LENNAR CORP NEW
For the period ended Feb 28, 2025. Filed Apr 4, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Feb 28, 2025 · Filed Apr 4, 2025
LEN$88.74-3.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-08-31; filed 2024-10-02.
0001628280-24-041915
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-02-28; filed 2025-04-04.
0001628280-25-016792
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 128 previous paragraphs and 118 current paragraphs.
61 unchanged; 39 reworded; 17 added; 27 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 28 previous and 22 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (17)
Current report
Our first quarter results were achieved against the backdrop of a challenging macroeconomic environment for the housing market. We adhered to our strategy and focus on driving consistent volume and growth by matching sales and production pace and using our margin as our shock absorber. Mortgage interest rates have remained higher for longer than we expected, which has left the overall housing market weaker for longer than expected. There remains a housing deficit and actionable demand is limited by affordability and credit, which remain challenged by limited funds for a down payment as well as insufficient homebuyer income to meet qualification requirements for mortgages. Even where household income indicates an approvable mortgage qualification, elevated personal debt levels have often presented an impediment to mortgage access. Until recently, consumers have been generally confident that they will remain employed and that their compensation is secure. However, more recently, even that security has been called into question. While there continues to be a considerable number of customers looking at homes, the urgency to purchase homes remains tepid.
Current report
Against this backdrop, our strategy has remained clear. Operationally, it is to build and deliver consistent volume to maximize efficiencies, while financially, it is to drive our asset-light, land-light focus to build cash flow. Now that we have completed our Millrose spin-off, we have intensified our focus on each. We have two focuses in our operating strategy.
Current report
First, we focus on maintaining a consistent volume of production and matching our sales pace to our production pace. This allows us to maximize efficiencies in construction costs, and cycle time, in S,G&A expenses and in all elements of marketing and sales. It also delivers a consistent and even-flow volume to our trade partners so they can be more efficient and deliver cost savings to us. By matching our sales pace and our production pace, we avoid building up inventory of finished homes or developed homesites, which efficiently converts production to cash.
Current report
Our second focus is our asset-light configuration. The Millrose spin-off completed the backbone of that effort. With Millrose operational, we have a strong complement of land bank partners that undertake land acquisition and land development and provide just-in-time delivery of finished homesites that enables us to act almost entirely as a manufacturer of homes. As with all of our trade partners, our land partners will benefit from our consistent and predictable volume, which will be reflected in reduced costs to us.
Current report
To date, tariffs have had no impact on our costs. However, we have recently been discussing the potential impact of tariffs with our supply chain, including working on alternative sourcing strategies and preparing our trade partners to absorb potential increases in their costs due to tariffs. Similarly, to date we have encountered no labor disruptions due to immigration enforcement policies.
Current report
In summary, the housing market has softened as affordability and consumer confidence have limited actionable demand. Incentives have been increasing, and net housing prices seem to be moderating. At very least, housing will not be contributing to inflationary pressures, and while demand is constrained, supply is equally limited.
Current report
We expect to sell in the second quarter of 2025 between 22,500 and 23,500 homes and to deliver between 19,500 and 20,500 homes. We expect our margin to be approximately 18%, depending on market conditions. We are focused on driving sales and closings to create strong cash flow, even at reduced profitability, while maintaining properly sized inventory levels, so that as market conditions stabilize or improve, we will benefit from normalized margins across our volume.
Current report
While the short-term road ahead may still seem choppy, we are optimistic about the longer-term outlook. We have continued to drive production to meet the housing shortage that we know persists across the markets. As and when homebuyer interest normalizes, we believe pent-up demand will be activated and our margins will quickly recover. As we complete our asset-light transformation, we expect to continue to generate cash flow which we can return to stockholders through dividends and stock buybacks, while continuing to pursue strategic growth.
Current report
On February 10, 2025, we completed our acquisition of Rausch Coleman Homes. The results of operations include activity related to Rausch Coleman Homes from February 10, 2025 to February 28, 2025. Prior year information includes only stand-alone data for Lennar Corporation for the three months ended February 29, 2024.
Current report
Operating earnings for the Financial Services segment were $142.9 million in the first quarter of 2025, compared to $130.6 million in the first quarter of 2024. The increase in operating earnings was primarily due to higher volume from increased Lennar deliveries.
Current report
The Multifamily operations were breakeven in the first quarter of 2025, compared to an operating loss of $15.5 million in the first quarter of 2024. Operating loss for the Lennar Other segment was $89.3 million in the first quarter of 2025, compared to an operating loss of $39.5 million in the first quarter of 2024. The Lennar Other operating loss for the first quarter of 2025 was primarily due to losses on our technology investments.
Current report
(1) As of February 28, 2025, backlog includes 980 homes acquired in connection with the Rausch Coleman Homes acquisition. Of the homes in backlog, 214 and 766 homes were in the Central and South Central homebuilding segments, respectively. As of February 28, 2025, backlog also includes 11 homes acquired from a small builder in the West homebuilding segment.
Current report
(1)During the three months ended February 28, 2025, we realized a loss of $28.4 million on the sale of our shares in Blend Labs, SmartRent, Sonder and Sunnova and, as of February 28, 2025, have a small remaining interest in Sunnova.
Current report
On February 7, 2025, we successfully completed the taxable spin-off of Millrose from Lennar through a distribution of approximately 80% of Millrose's stock to our stockholders. We will temporarily retain, but will not vote, the remaining 20% of the total outstanding shares of Millrose common stock, which we expect to dispose of through a subsequent spin-off, split-off, public offering, private sale or any combination of these potential transactions later in the year. In connection with the spin-off, we contributed to Millrose $5.6 billion in land assets and cash of $1.0 billion, which included $584 million of cash deposits related to option contracts. The spin-off transaction accelerates our longstanding strategy of becoming a pure-play, asset-light, new home manufacturing company.
Current report
On February 10, 2025, we acquired Rausch, a residential homebuilder based in Fayetteville, Arkansas. We acquired Rausch’s homebuilding operations while Millrose acquired Rausch's land assets and we have options on the land. With this acquisition, we have expanded our footprint into new markets in Arkansas (Bentonville/Fayetteville, Little Rock and Jonesboro), Oklahoma (Tulsa and Stillwater), Alabama (Birmingham and Tuscaloosa), and Kansas/Missouri (Kansas City), while adding to its existing footprint in Texas (Houston and San Antonio), Oklahoma (Oklahoma City), Alabama (Huntsville) and Florida (Gulf Coast).
Current report
On February 7, 2025, we distributed a stock dividend consisting of 120,980,401 shares of Millrose Class A common stock outstanding and 11,819,811 shares of Millrose Class B common stock outstanding (representing approximately 80% of the total outstanding shares of Millrose common stock) to each holder of Lennar Class A or Class B common stock as of the close of business on January 21, 2025, the record date of the Millrose spin-off.
Current report
We temporarily hold an approximately 20% investment in the total outstanding shares of Millrose common stock, which we expect to dispose of through a subsequent spin-off, split-off, public offering, private sale or any combination of these potential transactions later in the year.
