% senior notes due December 2021 (1)
$302,705 305,221 
4.125% senior notes due 2022
599,371 598,876 
5.375% senior notes due 2022
253,914 255,342 
4.750% senior notes due 2022
573,300 572,724 
4.875% senior notes due December 2023
397,948 397,347 
4.500% senior notes due 2024
647,890 647,528 
5.875% senior notes due 2024
441,147 443,484 
4.750% senior notes due 2025
498,224 498,002 
5.25% senior notes due 2026
406,103 406,709 
5.00% senior notes due 2027
352,316 352,508 
4.75% senior notes due 2027
895,135 894,760 
Mortgage notes on land and other debt526,289 583,257 
$5,894,342 5,955,758 
(1)Subsequent to May 31, 2021, the Company retired these notes. The redemption price, which was paid in cash, was par plus accrued but unpaid interest.
The carrying amounts of the senior notes in the table above are net of debt issuance costs of $13.6 million and $15.9 million as of May 31, 2021 and November 30, 2020, respectively.
As of May 31, 2021 the maximum available borrowings on the Company's unsecured revolving credit facility (the "Credit Facility") were $2.5 billion and included a $300 million accordion feature, subject to additional commitments, thus the maximum 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. 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. In addition to the Credit Facility, the Company has other letter of credit facilities with different financial institutions.
18

Lennar Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements (unaudited) (Continued)

Procedures related to performance letters of credit, 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. The Company's outstanding performance letters of credit and surety bonds are described below:
(In thousands)May 31, 2021November 30, 2020
Performance letters of credit$817,831 752,096 
Surety bonds3,306,473 3,087,711 
Anticipated future costs primarily for site improvements related to performance surety bonds1,743,993 1,584,642 
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.
(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 the Company’s warranty reserve, which are included in Homebuilding other liabilities, was as follows:
Three Months EndedSix Months Ended
May 31,May 31,
(In thousands)2021202020212020
Warranty reserve, beginning of the period$348,100 287,413 341,765 294,138 
Warranties issued51,690 46,272 94,618 84,543 
Adjustments to pre-existing warranties from changes in estimates (1)13,119 7,707 18,760 13,611 
Payments(51,168)(39,930)(93,402)(90,830)
Warranty reserve, end of period$361,741 301,462 361,741 301,462 
(1)The adjustments to pre-existing warranties from changes in estimates during the three and six months ended May 31, 2021 and May 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 May 31, 2021 and November 30, 2020, 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.
May 31, 2021November 30, 2020
(In thousands)Fair Value HierarchyCarrying AmountFair ValueCarrying AmountFair Value
ASSETS
Financial Services:
Loans held-for-investment, netLevel 3$77,680 77,780 72,626 70,808 
Investments held-to-maturityLevel 3162,919 193,781 164,230 196,047 
LIABILITIES
Homebuilding senior notes and other debts payable, netLevel 2$5,894,342 6,414,267 5,955,758 6,581,798 
Financial Services notes and other debts payable, netLevel 2928,185 929,051 1,463,919 1,464,850 
Lennar Other notes and other debts payable, netLevel 21,906 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.
19

Lennar Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements (unaudited) (Continued)

Lennar Other—The fair value for notes payable approximate their carrying value due to variable interest pricing terms and the short-term nature of the borrowings.
Fair Value Measurements:
GAAP provides a framework for measuring fair value, expands disclosures about fair value measurements and establishes a fair value hierarchy which prioritizes the inputs used in measuring fair value summarized as follows:
Level 1: Fair value determined based on quoted prices in active markets for identical assets.
Level 2: Fair value determined using significant other observable inputs.
Level 3: Fair value determined using significant unobservable inputs.
The Company’s financial instruments measured at fair value on a recurring basis are summarized below:
Fair Value HierarchyFair Value at
(In thousands)May 31, 2021November 30, 2020
Financial Services Assets:
Residential loans held-for-saleLevel 2$851,518 1,296,517 
LMF Commercial loans held-for-saleLevel 3163,920 193,588 
Mortgage servicing rightsLevel 32,602 2,113 
Lennar Other:
Investments in equity securitiesLevel 1$461,238 — 
Investments available-for-saleLevel 341,563 53,497 
Residential and LMF Commercial loans held-for-sale in the table above include:
May 31, 2021November 30, 2020
(In thousands)Aggregate Principal BalanceChange in Fair ValueAggregate Principal BalanceChange in Fair Value
Residential loans held-for-sale$817,901 33,617 1,232,548 63,969 
LMF Commercial loans held-for-sale
167,948 (4,028)194,362 (774)
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 May 31, 2021 and November 30, 2020. 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. 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 inputsAs of May 31, 2021As of November 30, 2020
Mortgage prepayment rate13%18%
Discount rate14%12%
Delinquency rate 3%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 the Company’s condensed consolidated statements of operations and comprehensive income (loss).
20

Lennar Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements (unaudited) (Continued)

Lennar Other investments available-for-sale - The fair value of investments available-for-sale is calculated from model-based techniques that use discounted cash flow assumptions and the Company’s own estimates of CMBS spreads, market interest rate movements and the underlying loan credit quality. Loan values are calculated by allocating the change in value of an assumed CMBS capital structure to each loan. The value of an assumed CMBS capital structure is calculated, generally, by discounting the cash flows associated with each CMBS class at market interest rates and at the Company’s own estimate of CMBS spreads.
The changes in fair values for Level 1 and Level 2 financial instruments measured on a recurring basis are shown below by financial instrument and financial statement line item:
Three Months EndedSix Months Ended
May 31,May 31,
(In thousands)2021202020212020
Changes in fair value included in Financial Services revenues:
Loans held-for-sale$4,669 5,270 (30,352)(2,223)
Mortgage loan commitments5,057 13,816 142 28,711 
Forward contracts(23,953)8,478 10,285 (883)
Changes in fair value included in Lennar Other realized and unrealized gain (loss):
Investments in equity securities$(272,625)— 197,120 — 
Changes in fair value included in other comprehensive loss, net of tax:
Lennar Other investments available-for-sale$316 (338)(626)(384)
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
May 31, 2021May 31, 2020
(In thousands)Mortgage servicing rightsLMF Commercial loans held-for-saleMortgage servicing rightsLMF Commercial loans held-for-sale
Beginning balance$1,499 123,148 12,576 300,402 
Purchases/loan originations20 201,296 607 5,400 
Sales/loan originations sold, including those not settled— (155,740)— (143,285)
Disposals/settlements (1)(58)(7,300)(8,908)— 
Changes in fair value (2)1,141 2,825 (3,037)(2,334)
Interest and principal paydowns— (309)— (298)
Ending balance$2,602 163,920 1,238 159,885 
Six Months Ended
May 31, 2021May 31, 2020
(In thousands)Mortgage servicing rightsLMF Commercial loans held-for-saleMortgage servicing rightsLMF Commercial loans held-for-sale
Beginning balance$2,113 193,588 24,679 197,224 
Purchases/loan originations443 420,796 1,354 417,650 
Sales/loan originations sold, including those not settled
— (438,705)— (457,724)
Disposals/settlements (1)(1,095)(7,300)(10,197)— 
Changes in fair value (2)1,141 (3,942)(14,598)3,267 
Interest and principal paydowns— (517)— (532)
Ending balance$2,602 163,920 1,238 159,885 
(1)The three and six months ended May 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:
21

