LENNAR CORP /NEW/
For the period ended May 31, 2026. Filed Jun 29, 2026.
View on SEC.govAbout this filing
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.
May 31, 2026 · Filed Jun 29, 2026
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 2026-02-28; filed 2026-04-09.
0001628280-26-024352
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-05-31; filed 2026-06-29.
0001628280-26-046019
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 114 previous paragraphs and 127 current paragraphs.
62 unchanged; 42 reworded; 21 added; 9 removed; 1 previous and 2 current paragraphs rearranged.
Tables are not compared: 21 previous and 27 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 (21)
Current report
Lennar's second quarter 2026 results represent strong operational execution against a macro backdrop that has grown more complicated throughout the quarter. While our margin remains under pressure as we continue to focus on bringing affordable housing to an affordability-constrained consumer base, underlying demand is real and growing and supply remains structurally short.
Current report
Mortgage interest rates remained stubbornly elevated in the mid-to-upper 6% range throughout the quarter, keeping affordability challenged for the majority of our buyers. Complicating the picture further, headline inflation rose to 4.2% year-over-year in May, the highest reading since early 2023, driven primarily by energy prices tied to supply disruptions from the Iran conflict. While core inflation decelerated on a monthly basis, higher energy costs impact every part of the American household budget and weigh on consumer confidence and the urgency to make major financial commitments. The Federal Reserve remains on hold, and near-term rate relief appears unlikely. Consumer psychology continues to be tested by concerns about long-term job security amid rapid advances in artificial intelligence. Traffic across our communities has been inconsistent; intent is high but urgency to close remains measured and deliberate rather than confident.
Current report
On an encouraging note, after three years of incentive levels that have been generally increasing, we saw a meaningful decline in our sales incentives on deliveries this quarter. While the overall market remains choppy and it is too early to declare a sustained trend, this may be a leading indicator of margin recovery. The federal government's engagement with the national housing crisis also continues to deepen, with housing affordability remaining a genuine focal point of both the administration and the legislature.
Current report
Our operating strategy has not changed. We remain focused on two strategic priorities: driving consistent, even-flow production and volume, and continuously refining our asset-light, land-light balance sheet model to generate strong and growing cash flow and returns. Using incentives, we price to market in order to maintain sales at a consistent level as the market adjusts. This has given us a competitive edge, and has enabled us to drive down construction costs per square foot and to reduce cycle time to a record low. Our land-light model enables us to be a significantly more efficient land buyer, land developer and land administrator at a meaningfully lower cost of capital. We are not waiting for conditions to normalize, we are building and executing in the market as it exists today, and we are currently expecting sequential margin improvement to continue as the year progresses.
Current report
After over three years of navigating a rather difficult and complicated housing market, we believe that we are well-positioned for market conditions as they unfold. In the current market, incentives are declining, margins are starting to improve, and our sales and marketing machines are generating stronger leads, faster engagement, and better conversion. Our position is strong in the vast majority of our markets, which gives us the scale and operational discipline to position ourselves for improvements in the market rather than waiting for conditions to improve on their own. We are building towards that with clarity, discipline, and confidence.
Current report
Three Months Ended May 31, 2026 versus Three Months Ended May 31, 2025
Current report
Operating earnings for the Multifamily segment were $18.3 million in the second quarter of 2026, compared to an operating loss of $14.8 million in the second quarter of 2025. Operating loss for the Lennar Other segment was $38.9 million in the second quarter of 2026, compared to an operating loss of $52.9 million in the second quarter of 2025. The Lennar Other operating loss for both second quarters of 2026 and 2025 was primarily driven by mark-to-market losses of $23.3 million and $29.4 million, respectively, on our technology investments.
Current report
Six Months Ended May 31, 2026 versus Six Months Ended May 31, 2025
Current report
Revenues from home sales decreased 8% in the six months ended May 31, 2026 to $13.9 billion from $15.0 billion in the six months ended May 31, 2025. Revenues were lower primarily due to a 6% decrease in the average sales price of homes delivered and a 2% decrease in the number of home deliveries. New home deliveries were 37,382 homes in the six months ended May 31, 2026, compared to 37,965 homes in the six months ended May 31, 2025. The average sales price of homes delivered was $373,000 in the six months ended May 31, 2026, compared to $398,000 in the six months ended May 31, 2025. The decrease in average sales price of homes delivered in the six months ended May 31, 2026 compared to the same period last year was primarily due to continued weakness in the market.
Current report
Selling, general and administrative expenses were $1.3 billion in the six months ended May 31, 2026, consistent with $1.3 billion in the six months ended May 31, 2025. As a percentage of revenues from home sales, selling, general and administrative expenses increased to 9.5% in the six months ended May 31, 2026, from 8.7% in the six months ended May 31, 2025, primarily due to less leverage as a result of lower revenues and an increase in marketing and selling expenses.
Current report
During the six months ended May 31, 2026, our homebuilding operating earnings included $29.3 million of interest income, compared to $37.0 million of interest income in the six months ended May 31, 2025. The decrease in interest income was primarily due to lower cash balances year over year.
Current report
Operating earnings for the Financial Services segment were $190.8 million in the six months ended May 31, 2026, compared to $299.5 million in the six months ended May 31, 2025, both amounts are net of noncontrolling interest. The decrease in operating earnings was primarily due to lower profit per locked loan in the mortgage business.
Current report
Of the total homes delivered listed above, 73 homes with a dollar value of $47.9 million and an average sales price of $656,000 represent homes from unconsolidated entities for the three months ended May 31, 2026, compared to 113 homes with a dollar value of $51.1 million and an average sales price of $452,000 for the three months ended May 31, 2025.
Current report
Of the total homes delivered listed above, 157 homes with a dollar value of $119.7 million and an average sales price of $763,000 represent homes from unconsolidated entities for the six months ended May 31, 2026, compared to 193 homes with a dollar value of $92.0 million and an average sales price of $477,000 for the six months ended May 31, 2025.