Removed paragraphs (27)
Previous report
Overall, the economic environment remains very constructive for homebuilders. While affordability has been a limiting factor for demand and access to homeownership, and inflation and interest rates have hindered the ability of average families to accumulate a down payment to qualify for a mortgage, demand remains strong and the migration to lower interest rates may further activate that demand. Although there have been narratives around challenged consumer confidence, lower rates and controlled inflation should boost that confidence. Lower interest rates should enable many more households to access either first-time homeownership or a move-up purchase. Consumers are employed and are generally confident they will remain employed and believe their compensation will rise. This is most often the foundation of a strong housing market. With that said, as interest rates subside and normalize, and now that the Fed has begun to cut rates, we believe that pent-up demand will be activated, and we are well prepared with growing community count and growing volume.
Previous report
While demand should remain strong, the supply of homes remains constrained. The housing shortage is a result of years of under-production, exacerbated by continuing shortfalls in production driven by restrictive land permitting and higher impact fees at local levels, and by higher construction costs. Awareness about the need for affordable housing, attainable housing and workforce housing in local markets has begun to generate the first signs of action. Also, the influx of immigrant population has expanded the labor pool, which offsets the pressure on construction costs, while increasing demand for more dwellings. The road ahead appears positive for our homebuilding business.
Previous report
Against that backdrop, we are adhering to our operating strategy focused on maintaining volume while we are sprinting towards the completion of our five-year marathon of migrating our operating platform from an asset-heavy model to a land-light, asset-light just-in-time finished homesite delivery model. As we have driven production pace, in sync with sales pace, we have used our margin as a point of adjustment to enable consistent production as market conditions have continued to adjust. During the third quarter, we pushed volume by increasing absorption levels in existing communities, which negatively impacted our gross margin.
Previous report
In the near future, we expect to spin off a company that we call Millrose Properties Inc. ("Millrose"). The goal of the spin-off is to generally complete our migration to an asset-light operating model by spinning off much of our land assets from our balance sheet. We expect Millrose to qualify as a real estate investment trust that will acquire and develop land, and will deliver fully developed homesites under a land option contract on a just in time basis for Lennar and potentially other homebuilders. Millrose is expected to be a self-renewing, permanent source of land acquisition and development capital. We are going to contribute to Millrose, in exchange for its stock, essentially all of our undeveloped, partially developed, and some of our fully developed, land, as well as cash with an expected book value between $6.0 billion and $8.0 billion. As a result of the spin-off, both our inventory and our equity will be reduced by the amount of assets contributed to Millrose. However, our balance sheet will remain very strong after the spin-off and we expect to have ample funds with which to pay down debt and repurchase stock.
Previous report
As we look ahead to the fourth quarter, given seasonality and customers adjusting to a changing interest rate environment, we are guiding to 22,500 to 23,000 closings next quarter, with a margin that is flat with the third quarter as customers build confidence in the changing economic and interest rate landscape. However, we expect our community count to exceed 1,400 by year-end 2024. We expect to deliver approximately 80,500 to 81,000 homes for the full fiscal 2024, a more than 10% increase over 2023. We expect that 10% growth to continue into 2025.
Previous report
Lennar will also continue to focus on being a pure play business model and reduce its exposure to non-core assets. It will continue to allocate capital to growth, debt retirement and stock repurchases as appropriate. We expect to repurchase in excess of $2 billion of stock for fiscal year 2024.
Previous report
As we look ahead to completing a successful 2024, we're well positioned for, and expect to see, much more of the same in the years ahead. We are confident that by design we will continue to grow, perform, and drive Lennar to new levels of consistent and predictable performance.
Previous report
(1)During both the three and nine months ended August 31, 2024, Multifamily revenues decreased primarily due to less general contractor and management fees income as a result of the completion of Multifamily properties.
Previous report
Operating earnings for the Financial Services segment were $144.4 million ($143.6 million net of noncontrolling interests) in the third quarter of 2024, compared to $149.0 million ($148.3 million net of noncontrolling interests) in the third quarter of 2023. The decrease in operating earnings was primarily due to lower lock volume and margin in the mortgage business, partially offset by higher volume in the title business as a result of increased deliveries year over year.
Previous report
Operating earnings for the Multifamily segment were $78.9 million ($79.0 million net of noncontrolling interests) in the third quarter of 2024, compared to an operating loss of $8.7 million in the third quarter of 2023. The increase in operating earnings was due to a $179.0 million one-time net gain from the sale of assets in our LMV Fund I, partially offset by a one-time $90.0 million write-down of non-core assets as we focus on immediately monetizing these assets. Operating earnings for the Lennar Other segment were $20.1 million in the third quarter of 2024, compared to an operating loss of $26.2 million in the third quarter of 2023. The Lennar Other operating earnings for the third quarter of 2024 were primarily due to mark-to-market gains on our publicly traded technology investments.
Previous report
Nine Months Ended August 31, 2024 versus Nine Months Ended August 31, 2023
Previous report
Revenues from home sales were $24.3 billion and $22.0 billion in the nine months ended August 31, 2024 and 2023, respectively. Revenues were higher primarily due to an 18% increase in the number of home deliveries, which was offset by a 6% decrease in average sales price of homes delivered. New home deliveries increased to 58,004 homes in the nine months ended August 31, 2024 from 49,292 homes in the nine months ended August 31, 2023. The average sales price of homes delivered was $421,000 in the nine months ended August 31, 2024, compared to $448,000 in the nine months ended August 31, 2023. The decrease in average sales price of homes delivered in the nine months ended August 31, 2024 compared to the same period last year was primarily due to pricing to market through an increased use of incentives and product mix.
Previous report
Gross margins on home sales were $5.4 billion, or 22.3%, in the nine months ended August 31, 2024, compared to $5.0 billion, or 22.9%, in the nine months ended August 31, 2023. During the nine months ended August 31, 2024, gross margins decreased primarily because revenues per square foot decreased while land costs increased year over year, which was partially offset by a decrease in costs per square foot due to lower material costs as we continued to focus on construction cost savings.
Previous report
Selling, general and administrative expenses were $1.8 billion in the nine months ended August 31, 2024, compared to $1.5 billion in the nine months ended August 31, 2023. As a percentage of revenues from home sales, selling, general and administrative expenses increased to 7.4% in the nine months ended August 31, 2024, from 7.0% in the nine months ended August 31, 2023, primarily due to an increase in digital marketing and advertising costs to generate more direct sales, professional expenses and insurance costs.
Previous report
During the nine months ended August 31, 2024, our homebuilding operating earnings included $134.6 million of interest income due to an increase in cash balances and higher interest rates. During the nine months ended August 31, 2023, our homebuilding operating earnings included $102.7 million of interest income, which was partially offset by an impairment of $36.8 million of an investment in a joint venture.
Previous report
Operating earnings for the Financial Services segment were $422.7 million ($420.5 million net of noncontrolling interests) in the nine months ended August 31, 2024, compared to $340.3 million ($338.7 million net of noncontrolling interests) in the nine months ended August 31, 2023. The increase in operating earnings was primarily due to higher volume from increased capture rate and Lennar deliveries in the mortgage business. There was also an increase in profitability in our title business primarily due to benefits of our technology efforts.