Lennar Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements (unaudited) (Continued)

Three Months Ended
May 31, 2021May 31, 2020
(In thousands)Fair Value
Hierarchy
Carrying ValueFair ValueTotal Losses, Net (1)Carrying ValueFair ValueTotal Losses, Net (1)
Non-financial assets - Homebuilding:
Finished homes and construction in progress (1)Level 3$19,240 6,378 (12,862)68,802 61,119 (7,683)
Land and land under development (1)Level 378 — (78)42,609 9,709 (32,900)
Six Months Ended
May 31, 2021May 31, 2020
(In thousands)Fair Value
Hierarchy
Carrying ValueFair ValueTotal Losses, Net (1)Carrying ValueFair ValueTotal Losses, Net (1)
Non-financial assets - Homebuilding:
Finished homes and construction in progress (1)Level 3$21,784 8,728 (13,056)141,809 120,404 (21,405)
Land and land under development (1)Level 3520 — (520)65,062 21,369 (43,693)
(1)Valuation adjustments were included in Homebuilding costs and expenses in the Company's condensed consolidated statements of operations and comprehensive income (loss).
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.
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. 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
# of active communities# of communities with potential indicator of impairment# of communities
Fair Value
(in thousands)
Valuation Adjustments
(in thousands)
At or for the Six Months Ended
May 31, 20211,221101$17,117 $11,849 
May 31, 20201,24141969,137 32,072 
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:
Six Months Ended
May 31,
20212020
Unobservable inputsRange
Average selling price$635,000201,000 -970,000
Absorption rate per quarter (homes)113-15
Discount rate20%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 six months ended May 31, 2021 and based on the Company's evaluation, there were no VIEs that were consolidated or deconsolidated.
22

Lennar Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements (unaudited) (Continued)

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.
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:
May 31, 2021November 30, 2020
(In thousands)Investments in
Unconsolidated VIEs
Lennar’s Maximum
Exposure to Loss
Investments in
Unconsolidated VIEs
Lennar’s Maximum
Exposure to Loss
Homebuilding (1)$94,264 214,014 89,654 89,828 
Multifamily (2)624,440 681,992 619,540 717,271 
Financial Services162,919 162,919 164,230 164,230 
Lennar Other (3)46,223 46,223 76,023 130,177 
$927,846 1,105,148 949,447 1,101,506 
(1)As of May 31, 2021 and November 30, 2020, the maximum exposure to loss of Homebuilding's investments in unconsolidated VIEs was limited to its investments in unconsolidated VIEs, except as of May 31, 2021, with regard to the Company's remaining commitment to fund capital in the Upward America Venture, a single family for rent platform.
(2)As of May 31, 2021 and November 30, 2020, 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 $34.7 million and $88.1 million, respectively, to fund LMV I and LMV II for future expenditures related to the construction and development of its projects.
(3)As of May 31, 2021, the decrease in investments in unconsolidated VIEs and maximum exposure to loss was related to an entity which had a reconsideration event due to the payoff of a note receivable which caused the entity to no longer be considered a VIE.
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 six months ended May 31, 2021, consolidated inventory not owned increased by $73.4 million with a corresponding increase to liabilities related to consolidated inventory not owned in the accompanying condensed consolidated balance sheet as of May 31, 2021. The increase was primarily due to additions in the six months ended May 31, 2021 as the Company focused on increasing its controlled homesites. 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 May 31, 2021. The liabilities related to consolidated inventory not
23

Lennar Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements (unaudited) (Continued)

owned primarily represent the difference between the option exercise prices for the optioned land and the Company’s cash deposits.
The Company's exposure to losses on its option contracts with third parties and unconsolidated entities were as follows:
(Dollars in thousands)May 31, 2021November 30, 2020
Non-refundable option deposits and pre-acquisition costs$891,910 414,154 
Letters of credit in lieu of cash deposits under certain land and option contracts138,244 87,537 
(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 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.
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 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)May 31, 2021November 30, 2020
Right-of-use assets$157,444 113,390 
Lease liabilities165,761 122,836 
Weighted-average remaining lease term (in years)8.42.9
Weighted-average discount rate3.0 %3.1 %
Future minimum payments under the noncancellable leases in effect at May 31, 2021 were as follows:
(In thousands)Lease Payments
2021$17,932 
202232,834 
202326,699 
202421,552 
202517,530 
2026 and thereafter71,177 
Total future minimum lease payments (1)$187,724 
Less: Interest (2)21,963 
Present value of lease liabilities (2)$165,761 
(1)Total future minimum lease payments exclude variable lease costs of $12.9 million and short-term lease costs of $1.7 million. This also does not include minimum lease payments for executed and legally enforceable leases that have not yet commenced. As of May 31, 2021, 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 May 31, 2021, the weighted average remaining lease term and weighted average discount rate used in calculating the lease liabilities were 8.4 years and 3.0%, 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:
Six months ended
(In thousands)May 31, 2021May 31, 2020
Rental expense$41,662 41,131 
Payment on lease liabilities18,122 28,958 
24

Lennar Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements (unaudited) (Continued)

On occasion, the Company may sublease rented space which is no longer used for the Company's operations. For both the six months ended May 31, 2021 and 2020, the Company had an immaterial amount of sublease income.
25


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.
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; increases in operating costs, including costs related to construction materials, labor, real estate taxes and insurance, and our inability to manage our cost structure, both in our Homebuilding and Multifamily businesses; an extended slowdown in the real estate markets across the nation, including a slowdown in the market for single family homes or the multifamily rental market; reduced availability of mortgage financing or increased interest rates; our inability to successfully execute our strategies, including our land lighter strategy and our planned spin-off of certain businesses; 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; the possibility that the benefit from our increasing use of technology will not justify its cost; increased competition for home sales from other sellers of new and resale homes; our inability to pay down debt; whether government actions or other factors 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 acceptable to us; 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 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.
26


