Signal management

LENNAR CORP /NEW/ Management’s Discussion and Analysis of Financial Condition and Results of Operations (Form 10-Q)

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, 2021.

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

The forward-looking statements reflect our current views about future events and
are subject to risks, uncertainties and assumptions. We wish to caution readers
that certain important factors may have affected and could in the future affect
our actual results and could cause actual results to differ significantly from
what is anticipated by our forward-looking statements.
The most important factors that could cause actual results to differ materially
from those anticipated by our forward-looking statements include, but are not
limited to: an extended slowdown in the real estate markets in which we have
significant homebuilding activity, including a slowdown in either the market for
single family homes or the multifamily rental market; 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; decreased
demand for our homes or Multifamily rental properties; the impact of inflation
or a higher interest rate environment; the potential negative impact to our
business of the ongoing coronavirus ("COVID-19") pandemic, the duration, impact
and severity of which is highly uncertain; continuation of supply shortages and
increased costs related to construction materials and labor; cost increases
related to real estate taxes and insurance; reduced availability or increased
cost of mortgage financing for homebuyers; increased interest rates or increased
competition in the mortgage industry; reductions in the market value of our
investments in public companies; our inability to successfully execute our
strategies, including our land lighter strategy and our strategy to monetize
noncore assets; 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; increased competition for home sales from other sellers
of new and resale homes; our inability to pay down debt; government actions or
other factors that might force us to terminate our program of repurchasing our
stock; a decline in the
value of our land inventories and resulting write-downs of the carrying value of
our real estate assets; the failure of the participants in various joint
ventures to honor their commitments; difficulty obtaining land-use entitlements
or construction financing; natural disasters and other unforeseen events for
which our insurance does not provide adequate coverage; new laws
or regulatory changes that adversely affect the profitability of our businesses;
our inability to refinance our debt on terms that are as favorable as our
current arrangements; and changes in accounting conventions that adversely
affect our reported earnings.

Please see our Form 10-K for the fiscal year ended November 30, 2021 and our
other filings with the SEC for a further discussion of these and other risks and
uncertainties which could affect our future results. We undertake no obligation,
other than those imposed by securities laws, to publicly revise any
forward-looking statements to reflect events or circumstances after the date of
those statements or to reflect the occurrence of anticipated or unanticipated
events.
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Outlook

Our second quarter results demonstrated strength and excellent performance
throughout the quarter. However, the weight of a rapid doubling of interest
rates over six months, together with accelerated price appreciation, began to
drive buyers in many markets to pause and reconsider. We began to see these
effects after quarter end. Despite the pause, demand remains reasonably strong
as household formation has continued to rise and buyers still have down payments
and are able to qualify for mortgages. Buyers are seeking shelter and protection
against inflationary pressures as scarcity of rentals drives rents higher.
Owning a home with a fixed rate mortgage provides protection against annual or
biennial rent increases. Although we have adjusted downward prices in some
markets, even those prices remain higher than a year ago. Supply remains limited
across the country and the need for affordable workforce housing continues to be
at crisis levels. Production must catch up to the growing household numbers as
production of dwellings over the past decade has lagged prior decades by as many
as five million homes.

Although market conditions in some markets are no longer as positive as they had
been, indicators that this would happen have been building since the Federal
Reserve's tightening began. Given the Federal Reserve's expressed commitment to
combat inflation, we can expect continued market tightening until inflation
subsides. We are focused on making the changes that are necessary to stay ahead
of the trend. So far in June, new orders and traffic have weakened in many of
our markets due to a rapid spike in mortgage rates and headwinds from negative
economic headlines. Many markets have also slowed because we have entered the
seasonably slower part of the year. To maintain sales momentum, we have offered
mortgage buy down programs and increased sales incentives. We have adjusted
prices in various communities to the levels that are necessary to maintain
reasonable sales volumes. Our price reductions have led to sales upticks, which
leads us to believe there is still underlying strength in the market. With
respect to our financial services business, the mortgage market has become
extraordinarily competitive as refinancings have all but halted and sales of
previously owned homes have declined. As a result, margins on sales of mortgages
into the secondary market have been decreasing.

Although deliveries have been constrained by supply chain disruptions and an
increase in labor costs, for the first time since the supply disruptions began,
we saw a flattening in cycle time - the time it takes us to build a home
increased by only five days over the past four months. This may signal that
supply chain problems have peaked. But it also is because we and our suppliers
have become much better at managing supply problems. The pace at which we are
starting new homes has been constrained by delays in getting permits. We are
matching our sales to our starts, rather than trying to match our starts to what
we can sell. We continue to strategically acquire land, primarily through
options. This continues our land-light strategy as our percentage of homesites
controlled increased by May 31, 2022 to 62% from 50% in the prior year, while
our years' supply of land owned decreased to 3.1 years as compared to 3.3 years
last year. We are also continuing to pay down debt as it comes due, with the
next tranche maturing in November 2022, and we are continuing to repurchase our
stock.

Our playbook going forward will be to use our dynamic pricing model week by week
to price products to current market conditions in order to maximize pricing and
margin while we maintain a carefully limited inventory level. We continue to
sell our homes later in the construction cycle to maximize prices and reduce the
likelihood of costs increasing after we commit to sales prices. We will continue
to build and to adjust prices in order to fill the housing shortage and provide
much-needed workforce housing across markets. We will continue to work to
improve our SG&A leverage and we expect to drive efficiencies through technology
and process improvement to offset market adjustments. We will continue to focus
on cash flow and our bottom line to protect and enhance our already strong
balance sheet. Finally, we expect to conclude our long-planned spin-off by year
end. We have formed a company, named Quarterra Group, In. ("Quarterra"), which
will have three asset management verticals - multifamily residential, single
family for rent and land banking and similar land finance strategies. When it is
spun off, Quarterra will remove $2.5 billion of assets from our balance sheet,
without materially affecting our earnings.

We believe we are well positioned financially, organizationally and
technologically to thrive in this evolving housing market. We recognize that
interest rates are rising and inflation continues to be a significant headwind.
It is difficult to provide the more targeted guidance that we typically offer
given the uncertainty about market conditions, so we are providing broader than
normal ranges in our guidance for our third quarter. We expect our new orders
for the third quarter of 2022 to be in the range of 16,000 to 18,000 homes, and
we anticipate our third quarter deliveries to be in the range of 17,000 to
18,500 homes. We expect gross margins to be in the range of 28.5% to 29.5, and
we expect our SG&A as a percentage of home sale revenues to be between 6.0% and
6.5%. We believe we are still on track to reach our goal of 2.75 years' land
owned and 65% homesites controlled by year-end. As we look to the remainder of
2022, we recognize that there are challenges in the market to which we must pay
careful attention. But there are also opportunities. We look forward to meeting
the challenges and taking advantage of the opportunities to make Lennar an even
stronger company in the future.
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(1) Operating results

Insight

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, 2022 are not necessarily indicative of the results to
be expected for the full year. Our homebuilding business is seasonal in nature
and generally reflects higher levels of new home order activity in our second
and third fiscal quarters and increased deliveries in the second half of our
fiscal year. However, a variety of factors can alter seasonal patterns.