Current report
Of the total new orders listed above, 128 homes with a dollar value of $62.1 million and an average sales price of $485,000 represent homes from unconsolidated entities for the six months ended May 31, 2026, compared to 242 homes with a dollar value of $129.7 million and an average sales price of $536,000 for the six months ended May 31, 2025.
Current report
Three Months Ended May 31, 2026 versus Three Months Ended May 31, 2025
Current report
Homebuilding East: Revenues from home sales decreased in the second quarter of 2026 compared to the second quarter of 2025 primarily due to a decrease in the average sales price of homes delivered in all states of the segment, partially offset by an increase in the number of homes delivered in New Jersey. The overall decrease in the average sales price of homes delivered was primarily due to pricing to market through an increased use of sales incentives. The overall increase in the number of homes delivered was primarily due to an increase in the number of active communities. During the second quarter of 2026, gross margin percentage on homes delivered increased primarily due to a decrease in construction costs, partially offset by lower revenue per square foot and higher land costs year over year.
Current report
Six Months Ended May 31, 2026 versus Six Months Ended May 31, 2025
Current report
Homebuilding Central: Revenues from home sales decreased in the six months ended May 31, 2026 compared to the six months ended May 31, 2025 primarily due to decreases in both the average sales price of homes delivered and number of homes delivered in all states of the segment, except for an increase in the number of homes delivered in Alabama, Illinois and South Carolina. The overall decrease in the average sales price of homes delivered was primarily due to pricing to market through an increased use of sales incentives. The overall decrease in the number of homes delivered was primarily due to a decrease in the number of deliveries per active community. During the six months ended May 31, 2026, gross margin percentage on homes delivered decreased, primarily due to lower revenue per square foot and higher land costs year over year partially offset by a decrease in construction costs.
Current report
Homebuilding South Central: Revenues from home sales decreased in the six months ended May 31, 2026 compared to the six months ended May 31, 2025 primarily due to a decrease in the average sales price of homes delivered in all states of the segment, except in Oklahoma, partially offset by an increase in the number of homes delivered in all states of the segment, except in Texas. The overall decrease in the average sales price of homes delivered was primarily due to pricing to market through an increased use of sales incentives. The overall increase in the number of homes delivered was primarily due to an increase in the number of active communities. During the six months ended May 31, 2026, gross margin percentage on homes delivered decreased primarily due to lower revenue per square foot, partially offset by decreases in both construction costs and land costs year over year.
Current report
Homebuilding West: Revenues from home sales decreased in the six months ended May 31, 2026 compared to the six months ended May 31, 2025 primarily due to a decrease in the average sales price of homes delivered in Arizona, California, Utah and Washington and a decrease in the number of homes delivered in all states of the segment, except in Idaho and Oregon. The overall decrease in the average sales price of homes delivered was primarily due to pricing to market through an increased use of sales incentives. The overall decrease in the number of homes delivered was primarily due to a decrease in the number of deliveries per active community. During the six months ended May 31, 2026, gross margin percentage on homes delivered decreased primarily due to lower revenue per square foot and higher land costs year over year, partially offset by a decrease in construction costs.
Removed paragraphs (9)
Previous report
Lennar's first quarter 2026 results reflect what remains a stubbornly challenging housing market. While margins continue to reflect the affordability-driven realities facing today's homebuyers, our underlying demand remains strong and supply continues to fall short of need. Throughout this period of market difficulty, we have remained focused on our clear and consistent strategy. We drove consistent volume and we matched production and sales pace. We used margin as a circuit breaker, and we continued to refine and improve our asset-light, land-light manufacturing platform. We have maintained volume and focused on building improved business programs to bring costs down so that we can remain profitable and still provide the much-needed housing supply America demands.
Previous report
We entered the first quarter with cautious optimism following signs of moderating interest rates late in 2025, however, consumer confidence continued to be tested by a range of domestic and global uncertainties. Mortgage rates remained stubbornly above 6%, hovering between approximately 6.2% and 6.4% throughout the quarter; concerns about job security have grown increasingly prominent as rapid advancements in artificial intelligence raise important questions about the future of employment; and ongoing conflict in the Middle East presents potential upside risks to energy prices, inflation, and interest rates. At the same time, institutional purchasers have been sidelined by political pressures that suggest that they are part of the housing problem. They generally purchased between 5% and 7% of new homes for rental purposes, primarily to people who cannot afford to purchase but still want single-family lifestyles. While traffic across our communities remained reasonably consistent, the urgency to transact remained measured.
Previous report
On a more positive note, the federal government's engagement with the national housing crisis continues to deepen. Federal officials have been actively engaged with builders and industry associations to explore practical solutions to the affordability challenge. What programs will be adopted remains to be seen, but the attention being paid at the federal level to the housing shortage is unprecedented, and we believe meaningful, long-term policy support is more likely now than at any time in recent history. Congress is working on housing legislation, but we believe that it will not meaningfully impact housing or affordability in the short term.
Previous report
We remain focused on three core operating tenets: driving consistent volume to maximize efficiency; refining our asset-light, land-light balance sheet to generate strong and growing returns and cash flow; and engaging new technologies to advance operational progress and enhance the customer experience. Our technology initiatives - including improvements to our marketing and sales platform, land bank administration, and the ongoing buildout of our internal engineering and technology capabilities - are beginning to yield real and measurable results and are positioning us to operate with a leaner, more competitive cost structure going forward.