Previous report
Operating earnings for the Multifamily segment were $42.8 million ($43.1 million net of noncontrolling interests) in the nine months ended August 31, 2024, compared to an operating loss of $38.5 million ($38.4 million net of noncontrolling interests) in the nine months ended August 31, 2023. The increase in operating earnings was due to a $179 million one-time net gain from the sale of assets in our LMV Fund I, partially offset by a one-time $90.0 million write-down of non-core assets as we focus on immediately monetizing these assets. Operating loss for the Lennar Other segment was $47.3 million in the nine months ended August 31, 2024, compared to operating loss of $85.8 million in the nine months ended August 31, 2023. The Lennar Other operating loss for the nine months ended August 31, 2024 was primarily related to operating losses from certain strategic investments, which was partially offset by $12.5 million of mark-to-market gains on our publicly traded technology investments and a $46.5 million one-time gain on the sale of a technology investment. Lennar Other operating loss in the nine months ended August 31, 2023 was primarily related to operating losses from certain strategic investments.
Previous report
Of the total homes delivered listed above, 271 homes with a dollar value of $128.0 million and an average sales price of $472,000 represent home deliveries from unconsolidated entities for the nine months ended August 31, 2024, compared to 201 home deliveries with a dollar value of $95.2 million and an average sales price of $474,000 for the nine months ended August 31, 2023.
Previous report
Of the total new orders listed above, 234 homes with a dollar value of $134.3 million and an average sales price of $574,000 represent new orders from unconsolidated entities for the nine months ended August 31, 2024, compared to 252 new orders with a dollar value of $117.3 million and an average sales price of $465,000 for the nine months ended August 31, 2023.
Previous report
Nine Months Ended August 31, 2024 versus Nine Months Ended August 31, 2023
Previous report
Homebuilding East: Revenues from home sales increased in the nine months ended August 31, 2024 compared to the nine months ended August 31, 2023, primarily due to an increase in the number of home deliveries in all the states in the segment, which was partially offset by a decrease in the average sales price of homes delivered in all the states in the segment except in New Jersey and Pennsylvania. The increase in the number of home deliveries in Alabama, Florida, New Jersey and Pennsylvania was primarily due to an increase in the number of deliveries per active community. The decrease in the average sales price of homes delivered in Alabama and Florida was primarily due to pricing to market and product mix. The increase in the average sales price of homes delivered in New Jersey and Pennsylvania was primarily due to product mix. In the nine months ended August 31, 2024, a decrease in revenues per square foot was partially offset by a decrease in costs per square foot. In addition, land costs increased year over year. Overall, this resulted in a decrease in gross margin percentage of home deliveries.
Previous report
Homebuilding Central: Revenues from home sales increased in the nine months ended August 31, 2024 compared to the nine months ended August 31, 2023, primarily due to an increase in the number of home deliveries in all the states in the segment, which was partially offset by a decrease in the average sales price of homes delivered in all the states in the segment except in Illinois and Maryland. The increase in the number of home deliveries in Georgia, Illinois, Indiana, Maryland, Minnesota, North Carolina, South Carolina, Tennessee and Virginia was primarily due to an increase in the number of deliveries per active community. The decrease in the average sales price of homes delivered in Georgia, Indiana, Minnesota, North Carolina, South Carolina, Tennessee and Virginia was primarily due to pricing to market through an increased use of incentives and product mix. The increase in the average sales price of homes delivered in Illinois and Maryland was primarily due to product mix. In the nine months ended August 31, 2024, a decrease in revenues per square foot was more than offset by a decrease in costs per square foot. In addition, land costs increased year over year. Overall, the gross margin percentage of home deliveries remained flat year over year.
Previous report
Homebuilding Texas: Revenues from home sales increased in the nine months ended August 31, 2024, compared to the nine months ended August 31, 2023, primarily due to an increase in the number of home deliveries, which was partially offset by a decrease in the average sales price of homes delivered. The increase in the number of home deliveries was primarily due to an increase in the number of active communities and deliveries per active community. The decrease in the average sales price of homes delivered was primarily due to pricing to market through an increased use of incentives and product mix. In the nine months ended August 31, 2024, a decrease in revenues per square foot was more than offset by a decrease in costs per square foot. In addition, land costs increased year over year. Overall, gross margin percentage of home deliveries increased year over year.
Previous report
Homebuilding West: Revenues from home sales increased in the nine months ended August 31, 2024 compared to the nine months ended August 31, 2023, primarily due to an increase in the number of home deliveries in all the states in the segment while the average sales price of homes delivered was flat. The increase in the number of home deliveries in Arizona, California, Colorado, Idaho, Nevada, Oregon, Utah and Washington was primarily due to an increase in the number of deliveries per active community. The decrease in the average sales price of homes delivered in Arizona, Colorado and Washington was primarily due to pricing to market through an increased use of incentives and product mix. The increase in the average sales price of homes delivered in California, Idaho, Nevada, Oregon and Utah was primarily due to product mix. In the nine months ended August 31, 2024, an increase in revenues per square foot was more than offset by a decrease in costs per square foot. In addition, land costs increased year over year. Overall, the gross margin percentage of home deliveries increased year over year.
Previous report
Subject to market conditions, we are planning a strategic taxable spin-off of a new public company to which we will have contributed land as well as cash with a value of approximately $6 billion to $8 billion. We have confidentially submitted to the Securities and Exchange Commission a draft registration statement relating to the spin-off and are actively engaged with the Securities and Exchange Commission in their review process. This project is ongoing and while we aim to work efficiently to consummate the transaction in the near term, there is no guarantee that the transaction will be completed on any given timeline. We expect the new company to qualify as a real estate investment trust and to operate as a permanent capital vehicle that will acquire and develop homesites and give options to acquire them on a “just-in-time” basis for Lennar and other customers. The goal of the spin-off is to accelerate our land light strategy by removing much of the land assets from our balance sheet.
Previous report
In April 2024, $350 million of our unsecured revolving credit facility matured.
Previous report
We manage, and have an investment in, Upward America Fund, which purchases single family homes and operates them as rental properties.
Reworded paragraphs (39)
Previous wording
We historically have experienced, and expect to continue to experience, variability in quarterly results. Our results of operations for the three and nine months ended August 31, 2024 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.
Current wording
We historically have experienced, and expect to continue to experience, variability in quarterly results. Our results of operations for the three months ended February 28, 2025 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.
Previous wording
Our net earnings attributable to Lennar were $1.2 billion, or $4.26 per diluted share, in the third quarter of 2024, compared to net earnings attributable to Lennar of $1.1 billion, or $3.87 per diluted share, in the third quarter of 2023. Excluding mark-to-market gains of $39 million on technology investments and one-time items of $89 million in our Multifamily segment, third quarter net earnings attributable to Lennar in 2024 were $1.1 billion, or $3.90 per diluted share. Excluding mark-to-market losses of $16 million on technology investments, third quarter net earnings attributable to Lennar in 2023 were $1.1 billion or $3.91 per diluted share.
Current wording
Our net earnings attributable to Lennar were $519.5 million, or $1.96 per diluted share, in the first quarter of 2025, compared to net earnings attributable to Lennar of $719.3 million, or $2.57 per diluted share, in the first quarter of 2024. Excluding mark-to-market losses on technology investments, first quarter net earnings attributable to Lennar in 2025 were $566.7 million, or $2.14 per diluted share, compared to first quarter net earnings attributable to Lennar in 2024 were $723.3 million or $2.58 per diluted share.