Our net earnings attributable to Lennar were $1.3 billion, or $4.49 per diluted
share ($4.50 per basic share), in the second quarter of 2022, compared to net
earnings attributable to Lennar of $831.4 million, or $2.65 per diluted share
($2.66 per basic share), in the second quarter of 2021. Results included
unrealized mark-to-market losses of $78 million in the second quarter of 2022
and unrealized mark-to-market gains of $272.6 million in the second quarter of
2021 on our publicly traded technology investments. Excluding mark-to-market
losses on technology investments in both years and a gain on the sale of our
residential solar business in the prior year, second quarter net earnings
attributable to Lennar in 2022 were $1.4 billion, or $4.69 per diluted share,
compared to second quarter net earnings attributable to Lennar in 2021 of $923.6
million, or $2.95 per diluted share.

The financial information relating to our operations was as follows:

                                                                                           Three Months Ended May 31, 2022

(In thousands)                              Homebuilding          Financial Services          Multifamily           Lennar Other           Corporate              Total
Revenues:
Sales of homes                            $   7,963,683                     -                       -                      -                     -             7,963,683
Sales of land                                     7,524                     -                       -                      -                     -                 7,524
Other revenues                                    6,775               200,166                 176,021                  4,527                     -               387,489
Total revenues                                7,977,982               200,166                 176,021                  4,527                     -             8,358,696
Costs and expenses:
Costs of homes sold                           5,610,783                     -                       -                      -                     -             5,610,783
Costs of land sold                                7,815                     -                       -                      -                     -                 7,815
Selling, general and administrative
expenses                                        486,555                     -                       -                      -                     -      

486 555

Other costs and expenses                              -                96,231                 175,152                  8,236                     -               279,619
Total costs and expenses                      6,105,153                96,231                 175,152                  8,236                     -             6,384,772
Equity in earnings (loss) from
unconsolidated entities, Multifamily
other gain and Lennar Other other income
(expense), net, and other gain (loss)             4,862                     -                    (201)               (26,750)                    -               (22,089)
Other income, net                                 2,720                     -                       -                      -                     -                 2,720
Lennar Other unrealized losses from
technology investments                                -                     -                       -                (77,965)                    -               (77,965)
Operating earnings (loss)                 $   1,880,411               103,935                     668               (108,424)                    -             1,876,590
Corporate general and administrative
expenses                                              -                     -                       -                      -               105,207      

105 207

Charitable foundation contribution                    -                     -                       -                      -                16,549      

16,549

Earnings (loss) before income taxes       $   1,880,411               103,935                     668               (108,424)             (121,756)            1,754,834


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                                                                                            Three Months Ended May 31, 2021

(In thousands)                              Homebuilding          Financial Services          Multifamily           Lennar Other            Corporate              Total
Revenues:
Sales of homes                            $   5,980,731                     -                       -                      -                      -             5,980,731
Sales of land                                    38,785                     -                       -                      -                      -                38,785
Other revenues                                    8,525               218,747                 177,473                  5,984                      -               410,729
Total revenues                                6,028,041               218,747                 177,473                  5,984                      -             6,430,245
Costs and expenses:
Costs of homes sold                           4,421,373                     -                       -                      -                      -             4,421,373
Costs of land sold                               32,979                     -                       -                      -                      -                32,979
Selling, general and administrative
expenses                                        455,164                     -                       -                      -                      -     

455 164

Other costs and expenses                              -                97,427                 168,930                  5,732                      -               272,089
Total costs and expenses                      4,909,516                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, and other gain (loss) (1)        (1,688)                    -                  13,854                218,276                      -               230,442
Other expense, net                               (4,362)                    -                       -                      -                      -                (4,362)
Lennar Other unrealized losses from
technology investments                                -                     -                       -               (272,625)                     -     

(272,625)

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


(1) During the three months ended May 31, 2021, our Lennar Other segment
realized a gain of $151.5 million on the sale of our residential solar business.

                                                                                              Six Months Ended May 31, 2022

(In thousands)                               Homebuilding           Financial Services          Multifamily          Lennar Other           Corporate               Total
Revenues:
Sales of homes                             $   13,685,440                     -                       -                     -                     -              13,685,440
Sales of land                                      31,491                     -                       -                     -                     -                  31,491
Other revenues (1)                                 13,256               376,867                 443,380                11,778                     -                 845,281
Total revenues                                 13,730,187               376,867                 443,380                11,778                     -              14,562,212
Costs and expenses:
Costs of homes sold                             9,795,647                     -                       -                     -                     -               9,795,647
Costs of land sold                                 36,371                     -                       -                     -                     -                  36,371
Selling, general and administrative
expenses                                          915,033                     -                       -                     -                     -                 915,033
Other costs and expenses                                -               182,141                 438,889                13,643                     -                 634,673
Total costs and expenses                       10,747,051               182,141                 438,889                13,643                     -              11,381,724
Equity in earnings (loss) from
unconsolidated entities and Multifamily
other gain and Lennar Other other income
(expense), net, and other gain (loss)               4,576                     -                   1,604               (36,558)                    -                 (30,378)

Other expense, net                                  2,549                     -                       -                     -                     -                   2,549
Lennar Other unrealized losses from
technology investments                                  -                     -                       -              (473,135)                    -                (473,135)
Operating earnings (loss)                  $    2,990,261               194,726                   6,095              (511,558)                    -               2,679,524
Corporate general and administrative
expenses                                                -                     -                       -                     -               218,868                 218,868
Charitable foundation contribution                      -                     -                       -                     -                29,087                  29,087
Earnings (loss) before income taxes        $    2,990,261               194,726                   6,095              (511,558)             (247,955)              2,431,569


(1) During the six months ended May 31, 2022 Other revenue in our Multifamily segment included land sales to unconsolidated entities of $147.8 million.

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                                                                                             Six Months Ended May 31, 2021

(In thousands)                              Homebuilding           Financial Services          Multifamily          Lennar Other          Corporate               Total
Revenues:
Sales of homes                            $   10,871,645                     -                       -                    -                     -              10,871,645
Sales of land                                     86,428                     -                       -                    -                     -                  86,428
Other revenues                                    13,024               462,816                 308,916               12,884                     -                 797,640
Total revenues                                10,971,097               462,816                 308,916               12,884                     -              11,755,713
Homebuilding costs and expenses:
Costs of homes sold                            8,088,235                     -                       -                    -                     -               8,088,235
Costs of land sold                                74,167                     -                       -                    -                     -                  74,167
Selling, general and administrative              865,400                     -                       -                    -                     -       

865,400

Other costs and expenses                               -               195,289                 299,979                9,984                                       505,252
Total costs and expenses                       9,027,802               195,289                 299,979                9,984                     -               9,533,054
Equity in earnings (loss) from
unconsolidated entities and Multifamily
other gain and Lennar Other other income
(expense), net, and other gain (loss) (1)         (6,253)                    -                  12,586              217,229                     -                 223,562
Other income, net                                  8,613                     -                       -                                          -                   8,613
Lennar Other unrealized losses from
technology investments                                 -                     -                       -              197,120                     -       

197 120

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


(1) During the six months ended May 31, 2021our Lennar Other segment achieved a gain of $151.5 million on the sale of our residential solar business.