Previous report
We know that margins will remain under pressure in the second quarter of 2026 as affordability headwinds persist and macroeconomic uncertainty continues. However, our cost structure is materially more efficient than it was two years ago, and we are seeing continuous improvement across construction costs, cycle times, and overhead. While our margins are down, this is due to incentives required to stimulate sales, which sit at 14% today, compared to our historical average between 4% to 6%. That gap represents significant margin recovery opportunity as mortgage rates moderate and pent-up demand is activated. We continue to believe we are approaching an inflection point. Our sales incentive levels showed early signs of stabilizing during the first quarter, as new order incentive rates trended below delivery incentive rates, which we believe reflects modestly improving demand dynamics.
Previous report
We are determined to build more with less capital deployed, so that as margins begin to recover, returns on capital and equity will grow faster. Our balance sheet is strong, our land banking relationships are deep and productive, and our technology initiatives are positioning Lennar to be a materially different and better company in the years ahead. We remain committed to delivering affordable, high-quality homes to families across America, and we are confident that the steps we are taking today are building a stronger and more resilient Lennar for the future.
Previous report
First Quarter 2026 versus First Quarter 2025
Previous report
Of the total homes delivered listed above, 84 homes with a dollar value of $71.9 million and an average sales price of $856,000 represent homes from unconsolidated entities for the first quarter of 2026, compared to 80 homes with a dollar value of $41.0 million and an average sales price of $512,000 for the first quarter of 2025.
Previous report
First Quarter 2026 versus First Quarter 2025
Reworded paragraphs (42)
Previous wording
For the second quarter of 2026, we expect new orders to be in the range of 21,000 to 22,000 homes, with continued focus on matching starts and sales pace. We anticipate second quarter deliveries to be in the range of 20,000 to 21,000 homes as we maintain even-flow production and convert inventory to cash. Our average sales price on those deliveries is expected to be between $370,000 and $375,000. We expect gross margins to be in the range of 15.5% to 16%, and we believe our first quarter gross margin of 15.2% represents the low point for the fiscal year. Our SG&A percentage is expected to be in the range of 8.9% to 9.1%.
Current wording
For the third quarter of 2026, we expect new orders to be in the range of 21,000 to 22,000 homes, with continued focus on matching starts and sales pace. We anticipate third quarter deliveries to be in the range of 20,500 to 21,500 homes as we maintain even-flow production and convert inventory to cash. Our average sales price on those deliveries is expected to be between $375,000 and $380,000. We expect gross margins to be approximately 16%, and our SG&A percentage should be in the range of 8.8% to 9.0%. For the full year, we are adjusting our annual delivery guidance to 82,000 to 83,000 homes, reflecting current pressures on interest rates and continued macro uncertainty.
Previous wording
We historically have experienced, and expect to continue to experience, variability in quarterly results. Our results of operations for the first quarter of 2026 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 and six months ended May 31, 2026 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 first quarter net earnings attributable to Lennar in 2026 were $229.4 million, or $0.93 per diluted share, compared to our first quarter net earnings attributable to Lennar in 2025 of $519.5 million, or $1.96 per diluted share. Excluding pretax mark-to-market gains of $14.8 million on technology investments, first quarter net earnings attributable to Lennar in 2026 were $218.0 million, or $0.88 per diluted share. Excluding pretax mark-to-market losses of $62.5 million on technology investments, first quarter net earnings attributable to Lennar in 2025 were $566.7 million or $2.14 per diluted share.
Current wording
Our second quarter net earnings attributable to Lennar in 2026 were $304.8 million, or $1.24 per diluted share, compared to our second quarter net earnings attributable to Lennar in 2025 of $477.4 million, or $1.81 per diluted share. Excluding pretax mark-to-market losses of $23.3 million and $29.4 million on technology investments, respectively, our second quarter net earnings attributable to Lennar in 2026 were $322.1 million, or $1.31 per diluted share, compared to $499.5 million or $1.90 per diluted share in the second quarter of 2025.
Previous wording
Revenues from home sales decreased 13% in the first quarter of 2026 to $6.3 billion from $7.2 billion in the first quarter of 2025. Revenues were lower primarily due to an 8% decrease in the average sales price of homes delivered and a 5% decrease in the number of home deliveries. New home deliveries were 16,863 homes in the first quarter of 2026, compared to 17,834 homes in the first quarter of 2025. The average sales price of homes delivered was $374,000 in the first quarter of 2026, compared to $408,000 in the first quarter of 2025. The decrease in average sales price of homes delivered in the first quarter of 2026 compared to the same period last year was primarily due to continued weakness in the market and an increased use of sales incentives offered to homebuyers.
Current wording
Revenues from home sales decreased 2% in the second quarter of 2026 to $7.6 billion from $7.8 billion in the second quarter of 2025. Revenues were lower primarily due to a 5% decrease in the average sales price of homes delivered, partially offset by a 2% increase in the number of home deliveries. New home deliveries were 20,519 homes in the second quarter of 2026, compared to 20,131 homes in the second quarter of 2025. The average sales price of homes delivered was $371,000 in the second quarter of 2026, compared to $389,000 in the second quarter of 2025. The decrease in average sales price of homes delivered in the second quarter of 2026 compared to the same period last year was primarily due to continued weakness in the market.
Previous wording
Gross margins on home sales were $951.3 million, or 15.2%, in the first quarter of 2026, compared to $1.4 billion, or 18.7%, in the first quarter of 2025. During the first quarter of 2026, gross margins decreased primarily due to lower revenue per square foot and higher land costs year over year, which were partially offset by a decrease in construction costs, reflecting our continued focus on cost-saving initiatives.
Current wording
Gross margins on home sales were $1.2 billion, or 15.6%, in the second quarter of 2026, compared to $1.4 billion, or 17.8%, in the second quarter of 2025. During the second quarter of 2026, gross margins decreased primarily due to lower revenue per square foot and higher land costs year over year, which were partially offset by a decrease in construction costs, reflecting our continued focus on cost-saving initiatives.