Previous wording
Revenues from home sales increased 9% in the third quarter of 2024 to $9.0 billion from $8.3 billion in the third quarter of 2023. Revenues were higher primarily due to a 16% increase in the number of home deliveries, partially offset by a 6% decrease in the average sales price of homes delivered. New home deliveries increased to 21,516 homes in the third quarter of 2024 from 18,559 homes in the third quarter of 2023. The average sales price of homes delivered was $422,000 in the third quarter of 2024, compared to $448,000 in the third quarter of 2023. The decrease in average sales price of homes delivered in the third quarter of 2024 compared to the same period last year was primarily due to pricing to market through an increased use of incentives and product mix.
Current wording
Revenues from home sales increased 5% in the first quarter of 2025 to $7.2 billion from $6.9 billion in the first quarter of 2024. Revenues were higher primarily due to a 6% increase in the number of home deliveries, partially offset by a 1% decrease in the average sales price of homes delivered. New home deliveries increased to 17,834 homes in the first quarter of 2025 from 16,798 homes in the first quarter of 2024. The average sales price of homes delivered was $408,000 in the first quarter of 2025, compared to $413,000 in the first quarter of 2024. The decrease in average sales price of homes delivered in the first quarter of 2025 compared to the same period last year was primarily due to continued weakness in the market.
Previous wording
Gross margins on home sales were $2.0 billion, or 22.5%, in the third quarter of 2024, compared to $2.0 billion, or 24.4%, in the third quarter of 2023. During the third quarter of 2024, gross margins decreased primarily because revenues per square foot decreased while land costs increased year over year, which was partially offset by a decrease in costs per square foot due to lower material costs as we continued to focus on construction cost savings.
Current wording
Gross margins on home sales were $1.4 billion, or 18.7% (18.8% excluding purchase accounting of $7.8 million), in the first quarter of 2025, compared to $1.5 billion, or 21.8%, in the first quarter of 2024. During the first quarter of 2025, gross margins decreased due to an increase in land costs year over year, as well as a decrease in revenue per square foot, which was partially offset by a decrease in construction costs as we continue to focus on construction cost savings.
Previous wording
Selling, general and administrative expenses were $600.7 million in the third quarter of 2024, compared to $582.8 million in the third quarter of 2023. As a percentage of revenues from home sales, selling, general and administrative expenses decreased to 6.7% in the third quarter of 2024, from 7.0% in the third quarter of 2023, primarily due to a decrease in broker commissions and the benefits of our technology efforts.
Current wording
Selling, general and administrative expenses were $615.7 million in the first quarter of 2025, compared to $568.0 million in the first quarter of 2024. As a percentage of revenues from home sales, selling, general and administrative expenses increased to 8.5% in the first quarter of 2025, from 8.2% in the first quarter of 2024, primarily due to an increase in marketing and selling expenses.
Previous wording
During the three months ended August 31, 2024, our homebuilding operating earnings included $33.8 million of interest income, compared to $38.2 million of interest income in the three months ended August 31, 2023.
Current wording
During the three months ended February 28, 2025, our homebuilding operating earnings included $23.2 million of interest income, compared to $57.6 million of interest income in the three months ended February 29, 2024.
Previous wording
In the third quarter of 2024 and 2023, we had tax provisions of $347.9 million and $358.2 million, respectively, which resulted in an overall effective income tax rate of 23.0% and 24.4%, respectively. For both periods, our effective income tax rate included state income tax expense and non-deductible executive compensation, partially offset by tax credits. In the three months ended August 31, 2024, our overall effective income tax rate was lower than last year primarily due to additional tax credits recognized during the three months ended August 31, 2024.
Current wording
In the first quarter of 2025 and 2024, we had tax provisions of $169.5 million and $210.9 million, which resulted in an overall effective income tax rate of 24.6% and 22.7%, respectively. For both periods, our effective income tax rate included state income tax expense and non-deductible executive compensation, partially offset by tax credits. The increase in the effective tax rate from the prior year for the first quarter of 2025 was primarily due to a decrease in excess tax benefits from share-based compensation and a decrease in solar tax credits.
Previous wording
Of the total homes delivered listed above, 124 homes with a dollar value of $49.9 million and an average sales price of $402,000 represent home deliveries from unconsolidated entities for the three months ended August 31, 2024, compared to 66 home deliveries with a dollar value of $32.6 million and an average sales price of $494,000 for the three months ended August 31, 2023.
Current wording
Of the total homes delivered listed above, 80 homes with a dollar value of $41.0 million and an average sales price of $512,000 represent home deliveries from unconsolidated entities for the three months ended February 28, 2025, compared to 77 home deliveries with a dollar value of $43.0 million and an average sales price of $558,000 for the three months ended February 29, 2024.
Previous wording
Of the total homes listed above, 114 homes with a dollar value of $69.1 million and an average sales price of $606,000 represent homes in 10 active communities from unconsolidated entities for the three months ended August 31, 2024, compared to 82 homes with a dollar value of $42.0 million and an average sales price of $512,000 in seven active communities for the three months ended August 31, 2023.
Current wording
Of the total homes listed above, 101 homes with a dollar value of $59.9 million and an average sales price of $593,000 represent homes in 11 active communities from unconsolidated entities for the three months ended February 28, 2025, compared to 46 homes with a dollar value of $25.2 million and an average sales price of $548,000 in six active communities for the three months ended February 29, 2024.
Previous wording
(2)Homes represent the number of new sales contracts executed with homebuyers, net of cancellations, during the three and nine months ended August 31, 2024 and 2023.
Current wording
(2)Homes represent the number of new sales contracts executed with homebuyers, net of cancellations, during the three months ended February 28, 2025 and February 29, 2024.
Previous wording
Of the total homes in backlog listed above, 110 homes with a backlog dollar value of $80.7 million and an average sales price of $734,000 represent the backlog from unconsolidated entities at August 31, 2024, compared to 217 homes with a backlog dollar value of $99.8 million and an average sales price of $460,000 at August 31, 2023.
Current wording
Of the total homes in backlog listed above, 100 homes with a backlog dollar value of $82.7 million and an average sales price of $827,000 represent the backlog from unconsolidated entities at February 28, 2025, compared to 116 homes with a backlog dollar value of $57.5 million and an average sales price of $495,000 at February 29, 2024.
Previous wording
Homebuilding East: Revenues from home sales decreased in the third quarter of 2024 compared to the third quarter of 2023, primarily due to a decrease in the average sales price of homes delivered in all the states in the segment except in New Jersey and Pennsylvania, which was partially offset by an increase in the number of home deliveries in all the states in the segment. The decrease in the average sales price of homes delivered in Alabama and Florida was primarily due to pricing to market through an increased use of incentives and product mix. The increase in the average sales price of homes delivered in New Jersey and Pennsylvania was primarily due to product mix. The increase in the number of home deliveries in Alabama, Florida, New Jersey and Pennsylvania was primarily due to an increase in the number of deliveries per active community. In the third quarter of 2024, a decrease in revenues per square foot was partially offset by a decrease in costs per square foot. In addition, land costs increased year over year. Overall, this resulted in a decrease in gross margin percentage of home deliveries.