Three months completed May 31, 2022 compared to the three months ended May 31, 2021

Revenues from home sales increased 33% in the second quarter of 2022 to $8.0
billion from $6.0 billion in the second quarter of 2021. Revenues were higher
primarily due to a 14% increase in the number of home deliveries to 16,549 homes
from 14,493 homes and a 17% increase in the average sales price to $483,000 from
$414,000.

Gross margin on home sales were $2.4 billion, or 29.5%, in the second quarter of
2022, compared to $1.6 billion, or 26.1%, in the second quarter of 2021. During
the second quarter of 2022, an increase in revenues per square foot was offset
by an increase in costs per square foot primarily due to higher material and
labor costs. Overall, gross margins improved year over year as land costs
remained relatively flat while interest expense decreased as a result of our
focus on reducing debt.

Selling, general and administrative expenses were $486.6 million in the second
quarter of 2022, compared to $455.2 million in the second quarter of 2021. As a
percentage of revenues from home sales, selling, general and administrative
expenses improved to 6.1% in the second quarter of 2022, from 7.6% in the second
quarter of 2021. This was the lowest percentage for a second quarter in our
history primarily due to a decrease in broker commissions and the benefits of
our technology efforts.

Operating earnings for our Financial Services segment were $103.9 million in the
second quarter of 2022, compared to $121.3 million in the second quarter of
2021. The decrease in operating earnings was primarily due to lower mortgage net
margins driven by a more competitive mortgage market, partially offset by an
increase in rate lock volume and an increase in profit per order in our title
business.

Operating earnings for our Multifamily segment were $0.7 million in the second
quarter of 2022, compared to $22.4 million in the second quarter of 2021.
Operating loss for our Lennar Other segment was $108.4 million in the second
quarter of 2022, compared to $54.1 million in the second quarter of 2021. Lennar
Other operating loss in the second quarter of 2022 was primarily due to
mark-to-market losses on our publicly traded technology investments. Lennar
Other operating loss in the second quarter of 2021 was primarily due to
mark-to-market losses on our publicly traded technology investments, partially
offset by the gain on the sale of our residential solar business.


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Semester completed May 31, 2022 compared to the half-year ended May 31, 2021

Revenues from home sales increased 26% in the six months ended May 31, 2022 to
$13.7 billion from $10.9 billion in the six months ended May 31, 2021. Revenues
were higher primarily due to a 9% increase in the number of home deliveries to
29,087 from 26,807 and a 16% increase in the average sales price to $472,000
from $406,000.

Gross margin on home sales were $3.9 billion, or 28.4%, in the six months ended
May 31, 2022, compared to $2.8 billion, or 25.6%, in the six months ended May
31, 2021. During the six months ended May 31, 2022, an increase in revenues per
square foot was offset by an increase in costs per square foot primarily due to
higher material and labor costs. Overall, gross margins improved year over year
as land costs remained relatively flat while interest expense decreased as a
result of our focus on reducing debt.

Selling, general and administrative expenses were $915.0 million in the six
months ended May 31, 2022, compared to $865.4 million in the six months ended
May 31, 2021. As a percentage of revenues from home sales, selling, general and
administrative expenses improved to 6.7% in the six months ended May 31, 2022,
from 8.0% in the six months ended May 31, 2021. The improvement was primarily
due to a decrease in broker commissions and the benefits of our technology
efforts.

Operating profit from our financial services segment was $194.7 million within six months May 31, 2022compared to $267.5 million within six months May 31, 2021. Lower operating income was primarily due to lower mortgage net spreads due to a more competitive mortgage market, partially offset by an increase in locked rate volume.

Operating earnings for our Multifamily segment were $6.1 million in the six
months ended May 31, 2022, compared to $21.5 million in the six months ended May
31, 2021. Operating loss for our Lennar Other segment was $511.6 million in the
six months ended May 31, 2022, compared to operating earnings of $417.2 million
in the six months ended May 31, 2021. Lennar Other operating loss for the six
months ended May 31, 2022 was primarily due to mark-to-market losses on our
publicly traded technology investments. Lennar Other operating earnings for the
six months ended May 31, 2021 was primarily due to mark-to-market unrealized
gains on our publicly traded technology investments and the gain on the sale of
our residential solar business.

For the six months ended May 31, 2022 and 2021, we had a tax provision of $599.7
million and $570.2 million, respectively, which resulted in an overall effective
income tax rate of 24.7% and 23.7%, respectively. The overall effective income
tax rate was higher in 2022 primarily due to the expiration of the new energy
efficient home tax credit.
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Residential building segments

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

Selected financial and operational data

                                                                                                                     Three Months Ended May 31, 2022
                                                Gross Margins                                                                                              Operating Earnings (Loss)
                                                                                                                       Gross Margins                                  Equity in Earnings
                        Sales of Homes         Costs of Sales of         Gross Margin          Net Margins on            (Loss) on                                       (Loss) from                 Other Income            Operating Earnings
($ in thousands)           Revenue                   Homes                     %             Sales of Homes (1)        Sales of Land         Other Revenue         Unconsolidated Entities          (Expense), net                 (Loss)
East                   $   2,209,967                 1,510,758                 31.6  %                546,589                (619)              1,195                           (659)                    7,313                        553,819
Central                    1,283,763                   981,832                 23.5  %                206,893                   -                 226                            302                      (626)                       206,795
Texas                      1,093,533                   747,861                 31.6  %                272,934                 473                 255                              -                      (805)                       272,857
West                       3,367,261                 2,360,554                 29.9  %                846,340                (145)                678                          2,571                    (1,595)                       847,849
Other (2)                      9,159                     9,778                 (6.8) %                 (6,411)                  -               4,421                          2,648                    (1,567)                          (909)
Totals                 $   7,963,683                 5,610,783                 29.5  %              1,866,345                (291)              6,775                          4,862                     2,720                      1,880,411


                                                                                                                        Three Months Ended May 31, 2021
                                                  Gross Margins                                                                                                Operating Earnings (Loss)
                                                                                                                                                                            Equity in Earnings
                         Sales of Homes         Costs of Sales of                                 Net Margins on          Gross Margins on                                     (Loss) from                 Other Income            Operating Earnings
($ in thousands)            Revenue                   Homes               Gross Margin %        Sales of Homes (1)         Sales of Land           Other Revenue         Unconsolidated Entities          (Expense), net                 (Loss)
East                    $   1,551,030                 1,115,010                   28.1  %                307,978                  1,335               1,768                            (59)                   (1,195)                       309,827
Central                     1,093,190                   846,427                   22.6  %                157,429                    774                 579                            317                       (51)                       159,048
Texas                         790,391                   551,067                   30.3  %                173,803                  1,837                 562                            387                      (532)                       176,057
West                        2,543,263                 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


