Lennar Reports Second Quarter EPS of $1.65

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Jun 15, 2020, 16:35 ET

MIAMI, June 15, 2020 /PRNewswire/ --

Net earnings of $517.4 million, or $1.65 per diluted share, up from net earnings of $421.5 million, or $1.30 per diluted share, a 27% increase in earnings per share
Deliveries of 12,672 homes – consistent with prior year
New orders of 13,015 homes – down 10%; new orders dollar value of $4.9 billion – down 16%
Backlog of 17,975 homes – down 6%; backlog dollar value of $7.1 billion – down 8%
Revenues of $5.3 billion – down 5%
Homebuilding operating margins of $636.2 million, up from $608.3 million

Gross margin on home sales of 21.6%, up from 20.1%
S,G&A expenses as a % of revenues from home sales of 8.3%, compared to 8.4%
Operating margin on home sales of 13.3%, up from 11.6%

Financial Services operating earnings of $150.6 million (including a $61.4 million gain on deconsolidation), up from operating earnings of $62.5 million (net of noncontrolling interest)
Multifamily operating loss of $0.6 million, compared to operating loss of $4.3 million
Lennar Other operating loss of $18.0 million, compared to operating earnings of $1.8 million
Homebuilding cash and cash equivalents of $1.4 billion
No borrowings outstanding under the Company's $2.45 billion revolving credit facility
Redeemed $300 million of 6.625% senior notes
Homebuilding debt to total capital of 31.2%, compared to 38.3% last year

Lennar Corporation (NYSE: LEN and LEN.B), one of the nation's leading homebuilders, today reported results for its second quarter ended May 31, 2020. Second quarter net earnings attributable to Lennar in 2020 were $517.4 million, or $1.65 per diluted share, compared to second quarter net earnings attributable to Lennar in 2019 of $421.5 million, or $1.30 per diluted share.

Stuart Miller, Executive Chairman of Lennar, said, "The three months ended May 31st, our second quarter, have been a time of transition for both our company and our country. The backdrop of an unprecedented health crisis, significant business disruption and distressing social injustice has defined the past three months. Today we announce Lennar's financial results, which reflect both our determination to do well by operating an excellent company, while doing good by serving our Customers, our Associates, our Trade Partners, our Communities and our Shareholders.

"As the quarter began, we focused on the safety, health and well-being of our Customers, Associates, and Trade Partners as new orders stalled significantly from mid-March to the end of April, driven by COVID-19 and the economic shutdown. Accordingly, we slowed starts and land spend to preserve cash and protect our balance sheet.

"Business rebounded significantly in May, and by quarter's end, our total new orders declined by only 10%, and deliveries ended flat year-over-year. In sync with the market rebound, we resumed starts and land spend to match the improving market conditions, and this rebound has continued into the first two weeks of June.

"While unemployment increased throughout the quarter due to impacts from the COVID-19 pandemic, customers moved from rental apartments and from densely populated areas to purchase homes, and home sales grew steadily, as record-low interest rates and low inventory levels drove a favorable rebound in the homebuilding industry.

"With daily video meetings, our management team recast our business using technology and innovation to accelerate change and operate efficiently in these changing times. Years of change management were condensed into weeks as our management focus and determination drove our second quarter, bottom-line after-tax profit to $517.4 million, or $1.65 per diluted share, compared to $421.5 million, or $1.30 per diluted share year in the prior year."

Rick Beckwitt, Chief Executive Officer of Lennar, said, "New home sales strengthened across the country in all of our major markets during the last six weeks. A limited supply of both new and existing homes and an intense focus on construction costs drove our homebuilding gross margin in the second quarter to 21.6%, compared to 20.1% last year. At the same time, our focus on making our homebuilding platform more efficient resulted in an SG&A percentage of 8.3%, an all-time, second quarter low. In addition, our financial services business performed extremely well with second quarter earnings of $150.6 million, an all-time, quarterly high."

Jon Jaffe, President of Lennar, said, "We made significant progress towards becoming a land lighter company by reducing our years owned supply of homesites to 3.9 years from 4.5 at the end of last year's second quarter. Profitability and reduced land spend created significant cash flow, as we ended the quarter with $1.4 billion of cash on our balance sheet, $0 borrowed on our revolver and a homebuilding debt to total capital of 31.2% vs 38.3% last year.

"We also remained focused on managing our construction spend by working closely with our Trade Partners. Never has the partnership between our company and our Trade Partners been more important to our success, as we worked together to reduce costs in order to provide essential housing to our Customers and keep housing affordable while interest rates are at all time lows. We thank our Trade Partners for their help and cooperation in these most difficult times."

Mr. Miller concluded, "While many parts of the economy are still waiting to open and rebound, the housing market has proven to be resilient in the current environment. We expect this trend to continue and for housing to be a significant driver of employment and rebound for the broader economy. In this context, we are re-instituting guidance for fiscal year 2020 and now expect our deliveries to be in the range of 50,500 – 51,000 homes with a gross margin on home sales of approximately 21.5% and a net margin on home sales of approximately 13.0%. A breakdown of our third and fourth quarters is included later in this release."