Current wording
Homebuilding East: Revenues from home sales decreased in the first quarter of 2025 compared to the first quarter of 2024, primarily due to a decrease in both the average sales price of homes delivered and the number of home deliveries in all the states in the segment except in New Jersey, which was partially offset by an increase in the average sales price of homes delivered and the number of home deliveries in New Jersey. The decrease in the average sales price of homes delivered in Florida and Pennsylvania was primarily due to pricing to market through an increased use of incentives and product mix. The increase in the average sales price of homes delivered in New Jersey was primarily due to product mix. The decrease in the number of home deliveries in Florida and Pennsylvania was primarily due to a decrease in the number of deliveries per active community due to the timing of opening and closing of communities. The increase in the number of home deliveries in New Jersey was primarily due to an increase in the number of active communities. In the first quarter of 2025, a decrease in revenues per square foot was partially offset by a decrease in costs per square foot. In addition, land costs increased year over year. Overall, gross margin percentage of home deliveries decreased year over year.
Previous wording
Homebuilding Central: Revenues from home sales increased in the third quarter of 2024 compared to the third quarter of 2023, primarily due to an increase in the number of home deliveries in all the states in the segment, which was partially offset by a decrease in the average sales price of homes delivered in all the states in the segment except in Illinois and Maryland. The increase in the number of home deliveries in Georgia, Illinois, Indiana, Maryland, Minnesota, North Carolina, South Carolina, Tennessee and Virginia was primarily due to an increase in the number of deliveries per active community. The decrease in the average sales price of homes delivered in Georgia, Indiana, Minnesota, North Carolina, South Carolina, Tennessee and Virginia was primarily due to pricing to market through an increased use of incentives and product mix. The increase in the average sales price of homes delivered in Illinois and Maryland was primarily due to product mix. In the third quarter of 2024, a decrease in revenues per square foot was more than offset by a decrease in costs per square foot. In addition, land costs increased year over year. Overall, this resulted in a decrease in gross margin percentage of home deliveries.
Current wording
Homebuilding Central: Revenues from home sales increased in the first quarter of 2025 compared to the first quarter of 2024, primarily due to an increase in the number of home deliveries in all the states in the segment except in Maryland, Minnesota and South Carolina, which was partially offset by a decrease in the average sales price of homes delivered in Alabama, Georgia, North Carolina, South Carolina and Virginia. The increase in the number of home deliveries in Alabama, Georgia, Illinois, Indiana, North Carolina, Tennessee and Virginia was primarily due to an increase in the number of active communities including communities acquired from Rausch. The decrease in the number of home deliveries in Maryland, Minnesota and South Carolina was primarily due to a decrease in the number of deliveries per active community due to the timing of opening and closing of communities. The decrease in the average sales price of homes delivered in Alabama, Georgia, North Carolina, South Carolina and Virginia was primarily due to pricing to market through an increased use of incentives and product mix. The increase in the average sales price of homes delivered in Illinois, Indiana, Maryland, Minnesota and Tennessee was primarily due to product mix. In the first quarter of 2025, an increase in revenues per square foot and a decrease in costs per square foot was more than offset by an increase in land costs per square foot. Overall, the gross margin percentage of home deliveries decreased year over year.
Previous wording
Homebuilding Texas: Revenues from home sales increased in the third quarter of 2024 compared to the third quarter of 2023, primarily due to an increase in the number of home deliveries, which was partially offset by a decrease in the average sales price of homes delivered. The increase in the number of home deliveries was primarily due to an increase in the number of active communities and deliveries per active community. The decrease in the average sales price of homes delivered was primarily due to pricing to market through an increased use of incentives and product mix. In the third quarter of 2024, a decrease in revenues per square foot was offset by a decrease in costs per square foot. In addition, land costs increased year over year. Overall, the gross margin percentage of home deliveries decreased year over year.
Current wording
Homebuilding South Central: Revenues from home sales increased in the first quarter of 2025 compared to the first quarter of 2024, primarily due to an increase in the number of home deliveries in all states in the segment, which was partially offset by a decrease in the average sales price of homes delivered. The increase in the number of home deliveries was primarily due to an increase in the number of active communities including communities acquired from Rausch. The decrease in the average sales price of homes delivered was primarily due to pricing to market through an increased use of incentives and product mix. In the first quarter of 2025, a decrease in revenues per square foot was partially offset by a decrease in costs per square foot. In addition, land costs increased year over year. Overall, the gross margin percentage of home deliveries decreased year over year.
Previous wording
Homebuilding West: Revenues from home sales increased in the third quarter of 2024 compared to the third quarter of 2023, primarily due to an increase in the number of home deliveries in all the states in the segment except in Colorado and Oregon, which was partially offset by a decrease in the average sales price of homes delivered in all the states in the segment except in California, Idaho, Oregon and Utah. The increase in the number of home deliveries in Arizona, California, Idaho, Nevada, Utah and Washington was primarily due to an increase in the number of deliveries per active community. The decrease in the number of home deliveries in Colorado and Oregon was primarily due to a decrease in the number of deliveries per active community due to the timing of opening and closing of communities. The decrease in the average sales price of homes delivered in Arizona, Colorado, Nevada and Washington was primarily due to pricing to market through an increased use of incentives and product mix. The increase in the average sales price of homes delivered in California, Idaho, Oregon and Utah was primarily due to product mix. In the third quarter of 2024, an increase in revenues per square foot was more than offset by a decrease in costs per square foot. In addition, land costs increased year over year. Overall, the gross margin percentage of home deliveries decreased year over year.
Current wording
Homebuilding West: Revenues from home sales increased in the first quarter of 2025 compared to the first quarter of 2024, primarily due to an increase in the number of home deliveries in all the states in the segment except in Colorado, Nevada and Oregon, which was partially offset by a decrease in the average sales price of homes delivered in all the states in the segment except in California and Idaho. The increase in the number of home deliveries in Arizona, California, Idaho, Utah and Washington was primarily due to an increase in the number of active communities and deliveries per active community. The decrease in the number of home deliveries in Colorado, Nevada and Oregon was primarily due to a decrease in the number of deliveries per active community due to the timing of opening and closing of communities. The decrease in the average sales price of homes delivered in Arizona, Colorado, Nevada, Oregon, Utah and Washington was primarily due to pricing to market through an increased use of incentives. The increase in the average sales price of homes delivered in California and Idaho was primarily due to product mix. In the first quarter of 2025, an increase in revenues per square foot and a decrease in costs per square foot were more than offset by an increase in land costs per square foot. Overall, the gross margin percentage of home deliveries decreased year over year.
Previous wording
At August 31, 2024 and November 30, 2023, the carrying value of Financial Services' commercial mortgage-backed securities was $138.0 million and $140.7 million, respectively. Details of these securities and related debt are disclosed in Note 2 of the Notes to Condensed Consolidated Financial Statements.
Current wording
At February 28, 2025 and November 30, 2024, the carrying value of Financial Services' commercial mortgage-backed securities was $134.4 million and $135.6 million, respectively. Details of these securities and related debt are disclosed in Note 3 of the Notes to Condensed Consolidated Financial Statements.