Outlook
The housing market remains very strong. Demand has continued to strengthen while the supply of new and existing 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. The bottom line is that supply of homes is short and while land, labor and supply chain are limiting factors in the drive to meet current demand, we believe that the housing shortage is likely to remain for some time to come. Even though home prices have moved much higher and interest rates have ticked up slightly higher, overall affordability remains strong and 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 home. We believe we are uniquely positioned to capitalize and drive even greater growth in our bottom line on this demand given our focus 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. We do not currently see the rising cost of homes reducing demand for the homes we build. We believe we are making up for the years of underproduction of homes now, which should keep the housing market thriving for some time to come.
The housing market is not only very 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 just a home sale option. They are an ever more effective and instrumental convenience provider, as the coordination of a new home is being complicated by supply chain disruption. Additionally, in the single-family for rent space, our Upward America Venture facilitates a better time delivery of our homes with reduced cycle times and makes the single-family lifestyle accessible to more families. Professional ownership of homes enables renters to access a single-family lifestyle, while they build the resources to own, and while commercial and professional owners manage the risk profile, which enables better housing for more families, and more diverse families, without weakening the mortgage market. Capitalized with $1.25 billion of equity from blue-chip institutional investors, the Upward America Venture had a pipeline of 2,534 homes with a total purchase price of $596 million at the end of the second quarter.
The combined effects of this strong housing market along with structural changes, which we are in position to capitalize on through our strategic investments, puts Lennar in position to continue to drive returns and should position us for consistent continued growth into fiscal 2022. We are focused on cash flow, debt reduction, and stock buyback, land controlled versus owned, return on capital, and return on equity, and on innovative technologies. In addition, we have been carefully managing a stressed supply chain by maintaining our delivery targets for the year rather than increasing them. We still expect to deliver between 62,000 and 64,000 homes in 2021, but with a now higher expected gross margin of 26.5% to 27.0% and expected SG&A of 7.3% to 7.5% for the year. Our return on equity stands now at 18.8%, which is a 550 basis point improvement over last year. Our return on capital is now 15.0%, and a 500-basis point improvement. We have remained focused on our optioned versus owned land strategy, and achieved 50% land controlled through options or similar agreements two quarters earlier than expected. We ended the second quarter with a 3.3 years supply of land owned, compared to a 3.9 years supply of land owned at the same time last year. Among other things, this has enabled us to reduce debt, such that our second quarter homebuilding debt-to-total capital ratio improved to 23.1%, from 31.2% in the prior year.
These points of improvement have enabled us to reconsider the size of our spin-off and aim for a larger asset base in order to further fortify the new company. Accordingly, we are now targeting an asset base of $5 billion to $6 billion, which will leave the remaining pure-play homebuilding and financial services company with an appropriately liquid balance sheet and no material loss of reported earnings. The new company will be an independent and active asset management business that raises third-party capital to support its ongoing business vertical. Two of these verticals, the multifamily platform and LSFR, our single-family rental platform, have already raised third-party capital and are active asset managers. Additionally, we have a dynamic and growing independent land development business, and we have a growing technology investment business, which is part of LENX. This separation of these businesses from the homebuilder will enable them to thrive in ways they cannot while they are part of Lennar.
As a company we are recasting the cost structure all the way from hard costs like labor and materials, to the softer costs around SG&A. We are re-wiring the way that this business operates, including through the technologies that we are incorporating into our business, the efficiency of our land program, our just-in-time delivery of land and the emergent inventory management component of our single-family for rent program. Additionally, as we bring debt down, we have less capital cost, and that is continuing to help our margin picture. We believe that we have never been better positioned financially, organizationally and technologically to thrive and grow in an evolving and exciting housing market. The market conditions remain strong for the foreseeable future, and we expect a strong second half of 2021, and continued strength in the market as we begin to look to 2022.

27


(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 six months ended May 31, 2021 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 $831.4 million, or $2.65 per diluted share ($2.66 per basic share), in the second quarter of 2021, compared to net earnings attributable to Lennar of $517.4 million, or $1.65 per diluted share ($1.66 per basic share), in the second quarter of 2020. Our net earnings attributable to Lennar were $1.8 billion, or $5.85 per diluted share ($5.86 per basic share), in the six months ended May 31, 2021, compared to net earnings attributable to Lennar of $915.9 million, or $2.91 per diluted share ($2.92 per basic share), in the six months ended May 31, 2020.
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Financial information relating to our operations was as follows:
Three Months Ended May 31, 2021
(In thousands)HomebuildingFinancial ServicesMultifamilyLennar OtherCorporateTotal
Revenues:
Sales of homes$5,980,731 — — — — 5,980,731 
Sales of land38,785 — — — — 38,785 
Other revenues8,525 218,747 177,473 5,984 — 410,729 
Total revenues6,028,041 218,747 177,473 5,984 — 6,430,245 
Costs and expenses:
Costs of homes sold4,421,373 — — — — 4,421,373 
Costs of land sold32,979 — — — — 32,979 
Selling, general and administrative expenses455,164 — — — — 455,164 
Other costs and expenses— 97,427 168,930 5,732 — 272,089 
Total costs and expenses4,909,516 97,427 168,930 5,732 — 5,181,605 
Equity in earnings (loss) from unconsolidated entities, Multifamily other gain and Lennar Other other income (expense), net(1,688)— 13,854 63,221 — 75,387 
Other expense, net(4,362)— — — — (4,362)
Lennar Other realized and unrealized gain (loss)— — — (117,570)— (117,570)
Operating earnings (loss)$1,112,475 121,320 22,397 (54,097)— 1,202,095 
Corporate general and administrative expenses— — — — 90,717 90,717 
Charitable foundation contribution— — — — 14,493 14,493 
Earnings (loss) before income taxes$1,112,475 121,320 22,397 (54,097)(105,210)1,096,885 
Three Months Ended May 31, 2020
(In thousands)HomebuildingFinancial ServicesMultifamilyLennar OtherCorporateTotal
Revenues:
Sales of homes$4,925,081 — — — — 4,925,081 
Sales of land19,833 — — — — 19,833 
Other revenues4,570 196,263 123,117 18,509 — 342,459 
Total revenues4,949,484 196,263 123,117 18,509 — 5,287,373 
Costs and expenses:
Costs of homes sold3,862,771 — — — — 3,862,771 
Costs of land sold43,369 — — — — 43,369 
Selling, general and administrative expenses407,191 — — — — 407,191 
Other costs and expenses— 110,355 123,473 (1,072)— 232,756 
Total costs and expenses4,313,331 110,355 123,473 (1,072)— 4,546,087 
Equity in loss from unconsolidated entities(9,100)— (282)(26,642)— (36,024)
Financial Services gain on deconsolidation— 61,418 — — — 61,418 
Other income (expense), net4,308 — — (10,960)— (6,652)
Operating earnings$631,361 147,326 (638)(18,021)— 760,028 
Corporate general and administrative expenses— — — — 78,183 78,183 
Charitable foundation contribution— — — — 5,268 5,268 
Earnings (loss) before income taxes$631,361 147,326 (638)(18,021)(83,451)676,577 