Previous wording
Selling, general and administrative expenses were $617.5 million in the first quarter of 2026, compared to $615.7 million in the first quarter of 2025. As a percentage of revenues from home sales, selling, general and administrative expenses increased to 9.8% in the first quarter of 2026, from 8.5% in the first quarter of 2025, primarily due to less leverage as a result of lower revenues.
Current wording
Selling, general and administrative expenses were $698.4 million in the second quarter of 2026, compared to $688.8 million in the second quarter of 2025. As a percentage of revenues from home sales, selling, general and administrative expenses increased to 9.2% in the second quarter of 2026, from 8.8% in the second quarter of 2025, primarily due to less leverage as a result of lower revenues and an increase in marketing and selling expenses.
Previous wording
During the first quarter of 2026, our homebuilding operating earnings included $19.9 million of interest income, compared to $23.2 million of interest income in the first quarter of 2025.
Current wording
During the second quarter of 2026, our homebuilding operating earnings included $9.4 million of interest income, compared to $13.8 million of interest income in the second quarter of 2025. The decrease in interest income was primarily due to lower cash balances year over year.
Previous wording
Operating earnings for the Financial Services segment were $90.6 million in the first quarter of 2026, compared to $142.9 million in the first quarter of 2025. The decrease in operating earnings was primarily due to lower lock volume and lower profit per locked loan.
Current wording
Operating earnings for the Financial Services segment were $100.2 million in the second quarter of 2026, compared to $156.6 million in the second quarter of 2025, both amounts are net of noncontrolling interest. The decrease in operating earnings was primarily due to lower profit per locked loan in the mortgage business.
Previous wording
In the first quarter of 2026 and 2025, we had tax provisions of $69.1 million and $169.5 million, which resulted in an overall effective income tax rate of 23.1% and 24.6%, 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 decrease in the effective tax rate for the first quarter of 2026 compared to the prior period was primarily due to a charitable contribution of appreciated stock.
Current wording
In the second quarter of 2026 and 2025, we had tax provisions of $105.1 million and $160.1 million, which resulted in an overall effective income tax rate of 25.6% and 25.1%, respectively. For both periods, our effective income tax rate included state income tax expense and non-deductible executive compensation, partially offset by tax credits.
Previous wording
Operating earnings for the Multifamily segment were $18.0 million in the first quarter of 2026, compared to a breakeven result in the first quarter of 2025. Operating loss for the Lennar Other segment was $5.2 million in the first quarter of 2026, compared to operating loss of $89.3 million in the first quarter of 2025. The Lennar Other operating loss for the first quarter of 2026 was primarily due to operating losses, which was partially offset by mark-to-market gains of $14.8 million on our technology investments. The Lennar Other operating loss for the first quarter of 2025 was primarily due to mark-to-market losses of $62.5 million on our technology investments.
Current wording
Operating earnings for the Multifamily segment were $36.2 million in the six months ended May 31, 2026, compared to an operating loss of $14.5 million in the six months ended May 31, 2025. Operating loss for the Lennar Other segment was $44.2 million in the six months ended May 31, 2026, compared to an operating loss of $142.2 million in the six months ended May 31, 2025. The Lennar Other operating loss for the six months ended May 31, 2026 was due to operating losses and mark-to-market losses of $8.4 million on our technology investments. The Lennar Other operating loss for the six months ended May 31, 2025 was primarily due to mark-to-market losses of $91.9 million on our technology investments.
Previous wording
Of the total new orders listed above, 71 homes with a dollar value of $31.2 million and an average sales price of $440,000 represent homes in seven active communities from unconsolidated entities for the first quarter of 2026, compared to 101 homes with a dollar value of $59.9 million and an average sales price of $593,000 in 11 active communities for the first quarter of 2025.
Current wording
Of the total new orders listed above, 57 homes with a dollar value of $30.9 million and an average sales price of $542,000 represent homes in five active communities from unconsolidated entities for the three months ended May 31, 2026, compared to 141 homes with a dollar value of $69.8 million and an average sales price of $495,000 in 10 active communities for the three months ended May 31, 2025.
Previous wording
(2)Homes represent the number of new sales contracts executed with homebuyers, net of cancellations, during the first quarter of 2026 and 2025.
Current wording
(2)Homes represent the number of new sales contracts executed with homebuyers, net of cancellations, during the three and six months ended May 31, 2026 and 2025.
Previous wording
Of the total homes in backlog listed above, 66 homes with a backlog dollar value of $45.4 million and an average sales price of $687,000 represent the backlog from unconsolidated entities at February 28, 2026, compared to 100 homes with a backlog dollar value of $82.7 million and an average sales price of $827,000 at February 28, 2025.
Current wording
Of the total homes in backlog listed above, 50 homes with a backlog dollar value of $28.4 million and an average sales price of $568,000 represent the backlog from unconsolidated entities at May 31, 2026, compared to 128 homes with a backlog dollar value of $101.4 million and an average sales price of $792,000 at May 31, 2025.
Previous wording
Homebuilding Central: Revenues from home sales decreased in the first quarter of 2026 compared to the first quarter of 2025, primarily due to decreases in the average sales price of homes delivered in Alabama, Illinois, Indiana, Maryland/Virginia, Minnesota, North Carolina, South Carolina, and Tennessee, partially offset by an increase in the number of homes delivered in Alabama, Illinois, Maryland/Virginia, and South Carolina. The overall decrease in the average sales price of homes delivered was primarily due to pricing to market through an increased use of sales incentives. The overall decrease in the number of homes delivered was primarily due to a decrease in the number of deliveries per active community. During the first quarter of 2026, gross margin percentage on homes delivered decreased, primarily due to lower revenue per square foot and higher land costs year over year, partially offset by a decrease in construction costs.