Previous wording
Lennar Multifamily Venture Fund I (“LMV I") is a long-term multifamily development investment vehicle involved in the development, construction and property management of class-A multifamily assets. As of November 30, 2023, there were 38 rental operation projects in LMV I. During the second half of fiscal 2024, the LMV I partners decided to liquidate and sell all of the individual rental operation projects of LMV I as the fund has come to the end of its contractual life. During the three months ended August 31, 2024, 27 LMV I rental operation projects were sold to various third-party buyers. We recognized a net gain of $179.0 million on the sale of these rental operation projects which was recorded as equity in earnings (losses) in the condensed consolidated statement of operations. As a result, we received net cash distributions of $147.3 million during the three months ended August 31, 2024. The remaining LMV I rental operation projects are expected to be monetized in the near term.
Current wording
During the second half of fiscal 2024, the LMV I partners decided to liquidate and sell all of its 38 rental operation projects of LMV I as the fund has come to the end of its contractual life. During the year ended November 30, 2024, 33 LMV I rental operation projects were sold to various third-party buyers. As of February 28, 2025, two additional LMV I rental operation projects were sold to various third-party buyers.
Previous wording
Our Lennar Other segment includes fund investments we retained subsequent to our sale of the Rialto investment and asset management platform, as well as strategic investments in technology companies that are looking to improve the homebuilding and financial services industries to better serve homebuyers and homeowners and increase efficiencies. At August 31, 2024 and November 30, 2023, we had $854.3 million and $657.9 million, respectively, of assets in our Lennar Other segment, which included investments in unconsolidated entities of $351.2 million and $276.2 million, respectively. The investments in equity securities of Blend Labs, Inc. (“Blend Labs”), Hippo Holdings, Inc. (“Hippo”), Opendoor Technologies, Inc. (“Opendoor”), SmartRent, Inc. (“SmartRent”), Sonder Holdings, Inc. (“Sonder”), and Sunnova Energy International, Inc. (“Sunnova”) are carried at market and will therefore change depending on the market value of our shareholdings in those entities on the last day of each quarter. All of the investments are accounted for as investments in equity securities which are held at fair value and the changes in fair values are recognized through earnings. Details of these investments are included within Note 2 of the Notes to Condensed Consolidated Financial Statements. The following is a detail of Lennar Other unrealized gains (losses) from mark-to-market adjustments on our publicly traded technology investments:
Current wording
Our Lennar Other segment includes fund investments we retained subsequent to our sale of the Rialto investment and asset management platform, as well as strategic investments in technology companies that are looking to improve the homebuilding and financial services industries to better serve homebuyers and homeowners and increase efficiencies. At February 28, 2025 and November 30, 2024, we had $824.2 million and $894.9 million, respectively, of assets in our Lennar Other segment, which included investments in unconsolidated entities of $375.4 million and $379.4 million, respectively. The investments in equity securities of Blend Labs, Inc. (“Blend Labs”), Hippo Holdings, Inc. (“Hippo”), Opendoor Technologies, Inc. (“Opendoor”), SmartRent, Inc. (“SmartRent”), Sonder Holdings, Inc. (“Sonder”), and Sunnova Energy International, Inc. (“Sunnova”) are carried at market and will therefore change depending on the market value of our shareholdings in those entities on the last day of each quarter. All of the investments are accounted for as investments in equity securities which are held at fair value and the changes in fair values are recognized through earnings. Details of these investments are included within Note 3 of the Notes to Condensed Consolidated Financial Statements. The following is a detail of Lennar Other realized and unrealized gains (losses) from sales of shares and mark-to-market adjustments on our publicly traded technology investments:
Previous wording
At August 31, 2024, we had cash and cash equivalents and restricted cash related to our homebuilding, financial services, multifamily and other operations of $4.3 billion, compared to $6.6 billion at November 30, 2023 and $4.1 billion at August 31, 2023.
Current wording
At February 28, 2025, we had cash and cash equivalents and restricted cash related to our homebuilding, financial services, multifamily and other operations of $2.6 billion, compared to $5.0 billion at November 30, 2024 and $5.3 billion at February 29, 2024.
Previous wording
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 August 31, 2024, we had $4.0 billion of homebuilding cash and cash equivalents and no outstanding borrowings under our $2.2 billion revolving credit facility, thereby providing approximately $6.2 billion of available capacity.
Current wording
We finance all of our activities, including homebuilding, financial services, multifamily, other and general operating needs, primarily with cash generated from our operations, debt issuances and cash borrowed under our warehouse lines of credit and our unsecured revolving credit facility (the “Credit Facility”). At February 28, 2025, we had $2.3 billion of homebuilding cash and cash equivalents and no outstanding borrowings under our $3.0 billion revolving credit facility, thereby providing approximately $5.3 billion of available capacity.
Previous wording
During the nine months ended August 31, 2024 and 2023, cash provided by operating activities totaled $1.4 billion and $2.6 billion, respectively. During the nine months ended August 31, 2024, cash provided by operating activities was impacted primarily by our net earnings and a decrease in loans held-for-sale of $245 million primarily related to the sale of loans originated by our Financial Services segment. This was offset by an increase in inventories due to strategic land purchases, land development and construction costs of $708 million, an increase in deposits and pre-acquisition costs on real estate of $985 million as we increased the percentage of controlled homesites, and a decrease in accounts payable and other liabilities of $176 million.
Current wording
During the three months ended February 28, 2025 and February 29, 2024, cash (used in) provided by operating activities totaled ($289) million and $368 million, respectively. During the three months ended February 28, 2025, cash used in operating activities was impacted by an increase in inventories due to strategic land purchases, land development and construction costs of $513 million, an increase in deposits and pre-acquisition costs on real estate of $758 million as we increased the percentage of controlled homesites primarily as a result of option contracts with Millrose Properties, Inc. ("Millrose"), and a decrease in accounts payable and other liabilities of $215 million. This was offset by our net earnings and a decrease in loans held-for-sale of $445 million primarily related to the sale of loans originated by our Financial Services segment.
Previous wording
During the nine months ended August 31, 2023, cash provided by operating activities was impacted primarily by our net earnings, a decrease in loans held-for-sale of $434 million primarily related to the sale of loans originated by our Financial Services segment and a decrease in receivables of $168 million primarily related to a decrease in Financial Services receivables, net, which are loans sold to investors for which we have not yet been paid. This was partially offset by a decrease in accounts payable and other liabilities of $882 million, primarily due to the payment of income taxes and an increase in other assets of $105 million.
Current wording
During the three months ended February 29, 2024, cash provided by operating activities was impacted primarily by our net earnings, a decrease in loans held-for-sale of $54 million primarily related to the sale of loans originated by our Financial Services segment and a decrease in receivables of $379 million primarily related to a decrease in Financial Services receivables, net, which are loans sold to investors for which we have not yet been paid. This was partially offset by an increase in inventories due to strategic land purchases, land development and construction costs of $285 million, an increase in deposits and pre-acquisition costs on real estate of $411 million as we increased the percentage of controlled homesites, and a decrease in accounts payable and other liabilities of $326 million.