                                                                                                                            Six Months Ended May 31, 2022
                                                  Gross Margins                                                                                                   Operating Earnings (Loss)
                                                                                                                                                                                 Equity in Earnings
                         Sales of Homes          Costs of Sales of                                 Net Margins on          Gross Margins (Loss)                                     (Loss) from                 Other Income            Operating Earnings
($ in thousands)             Revenue                   Homes               Gross Margin %        Sales of Homes (1)          on Sales of Land           Other Revenue         Unconsolidated Entities          (Expense), net                 (Loss)
East                    $    3,872,958                 2,687,311                   30.6  %                898,143                     (6,293)              1,992                         (2,017)                   13,989                        905,814
Central                      2,389,693                 1,852,445                   22.5  %                357,268                      1,619                 460                            431                      (905)                       358,873
Texas                        1,899,163                 1,321,703                   30.4  %                442,875                      2,871                 497                              -                    (2,074)                       444,169
West                         5,509,465                 3,918,290                   28.9  %              1,290,864                       (984)              1,559                          2,707                    (4,849)                     1,289,297
Other (2)                       14,161                    15,898                  (12.3) %                (14,390)                    (2,093)              8,748                          3,455                    (3,612)                        (7,892)
Totals                  $   13,685,440                 9,795,647                   28.4  %              2,974,760                     (4,880)             13,256                          4,576                     2,549                      2,990,261


                                                                                                                           Six Months Ended May 31, 2021
                                                   Gross Margins                                                                                                  Operating Earnings (Loss)
                                                                                                                                                                               Equity in Earnings
                         Sales of Homes          Costs of Sales of                                  Net Margins on          Gross Margins on                                      (Loss) from                 Other Income            Operating Earnings
($ in thousands)             Revenue                   Homes                Gross Margin %        Sales of Homes (1)          Sales of Land           Other Revenue         Unconsolidated Entities          (Expense), net                 (Loss)
East                    $    2,898,641                 2,103,873                    27.4  %                549,512                   6,411               3,186                           (551)                   13,352                        571,910
Central                      2,019,628                 1,559,973                    22.8  %                289,528                     751                 984                            415                      (607)                       291,071
Texas                        1,426,801                 1,002,264                    29.8  %                302,964                   2,871                 820                            541                    (1,496)                       305,700
West                         4,520,071                 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


(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,
                                 2022                2021                  2022                  2021                 2022                2021
East                              5,198               4,480          $   2,225,725            1,560,934          $   428,000             348,000
Central                           2,944               2,761              1,283,763            1,093,190              436,000             396,000
Texas                             3,288               2,747              1,093,533              790,391              333,000             288,000
West                              5,110               4,502              3,367,261            2,543,263              659,000             565,000
Other                                 9                   3                  9,159                2,857            1,018,000             952,000
Total                            16,549              14,493          $   7,979,441            5,990,635          $   483,000             414,000


Of the total homes delivered listed above, 44 homes with a dollar value of $15.8
million and an average sales price of $358,000 represent home deliveries from
unconsolidated entities for the three months ended May 31, 2022, compared to 31
home deliveries with a dollar value of $9.9 million and an average sales price
of $319,000 for the three months ended May 31, 2021.

                                                                                Six Months Ended
                                          Homes                            Dollar Value (In thousands)                    Average Sales Price
                                         May 31,                                     May 31,                                    May 31,
                                 2022                2021                  2022                   2021                  2022                2021
East                              9,280               8,400          $    3,898,097             2,912,235          $   420,000             347,000
Central                           5,465               5,180               2,389,692             2,019,628              437,000             390,000
Texas                             5,825               5,096               1,899,163             1,426,802              326,000             280,000
West                              8,502               8,124               5,509,465             4,520,071              648,000             556,000
Other                                15                   7                  14,161                 6,504              944,000             929,000
Total                            29,087              26,807          $   13,710,578            10,885,240          $   472,000             406,000


Of the total homes delivered listed above, 69 homes with a dollar value of $25.1
million and an average sales price of $364,000 represent home deliveries from
unconsolidated entities for the six months ended May 31, 2022, compared to 43
home deliveries with a dollar value of $13.6 million and an average sales price
of $316,000 for the six months ended May 31, 2021.


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New orders (1):

                                                                                         Three Months Ended
                            Active Communities                            Homes                         Dollar Value (In thousands)                   Average Sales Price
                                 May 31,                                 May 31,                                  May 31,                                   May 31,
                        2022                  2021               2022                2021                 2022                 2021                 2022                2021
East                     354                   351                5,973              5,351          $   2,753,770           1,987,929          $   461,000             372,000
Central                  315                   297                3,576              3,416              1,663,354           1,399,730              465,000             410,000
Texas                    205                   232                3,375              3,250              1,189,263           1,000,013              352,000             308,000
West                     348                   342                4,858              5,135              3,482,679           3,172,569              717,000             618,000
Other                      3                     3                   10                  5                  9,203               5,146              920,000           1,029,000
Total                  1,225                 1,225               17,792             17,157          $   9,098,269           7,565,387          $   511,000             441,000


Of the total homes listed above, 60 homes with a dollar value of $30.8 million
and an average sales price of $514,000 represent homes in seven active
communities from unconsolidated entities for the three months ended May 31,
2022, compared to 32 homes with a dollar value of $9.9 million and an average
sales price of $373,000 in four active communities for the three months ended
May 31, 2021.

                                                                                   Six Months Ended
                                             Homes                          Dollar Value (In thousands)                    Average Sales Price
                                            May 31,                                   May 31,                                    May 31,
                                    2022                2021                 2022                   2021                 2022                2021
East                                10,883             10,165          $    4,886,826            3,688,041          $   449,000             363,000
Central                              6,688              6,742               3,065,492            2,733,356              458,000             405,000
Texas                                6,141              6,025               2,111,048            1,812,182              344,000             301,000
West                                 9,812              9,787               6,818,611            5,864,964              695,000             599,000
Other                                   15                  8                  13,831                8,121              922,000           1,015,000
Total                               33,539             32,727          $   16,895,808           14,106,664          $   504,000             431,000


Of the total new orders listed above, 104 homes with a dollar value of $48.2
million and an average sales price of $463,000 represent new orders from
unconsolidated entities for the six months ended May 31, 2022, compared to 67
new orders with a dollar value of $23.5 million and an average sales price of
$351,000 for the six months ended May 31, 2021.

(1)Homes represent the number of new sales contracts executed with homebuyers,
net of cancellations, during the three and six months ended May 31, 2022 and
2021.