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Six Months Ended May 31, 2021
(In thousands)HomebuildingFinancial ServicesMultifamilyLennar OtherCorporate and unallocatedTotal
Revenues:
Sales of homes$10,871,645 — — — — 10,871,645 
Sales of land86,428 — — — — 86,428 
Other revenues13,024 462,816 308,916 12,884 — 797,640 
Total revenues10,971,097 462,816 308,916 12,884 — 11,755,713 
Costs and expenses:
Costs of homes sold8,088,235 — — — — 8,088,235 
Costs of land sold74,167 — — — — 74,167 
Selling, general and administrative expenses865,400 — — — — 865,400 
Other costs and expenses— 195,289 299,979 9,984 — 505,252 
Total costs and expenses9,027,802 195,289 299,979 9,984 — 9,533,054 
Equity in earnings (loss) from unconsolidated entities and Multifamily other gain(6,253)— 12,586 62,174 — 68,507 
Other income, net8,613 — — — — 8,613 
Lennar Other realized and unrealized gain (loss)— — — 352,175 — 352,175 
Operating earnings$1,945,655 267,527 21,523 417,249 — 2,651,954 
Corporate general and administrative expenses— — — — 201,248 201,248 
Charitable foundation contribution— — — — 26,807 26,807 
Earnings (loss) before income taxes$1,945,655 267,527 21,523 417,249 (228,055)2,423,899 
Six Months Ended May 31, 2020
(In thousands)HomebuildingFinancial ServicesMultifamilyLennar OtherCorporate and unallocatedTotal
Revenues:
Sales of homes$9,065,848 — — — — 9,065,848 
Sales of land46,700 — — — — 46,700 
Other revenues9,052 394,924 255,734 20,452 — 680,162 
Total revenues9,121,600 394,924 255,734 20,452 — 9,792,710 
Costs and expenses:
Costs of homes sold7,154,550 — — — — 7,154,550 
Costs of land sold70,504 — — — — 70,504 
Selling, general and administrative786,083 — — — — 786,083 
Other costs and expenses— 261,699 260,821 1,502 524,022 
Total costs and expenses8,011,137 261,699 260,821 1,502 — 8,535,159 
Equity in earnings (loss) from unconsolidated entities and Multifamily other gain
(13,646)— 6,234 (26,523)— (33,935)
Financial Services gain on deconsolidation— 61,418 — — — 61,418 
Other expense, net(5,058)— — (9,549)— (14,607)
Operating earnings (loss)$1,091,759 194,643 1,147 (17,122)— 1,270,427 
Corporate general and administrative expenses— — — — 160,817 160,817 
Charitable foundation contribution— — — — 9,481 9,481 
Earnings (loss) before income taxes$1,091,759 194,643 1,147 (17,122)(170,298)1,100,129 
Three Months Ended May 31, 2021 versus Three Months Ended May 31, 2020
Revenues from home sales increased 21% in the second quarter of 2021 to $6.0 billion from $4.9 billion in the second quarter of 2020. Revenues were higher primarily due to a 14% increase in the number of home deliveries, excluding unconsolidated entities, and a 6% increase in the average sales price. New home deliveries, excluding unconsolidated entities, increased to 14,462 homes in the second quarter of 2021 from 12,653 homes in the second quarter of 2020. The average sales price of homes delivered was $414,000 in the second quarter of 2021, compared to $389,000 in the second quarter of 2020.
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Gross margin on home sales were $1.6 billion, or 26.1%, in the second quarter of 2021, compared to $1.1 billion, or 21.6%, in the second quarter of 2020. The gross margin percentage on home sales increased primarily as a result of pricing power as the increase in revenue per square foot outpaced the increase in cost per square foot. Additionally, we continued to focus on controlling construction costs. Gross margin on land sales in the second quarter of 2021 was $5.8 million compared to a loss of $23.5 million in the second quarter of 2020. The loss in the second quarter of 2020 was primarily due to a write-off of costs as a result of us not moving forward with a naval base development in Concord, California, northeast of San Francisco.
Selling, general and administrative expenses were $455.2 million in the second quarter of 2021, compared to $407.2 million in the second quarter of 2020. As a percentage of revenues from home sales, selling, general and administrative expenses improved to 7.6% in the second quarter of 2021, from 8.3% in the second quarter of 2020. This was the lowest percentage for a second quarter in our history primarily due to a decrease in broker commissions and benefits of our technology efforts.
Operating earnings for the Financial Services segment were $121.2 million in the second quarter of 2021, compared to $150.6 million in the second quarter of 2020 (which included $147.3 million of operating earnings and an add back of $3.3 million of net loss attributable to noncontrolling interests). The second quarter of 2020 included a $61.4 million gain on the deconsolidation of a previously consolidated entity. Excluding this gain, the improvement in operating earnings was primarily due to an increase in margin in the mortgage business and an increase in volume and margin in the title business.
Operating earnings for the Multifamily segment were $22.4 million in the second quarter of 2021, compared to an operating loss of $0.6 million in the second quarter of 2020. Operating loss for the Lennar Other segment was $54.1 million in the second quarter of 2021, compared to $18.0 million in the second quarter of 2020. In the second quarter of 2021, we recorded mark to market losses on our Opendoor Technologies, Inc ("Opendoor") and Sunnova Energy International Inc. ("Sunnova") investments of $234.3 million and $38.3 million, respectively. This was partially offset by a gain of $151.5 million recognized during the quarter related to the sale of our solar business to Sunnova.
Six Months Ended May 31, 2021 versus Six Months Ended May 31, 2020
Revenues from home sales increased 20% in the six months ended May 31, 2021 to $10.9 billion from $9.1 billion in the six months ended May 31, 2020. Revenues were higher primarily due to a 17% increase in the number of home deliveries, excluding unconsolidated entities. New home deliveries, excluding unconsolidated entities, increased to 26,764 homes in the six months ended May 31, 2021 from 22,966 homes in the six months ended May 31, 2020. The average sales price of homes delivered was $406,000 in the six months ended May 31, 2021, compared to $395,000 in the six months ended May 31, 2020.
Gross margin on home sales were $2.8 billion, or 25.6%, in the six months ended May 31, 2021, compared to $1.9 billion or 21.1%, in the six months ended May 31, 2020. The gross margin percentage on home sales increased primarily as a result of pricing power as the increase in revenue per square foot outpaced the increase in cost per square foot. Additionally, we continued to focus on controlling construction costs. Gross margin on land sales in the six months ended May 31, 2021 was $12.3 million, compared to a loss of $23.8 million in the six months ended May 31, 2020. The loss in the six months ended May 31, 2020 was primarily due to a write-off of costs in the second quarter of 2020 as a result of us not moving forward with a naval base development in Concord, California, northeast of San Francisco.
Selling, general and administrative expenses were $865.4 million in the six months ended May 31, 2021, compared to $786.1 million in the six months ended May 31, 2020. As a percentage of revenues from home sales, selling, general and administrative expenses improved to 8.0% in the six months ended May 31, 2021, from 8.7% in the six months ended May 31, 2020. The improvement was primarily due to a decrease in broker commissions and benefits of our technology efforts.
Operating earnings for the Financial Services segment were $267.4 million in the six months ended May 31, 2021, compared to $208.8 million in the six months ended May 31, 2020 (which included $194.6 million in operating earnings and an add back of $14.1 million net loss attributable to noncontrolling interests). The six months ended May 31, 2020 included a $61.4 million gain on the deconsolidation of a previously consolidated entity. Excluding this gain, the improvement in operating earnings was primarily due to an increase in volume and margin in the mortgage and title businesses.
