Lennar LEN · USD

Operating and Reporting SegmentsEach reportable segment follows the accounting policies described in Note 1 - "Summary of Significant Accounting Policies" to the consolidated financial statements. Operations of the Company’s Homebuilding segments primarily include the construction and sale of single-family attached and detached homes, as well as the purchase, development and sale of residential land directly and through the Company’s unconsolidated entities. The Company defines the Chief Operating Decision Maker ("CODM") function as the Executive Chairman and Chief Executive Officer. During fiscal year 2025, the CODM also included a Co-Chief Executive Officer and President, who retired in December 2025. The CODM manages and assesses the Company's Homebuilding performance at a regional level. The CODM evaluates the Homebuilding segment performance using each segment’s revenues generated from sales of homes and earnings (loss) before income taxes. These operating results are reviewed against the annual business plan and quarterly forecast updates, as applicable, and used by the CODM when making the Company’s decisions about the allocation of operating and capital resources to each Homebuilding segment. The CODM’s evaluation of the Financial Services, Multifamily and Lennar Other segments is based on the revenues and earnings (loss) before income taxes.Operational results of each segment are not necessarily indicative of the results that would have occurred had the segment been an independent, stand-alone entity during the periods presented.

The Company has entered into agreements to lease certain office facilities and equipment under operating leases. Future minimum payments under the noncancellable leases in effect at November 30, 2025 were as follows:(In thousands)Lease Payments2026$86,899 202755,515 202840,123 202928,709 203025,271 Thereafter64,809 Total future minimum lease payments (1)$301,326 Less: Interest (2)37,169 Present value of lease liabilities (2)$264,157 (1)Total future minimum lease payments exclude variable lease costs of $32.7 million and short-term lease costs of $2.0 million.(2)The Company's leases do not include a readily determinable implicit rate. As such, the Company estimated the discount rate for these leases to determine the present value of lease payments at the lease commencement date. As of November 30, 2025, the Company recognized the lease liabilities on its consolidated balance sheets within accounts payable and other liabilities of the respective segments.

Commitments and Contingent LiabilitiesThe Company is involved in various claims, legal proceedings, and regulatory matters that arise in the ordinary course of business, including, but not limited to, matters related to construction defects, product liability, warranty claims, land use, zoning and permitting issues, environmental matters, contract disputes, employment matters, and other legal matters incidental to its business operations.The Company follows established accounting standards to identify, evaluate, record, and disclose legal contingencies. A liability is recorded when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. The Company does not record liabilities for contingencies when the likelihood of loss is remote or if reasonably possible, or when a probable loss cannot be reasonably estimated. If a loss is probable or reasonably possible, the Company discloses the nature of the contingency and, if estimable, the possible range of loss.In assessing contingencies, management considers, among other factors, the nature of the claim, the status of the matter, the advice of legal counsel, the Company's historical experience with similar matters, insurance coverage, and recoveries, if any, and other relevant facts and circumstances. Estimates of loss contingencies are inherently subjective and involve significant judgment. As a result, actual outcomes may differ materially from amounts recorded or disclosed.Certain of the Company's legal matters are covered, in whole or in part, by insurance policies subject to applicable retentions, deductibles, and policy limits, as well as through contractual indemnities. Recoveries, if any, are recognized only when realization is considered probable.As of November 30, 2025, the Company has recorded accruals for loss contingencies that management believes are probable and reasonably estimable. These accruals are included in Other liabilities in the consolidated balance sheets. For these matters as well as for matters for which a loss is reasonably possible but not probable, management believes that any reasonably possible losses, either individually or in the aggregate, would not have a material adverse effect on the Company’s consolidated financial position. However, the ultimate resolution of these matters could have a material effect on the Company’s results of operations or cash flows in a particular period.