Backlog:
                                                                                           At
                                              Homes                          Dollar Value (In thousands)                    Average Sales Price
                                             May 31,                                   May 31,                                    May 31,
                                     2022                2021                 2022                   2021                 2022                2021
East                                  9,882              7,778          $    4,566,295            3,086,740          $   462,000             397,000
Central                               6,381              5,933               3,010,596            2,475,900              472,000             417,000
Texas                                 4,582              3,752               1,665,155            1,209,965              363,000             322,000
West                                  7,775              7,275               5,444,307            4,258,324              700,000             585,000
Other                                     4                  3                   3,611                3,465              903,000           1,155,000
Total                                28,624             24,741          $   14,689,964           11,034,394          $   513,000             446,000


Of the total homes in backlog listed above, 114 homes with a backlog dollar
value of $51.7 million and an average sales price of $453,000 represent the
backlog from unconsolidated entities at May 31, 2022, compared to 62 homes with
a backlog dollar value of $21.4 million and an average sales price of $345,000
at May 31, 2021. During the six months ended May 31, 2022, we acquired 347 homes
and 54 homes in backlog in the East and Central Homebuilding segment,
respectively.

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 completed May 31, 2022 compared to the three months ended May 31, 2021

Homebuilding East: Revenues from home sales increased in the second quarter of
2022 compared to the second quarter of 2021, primarily due to an increase in the
number of home deliveries in all the states in the segment except in New Jersey
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
driven by an increase in the number of active communities. The decrease in the
number of home deliveries in New Jersey was primarily due to a decrease in the
number of active communities due to the timing of opening and
                                       35
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closing of communities as a result of supply chain disruptions. The increase in
the average sales price of homes delivered was primarily due to favorable market
conditions. In the second quarter of 2022, an increase in revenues per square
foot was partially offset by an increase in costs per square foot primarily due
to higher material and labor costs. Overall, gross margin percentage on home
deliveries improved year over year as land costs remained relatively flat.

Homebuilding Central: Revenues from home sales increased in the second quarter
of 2022 compared to the second quarter of 2021, primarily due to an increase in
the number of home deliveries in all the states in the segment except in North
Carolina and Virginia, and an increase in the average sales price of homes
delivered in all the states in the segment except in Georgia, Maryland and
Tennessee. The increase in the number of home deliveries was primarily driven by
an increase in active communities. The decrease in the number of home deliveries
in North Carolina and Virginia was primarily due to a decrease in the number of
deliveries per active community due to the timing of opening and closing of
communities as a result of supply chain disruptions. The increase in the average
sales price of homes delivered was primarily due to favorable market conditions.
The decrease in the average sales price of homes delivered in Georgia, Maryland
and Tennessee was primarily driven by a change in product mix due to a higher
percentage of deliveries in lower-priced communities. In the second quarter of
2022, an increase in revenues per square foot was offset by an increase in costs
per square foot primarily due to higher material and labor costs. Overall, gross
margin percentage on home deliveries improved year over year as land costs
remained relatively flat.

Homebuilding Texas: Revenues from home sales increased in the second quarter of
2022 compared to the second quarter of 2021, primarily due to an increase in the
number of home deliveries and an increase in the average sales price of homes
delivered. The increase in the number of home deliveries was primarily driven by
an increase in deliveries per active community over the same period last year.
The increase in the average sales price of homes delivered was primarily due to
favorable market conditions. In the second quarter of 2022, an increase in
revenues per square foot was offset by an increase in costs per square foot
primarily due to higher material and labor costs. Overall, gross margin
percentage on home deliveries improved year over year as land costs remained
relatively flat.

Homebuilding West: Revenues from home sales increased in the second quarter of
2022 compared to the second quarter of 2021, primarily due to an increase in the
number of home deliveries in all the states in the segment except in Utah, and
an increase in the average sales price of homes delivered in all the states in
the segment. The increase in the number of home deliveries was primarily driven
by an increase in deliveries per active community over the same period last
year. The decrease in the number of home deliveries in Utah was primarily due to
a decrease in the number of deliveries per active community due to the timing of
opening and closing of communities as a result of supply chain disruptions. The
increase in the average sales price of homes delivered was primarily due to
favorable market conditions. In the second quarter of 2022, an increase in
revenues per square foot was offset by an increase in costs per square foot
primarily due to higher material and labor costs. Overall, gross margin
percentage on home deliveries improved year over year as land costs remained
relatively flat.

Semester completed May 31, 2022 compared to the half-year ended May 31, 2021

Homebuilding East: Revenues from home sales increased in the six months ended
May 31, 2022 compared to the six months ended May 31, 2021, primarily due to an
increase in the number of home deliveries and an increase the average sales
price of homes delivered in all the states in the segment. The increase in the
number of home deliveries was primarily driven by an increase in the number of
active communities. The increase in the average sales price of homes delivered
was primarily due to favorable market conditions. In the six months ended May
31, 2022, an increase in revenues per square foot was partially offset by an
increase in costs per square foot primarily due to higher material and labor
costs. Overall, gross margin percentage on home deliveries improved year over
year as land costs remained relatively flat.

Homebuilding Central: Revenues from home sales increased in the six months ended
May 31, 2022 compared to the six months ended May 31, 2021, primarily due to an
increase in the number of home deliveries in all the states in the segment
except in North Carolina and Virginia, and an increase in the average sales
price of homes delivered in all the states of the segment except in Georgia and
Tennessee. The increase in the number of home deliveries was primarily driven by
an increase in active communities. The decrease in the number of home deliveries
in North Carolina and Virginia was primarily due to a decrease in the number of
deliveries per active community due to the timing of opening and closing of
communities as a result of supply chain disruptions. The increase in the average
sales price of homes delivered was primarily due to favorable market conditions.
The decrease in the average sales price of homes delivered in Georgia and
Tennessee was primarily driven by a change in product mix due to a higher
percentage of deliveries in lower-priced communities. In the six months ended
May 31, 2022, an increase in revenues per square foot was less than offset by an
increase in costs per square foot primarily due to higher material and labor
costs. Overall, gross margin percentage on home deliveries was slightly down
year over year while land costs remained relatively flat.

Homebuilding Texas: Revenues from home sales increased in the six months ended
May 31, 2022 compared to the six months ended May 31, 2021, primarily due to an
increase in the number of home deliveries and an increase in the average sales
price of homes delivered. The increase in the number of home deliveries was
primarily driven by an increase in deliveries per active community over the same
period last year. The increase in the average sales price of homes delivered was
primarily due
                                       36
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at favorable market conditions. In the six months ended May 31, 2022, an increase in revenue per square foot was offset by an increase in cost per square foot primarily due to higher material and labor costs. Overall, home delivery gross margin percentage improved year over year as land costs remained relatively flat.