Operating earnings for the Multifamily segment were $21.5 million in the six months ended May 31, 2021, compared to operating earnings of $1.1 million in the six months ended May 31, 2020. Operating earnings for the Lennar Other segment were $417.2 million in the six months ended May 31, 2021, compared to an operating loss of $17.1 million in the six months ended May 31, 2020. The operating earnings for the six months ended May 31, 2021 were primarily due to the net gain related to the mark to market of our shareholdings in Opendoor, which began trading on the Nasdaq stock market in December 2020, and the gain on the sale of our solar business to Sunnova.
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Homebuilding Segments
At May 31, 2021, our reportable Homebuilding segments and Homebuilding Other are outlined in Note 2 of the Notes to Condensed Consolidated Financial Statements. The following tables set forth selected financial and operational information related to our homebuilding operations for the periods indicated:
Selected Financial and Operational Data
Three Months Ended May 31, 2021
Gross MarginsOperating Earnings (Loss)
($ in thousands)Sales of Homes RevenueCosts of Sales of HomesGross Margin %Net Margins on Sales of Homes (1)Gross Margins on Sales of LandOther RevenueEquity in Earnings (Loss) from Unconsolidated EntitiesOther Income (Expense), netOperating Earnings (Loss)
East$1,551,030 1,115,010 28.1 %307,978 1,335 1,768 (59)(1,195)309,827 
Central1,093,190 846,427 22.6 %157,429 774 579 317 (51)159,048 
Texas790,391 551,067 30.3 %173,803 1,837 562 387 (532)176,057 
West2,543,263 1,893,148 25.6 %491,223 1,860 1,311 (921)(662)492,811 
Other (2)2,857 15,721 (450.3)%(26,239)— 4,305 (1,412)(1,922)(25,268)
Totals
$5,980,731 4,421,373 26.1 %1,104,194 5,806 8,525 (1,688)(4,362)1,112,475 
Three Months Ended May 31, 2020
Gross MarginsOperating Earnings (Loss)
($ in thousands)Sales of Homes RevenueCosts of Sales of HomesGross Margin %Net Margins on Sales of Homes (1)Gross Margins (Loss) on Sales of LandOther RevenueEquity in Earnings (Loss) from Unconsolidated EntitiesOther Income (Expense), netOperating Earnings (Loss)
East$1,276,275 978,677 23.3 %185,194 (1,126)1,156 218 7,445 192,887 
Central984,248 800,736 18.6 %102,873 280 1,074 19 (342)103,904 
Texas694,110 530,004 23.6 %98,566 1,524 250 (454)99,887 
West1,957,435 1,533,513 21.7 %279,509 (776)1,914 (40)(513)280,094 
Other (2)13,013 19,841 (52.5)%(11,023)(23,438)176 (9,298)(1,828)(45,411)
Totals
$4,925,081 3,862,771 21.6 %655,119 (23,536)4,570 (9,100)4,308 631,361 
Six Months Ended May 31, 2021
Gross MarginsOperating Earnings (Loss)
(In thousands)Sales of Homes RevenueCosts of Sales of HomesGross Margin %Net Margins on Sales of Homes (1)Gross Margins on Sales of LandOther RevenueEquity in Earnings (Loss) from Unconsolidated EntitiesOther Income (Expense), netOperating Earnings (Loss)
East$2,898,641 2,103,873 27.4 %549,512 6,411 3,186 (551)13,352 571,910 
Central2,019,628 1,559,973 22.8 %289,528 751 984 415 (607)291,071 
Texas1,426,801 1,002,264 29.8 %302,964 2,871 820 541 (1,496)305,700 
West4,520,071 3,400,875 24.8 %809,213 2,228 2,361 41 674 814,517 
Other (2)6,504 21,250 (226.7)%(33,207)— 5,673 (6,699)(3,310)(37,543)
Totals
$10,871,645 8,088,235 25.6 %1,918,010 12,261 13,024 (6,253)8,613 1,945,655 
Six Months Ended May 31, 2020
Gross MarginsOperating Earnings (Loss)
(In thousands)Sales of Homes RevenueCosts of Sales of HomesGross Margin %Net Margins on Sales of Homes (1)Gross Margins on Sales of LandOther RevenueEquity in Earnings (Loss) from Unconsolidated EntitiesOther Income (Expense), netOperating Earnings (Loss)
East$2,426,996 1,859,895 23.4 %340,019 (1,577)2,618 577 341,641 
Central1,770,945 1,458,018 17.7 %157,277 (647)1,525 572 900 159,627 
Texas1,157,907 890,278 23.1 %151,693 3,197 767 204 (2,901)152,960 
West3,688,948 2,912,803 21.0 %498,016 (1,339)3,728 3,900 696 505,001 
Other (2)21,052 33,556 (59.4)%(21,790)(23,438)414 (18,899)(3,757)(67,470)
Totals
$9,065,848 7,154,550 21.1 %1,125,215 (23,804)9,052 (13,646)(5,058)1,091,759 
(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.
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Summary of Homebuilding Data
Deliveries:
Three Months Ended
Homes
Dollar Value (In thousands)
Average Sales Price
May 31,May 31,May 31,
202120202021202020212020
East4,480 3,814 $1,560,934 1,282,553 $348,000 336,000 
Central2,761 2,579 1,093,190 984,247 396,000 382,000 
Texas2,747 2,462 790,391 694,110 288,000 282,000 
West4,502 3,804 2,543,263 1,957,435 565,000 515,000 
Other13 2,857 13,013 952,000 1,001,000 
Total14,493 12,672 $5,990,635 4,931,358 $413,000 389,000 
Of the total homes delivered listed above, 31 homes with a dollar value of $9.9 million and an average sales price of $319,000 represent home deliveries from unconsolidated entities for the three months ended May 31, 2021, compared to 19 home deliveries with a dollar value of $6.3 million and an average sales price of $330,000 for the three months ended May 31, 2020.
Six Months Ended
Homes
Dollar Value (In thousands)
Average Sales Price
May 31,May 31,May 31,
202120202021202020212020
East8,400 7,202 $2,912,235 2,436,268 $347,000 338,000 
Central5,180 4,622 2,019,628 1,770,945 390,000 383,000 
Texas5,096 4,039 1,426,802 1,157,907 280,000 287,000 
West8,124 7,108 4,520,071 3,688,948 556,000 519,000 
Other22 6,504 21,052 929,000 957,000 
Total26,807 22,993 $10,885,240 9,075,120 $406,000 395,000 
Of the total homes delivered listed above, 43 homes with a dollar value of $13.6 million and an average sales price of $316,000 represent home deliveries from unconsolidated entities for the six months ended May 31, 2021, compared to 27 home deliveries with a dollar value of $9.3 million and an average sales price of $343,000 for the six months ended May 31, 2020.
New Orders (1):
Three Months Ended
Active CommunitiesHomes
Dollar Value (In thousands)
Average Sales Price
May 31,May 31,May 31,May 31,
20212020202120202021202020212020
East351 344 5,351 4,126 $1,987,929 1,360,519 $372,000 330,000 
Central297 325 3,416 2,699 1,399,730 1,024,724 410,000 380,000 
Texas232 221 3,250 2,582 1,000,013 670,139 308,000 260,000 
West342 352 5,135 3,608 3,172,569 1,802,705 618,000 500,000 
Other— 5,146 — 1,029,000 — 
Total1,225 1,245 17,157 13,015 $7,565,387 4,858,087 $441,000 373,000 
Of the total homes listed above, 32 homes with a dollar value of $9.9 million and an average sales price of $373,000 represent homes in four active communities from unconsolidated entities for the three months ended May 31, 2021, compared to 25 homes with a dollar value of $9.0 million and an average sales price of $361,000 in four active communities for the three months ended May 31, 2020.
(1)Homes represent the number of new sales contracts executed with homebuyers, net of cancellations, during the three and six months ended May 31, 2021 and May 31, 2020.
Six Months Ended
Homes
Dollar Value (In thousands)
Average Sales Price
May 31,May 31,May 31,
202120202021202020212020
East10,165 7,857 $3,688,041 2,634,872 $363,000 335,000 
Central6,742 5,366 2,733,356 2,043,167 405,000 381,000 
Texas6,025 4,581 1,812,182 1,243,218 301,000 271,000 
West9,787 7,573 5,864,964 3,928,337 599,000 519,000 
Other14 8,121 13,581 1,015,000 970,000 
Total32,727 25,391 $14,106,664 9,863,175 $431,000 388,000 
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Of the total homes listed above, 67 homes with a dollar value of $23.5 million and an average sales price of $351,000 represent homes from unconsolidated entities for the six months ended May 31, 2021, compared to 51 homes with a dollar value of $17.1 million and an average sales price of $335,000 for the six months ended May 31, 2020.
Backlog:
At
Homes
Dollar Value (In thousands)
Average Sales Price
May 31,May 31,May 31,
202120202021202020212020
East7,778 6,345 $3,086,740 2,224,974 $397,000 351,000 
Central5,933 3,894 2,475,900 1,516,188 417,000 389,000 
Texas3,752 2,712 1,209,965 798,648 322,000 294,000 