Income TaxesThe provision for income taxes consisted of the following:For the Years Ended November 30,(In thousands)202520242023Current:Federal$473,890 863,867 1,037,229 State154,378 292,960 271,752 $628,268 1,156,827 1,308,981 Deferred:Federal$61,885 48,080 (53,474)State15,410 12,346 (14,494)77,295 60,426 (67,968)$705,563 1,217,253 1,241,013 A reconciliation of the statutory rate and the effective tax rate was as follows:Percentage of Pretax Income202520242023Statutory rate21.00 %21.00 %21.00 %State income taxes, net of federal income tax benefit4.94 4.74 4.09 Tax credits(1.87)(1.85)(1.48)Tax reserves and interest expense, net— (0.01)— Deferred tax asset valuation allowance, net— — (0.01)Other0.10 (0.24)0.36 Non-deductible loss on Millrose Properties, Inc. exchange offer1.18 ——Effective rate25.35%23.64%23.96%On July 4, 2025, the One Big Beautiful Bill Act (the "Act") was enacted, introducing various changes to U.S. federal tax law. The Act did not have a material impact on the Company's consolidated financial statements for the year ended November 30, 2025. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of the assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

Risk Management and StrategyWe rely extensively on information technology (“IT”) systems, including Internet sites, data hosting facilities and other hardware and software platforms, some of which are hosted by third parties, to assist in conducting our businesses. These systems, like those used by most companies, may be vulnerable to a variety of disruptions, including, but not limited to, those caused by natural disasters, telecommunications failures, hackers, and other security issues. Moreover, these IT systems, like those used by most companies, are subject to the possibility of computer viruses or other malicious codes, and to security breaches, cyber incidents, ransomware attack or phishing-attacks. Cybersecurity is an integral part of risk management at our Company, and we maintain a comprehensive process for assessing, identifying and managing material risks from cybersecurity threats, which is part of our overall risk management system and processes.We have installed and continually upgrade an array of protections against cyber-intrusions. Our cybersecurity risk management processes are based upon the National Institute of Standards and Technology (NIST) Cybersecurity Framework, as well as various other regulatory requirements and industry-specific standards. We implement risk-based controls to protect our information, the information of our customers, suppliers, and other third parties, our information systems, our business operations, and our products and related services. These controls include multifactor authentication on all critical systems, firewalls, encryption, anti-virus protections, intrusion detection and prevention systems and identity management systems. We provide mandatory cybersecurity awareness training of threats to associates at least annually and routinely deploy simulated phishing tests to increase security awareness. Our IT team regularly tests our controls through penetration testing, vulnerability scanning, internal compliance assessments, threat-hunting operations and attack simulation.Additionally, in connection with our cybersecurity risk management processes, from time to time, we engage independent third parties to assess our cybersecurity program and to assist us with defining our cybersecurity strategy, uplifting our processes and aligning our objectives. Outside counsel has also advised the Board about legal obligations in managing cybersecurity issues and risks.

Earnings Per ShareBasic and diluted earnings per share were calculated as follows:For the Years Ended November 30,(In thousands, except per share amounts)202520242023Numerator:Net earnings attributable to Lennar$2,078,179 3,932,533 3,938,511 Less: distributed earnings allocated to nonvested shares5,072 4,980 5,514 Less: undistributed earnings allocated to nonvested shares15,024 33,843 43,022 Numerator for basic and diluted earnings per share$2,058,083 3,893,710 3,889,975 Denominator:Denominator for basic and diluted earnings per share - weighted average common shares outstanding257,746 272,019 283,319 Basic and diluted earnings per share$7.98 14.31 13.73 For the years ended November 30, 2025, 2024 and 2023, there were no options to purchase shares of common stock that were outstanding and anti-dilutive.