Current wording
Homebuilding Central: Revenues from home sales decreased in the second quarter of 2026 compared to the second quarter of 2025 primarily due to a decrease in the average sales price of homes delivered in all states of the segment, except in Illinois, partially offset by an increase in the number of homes delivered in Alabama, Georgia, Illinois, and South Carolina. The overall decrease in the average sales price of homes delivered was primarily due to pricing to market through an increased use of sales incentives. The overall increase in the number of homes delivered was primarily due to an increase in the number of active communities. During the second quarter of 2026, gross margin percentage on homes delivered decreased primarily due to lower revenue per square foot and higher land costs year over year, partially offset by a decrease in construction costs.
Previous wording
Homebuilding South Central: Revenues from home sales were essentially flat in the first quarter of 2026 compared to the first quarter of 2025, as an increase in the number of homes delivered in Arkansas, Kansas, and Oklahoma was offset by a decrease in the number of homes delivered in Texas and a decrease in the average sales price of homes delivered in Texas and Kansas. The increase in the number of homes delivered was primarily due to an increase in the number of active communities. The overall decrease in the average sales price of homes delivered was primarily due to pricing to market through an increased use of sales incentives. During the first quarter of 2026, gross margin percentage on homes delivered decreased, primarily due to lower revenue per square foot, partially offset by decreases in both construction costs and land costs year over year.
Current wording
Homebuilding South Central: Revenues from home sales decreased in the second quarter of 2026 compared to the second quarter of 2025 primarily due to decreases in the average sales price of homes delivered in Arkansas and Texas, partially offset by an increase in the number of homes delivered in all states of the segment. The overall decrease in the average sales price of homes delivered was primarily due to pricing to market through an increased use of sales incentives. The increase in the number of homes delivered was primarily due to an increase in the number of active communities. During the second quarter of 2026, gross margin percentage on homes delivered decreased slightly primarily due to lower revenue per square foot, partially offset by decreases in both construction costs and land costs year over year.
Previous wording
Homebuilding West: Revenues from home sales decreased in the first quarter of 2026 compared to the first quarter of 2025, primarily due to decreases in the number of homes delivered in all states in the segment except in Oregon, partially offset by an increase in the average sales price of homes delivered in Colorado, Idaho, Nevada, and Oregon. The overall decrease in the number of homes delivered was primarily due to a decrease in the number of deliveries per active community as a result of the timing of homes delivered. The overall decrease in the average sales price of homes delivered was primarily due to pricing to market through an increased use of sales incentives. During the first quarter of 2026, gross margin percentage on homes delivered decreased, primarily due to lower revenue per square foot and higher land costs year over year, partially offset by decreases in construction costs.
Current wording
Homebuilding West: Revenues from home sales decreased in the second quarter of 2026 compared to the second quarter of 2025 primarily due to a decrease in the average sales price of homes delivered in California, Oregon and Washington, partially offset by an increase in the number of homes delivered in Arizona, California, Idaho, and Oregon. The overall decrease in the average sales price of homes delivered was primarily due to pricing to market through an increased use of sales incentives. The overall increase in the number of homes delivered was primarily due to an increase in the number of deliveries per active community. During the second quarter of 2026, gross margin percentage on homes delivered decreased primarily due to lower revenue per square foot and higher land costs year over year, partially offset by a decrease in construction costs.
Previous wording
Homebuilding East: Revenues from home sales decreased in the first quarter of 2026 compared to the first quarter of 2025, primarily due to decreases in the number of homes delivered and the average sales price of homes delivered in all states of the segment, except in New Jersey. The overall decrease in the number of homes delivered was primarily due to a decrease in the number of deliveries per active community as a result of the timing of homes delivered, despite an increase in the number of active communities year over year. The overall decrease in the average sales price of homes delivered was primarily due to pricing to market through an increased use of sales incentives. During the first quarter of 2026, gross margin percentage on homes delivered decreased, primarily due to lower revenue per square foot and higher land costs year over year, partially offset by a decrease in construction costs.
Current wording
Homebuilding East: Revenues from home sales decreased in the six months ended May 31, 2026 compared to the six months ended May 31, 2025 primarily due to decreases in both the number of homes delivered and the average sales price of homes delivered in all states of the segment, except for an increase in the number of homes delivered in New Jersey. The overall decrease in the number of homes delivered was primarily due to a decrease in the number of deliveries per active community. The overall decrease in the average sales price of homes delivered was primarily due to pricing to market through an increased use of sales incentives. During the six months ended May 31, 2026, gross margin percentage on homes delivered decreased primarily due to lower revenue per square foot and higher land costs year over year, partially offset by a decrease in construction costs.
Previous wording
At February 28, 2026 and November 30, 2025, the carrying value of Financial Services' commercial mortgage-backed securities was $131.0 million and $132.9 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 May 31, 2026 and November 30, 2025, the carrying value of Financial Services' commercial mortgage-backed securities was $129.3 million and $132.9 million, respectively. Details of these securities and related debt are disclosed in Note 2 of the Notes to Condensed Consolidated Financial Statements.
Previous 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, 2025, 35 LMV I rental operation projects were sold to various third-party buyers. During the first quarter of 2026, one additional LMV I rental operation project was sold to third-party buyers.
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, 2025, 35 LMV I rental operation projects were sold to various third-party buyers. During the six months ended May 31, 2026, one additional LMV I rental operation project was sold to a third-party buyer.
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 various types of technology and other companies that are looking to improve the homebuilding and financial services industries to better serve homebuyers and homeowners and increase efficiencies. At February 28, 2026 and November 30, 2025, we had $829.7 million and $897.6 million, respectively, of assets in our Lennar Other segment, which included investments in unconsolidated entities of $361.1 million and $368.0 million, respectively.