West7,275 5,023 4,258,324 2,547,649 585,000 507,000 
Other3,465 1,138 1,155,000 1,138,000 
Total24,741 17,975 $11,034,394 7,088,597 $446,000 394,000 
Of the total homes in backlog listed above, 62 homes with a backlog dollar value of $21.4 million and an average sales price of $345,000 represent the backlog from unconsolidated entities at May 31, 2021, compared to 55 homes with a backlog dollar value of $18.0 million and an average sales price of $327,000 at May 31, 2020.
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 May 31, 2021 versus Three Months Ended May 31, 2020
Homebuilding East: Revenues from home sales increased in the second quarter of 2021 compared to the second quarter of 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 second quarter of 2021 increased compared to the same period last year primarily due to an increase in the revenue per square foot of homes delivered, which outpaced increases in costs per square foot.
Homebuilding Central: Revenues from home sales increased in the second quarter of 2021 compared to the second quarter of 2020, primarily due to an increase in the number of home deliveries in all the states of the segment except in Georgia, Tennessee and Virginia, 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 was primarily due to higher demand as the number of deliveries per active community increased. The decrease in the number of home deliveries in Georgia, Tennessee and 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. Gross margin percentage on home deliveries in the second quarter of 2021 increased compared to the same period last year primarily due to an increase in revenue per square foot of homes delivered, which outpaced increases in cost per square foot.
Homebuilding Texas: Revenues from home sales increased in the second quarter of 2021 compared to the second quarter of 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 the average sales price of homes delivered was primarily due to favorable market conditions. Gross margin percentage on home deliveries in the second quarter of 2021 increased compared to the same period last year primarily due to an increase in revenue per square foot of homes delivered, which outpaced increases in cost per square foot.
Homebuilding West: Revenues from home sales increased in the second quarter of 2021 compared to the second quarter of 2020, primarily due to an increase in the number of home deliveries in all the states of the segment except in Oregon and an increase in the average sales price of homes delivered in all the states of the segment except in Colorado. The increase in the number of home deliveries was primarily due to higher demand as the number of deliveries per active community increased during the quarter. The decrease in the number of home deliveries in Oregon was primarily due to a decrease in the number of
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deliveries per active community 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 Colorado 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 second quarter of 2021 increased compared to the same period last year primarily due to an increase in revenue per square foot of homes delivered, which outpaced increases in cost per square foot.
Six Months Ended May 31, 2021 versus Six Months Ended May 31, 2020
Homebuilding East: Revenues from home sales increased in the six months ended May 31, 2021 compared to the six months ended May 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 six months ended May 31, 2021 increased compared to the same period last year primarily due to an increase in the revenue per square foot of homes delivered while cost per square foot were unchanged.
Homebuilding Central: Revenues from home sales increased in the six months ended May 31, 2021 compared to the six months ended May 31, 2020, primarily due to an increase in the number of home deliveries in all the states of the segment except in Georgia, Maryland and Virginia, and an increase in the average sales price of homes delivered in all the states of the segment except in North Carolina and Indiana. 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 Georgia, Maryland and 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 North Carolina and Indiana 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 six months ended May 31, 2021 increased compared to the same period last year primarily due to an increase in revenue per square foot of homes delivered.
Homebuilding Texas: Revenues from home sales increased in the six months ended May 31, 2021 compared to the six months ended May 31, 2020, primarily due to an increase in the number of home deliveries, partially offset by a decrease 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 decrease in average sales price of homes delivered was primarily due to closing out higher priced communities and shifting into lower priced communities. Gross margin percentage on home deliveries in the six months ended May 31, 2021 increased compared to the same period last year primarily due to an increase in revenue per square foot of homes delivered while cost per square foot were unchanged.
Homebuilding West: Revenues from home sales increased in the six months ended May 31, 2021 compared to the six months ended May 31, 2020, primarily due to an increase in the number of home deliveries in all states of the segment and an increase in the average sales price of homes delivered in all the states of the segment except in Colorado. 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. The decrease in average sales price of homes delivered in Colorado was primarily due to closing out higher priced communities and shifting into lower priced communities. Gross margin percentage on home deliveries in the six months ended May 31, 2021 increased compared to the same period last year primarily due to an increase in revenue per square foot of homes delivered, which outpaced increases 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.
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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 EndedSix Months Ended
May 31,May 31,
(Dollars in thousands)2021202020212020
Dollar value of mortgages originated$3,186,000 3,258,000 5,947,000 5,478,000 
Number of mortgages originated9,500 10,100 17,900 17,000 
Mortgage capture rate of Lennar homebuyers74 %82 %75 %79 %
Number of title and closing service transactions17,100 14,400 32,100 25,500 
At May 31, 2021 and November 30, 2020, the carrying value of Financial Services' commercial mortgage-backed securities ("CMBS") was $162.9 million and $164.2 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)May 31, 2021November 30, 2020
Multifamily investments in unconsolidated entities$691,330 724,647 
Lennar's net investment in Multifamily936,941 906,632 
Statements of OperationsThree Months EndedSix Months Ended
May 31,May 31,
(Dollars in thousands)2021202020212020
Number of operating properties/investments sold through joint ventures— 
Lennar's share of gains on the sale of operating properties/investments$14,784 — 14,784 3,000 
Lennar Other Segment
At May 31, 2021 and November 30, 2020, we had $1.1 billion and $521.7 million, respectively, of assets in our Lennar Other segment, which included investments in unconsolidated entities of $379.2 million and $387.1 million, respectively. The increase in assets during the six months ended May 31, 2021 was due to an increase in the value of our strategic technology investments, primarily managed by our LENX subsidiary. This increase was largely related to our strategic investments in Opendoor and Sunnova. During the three months ended May 31, 2021, we completed the sale of our residential solar business to Sunnova for shares in the entity. The following is a detail of Lennar Other realized and unrealized gain (loss):
Three Months EndedSix Months Ended
May 31,May 31,
(In thousands)2021202020212020
Opendoor (OPEN) mark to market$(234,290)— 235,455 — 
Sunnova (NOVA) mark to market(38,335)— (38,335)— 