Previous wording
During the nine months ended August 31, 2024 and 2023, cash used in investing activities totaled $177 million and $115 million, respectively. During the nine months ended August 31, 2024, our cash used in investing activities was primarily due to cash contributions of $312 million to unconsolidated entities, which included (1) $164 million to Homebuilding unconsolidated entities, (2) $131 million to Lennar other unconsolidated entities and (3) $17 million to Multifamily unconsolidated entities and $130 million of net additions of operating properties and equipment. This was partially offset by distributions of capital from unconsolidated entities of $237 million, which primarily included (1) $53 million from Homebuilding unconsolidated entities, (2) $18 million from our Lennar Other unconsolidated entities and (3) $166 million from Multifamily entities.
Current wording
During the three months ended February 28, 2025 and February 29, 2024, cash provided by (used in) investing activities totaled $21 million and ($148) million, respectively. During the three months ended February 28, 2025, our cash provided by investing activities was primarily due to $233 million received from the sale of an investment in a joint venture, $72 million proceeds from the sale of investments and distributions of capital from unconsolidated entities of $35 million, which primarily included (1) $15 million from Homebuilding unconsolidated entities, (2) $17 million from Multifamily entities and (3) $4 million from our Lennar Other unconsolidated entities. This was partially offset by the $231 million acquisition of Rausch Coleman Homes ("Rausch"), net of cash acquired. In addition, we had cash contributions of $79 million to unconsolidated entities, which included (1) $67 million to Homebuilding unconsolidated entities, (2) $4 million to Lennar other unconsolidated entities and (3) $8 million to Multifamily unconsolidated entities and $56 million of net additions of operating properties and equipment.
Previous wording
During the nine months ended August 31, 2023, our cash used in investing activities was primarily due to cash contributions of $153 million to unconsolidated entities, which included (1) $75 million to Homebuilding unconsolidated entities, (2) $58 million to Lennar Other unconsolidated entities, and (3) $20 million to Multifamily unconsolidated entities. This was partially offset by distributions of capital from unconsolidated entities of $70 million, which primarily included (1) $48 million from Homebuilding unconsolidated entities, (2) $21 million from our Lennar Other unconsolidated entities, and (3) $1 million from Multifamily entities.
Current wording
During the three months ended February 29, 2024, our cash used in investing activities was primarily due to cash contributions of $118 million to unconsolidated entities, which included (1) $56 million to Homebuilding unconsolidated entities, (2) $54 million to Lennar Other unconsolidated entities, and (3) $7 million to Multifamily unconsolidated entities. This was partially offset by distributions of capital from unconsolidated entities of $35 million, which primarily included (1) $23 million from Homebuilding unconsolidated entities, (2) $8 million from our Lennar Other unconsolidated entities, and (3) $4 million from Multifamily entities.
Previous wording
During the nine months ended August 31, 2024 and 2023, cash used in financing activities totaled $3.5 billion and $3.2 billion, respectively. During the nine months ended August 31, 2024, cash used in financing activities was primarily due to (1) $618 million of net repayments under our Financial Services' warehouse facilities; (2) redemption of $454 million aggregate principal amount of our 4.50% senior notes due April 2024; (3) $100 million of partial repurchase of our 4.75% senior notes due 2027; (4) $1.7 billion of repurchases of our common stock, which included $1.6 billion of repurchases under our repurchase program and $86 million of repurchases related to our equity compensation plan; (5) $414 million of dividend payments; and (6) $125 million of net payments from liabilities related to consolidated inventory not owned due to activity with land banks.
Current wording
During the three months ended February 28, 2025 and February 29, 2024, cash used in financing activities totaled $2.1 billion and $1.5 billion, respectively. During the three months ended February 28, 2025, cash used in financing activities was primarily due to (1) $534 million of net repayments under our Financial Services' warehouse facilities; (2) $416 million net cash in connection with Millrose spin-off; (3) $256 million of net payments from liabilities related to consolidated inventory not owned due to activity with land banks; (4) $775 million of repurchases of our common stock, which included $710 million of repurchases under our repurchase program and $65 million of repurchases related to our equity compensation plan; and (5) $132 million of dividend payments.
Previous wording
During the nine months ended August 31, 2023, cash used in financing activities was primarily due to (1) $981 million of net repayments under our Financial Services' warehouse facilities; (2) $842 million of repurchases of our common stock, which included $769 million of repurchases under our repurchase program and $72 million of repurchases related to our equity compensation plan; (3) the early redemption of $425 million aggregate principal amount of our 5.875% senior notes due November 2024; (4) $208 million of repurchases of our senior notes due in fiscal year 2024; (5) $325 million of dividend payments; and (6) $256 million of net payments from liabilities related to consolidated inventory not owned due to activity with land banks.
Current wording
During the three months ended February 29, 2024, cash used in financing activities was primarily due to (1) $600 million of net repayments under our Financial Services' warehouse facilities; (2) $595 million of repurchases of our common stock, which included $512 million of repurchases under our repurchase program and $84 million of repurchases related to our equity compensation plan; (3) $139 million of dividend payments; and (4) $185 million of net payments from liabilities related to consolidated inventory not owned due to activity with land banks.
Previous wording
At August 31, 2024, Homebuilding debt to total capital was lower compared to both November 30, 2023 and August 31, 2023, primarily as a result of an increase in stockholders' equity due to net earnings and a decrease in Homebuilding debt due to debt paydowns, partially offset by share repurchases.
Current wording
At February 28, 2025, Homebuilding debt to total capital was higher compared to November 30, 2024, primarily as a result of a decrease in stockholders' equity due to the spin-off of Millrose and share repurchases, partially offset by net earnings and a decrease in Homebuilding debt due to debt paydowns. At February 28, 2025, Homebuilding debt to total capital was lower compared to February 29, 2024, primarily as a result of a decrease in stockholders' equity due to the spin-off of Millrose and share repurchases, partially offset by net earnings and a decrease in Homebuilding debt due to debt paydowns.
Previous wording
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, strategic transactions to accelerate our land light strategy 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.
Current wording
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, strategic transactions to accelerate our land light strategy 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 as we continue to move towards being a pure play homebuilding company.
Previous wording
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 Facility also provides that up to $500 million in commitments may be used for letters of credit. The maturity, debt covenants and details of the Credit Facility are unchanged from the disclosure in our Financial Condition and Capital Resources section in our Annual Report on Form 10-K for the fiscal year ended November 30, 2023. In addition to the Credit Facility, we have other letter of credit facilities with different financial institutions.
Current wording
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. During the three months ended February 28, 2025, we received an additional $150 million in commitments. The Credit Facility also provides that up to $477.5 million in commitments may be used for letters of credit. The maturity, debt covenants and details of the Credit Facility are unchanged from the disclosure in our Financial Condition and Capital Resources section in our Annual Report on Form 10-K for the fiscal year ended November 30, 2024. In addition to the Credit Facility, we have other letter of credit facilities with different financial institutions.
Previous wording
In January 2024, our Board of Directors authorized an increase to our stock repurchase program to enable us to repurchase up to an additional $5 billion in value of our outstanding Class A or Class B common stock. Repurchases are authorized to be made in open-market or private transactions. The repurchase authorization has no expiration date. At August 31 2024, we have a remaining authorization to repurchase $3.9 billion in value of our Class A or B common stock. The details of our Class A and Class B common stock repurchases under the authorized repurchase program for the nine months ended August 31, 2024 and 2023 are included in Note 4 of the Notes to Condensed Consolidated Financial Statements.