Current wording
Our Lennar Other segment includes strategic investments in various types of technology and other companies that are looking to improve the homebuilding and financial services industries to better serve homebuyers and homeowners and increase efficiencies as well as fund investments we retained subsequent to our sale of the Rialto investment and asset management platform. At May 31, 2026 and November 30, 2025, we had $800.4 million and $897.6 million, respectively, of assets in our Lennar Other segment, which included investments in unconsolidated entities of $364.5 million and $368.0 million, respectively.
Previous wording
We have investments in several publicly traded technology companies, which are held at market and the carrying value of which will therefore change depending on the value of our shareholdings in those entities on the last day of each quarter. All 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. In the first quarter of 2026 and 2025, we recorded mark-to-market gains of $14.8 million and losses of $62.5 million, respectively, on our publicly traded technology investments.
Current wording
We have investments in publicly traded technology companies, which are held at market and the carrying value of which will therefore change depending on the value of our shareholdings in those entities on the last day of each quarter. All 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 as discussed in the Overview section earlier of our Management's Discussions and Analysis of Financial Condition and Results of Operations.
Previous wording
At February 28, 2026, we had cash and cash equivalents and restricted cash related to our homebuilding, financial services, multifamily and other operations of $2.4 billion, compared to $3.8 billion at November 30, 2025 and $2.6 billion at February 28, 2025.
Current wording
At May 31, 2026, we had cash and cash equivalents and restricted cash related to our homebuilding, financial services, multifamily and other operations of $2.2 billion, compared to $3.8 billion at November 30, 2025 and $1.5 billion at May 31, 2025.
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 February 28, 2026, we had $2.1 billion of homebuilding cash and cash equivalents and ended the first quarter of 2026 with total liquidity of $5.2 billion.
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 May 31, 2026, we had $1.8 billion of homebuilding cash and cash equivalents and ended the second quarter of 2026 with total liquidity of $4.9 billion.
Previous wording
During the three months ended February 28, 2026 and 2025, cash used in operating activities totaled $434 million and $289 million, respectively. During the three months ended February 28, 2026, cash used in operating activities was impacted by (1) an increase in inventories due to land purchases and construction costs of $652 million; (2) an increase in deposits and pre-acquisition costs on real estate of $354 million as we increased the percentage of controlled homesites primarily as a result of option contracts with land banks; and (3) a decrease in accounts payable and other liabilities of $404 million. This was partially offset by (1) our net earnings; (2) a decrease in loans held-for-sale of $398 million primarily related to the sale of loans originated by our Financial Services segment; and (3) a decrease in receivables of $296 million.
Current wording
During the six months ended May 31, 2026 and 2025, cash used in operating activities totaled $718 million and $1.4 billion, respectively. During the six months ended May 31, 2026, cash used in operating activities was impacted by (1) an increase in inventories due to land purchases and construction costs of $1.1 billion; (2) an increase in deposits and pre-acquisition costs on real estate of $555 million primarily as a result of option contracts with land banks, which included option maintenance fees paid to land banks; and (3) a decrease in accounts payable and other liabilities of $272 million. This was partially offset by (1) our net earnings; (2) a decrease in loans held-for-sale of $247 million primarily related to the sale of loans originated by our Financial Services segment; and (3) a decrease in receivables of $129 million.
Previous wording
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.
Current wording
During the six months ended May 31, 2025, cash used in operating activities was impacted by an increase in inventories due to land purchases, land development and construction costs of $1.6 billion, an increase in deposits and pre-acquisition costs on real estate of $782 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 $600 million. This was partially offset by our net earnings and a decrease in loans held-for-sale of $361 million primarily related to the sale of loans originated by our Financial Services segment.
Previous wording
$105 million, which primarily included (1) $84 million from Multifamily entities, (2) $17 million from Homebuilding unconsolidated entities, and (3) $4 million from our Lennar Other unconsolidated entities. In addition, we had cash contributions of $32 million to unconsolidated entities, which included (1) $15 million to Homebuilding unconsolidated entities, (2) $1 million to Lennar Other unconsolidated entities and (3) $16 million to Multifamily unconsolidated entities and $30 million of net additions of operating properties and equipment.
Current wording
During the six months ended May 31, 2026 and 2025, cash provided by investing activities totaled $77 million and $183 million, respectively. During the six months ended May 31, 2026, our cash provided by investing activities was primarily due to distributions of capital from unconsolidated entities of $134 million, which primarily included (1) $105 million from Multifamily entities, (2) $23 million from Homebuilding unconsolidated entities, and (3) $6 million from our Lennar Other unconsolidated entities. This was partially offset by cash contributions of $59 million to unconsolidated entities, which included (1) $30 million to Homebuilding unconsolidated entities, (2) $2 million to Lennar Other unconsolidated entities and (3) $27 million to Multifamily unconsolidated entities.
Previous wording
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, 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.
Current wording
During the six months ended May 31, 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 $175 million, which primarily included (1) $32 million from Homebuilding unconsolidated entities, (2) $129 million from Multifamily entities and (3) $15 million from our Lennar Other unconsolidated entities and $115 million proceeds from the sale of loan receivables. This was partially offset by the $254 million acquisition of Rausch Coleman Homes, net of cash acquired, and cash contributions of $145 million to unconsolidated entities, which included (1) $124 million to Homebuilding unconsolidated entities, (2) $7 million to Lennar Other unconsolidated entities and (3) $14 million to Multifamily unconsolidated entities and $71 million of net additions of operating properties and equipment.
Previous wording
During the three months ended February 28, 2026 and 2025, cash used in financing activities totaled $1.1 billion and $2.1 billion, respectively. During the three months ended February 28, 2026, cash used in financing activities was primarily due to (1) $599 million of net repayments under our Financial Services' warehouse facilities; (2) $270 million of repurchases of our common stock, which included $239 million of repurchases under our repurchase program and $30 million of repurchases related to our equity compensation plan; (3) $123 million of dividend payments; and (4) $80 million of net payments from liabilities related to consolidated inventory not owned due to activity with land banks.