Gain on sale of solar business151,475 — 151,475 — 
Other realized gain3,580 — 3,580 — 
$(117,570)— 352,175 — 
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(2) Financial Condition and Capital Resources
At May 31, 2021, we had cash and cash equivalents and restricted cash related to our homebuilding, financial services, multifamily and other operations of $2.8 billion, compared to $2.9 billion at November 30, 2020 and $1.7 billion at May 31, 2020.
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").
Operating Cash Flow Activities
During the six months ended May 31, 2021 and May 31, 2020, cash provided by operating activities totaled $718.1 million and $1.3 billion, respectively. During the six months ended May 31, 2021, cash provided by operating activities was impacted primarily by our net earnings, a decrease in loans held-for-sale of $444.4 million primarily related to the sale of loans originated by our Financial Services segment, an increase in accounts payable and other liabilities of $184.7 million, and a decrease in receivables of $117.9 million, partially offset by an increase in inventories due to strategic land purchases, and land development and construction costs of $1.6 billion.
During the six months ended May 31, 2020, cash provided by operating activities was impacted primarily by our net earnings and a decrease in loans held-for-sale of $479.4 million primarily related to the sale of loans originated by our Financial Services segment, partially offset by an increase in inventories due to strategic land purchases, land development and construction costs of $159.1 million and increase in other assets of $148.1 million.
Investing Cash Flow Activities
During the six months ended May 31, 2021 and May 31, 2020, cash used in investing activities totaled $50.1 million and $174.0 million, respectively. During the six months ended May 31, 2021, our cash used in investing activities was primarily due to cash contributions of $282.2 million to unconsolidated entities, which included (1) $178.6 million to Homebuilding unconsolidated entities, (2) $57.8 million to Multifamily unconsolidated entities, and (3) $45.8 million to the strategic technology investments included in the Lennar Other segment. This was partially offset by distributions of capital from unconsolidated entities of $231.5 million, which primarily included (1) $134.2 million from Homebuilding unconsolidated entities, (2) $80.1 million from Multifamily unconsolidated entities, and (3) $17.2 million from the unconsolidated Rialto real estate funds included in our Lennar Other segment.
During the six months ended May 31, 2020, our cash used in investing activities was primarily due to $302.8 million of investments in and contributions to unconsolidated entities and deconsolidation of a previously consolidated entity, which included (1) $31.2 million to Homebuilding unconsolidated entities; (2) $79.7 million to Multifamily unconsolidated entities; (3) $39.3 million in strategic technology investments included in our Lennar Other segment; and (4) 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 $115.1 million, which primarily included (1) $33.4 million from Multifamily unconsolidated entities, (2) $36.4 million from the unconsolidated Rialto real estate funds included in our Lennar Other segment and (3) $45.3 million from Homebuilding unconsolidated entities.
Financing Cash Flow Activities
During the six months ended May 31, 2021 and May 31, 2020, cash used in financing activities totaled $817.8 million and $948.6 million, respectively. During the six months ended May 31, 2021, cash used in financing activities was primarily impacted by (1) $535.7 million of net repayments under our Financial Services' warehouse facilities, which included the LMF Commercial warehouse repurchase facilities; (2) $156.3 million of dividend payments; and (3) repurchases of our common stock for $173.6 million, which included $141.6 million of repurchases under our repurchase program and $32.1 million of repurchases related to our equity compensation plan. These were partially offset by $301.9 million of proceeds from liabilities related to consolidated inventory not owned due to land sales to land banks.
During the six months ended May 31, 2020, cash used in financing activities was primarily impacted by (1) $310.2 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 6.625% senior notes due May 2020; (3) repurchases of our common stock, which included $288.5 million of repurchases under our repurchase program and $7.5 million of repurchases related to our equity compensation plan; and (4) $174.4 million of principal payments on notes payable and other borrowings. These were partially offset by $169.1 million of receipts related to noncontrolling interests.
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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)May 31, 2021November 30, 2020May 31, 2020
Homebuilding debt$5,894,342 5,955,758 7,495,674 
Stockholders’ equity19,576,108 17,994,856 16,542,703 
Total capital$25,470,450 23,950,614 24,038,377 
Homebuilding debt to total capital23.1 %24.9 %31.2 %
Homebuilding debt$5,894,342 5,955,758 7,495,674 
Less: Homebuilding cash and cash equivalents2,581,583 2,703,986 1,398,682 
Net Homebuilding debt$3,312,759 3,251,772 6,096,992 
Net Homebuilding debt to total capital (1)14.5 %15.3 %26.9 %
(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 May 31, 2021, Homebuilding debt to total capital was lower compared to May 31, 2020, primarily as a result of a decrease in Homebuilding debt and an increase in stockholders' equity due to net earnings. At May 31, 2021, Homebuilding debt to total capital was lower compared to November 30, 2020, primarily as a result of an increase in stockholders' equity due to net earnings.
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:
Six Months Ended
May 31,
(Dollars in thousands)20212020
Homebuilding average debt outstanding$5,981,490 $8,171,686 
Average interest rate4.9 %4.9 %
Interest incurred$142,517 $184,198 
As of May 31, 2021, the maximum borrowings on our Credit Facility were $2.5 billion and included a $300 million accordion feature, subject to additional commitments, thus the maximum 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. 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 May 31, 2021:
(Dollars in thousands)Covenant LevelLevel Achieved as of
May 31, 2021
Minimum net worth test$9,290,371 13,075,167 
Maximum leverage ratio65.0 %18.8 %
Liquidity test1.00 9.09 
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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 2021, our Board of Directors authorized the repurchase of up to the lesser of $1.0 billion in value, or 25 million in shares, of our outstanding Class A and 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 under this program for both the three and six months ended May 31, 2021 and 2020 are included in Note 4 of the Notes to Condensed Consolidated Financial Statements.
During the six months ended May 31, 2021, treasury stock increased due to our repurchase of 1.9 million shares of Class A and Class B common stock due primarily to our repurchase of 1.5 million shares of Class A and Class B common stock through our stock repurchase program. During the six months ended May 31, 2020, treasury stock increased due to our repurchase of 4.4 million shares of Class A and Class B common stock through our stock repurchase program.
On June 18, 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 July 19, 2021 to holders of record at the close of business on July 2, 2021. On May 5, 2021, we paid cash dividends of $0.25 per share on both our Class A and Class B common stock to holders of record at the close of business on April 21, 2021, as declared by our Board of Directors on April 7, 2021. We approved and paid cash dividends of $0.125 per share for each of the first three quarters of 2020 and $0.25 per share in fourth quarter of 2020 on both our Class A and Class B common stock and first two quarter of 2021 on both its 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 May 31, 2021 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 May 31, 2021 is included in the following tables. Intercompany balances and transactions within the Obligors have been eliminated and amounts attributable to the Obligor’s 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)May 31, 2021November 30, 2020