Current wording
In January 2024, our Board of Directors authorized an increase to our stock repurchase program to enable us to repurchase up to an additional $5 billion in value of our outstanding Class A or Class B common stock. Repurchases are authorized to be made in open-market or private transactions. The repurchase authorization has no expiration date. At February 28 2025, we have a remaining authorization to repurchase $2.7 billion in value of our Class A or B common stock. The details of our Class A and Class B common stock repurchases under the authorized repurchase program for the three months ended February 28, 2025 and February 29, 2024 are included in Note 5 of the Notes to Condensed Consolidated Financial Statements.
Previous wording
During the nine months ended August 31, 2024, treasury shares increased by 11.2 million shares primarily due to our repurchase of 10.6 million shares of Class A and Class B common stock through our stock repurchase program. During the nine months ended August 31, 2023, treasury shares increased by 7.8 million shares primarily due to our repurchase of 7.0 million shares of Class A and Class B common stock through our stock repurchase program.
Current wording
During the three months ended February 28, 2025, treasury shares increased by 5.8 million shares primarily due to our repurchase of 5.2 million shares of Class A and Class B common stock through our stock repurchase program. During the three months ended February 29, 2024, treasury shares increased by 3.6 million shares primarily due to our repurchase of 3.4 million shares of Class A and Class B common stock through our stock repurchase program.
Previous wording
On September 25, 2024, our Board of Directors declared a quarterly cash dividend of $0.50 per share on both our Class A and Class B common stock, payable on October 24, 2024 to holders of record at the close of business on October 9, 2024. On July 19, 2024, the Company paid a quarterly cash dividend of $0.50 per share for both of its Class A and Class B common stock to holders of record at the close of business on July 5, 2024, as declared by its Board of Directors on June 20, 2024. We approved and paid cash dividends of $0.375 per share for each of the four quarters of 2023 on both our Class A and Class B common stock.
Current wording
On February 12, 2025, we paid a quarterly cash dividend of 0.50 per share for both our Class A and Class B common stock to holders of record at the close of business day January 29, 2025. We approved and paid cash dividends of $0.50 per share for each of the four quarters of 2024 for both its Class A and Class B common stock.
Previous wording
As of August 31, 2024, we had equity investments in 49 active Homebuilding and land unconsolidated entities (of which 5 had recourse debt, 14 had non-recourse debt and 30 had no debt) and 48 active Homebuilding and land unconsolidated entities at November 30, 2023. 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.
Current wording
As of February 28, 2025, we had equity investments in 53 active Homebuilding and land unconsolidated entities (of which 5 had recourse debt, 14 had non-recourse debt and 34 had no debt) and 51 active Homebuilding and land unconsolidated entities at November 30, 2024. 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 each partner. Details regarding these investments, balances and debt are included in Note 4 of the Notes to Condensed Consolidated Financial Statements.
Previous wording
At August 31, 2024, Multifamily had equity investments in 22 active unconsolidated entities that are engaged in multifamily residential developments (of which 18 had non-recourse debt and 4 had no debt) and 22 active unconsolidated entities at November 30, 2023. 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. 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.
Current wording
At February 28, 2025, Multifamily had equity investments in 24 active unconsolidated entities that are engaged in multifamily residential developments (of which 17 had non-recourse debt and 7 had no debt) and 23 active unconsolidated entities at November 30, 2024. 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. 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’
Previous wording
The Multifamily segment includes LMV I, LMV II and Canada Pension Plan Investments Fund, which are long-term multifamily development investment vehicles involved in the development, construction and property management of class-A multifamily assets. During the three months ended August 31, 2024, the LMV I fund sold some of its individual rental operation projects which resulted in a net gain of $179.0 million and received net cash distributions of $147.3 million. The remaining LMV I rental operation projects are expected to be monetized in the near term. Combined, these transactions could result in cash proceeds of approximately $250 million. Details of each fund as of and during the nine months ended August 31, 2024 are included in Note 3 of the Notes to Condensed Consolidated Financial Statements.
Current wording
The Multifamily segment includes LMV I, LMV II and Canada Pension Plan Investments 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 fund as of and during the three months ended February 28, 2025 are included in Note 4 of the Notes to Condensed Consolidated Financial Statements.
Previous wording
As part of the sale of the Rialto investment and asset management platform, we retained the right to receive a portion of payments with regard to carried interests if certain 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 reduce future carried interest payments to which we become entitled from the applicable funds and are recorded as equity in earnings (loss) in the condensed consolidated statement of operations. Our investment in the Rialto funds totaled $145.7 million and $148.7 million as of August 31, 2024 and November 30, 2023, respectively.
Current wording
As part of the sale of the Rialto investment and asset management platform, we retained the right to receive a portion of payments with regard to carried interests if certain 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 reduce future carried interest payments to which we become entitled from the applicable funds and are recorded as equity in earnings (losses) in the condensed consolidated statement of operations. Our investment in the Rialto funds totaled $136.6 million and $140.1 million as of February 28, 2025 and November 30, 2024, respectively.
Previous wording
As of August 31, 2024 and November 30, 2023, we had strategic technology investments in unconsolidated entities of $205.5 million and $127.5 million, respectively, accounted for under the equity method of accounting. Our strategic technology investments through our LENX business help to enhance the homebuying and home ownership experience, and help us stay at the forefront of homebuilding innovation. Details regarding these investments are included in Note 3 of the Notes to Condensed Consolidated Financial Statements.
Current wording
As of February 28, 2025 and November 30, 2024, we had strategic technology investments in unconsolidated entities of $238.8 million and $239.3 million, respectively, accounted for under the equity method of accounting. Our strategic technology investments through our LENX business help to enhance the homebuying and homeownership experience, and help us stay at the forefront of homebuilding innovation. Details regarding these investments are included in Note 4 of the Notes to Condensed Consolidated Financial Statements.
Previous wording
Our contractual obligations and commercial commitments have not changed materially from those reported in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended November 30, 2023, except for redemption/repurchase of $553 million of senior notes and a decrease of $618 million in borrowings under the Financial Services' warehouse repurchase facilities.
Current wording
Our contractual obligations and commercial commitments have not changed materially from those reported in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended November 30, 2024, except for a decrease of $534 million in borrowings under the Financial Services' warehouse repurchase facilities and a decrease of $449 million in land purchase contract obligations.
Previous wording
There have been no significant changes to our critical accounting policies during the nine months ended August 31, 2024 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 fiscal year ended November 30, 2023.
Current wording
There have been no significant changes to our critical accounting policies during the three months ended February 28, 2025 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 fiscal year ended November 30, 2024.
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Current report — wording carried from elsewhere
capital. Each joint venture is governed by an operating agreement that provides significant substantive participating voting rights on major decisions to our partners.
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Previous report — wording carried elsewhere
For the nine months ended August 31, 2024 and 2023, we had tax provisions of $859.2 million and $824.2 million, respectively, which resulted in overall effective income tax rates of 23.2% and 24.2%, respectively. For both periods, our effective income tax rate included state income tax expense and non-deductible executive compensation, partially offset by tax credits. In the nine months ended August 31, 2024, our overall effective income tax rate was lower than last year primarily due to additional tax credits recognized during the three months ended August 31, 2024.