Homebuilding West: Revenues from home sales increased in the six months ended
May 31, 2022 compared to the six months ended May 31, 2021, primarily due to an
increase in the number of home deliveries in all the states in the segment
except in Arizona, Nevada and Utah, and an increase in the average sales price
of homes delivered in all the states in the segment. The decrease in the number
of home deliveries in Arizona, Nevada and Utah was primarily due to a decrease
in the number of deliveries per active community due to the timing of opening
and closing of communities as a result of supply chain disruptions. The increase
in the average sales price of homes delivered was primarily due to favorable
market conditions. In the six months ended May 31, 2022, an increase in revenues
per square foot was offset by an increase in costs per square foot primarily due
to higher material and labor costs. Overall, gross margin percentage on home
deliveries improved year over year as land costs remained relatively flat.

Financial services sector

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

The following table sets forth selected financial and operational information
related to the residential mortgage and title activities of our Financial
Services segment:
                                                             Three Months Ended                                     Six Months Ended
                                                                  May 31,                                                May 31,
(Dollars in thousands)                                2022                       2021                        2022                        2021
Dollar value of mortgages originated           $      3,507,000                  3,186,000                     6,267,000                 5,947,000
Number of mortgages originated                            9,200                      9,500                        16,500                    17,900
Mortgage capture rate of Lennar homebuyers                   69  %                      74  %                         71  %                     75  %
Number of title and closing service
transactions                                             17,400                     17,100                        31,100                    32,100


At May 31, 2022 and November 30, 2021, the carrying value of Financial Services'
commercial mortgage-backed securities ("CMBS") was $155.8 million and $157.8
million, respectively. Details of these securities and related debt are within
Note 2 of the Notes to Condensed Consolidated Financial Statements.

Multi-family segment

We have been actively involved, primarily through unconsolidated funds and joint
ventures, 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.

The following tables provide information related to our investment in the
Multifamily segment:
Balance Sheets
(In thousands)                                                       May 31, 2022           November 30, 2021

Multifamily investments in unconsolidated entities                 $     638,559                 654,029
Lennar's net investment in Multifamily                                   934,022                 976,676



Statement of Operations                                            Three Months Ended                       Six Months Ended
                                                                         May 31,                                 May 31,
(Dollars in thousands)                                           2022                2021              2022                  2021

Number of operating/investment properties sold through joint ventures

                                                        -                  1                -                      1
Lennar's share of gains on the sale of operating
properties/investments                                      $         -             14,784                -                 14,784


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Lennar Other Segment

Lennar Other primarily includes strategic investments in technology companies,
primarily managed by our LENX subsidiary, and fund interests we retained when we
sold the Rialto Capital Management ("Rialto") asset and investment management
platform in 2018. At May 31, 2022 and November 30, 2021, we had $1.0 billion and
$1.5 billion, respectively, of assets in our Lennar Other segment, which
included investments in unconsolidated entities of $325.3 million and
$346.3 million, respectively. The investments in equity securities of Blend
Labs, Inc. ("Blend Labs"), Hippo Holdings, Inc. ("Hippo"), Opendoor, Inc.
("Opendoor"), SmartRent, Inc. ("SmartRent"), Sonder Holdings, Inc. ("Sonder"),
and Sunnova Energy International, Inc. ("Sunnova") are held at market and will
therefore change depending on the value of our share holdings in those entities
on the last day of each quarter. The following is a detail of Lennar Other
unrealized gains (losses) from technology investments:

                                                          Three Months Ended                          Six Months Ended
                                                               May 31,                                     May 31,
(In thousands)                                        2022                 2021                  2022                    2021
Blend Labs (BLND) mark-to-market                  $  (13,550)                   -               (20,992)                      -
Hippo (HIPO) mark-to-market                          (37,946)                   -              (162,403)                      -
Opendoor (OPEN) mark-to-market                       (20,999)            (234,290)             (164,360)                235,455
SmartRent (SMRT) mark-to-market                       (3,950)                   -               (48,313)                      -
Sonder (SOND) mark-to-market                          (1,626)                   -                (2,132)                      -
Sunnova (NOVA) mark-to-market                            106              (38,335)              (74,935)                (38,335)
Lennar Other unrealized gains (losses) from
technology investments                            $  (77,965)            (272,625)             (473,135)                197,120



(2) Financial position and capital resources

At May 31, 2022, we had cash and cash equivalents and restricted cash related to
our homebuilding, financial services, multifamily and other operations of $1.6
billion, compared to $3.0 billion at November 30, 2021 and $2.8 billion at
May 31, 2021.

We finance all of our activities, including homebuilding, financial services,
multifamily, other and general operating needs, primarily with cash generated
from our operations, debt issuances and cash borrowed under our warehouse lines
of credit and our unsecured revolving credit facility (the "Credit Facility").
At May 31, 2022, we had $1.3 billion of homebuilding cash and cash equivalents
and no outstanding borrowings under our $2.575 billion revolving credit
facility, thereby providing $3.9 billion of available capacity.

Operating cash activities

During the six months ended May 31, 2022 and 2021, cash provided by operating
activities totaled $53 million and $718 million, respectively. During the six
months ended May 31, 2022, cash provided by operating activities was impacted
primarily by our net earnings, gross of Lennar Other mark-to-market loss on our
publicly trade technology investments and other loss of $483 million, a decrease
in loans held-for-sale of $336 million primarily related to the sale of loans
originated by our Financial Services segment, an increase in accounts payable
and other liabilities of $277 million and a decrease in receivables of $126
million primarily related to a decrease in Financial Services' receivables, net,
which are loans sold to investors for which we have not been paid. This was
partially offset by an increase in inventories due to strategic land purchases,
land development and construction costs of $3.1 billion.

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 million primarily related to the sale of loans originated by our Financial
Services segment, an increase in accounts payable and other liabilities of $185
million, and a decrease in receivables of $118 million, partially offset by an
increase in inventories due to strategic land purchases, and land development
and construction costs of $1.6 billion.

Investing Cash Flow Activities

During the six months ended May 31, 2022 and 2021, cash used in investing
activities totaled $65 million and $50 million, respectively. During the six
months ended May 31, 2022, our cash used in investing activities was primarily
due to cash contributions of $261 million to unconsolidated entities, which
included (1) $197 million to Homebuilding unconsolidated entities (2) $53
million to Lennar Other unconsolidated entities and (3) $11 million to
Multifamily unconsolidated entities. In addition, we had $79 million of
purchases of investment securities related to strategic technology investments
included in the Lennar Other segment. This was partially offset by distributions
of capital from unconsolidated entities of $239 million, which primarily
included (1) $156 million from Multifamily unconsolidated entities, (2) $67
million from Homebuilding unconsolidated entities, and (3) $16 million from our
Lennar Other unconsolidated entities.
                                       38
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During the six months ended May 31, 2021, our cash used in investing activities
was primarily due to cash contributions of $282 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.

Financing of treasury activities

During the six months ended May 31, 2022 and 2021, cash used in financing
activities totaled $1.4 billion and $818 million, respectively. During the six
months ended May 31, 2022, cash used in financing activities was primarily due
to (1) $404 million of net repayments under our Financial Services' warehouse
facilities, which included the LMF Commercial warehouse repurchase facilities;
(2) $906 million of repurchases of our common stock, which included $847 million
of repurchases under our repurchase program and $58 million of repurchases
related to our equity compensation plan; and (3) $221 million of dividend
payments. These were partially offset by $210 million of net proceeds from
liabilities related to consolidated inventory not owned due to activity with
land banks.