Due from non-guarantor subsidiaries$3,501,212 2,655,503 
Equity method investments1,008,979 951,579 
Total assets29,645,023 27,695,067 
Total liabilities9,824,021 9,599,718 
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Six Months Ended
(In thousands)May 31, 2021
Total revenues$11,065,793 
Operating earnings2,009,860 
Earnings before income taxes1,784,336 
Net earnings attributable to Lennar1,363,838 
Off-Balance Sheet Arrangements
Homebuilding: Investments in Unconsolidated Entities
As of May 31, 2021, we had equity investments in 42 active homebuilding and land unconsolidated entities (of which three had recourse debt, 13 had non-recourse debt and 26 had no debt) compared to 38 active homebuilding and land unconsolidated entities at November 30, 2020. 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 May 31, 2021 and 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
(In thousands)Total JV Debt202120222023ThereafterOther
Debt without recourse to Lennar$1,204,527 97,054 224,668 19,255 863,550 — 
Land seller and CDD and other debt11,208 — — — — 11,208 
Maximum recourse debt exposure to Lennar3,599 — 3,599 — — — 
Debt issuance costs(13,118)— — — — (13,118)
Total$1,206,216 97,054 228,267 19,255 863,550 (1,910)
Multifamily: Investments in Unconsolidated Entities
At May 31, 2021, Multifamily had equity investments in 16 unconsolidated entities that are engaged in multifamily residential developments (of which 10 had non-recourse debt and six had no debt), compared to 22 unconsolidated entities at November 30, 2020. 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, 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 six months ended May 31, 2021 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
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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 May 31, 2021.
The following table summarizes the principal maturities of our Multifamily unconsolidated entities debt as per current debt arrangements as of May 31, 2021 and it does not represent estimates of future cash payments that will be made to reduce debt balances.
Principal Maturities of Unconsolidated JVs by Period
(In thousands)Total JV Debt202120222023ThereafterOther
Debt without recourse to Lennar$2,865,860 288,422 529,886 758,597 1,288,955 — 
Debt issuance costs(26,220)— — — — (26,220)
Total$2,839,640 288,422 529,886 758,597 1,288,955 (26,220)
Lennar Other: Investments in Unconsolidated Entities
As part of the sale of the Rialto investment and asset management platform, 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 May 31, 2021 and November 30, 2020, we had strategic technology investments in unconsolidated entities of $178.2 million and $196.7 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 HomesitesYears of
May 31, 2021OptionedJVsTotalOwned HomesitesTotal HomesitesSupply Owned (1)
East55,537 5,750 61,287 55,218 116,505 
Central24,283 92 24,375 41,816 66,191 
Texas43,447 — 43,447 38,332 81,779 
West52,347 3,444 55,791 51,336 107,127 
Other7,569 7,573 2,235 9,808 
Total homesites175,618 16,855 192,473 188,937 381,410 3.3 
% of total homesites50 %50 %
Controlled HomesitesYears of
May 31, 2020OptionedJVsTotalOwned HomesitesTotal HomesitesSupply Owned (1)
East 22,812 13,608 36,420 63,932 100,352 
Central13,271 122 13,393 43,203 56,596 
Texas23,164 — 23,164 36,179 59,343 
West12,355 2,900 15,255 59,777 75,032 
Other— 8,681 8,681 2,071 10,752 
Total homesites71,602 25,311 96,913 205,162 302,075 3.9 
% of total homesites32 %68 %
(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. There were no outstanding borrowings under our Credit Facility as of May 31, 2021.
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(3) New 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 accounting pronouncements applicable to our company.
(4) Critical Accounting Policies
We believe that there have been no significant changes to our critical accounting policies during the six months ended May 31, 2021 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.
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 May 31, 2021, we had no outstanding borrowings under our Credit Facility.
As of May 31, 2021, our borrowings under Financial Services' warehouse repurchase facilities totaled $671.5 million under residential facilities and $104.2 million under LMF Commercial facilities.
Information Regarding Interest Rate Sensitivity
Principal (Notional) Amount by
Expected Maturity and Average Interest Rate
May 31, 2021
Six Months Ending November 30,Years Ending November 30,Fair Value at May 31,
(Dollars in millions)202120222023202420252026ThereafterTotal2021
LIABILITIES:
Homebuilding:
Senior Notes and
other debts payable:
Fixed rate$355.2 1,539.7 99.0 1,557.2 591.8 402.9 1,297.5 5,843.3 6,381.0 
Average interest rate5.6 %4.5 %4.2 %5.0 %4.8 %5.2 %4.7 %4.8 %— 
Variable rate$33.0 — — — — — — 33.0 33.3 
Average interest rate4.6 %— — — — — — 4.6 %— 
Financial Services:
Notes and other
debts payable:
Fixed rate $— — — — — — 152.4 152.4 153.3 
Average interest rate— — — — — — 3.4 %3.4 %— 
Variable rate$775.8 — — — — — — 775.8 775.8 
Average interest rate2.4 %— — — — — — 2.4 %— 
Lennar Other:
Notes and other
debts payable:
Fixed rate $1.9 — — — — — — 1.9 1.9 
Average interest rate3.0 %— — — — — — 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.
Item 4. Controls and Procedures
Each of our Co-Chief Executive Officers and Co-Presidents ("Co-CEOs") and 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 May 31, 2021 to ensure that information required to be disclosed in our reports filed or
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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 CFO, as appropriate, to allow timely decisions regarding required disclosures.
Both of our Co-CEOs and 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 May 31, 2021. That evaluation did not identify any changes that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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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.
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 May 31, 2021:
Period:Total Number of Shares Purchased (1)Average Price Paid Per ShareTotal 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)
March 1 to March 31, 202167,370 $82.60 — 24,490,000 
April 1 to April 30, 2021— $— — 24,490,000 
May 1 to May 31, 20211,001,313 $98.45 1,000,000 23,490,000 
(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 2021, our Board of Directors authorized a stock repurchase program, which replaced a January 2019 stock repurchase program, under which we are authorized to purchase up to the lesser of $1.0 billion in value, excluding commission, or 25 million in shares, of our outstanding Class A or Class B common stock. This repurchase authorization has no expiration.
Items 3 - 5. Not Applicable
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Item 6. Exhibits
10.1***
10.2***
31.1*
31.2*
31.3*
32.*
101.*The following financial statements from Lennar Corporation's Quarterly Report on Form 10-Q for the quarter ended May 31, 2021, filed on July 2, 2021, 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 May 31, 2021 was formatted in iXBRL.
* Filed herewith.
** Included in Exhibit 101.
*** Management contract or compensatory plan or arrangement.

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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:July 2, 2021/s/    Diane Bessette        
Diane Bessette
Vice President, Chief Financial Officer and Treasurer
Date:July 2, 2021/s/    David Collins        
David Collins
Vice President and Controller

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