Business TransactionsSpin-off of Millrose Properties, Inc.In February 2025, the Company completed the taxable spin-off of Millrose through a distribution of approximately 80% of Millrose's total outstanding stock to the Company's stockholders (the "Millrose Spin-Off"). The Company temporarily retained the remaining 20% of the total outstanding shares of Millrose common stock, which carried no voting rights, and subsequently disposed of them through a non-cash exchange offer completed in November 2025 ("Millrose Exchange Offer"). In connection with the Millrose Spin-Off, the Company contributed to Millrose $5.6 billion in land assets, representing approximately 87,000 homesites, and cash of $1.0 billion, which included $584.0 million of cash deposits related to option contracts. The Millrose Spin-Off transaction accelerated Lennar's longstanding strategy of becoming a pure-play, asset-light, new home manufacturing company.The Company performed a reassessment of control over Millrose and determined that Millrose met the definition of a variable interest entity in which the Company held a variable interest. The assessment further showed that the Company was not the primary beneficiary and should not consolidate Millrose because the Company does not have the power, either explicitly or implicitly through voting rights or otherwise, to direct the activities that most significantly impact the economic performance of Millrose. Accordingly, the Company deconsolidated the Millrose net assets from the Company's financial statements on the date of the spin-off transaction.In connection with the Millrose Exchange Offer, the Company accepted 8,049,594 shares of Lennar Class A common stock in exchange for 33,298,754 shares of Millrose Class A common stock. The Millrose Exchange Offer reduced investments in unconsolidated entities and stockholders' equity by $1.1 billion as of November 30, 2025 and resulted in a one-time loss of $156.1 million recorded in Other income (expense), net and other gains (losses), net, in the Company's consolidated statements of operations and comprehensive income (loss).Acquisition of Rausch Coleman HomesIn February 2025, the Company acquired Rausch, a residential homebuilder based in Fayetteville, Arkansas. The Company acquired Rausch’s homebuilding operations while Millrose acquired Rausch's land assets and the Company has options on the land.

Variable Interest EntitiesDuring the year ended November 30, 2025, the Company evaluated the joint venture ("JV") agreements of its JV's that were formed or that had reconsideration events, such as changes in the governing documents or to debt arrangements. Based on the Company's evaluation, there were no VIEs that were consolidated during the year ended November 30, 2025. During the year ended November 30, 2025, the Company deconsolidated two VIEs that had total assets and liabilities of $412.4 million and $100.1 million, respectively.The carrying amount of the Company's consolidated VIE's assets and non-recourse liabilities are disclosed in the footnotes to the consolidated balance sheets.A VIE’s assets can only be used to settle obligations of that VIE. The VIEs are not guarantors of the Company’s senior notes or other debts payable. The assets held by a VIE are usually collateral for that VIE’s debt. The Company and other partners do not generally have an obligation to make capital contributions to a VIE unless the Company and/or the other partner(s) have entered into debt guarantees with VIE’s lenders. Other than debt guarantee agreements with VIE’s lenders, there are no liquidity arrangements or agreements to fund capital or purchase assets that could require the Company to provide financial support to a VIE. While the Company has option contracts to purchase land from certain of its VIEs, the Company is not required to purchase the assets and could walk away from the contracts, but that would require forfeiture of deposits and pre-acquisition costs.Unconsolidated VIEsThe Company’s recorded investments in VIEs that are unconsolidated and related estimated maximum exposure to loss were as follows:At November 30,20252024(In thousands)Investments in Unconsolidated VIEsLennar’s Maximum Exposure to LossInvestments inUnconsolidatedVIEsLennar’s Maximum Exposure to LossHomebuilding (1)$824,241 861,679 802,901 876,035 Multifamily (2)167,873 169,364 136,158 140,120 Financial Services (3)135,396 135,396 135,646 135,646 Lennar Other (4)105,151 105,151 119,258 119,258 Total$1,232,661 1,271,590 1,193,963 1,271,059 (1)As of November 30, 2025 and 2024, the Company's maximum exposure to loss of Homebuilding's investments in unconsolidated VIEs was limited to its investments in unconsolidated VIEs. In addition, as of November 30, 2025 and 2024, there was recourse debt of VIEs of $30.1 million and $44.2 million, respectively.