Current wording
During the six months ended May 31, 2026 and 2025, cash used in financing activities totaled $1.0 billion and $2.3 billion, respectively. During the six months ended May 31, 2026, cash used in financing activities was primarily due to (1) $737 million of repurchases of our common stock, which included $691 million of repurchases under our repurchase program and $46 million of repurchases related to our equity compensation plan; (2) $247 million of dividend payments; and (3) $155 million of net payments from liabilities related to consolidated inventory not owned due to activity with land banks. This was partially offset by $173 million of net borrowings under our Financial Services' warehouse facilities.
Previous wording
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 the 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.
Current wording
During the six months ended May 31, 2025, cash used in financing activities was primarily due to (1) $515 million of net repayments under our Financial Services' warehouse facilities; (2) redemption of $500 million aggregate principal amount of our 4.75% senior notes due May 2025; (3) $416 million net cash in connection with the Millrose spin-off; (4) $386 million of net payments from liabilities related to consolidated inventory not owned due to activity with land banks; (5) $1.3 billion of repurchases of our common stock, which included $1.2 billion of repurchases under our repurchase program and $65 million of repurchases related to our equity compensation plan; and (6) $265 million of dividend payments. The cash used in financing activities was partially offset by the receipt of proceeds of the sale of $700 million aggregate principal amount of our 5.20% senior notes due 2030 and $400 million of net borrowings under our unsecured revolving credit facility.
Previous wording
At February 28, 2026, Homebuilding debt to total capital was consistent with November 30, 2025. At February 28, 2026, Homebuilding debt to total capital was higher compared to February 28, 2025, primarily as a result of a decrease in stockholders' equity due to the non-cash exchange of Millrose Class A common stock and stock repurchases, partially offset by net earnings and an increase in Homebuilding debt due to issuance of senior notes and outstanding borrowings under our Delayed Draw Term Loan Facility (defined below), partially offset by debt paydowns.
Current wording
At May 31, 2026, Homebuilding debt to total capital was consistent with November 30, 2025. At May 31, 2026, Homebuilding debt to total capital was higher compared to May 31, 2025, primarily as a result of a decrease in stockholders' equity due to the non-cash exchange of Millrose Class A common stock, stock repurchases, an increase in Homebuilding debt due to issuance of senior notes and outstanding borrowings under our unsecured delayed draw term loan facility (the "Delayed Draw Term Loan Facility"), partially offset by net earnings and debt paydowns.
Previous wording
In May 2025, we entered into a new unsecured delayed draw term loan facility with an initial committed borrowing availability of approximately $1.6 billion (the “Delayed Draw Term Loan Facility”), which can be increased by an additional $500 million via an accordion feature. In July 2025, the total commitment under the Delayed Draw Term Loan Facility was increased by $100 million, thereby increasing the borrowing available capacity to $1.7 billion. Once drawn, we may at any time prepay the loan, in whole or in part, without premium or penalty. The term loan’s maturity date is three years from the initial effectiveness date of the credit agreement or May 2028, and at our discretion, it can be extended for an additional year until May 2029, subject to the satisfaction of certain conditions. Under the Delayed Draw Term Loan Facility, interest rates are equal to the adjusted term SOFR determined for the interest period plus the applicable margin. As of February 28, 2026, we had outstanding borrowings of approximately $1.7 billion under the credit agreement governing our new unsecured Delayed Draw Term Loan Facility.
Current wording
We have the Delayed Draw Term Loan Facility with committed borrowing availability of approximately $1.7 billion, which can be increased by an additional $500 million via an accordion feature. As of May 31, 2026, we had outstanding borrowings of $1.7 billion under the credit agreement governing its unsecured Delayed Draw Term Loan Facility. We may at any time prepay the loan, in whole or in part, without premium or penalty. The term loan’s maturity date is three years from the initial effectiveness date of the credit agreement or May 2028, and at our discretion, it can be extended for an additional year until May 2029, subject to the satisfaction of certain conditions. Under the Delayed Draw Term Loan Facility, interest rates equal the adjusted term SOFR determined for the interest period plus the applicable margin.
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 February 28, 2026, we have a remaining authorization to repurchase $1.5 billion in value of our Class A or Class 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, 2026 and 2025 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 May 31, 2026, we have a remaining authorization to repurchase $1.0 billion in value of our Class A or Class B common stock. The details of our Class A and Class B common stock repurchases under the authorized repurchase program for the six months ended May 31, 2026 and 2025 are included in Note 4 of the Notes to Condensed Consolidated Financial Statements.
Previous wording
During the three months ended February 28, 2026, treasury shares increased by 2.3 million shares primarily due to our repurchase of 2.0 million shares of Class A and Class B common stock through our stock repurchase program. 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.
Current wording
During the six months ended May 31, 2026, treasury shares increased by 7.6 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. During the six months ended May 31, 2025, treasury shares increased by 10.6 million shares primarily due to our repurchase of 9.9 million shares of Class A and Class B common stock through our stock repurchase program.
Previous wording
At February 28, 2026, Multifamily had equity investments in 26 active unconsolidated entities that are engaged in multifamily residential developments (of which 17 had non-recourse debt and 9 had no debt) compared to 25 active unconsolidated entities at November 30, 2025. 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. 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 May 31, 2026, Multifamily had equity investments in 27 active unconsolidated entities that are engaged in multifamily residential developments (of which 18 had non-recourse debt and 9 had no debt) compared to 25 active unconsolidated entities at November 30, 2025. 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. 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.