RESULTS OF OPERATIONS

THREE MONTHS ENDED MAY 31, 2020 COMPARED TO
THREE MONTHS ENDED MAY 31, 2019

Homebuilding

Revenues from home sales decreased 5% in the second quarter of 2020 to $4.9 billion from $5.2 billion in the second quarter of 2019. Revenues were lower primarily due to a 4% decrease in the average sales price of homes delivered. New home deliveries, excluding unconsolidated entities, of 12,653 homes in the second quarter of 2020 were flat compared to 12,706 homes in the second quarter of 2019, as a result of the coronavirus (COVID-19) pandemic and the economic shutdown. The average sales price of homes delivered was $389,000 in the second quarter of 2020, compared to $407,000 in the second quarter of 2019. The decrease in average sales price primarily resulted from continuing to shift to lower-priced communities and regional product mix due to COVID-19 stay-at-home orders in certain higher priced markets.

Gross margin on home sales was $1.1 billion, or 21.6%, in the second quarter of 2020, compared to $1.0 billion, or 20.1% in the second quarter of 2019. The gross margin percentage on home sales increased primarily due to the Company's continued focus on reducing construction costs. Loss on land sales in the second quarter of 2020 was $23.5 million, primarily due to a write-off of costs as a result of Lennar not moving forward with a naval base development in Concord, California, northeast of San Francisco. Gross margin on land sales were $2.4 million in the second quarter of 2019.

Selling, general and administrative expenses were $407.2 million in the second quarter of 2020, compared to $435.7 million in the second quarter of 2019. As a percentage of revenues from home sales, selling, general and administrative expenses improved to 8.3% in the second quarter of 2020, from 8.4% in the second quarter of 2019.

Financial Services

Operating earnings for the Financial Services segment were $150.6 million in the second quarter of 2020 (which included $147.3 million of operating earnings and an add back of $3.3 million of net loss attributable to noncontrolling interests) compared to $62.5 million in the second quarter of 2019 (which included $56.2 million of operating earnings and an add back of $6.3 million of net loss attributable to noncontrolling interests). Operating earnings increased due to an improvement in the mortgage business as a result of an increase in volume and margin, as well as reductions in loan origination costs and a $5.0 million gain on the sale of a servicing portfolio. Additionally, the Financial Services segment recorded a $61.4 million gain on the deconsolidation of a previously consolidated entity.

Other Ancillary Businesses

Operating loss for the Multifamily segment was $0.6 million in the second quarter of 2020, compared to $4.3 million ($3.9 million net of noncontrolling interest) in the second quarter of 2019. Operating loss for the Lennar Other segment was $18.0 million in the second quarter of 2020 primarily due to a $25.0 million write-down of assets held by Rialto legacy funds because of disruption in the capital markets as a result of COVID-19 and the economic shutdown. This compared to operating earnings of $1.8 million ($2.2 million net of noncontrolling interest) in the second quarter of 2019.

RESULTS OF OPERATIONS

SIX MONTHS ENDED MAY 31, 2020 COMPARED TO
SIX MONTHS ENDED MAY 31, 2019

Homebuilding

Revenues from home sales increased 3% in the six months ended May 31, 2020 to $9.1 billion from $8.8 billion in the six months ended May 31, 2019. Revenues were higher primarily due to a 7% increase in the number of home deliveries, excluding unconsolidated entities. Despite new home deliveries in the second quarter of 2020 being consistent with the second quarter of 2019 as a result of COVID-19 and the economic shutdown, new home deliveries, excluding unconsolidated entities, increased to 22,966 homes in the six months ended May 31, 2020 from 21,508 homes in the six months ended May 31, 2019, as a result of an increase in home deliveries in all of Homebuilding's segments except Other. The average sales price of homes delivered was $395,000 in the six months ended May 31, 2020, compared to $408,000 in the six months ended May 31, 2019. The decrease in average sales price primarily resulted from continuing to shift to lower-priced communities and regional product mix due to COVID-19 stay-at-home orders in certain higher priced markets.

Gross margin on home sales was $1.9 billion, or 21.1%, in the six months ended May 31, 2020, compared to $1.8 billion, or 20.1% in the six months ended May 31, 2019. The gross margin percentage on home sales increased primarily due to the Company's continued focus on reducing construction costs. Loss on land sales in the six months ended May 31, 2020 was $23.8 million, primarily due to a write-off of costs as a result of Lennar not moving forward with a naval base development in Concord, California, northeast of San Francisco. Gross margin on land sales were $2.7 million in the six months ended May 31, 2019.

Selling, general and administrative expenses were $786.1 million in the six months ended May 31, 2020, compared to $779.0 million in the six months ended May 31, 2019. As a percentage of revenues from home sales, selling, general and administrative expenses improved to 8.7% in the six months ended May 31, 2020, from 8.9% in the six months ended May 31, 2019.