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.

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, 2022              November 30, 2021                 May 31, 2021
Homebuilding debt                                     $  4,645,791                         4,652,338                    5,894,342
Stockholders' equity                                    21,598,255                        20,816,425                   19,576,108
Total capital                                         $ 26,244,046                        25,468,763                   25,470,450
Homebuilding debt to total capital                            17.7  %                           18.3  %                      23.1  %
Homebuilding debt                                     $  4,645,791                         4,652,338                    5,894,342
Less: Homebuilding cash and cash equivalents             1,314,741                         2,735,213                    2,581,583
Net Homebuilding debt                                 $  3,331,050                         1,917,125                    3,312,759
Net Homebuilding debt to total capital (1)                    13.4  %                            8.4  %                      14.5  %


(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, 2022, Homebuilding debt to total capital was lower compared to
November 30, 2021, primarily as a result of an increase in stockholders' equity
due to net earnings, partially offset by share repurchases. At May 31, 2022,
Homebuilding debt to total capital was lower compared to May 31, 2021, primarily
as a result of a decrease in Homebuilding debt due to debt pay downs and an
increase in stockholders' equity due to net earnings, partially offset by share
repurchases.

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

We have announced an intention to spin-off to our stockholders our asset
management businesses (Lennar Multifamily and Lennar Single Family Rental) and
some of our other non-core assets. We expect the spin-off to take place by the
end of 2022.
                                       39
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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)                         2022              2021
        Homebuilding average debt outstanding     $ 5,087,360       $ 5,981,490
        Average interest rate                             4.6  %            4.9  %
        Interest incurred                         $   121,732           142,517


In May 2022, we amended the credit agreement governing our unsecured revolving
credit facility (the "Credit Facility") to increase the commitment from $2.5
billion to $2.575 billion and extended the maturity to May 2027, except for $350
million which matures in April 2024. The Credit Facility has a $425 million
accordion feature, subject to additional commitments, thus the maximum
borrowings are $3.0 billion. The proceeds available under the Credit Facility,
which are subject to specified conditions for borrowing, may be used for working
capital and general corporate purposes. The credit agreement also provides that
up to $500 million in commitments may be used for letters of credit. Under our
Credit Facility agreement, we are required to maintain a minimum consolidated
tangible net worth, a maximum leverage ratio and either a liquidity or an
interest coverage ratio. These ratios are calculated per the Credit Facility
agreement, which involves adjustments to GAAP financial measures. We believe we
were in compliance with our debt covenants as of May 31, 2022. The following
summarizes our debt covenant requirements and our actual levels or ratios with
respect to those covenants as calculated per the Credit Facility agreement as of
May 31, 2022:
                                                Level Achieved as of
(Dollars in thousands)      Covenant Level          May 31, 2022
Minimum net worth test     $  10,919,391                15,123,049
Maximum leverage ratio              65.0  %                   19.5  %
Liquidity test                      1.00                     15.15

Financial Services Warehouses

Our Financial Services segment uses the residential warehouse facilities to
finance its residential lending activities until the mortgage loans are sold to
investors and the proceeds are collected. The facilities are non-recourse to 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 October 2021, the Board of Directors authorized an increase to our stock
repurchase program to enable us to repurchase up to the lesser of an additional
$1 billion in value, or 25 million in shares, of our outstanding Class A or
Class B common stock. As a result of prior authorizations being almost
exhausted, in March 2022, our Board of Directors approved an additional
authorization for us to repurchase up to the lesser of $2 billion in value, or
30 million in shares, of our outstanding Class A or Class B common stock. The
repurchase authorization has no expiration date. The details of our Class A and
Class B common stock repurchases under the authorized repurchase programs for
the three and six months ended May 31, 2022 and 2021 are included in Note 4 of
the Notes to Condensed Consolidated Financial Statements.

During the six months ended May 31, 2022, treasury stock decreased due to our
retirement of 46.7 million and 2.8 million treasury shares of Class A and Class
B common stock, respectively, as authorized by our Board of Directors. The
retirement of Class A and Class B common stock in treasury resulted in a reclass
between treasury shares and additional paid-in capital within stockholders'
equity. This decrease in treasury shares was partially offset by our repurchase
of 8.2 million and 1.1 million shares of Class A and Class B common stock,
respectively, through our stock repurchase program. During the six months ended
May 31, 2021, treasury shares increased due to our repurchase of 1.9 million
shares of Class A and Class B common stock primarily due to our repurchase of
1.5 million shares of Class A and Class B common stock through our stock
repurchase program.

On June 22, 2022, our Board of Directors declared a quarterly cash dividend of
$0.375 per share on both our Class A and Class B common stock, payable on July
21, 2022 to holders of record at the close of business on July 7, 2022. On May
10, 2022, we paid cash dividends of $0.375 per share on both our Class A and
Class B common stock to holders of record at the close of business on April 26,
2022, as declared by our Board of Directors on April 12, 2022. We approved and
paid cash dividends of $0.250 per share for each of the four quarters of 2021 on
both its Class A and Class B common stock.
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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.

Additional financial information

Currently, certain of our wholly-owned subsidiaries, which are primarily residential construction subsidiaries, guarantee all of our senior obligations. The guarantees are complete 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, 2022 they were guaranteeing Lennar Corporation's letter
of credit facilities and its Credit Facility, disclosed in Note 7 of the Notes
to Condensed Consolidated Financial Statements. The guarantees are full,
unconditional and joint and several and the guarantor subsidiaries are 100%
directly or indirectly owned by Lennar Corporation. A subsidiary's guarantee of
Lennar senior notes will be suspended at any time when it is not directly or
indirectly guaranteeing at least $75 million principal amount of debt of Lennar
Corporation (other than senior notes), and a subsidiary will be released from
its guarantee and any other obligations it may have regarding the senior notes
if all or substantially all its assets, or all of its capital stock, are sold or
otherwise disposed.