Previous wording
The Multifamily segment manages and has investments in LMV I, LMV II and Canada Pension Plan Investments (the "CPPIB Fund") and a new joint venture with an institutional investor (the "Institutional JV"), which are long-term multifamily development investment vehicles involved in the development, construction and ownership of class-A multifamily assets. The Multifamily segment expects the CPPIB Fund to have almost $1.0 billion in equity and Lennar's ownership percentage in the CPPIB Fund is 4%. The Multifamily segment expects the Institutional JV to acquire certain portfolio assets and invest additional capital to support pipeline opportunities. Details of each fund as of and during the three months ended February 28, 2026 are included in Note 3 of the Notes to Condensed Consolidated Financial Statements.
Current wording
The Multifamily segment manages and has investments in LMV I, LMV II and Canada Pension Plan Investments (the "CPPIB Fund") and a new joint venture with an institutional investor (the "Institutional JV"), which are long-term multifamily development investment vehicles involved in the development, construction and ownership of class-A multifamily assets. The Multifamily segment expects the CPPIB Fund to have almost $1.0 billion in equity and Lennar's ownership percentage in the CPPIB Fund is 4%. The Multifamily segment expects the Institutional JV to acquire certain portfolio assets and invest additional capital to support pipeline opportunities. Details of each fund as of and during the six months ended May 31, 2026 are included in Note 3 of the Notes to Condensed Consolidated Financial Statements.
Previous wording
In addition, in December 2025, we sold a majority interest in Quarterra Group, Inc. ("Quarterra"), a subsidiary of the Multifamily segment, to TPG Real Estate (“TPG”), thus retaining a non-controlling interest. TPG’s acquisition of Quarterra and its $1.0 billion strategic commitment, combined with Lennar’s insights, will accelerate Quarterra’s development pipeline and strengthen its platform for delivering thoughtfully designed rental communities in high-growth markets.
Current wording
In addition, in December 2025, we sold a majority interest in Quarterra Group, Inc. ("Quarterra"), a subsidiary of the Multifamily segment, to TPG Real Estate (“TPG”), thus retaining a noncontrolling interest. TPG’s acquisition of Quarterra and its $1.0 billion strategic commitment, combined with Lennar’s insights, will accelerate Quarterra’s development pipeline and strengthen its platform for delivering thoughtfully designed rental communities in high-growth markets.
Previous wording
As of February 28, 2026 and November 30, 2025, we had strategic technology investments in unconsolidated entities of $232.5 million and $235.0 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 May 31, 2026 and November 30, 2025, we had strategic technology investments in unconsolidated entities of $234.1 million and $235.0 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.
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 were recorded as equity in earnings (losses) in the consolidated statement of operations. Our investment in the Rialto funds totaled $128.6 million and $133.0 million as of February 28, 2026 and November 30, 2025, 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 were recorded as equity in earnings (losses) in the condensed consolidated statement of operations. Our investment in the Rialto funds totaled $130.3 million and $133.0 million as of May 31, 2026 and November 30, 2025, respectively.
Previous wording
We often obtain access to land through option contracts, which generally enable us to control portions of properties owned by third parties (including land banks) and unconsolidated entities until we have determined whether to exercise the options. Since fiscal year 2020, we have been increasing the percentage of our total homesites that we control through options rather than own.
Current wording
We often obtain access to land through option contracts, which generally enable us to control portions of properties owned by third parties (including land banks) and unconsolidated entities until we have determined whether to exercise the options. Since fiscal year 2020, we have increased the percentage of our total homesites that we control through options rather than own.
Previous wording
As part of our focus on strategic relationships to further enhance our land-lighter strategy, at the end of fiscal year 2020 we entered into an arrangement with various land bank investor groups. Under the arrangement, in most instances when we want to acquire a property for use in our for-sale single-family home business, we will offer the investor group the opportunity to acquire the property and give us an option to purchase all or a portion of it back in the future, if it is mutually beneficial to both parties. To the extent the investor group does not elect to purchase properties we identify, we can utilize our other investor relationships to have other investor groups purchase the land or we can purchase it directly. The arrangement with the investor group, together with existing and other strategic partnerships we are discussing, are significant steps in our strategy to migrate to a higher percentage of our homesites which we control but do not own, which we expect will result in greater cash flow and higher returns on assets and equity.
Current wording
As part of our focus on strategic relationships to further enhance our land-lighter strategy, at the end of fiscal year 2020 we entered into an arrangement with various land bank investor groups. Under the arrangement, in most instances when we want to acquire a property for use in our for-sale single-family home business, we will offer the investor group the opportunity to acquire the property and give us an option to purchase all or a portion of it back in the future, if it is mutually beneficial to both parties. To the extent the investor group does not elect to purchase properties we identify, we can utilize our other investor relationships to have other investor groups purchase the land or we can purchase it directly. The arrangement with the investor group, together with existing and other strategic partnerships, including the spin-off of Millrose in 2025, were significant steps in our strategy to migrate to a higher percentage of our homesites which we control but do not own, which we expect will result in greater cash flow and higher returns on assets and equity.
Showing the first 40 of 42 pairs. Open the source sections for the rest.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
Gross margins on home sales were $2.1 billion, or 15.4%, in the six months ended May 31, 2026, compared to $2.7 billion, or 18.2%, in the six months ended May 31, 2025. During the six months ended May 31, 2026, gross margins decreased primarily due to lower revenue per square foot and higher land costs year over year, which were partially offset by a decrease in construction costs, reflecting our continued focus on cost-saving initiatives.
Current report — wording carried from elsewhere
In the six months ended May 31, 2026 and 2025, we had tax provisions of $174.2 million and $329.6 million, which resulted in an overall effective income tax rate of 24.6% and 24.8%, respectively. For both periods, our effective income tax rate included state income tax expense and non-deductible executive compensation, partially offset by tax credits.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
During the three months ended February 28, 2026 and 2025, cash provided by investing activities totaled $93 million and $21 million, respectively. During the three months ended February 28, 2026, our cash provided by investing activities was primarily due to $28 million proceeds from the sale of investments and distributions of capital from unconsolidated entities of