Supplemental information for the Obligors, which excludes non-guarantor
subsidiaries and intercompany transactions, at May 31, 2022 is included in the
following tables. Intercompany balances and transactions within the Obligors
have been eliminated and amounts attributable to the Obligors' investment in
consolidated subsidiaries that have not issued or guaranteed the senior notes
have been excluded. Amounts due from and transactions with nonobligor
subsidiaries and related parties are separately disclosed:
(In thousands)                          May 31, 2022      November 30, 2021
Due from non-guarantor subsidiaries    $ 15,629,491         4,187,044
Equity method investments                 1,031,783           937,920
Total assets                             34,808,404        30,750,296
Total liabilities                         9,990,538         9,631,796


                                        Six Months Ended
(In thousands)                            May 31, 2022
Total revenues                         $      12,489,613
Operating earnings                             2,719,162
Earnings before income taxes                   2,475,436
Net earnings attributable to Lennar            1,862,647


Off-balance sheet arrangements

Residential construction: investments in non-consolidated entities

As of May 31, 2022, we had equity investments in 47 active homebuilding and land
unconsolidated entities (of which three had recourse debt, 14 had non-recourse
debt and 30 had no debt) compared to 41 active homebuilding and land
unconsolidated entities at November 30, 2021. Historically, we have invested in
unconsolidated entities that acquired and developed land (1) for our
homebuilding operations or for sale to third parties or (2) for the construction
of homes for sale to third-party homebuyers. Through these entities, we have
primarily sought to reduce and share our risk by limiting the amount of our
capital invested in land, while obtaining access to potential future homesites
and allowing us to participate in strategic ventures. The use of these entities
also, in some instances, has enabled us to acquire land to which we could not
otherwise obtain access, or could not obtain access on as favorable terms,
without the participation of a strategic partner. Participants in these joint
ventures have been land owners/developers, other homebuilders and financial or
strategic partners. Joint ventures with land owners/developers have given us
access to homesites owned or controlled by our partners. Joint ventures with
other homebuilders have provided us with the ability to bid jointly with our
partners for large land parcels. Joint ventures with financial partners have
allowed us to combine our homebuilding expertise with access to our partners'
capital. Joint ventures with strategic partners have allowed us to combine our
homebuilding expertise with the specific expertise (e.g. commercial or infill
experience) of our partners. Each joint venture is governed by an executive
committee consisting of members from the partners. Details regarding these
investments, balances and debt are included in Note 3 of the Notes to Condensed
Consolidated Financial Statements.
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The following table summarizes the principal maturities of our Homebuilding
unconsolidated entities ("JVs") debt as per current debt arrangements as of
May 31, 2022. It does not represent estimates of future cash payments that will
be made to reduce debt balances. Many JV loans have extension options in the
loan agreements that would allow the loans to be extended into future years.
                                                                           

Main non-consolidated JV maturities by period (in thousands)

                               Total JV Debt               2022               2023               2024             Thereafter           

Other

Debt without recourse to Lennar          $        1,222,548             83,023            108,857            374,337            656,331                     -
Land seller and other debt                           13,508                  -                  -                  -                  -                13,508
Maximum recourse debt exposure to
Lennar                                                3,303                  -                  -                  -              3,303                     -
Debt issuance costs                                 (13,828)                 -                  -                  -                  -               (13,828)
Total                                    $        1,225,531             83,023            108,857            374,337            659,634                  (320)

Multifamily: Investments in non-consolidated entities

At May 31, 2022, Multifamily had equity investments in 19 unconsolidated
entities that are engaged in multifamily residential developments (of which 12
had non-recourse debt and 7 had no debt), compared to 17 unconsolidated entities
at November 30, 2021. We invest in unconsolidated entities that acquire and
develop land to construct multifamily rental properties. Through these entities,
we are focusing on developing a geographically diversified portfolio of
institutional quality multifamily rental properties in select U.S. markets.
Initially, we participated in building multifamily developments and selling them
soon after they were completed. Recently, however, we have been focused on
developing properties with the intention of retaining them. Participants in
these joint ventures have been financial partners. Joint ventures with financial
partners have allowed us to combine our development and construction expertise
with access to our partners' capital. Each joint venture is governed by an
operating agreement that provides significant substantive participating voting
rights on major decisions to our partners.

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

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

The following table summarizes the major maturities of our unconsolidated multifamily entity debt under current debt agreements as of May 31, 2022. It does not represent estimates of future cash payments that will be made to reduce debt balances.

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

Debt without recourse to
Lennar                           $        3,962,022             347,265            1,230,742              893,349             1,490,666                       -
Debt issuance costs                         (23,426)                  -                    -                    -                     -                 (23,426)
Total                            $        3,938,596             347,265            1,230,742              893,349             1,490,666                 (23,426)


Lennar Other: Investments in Unconsolidated Entities
As part of the sale of the Rialto investment and asset management platform in
2018, we retained our ability to receive a portion of payments with regard to
carried interests if funds meet specified performance thresholds. We
periodically receive advance distributions related to the carried interests in
order to cover income tax obligations resulting from allocations of taxable
income to the carried interests. These distributions are not subject to
clawbacks but will reduce future carried interest payments to which we become
entitled from the applicable funds and have been recorded as revenues. Our
investment in the Rialto funds and investment vehicles totaled $200.1 million
and $200.6 million as of May 31, 2022 and November 30, 2021, respectively.

As of May 31, 2022 and November 30, 2021, we had strategic technology
investments in unconsolidated entities of $123.7 million and $145.6 million,
respectively. Our strategic technology investments through LENX business help to
enhance the homebuying and home ownership experience, and help us stay at the
forefront of homebuilding innovation.

We own an approximately 40% interest in FivePoint Holdings, LLC., a NYSE listed
company, and companies it manages, which own three large multi-use properties in
California.
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We manage and invest in Rising America Fundthat buys single-family homes and operates them as rental properties.

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 shows the number of residential sites owned and residential sites we have had access to through option agreements with third parties (“option”) or unconsolidated joint ventures (i.e. say, controlled residential sites):

                                                 Controlled Homesites                                                                                     Years of
May 31, 2022                      Optioned                JVs                  Total              Owned Homesites           Total Homesites           Supply Owned (1)
East                                 109,986                  -                 109,986                   54,610               164,596
Central                               42,281                  -                  42,281                   41,674                83,955
Texas                                 90,443                  -                  90,443                   44,388               134,831
West                                  70,434                  -                  70,434                   49,997               120,431
Other                                      -              5,758                   5,758                    2,028                 7,786
Total homesites                      313,144              5,758                 318,902                  192,697               511,599                        3.1
% of total homesites                                                                 62  %                    38  %


                                                  Controlled Homesites                                                                                     Years of
May 31, 2021                      Optioned                 JVs                  Total              Owned Homesites           Total Homesites           Supply Owned (1)
East                                  55,537               5,750                  61,287                   55,218               116,505
Central                               24,283                  92                  24,375                   41,816                66,191
Texas                                 43,447                   -                  43,447                   38,332                81,779
West                                  52,347               3,444                  55,791                   51,336               107,127
Other                                      4               7,569                   7,573                    2,235                 9,808
Total homesites                      175,618              16,855                 192,473                  188,937               381,410                        3.3
% of total homesites                                                                  50  %                    50  %


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

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

Contractual obligations and commercial commitments

Our contractual obligations and business commitments have not changed materially from those disclosed in the MD&A of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended November 30, 2021. There were no outstanding borrowings under our credit facility at May 31, 2022.

(3) Recently Adopted Accounting Pronouncements

See Note 1 of the Notes to the Condensed Consolidated Financial Statements included in Section 1 of this report for a discussion of recently adopted accounting pronouncements.

(4) Critical Accounting Principles

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

Revenue recognition

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

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