Financial Services

Operating earnings for the Financial Services segment were $208.8 million in the six months ended May 31, 2020 (which included $194.6 million of operating earnings and an add back of $14.1 million of net loss attributable to noncontrolling interests), compared to $84.2 million in the six months ended May 31, 2019 (which included $75.2 million of operating earnings and an add back of $9.1 million of net loss attributable to noncontrolling interests). Operating earnings increased due to an improvement in the mortgage and title businesses as a result of an increase in volume and margin, as well as reductions in loan origination costs and a $5.0 million gain on the sale of a servicing portfolio. Additionally, the Financial Services segment recorded a $61.4 million gain on the deconsolidation of a previously consolidated entity.

Other Ancillary Businesses

Operating earnings for the Multifamily segment were $1.1 million in the six months ended May 31, 2020, compared to $2.5 million ($2.9 million net of noncontrolling interest) in the six months ended May 31, 2019. Operating loss for the Lennar Other segment was $17.1 million in the six months ended May 31, 2020 primarily due to a $25.0 million write-down of assets held by Rialto legacy funds because of disruption in the capital markets as a result of COVID-19 and the economic shutdown. This compared to operating earnings of $4.9 million ($5.2 million net of noncontrolling interest) in the six months ended May 31, 2019.

Tax Rate

For the six months ended May 31, 2020 and May 31, 2019, we had a tax provision of $192.8 million and $220.2 million, respectively, which resulted in an overall effective income tax rate of 17.4% and 25.0%, respectively. The reduction in the overall effective income tax rate is primarily due to the extension of the new energy efficient home tax credit during the first quarter of 2020.

Liquidity

At May 31, 2020, the Company had $1.4 billion of Homebuilding cash and cash equivalents and no outstanding borrowings under its $2.45 billion revolving credit facility, thereby providing total Homebuilding liquidity of $3.85 billion.

Debt Transaction

In May 2020, the Company redeemed $300 million aggregate principal amount of its 6.625% senior notes due May 2020. The redemption price, which was paid in cash, was 100% of the principal amount plus accrued but unpaid interest.

2020 Core Earnings Guidance

	Third Quarter	Fourth Quarter
New Orders	12,800 - 13,000	12,000 - 12,250
Deliveries	13,200 - 13,400	14,300 - 14,600
Average Sales Price	$380,000 - $385,000	$380,000
Gross Margin % on Home Sales	21.5% - 21.75%	21.75% - 22.0%
S,G&A as a % of Home Sales	8.3% - 8.5%	8.0%
Financial Services Operating Earnings	Approximately $70 million	Approximately $60 million

About Lennar

Lennar Corporation, founded in 1954, is one of the nation's leading builders of quality homes for all generations. Lennar builds affordable, move-up and active adult homes primarily under the Lennar brand name. Lennar's Financial Services segment provides mortgage financing, title and closing services primarily for buyers of Lennar's homes and, through LMF Commercial, originates mortgage loans secured primarily by commercial real estate properties throughout the United States. Lennar's Multifamily segment is a nationwide developer of high-quality multifamily rental properties. Len^X, formerly known as Lennar Ventures, drives Lennar's technology, innovation and strategic investments. For more information about Lennar, please visit www.lennar.com.

Note Regarding Forward-Looking Statements: Some of the statements in this press release are "forward-looking statements," as that term is defined in the Private Securities Litigation Reform Act of 1995, including statements relating to the homebuilding market and other markets in which we participate. You can identify forward-looking statements by the fact that these statements do not relate strictly to historical or current matters. Rather, forward-looking statements relate to anticipated or expected events, activities, trends or results. Accordingly, these forward-looking statements should be evaluated with consideration given to the many risks and uncertainties inherent in our business that could cause actual results and events to differ materially from those anticipated by the forward-looking statements. Important factors that could cause such differences include the potential continuing negative impact of the ongoing coronavirus (COVID-19) pandemic, the duration, impact and severity of which is highly uncertain; slowdowns in real estate markets in regions where we have significant Homebuilding or Multifamily development activities; increases in operating costs, including costs related to construction materials, labor, real estate taxes and insurance, which exceed our ability to increase prices, both in our Homebuilding and Multifamily businesses; reduced availability of mortgage financing or increased interest rates; decreased demand for our homes or Multifamily rental apartments; natural disasters or catastrophic events for which our insurance may not provide adequate coverage; our inability to successfully execute our strategies, including our land lighter strategy; a decline in the value of the land and home inventories we maintain and resulting possible future writedowns of the carrying value of our real estate assets; unfavorable losses in legal proceedings; conditions in the capital, credit and financial markets; changes in laws, regulations or the regulatory environment affecting our business, and the risks described in our filings with the Securities and Exchange Commission, including our Form 10-K for the fiscal year ended November 30, 2019. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

A conference call to discuss the Company's second quarter earnings will be held at 11:00 a.m. Eastern Time on Tuesday, June 16, 2020. The call will be broadcast live on the Internet and can be accessed through the Company's website at www.lennar.com. If you are unable to participate in the conference call, the call will be archived at www.lennar.com for 90 days. A replay of the conference call will also be available later that day by calling 203-369-0154 and entering 5723593 as the confirmation number.

LENNAR CORPORATION AND SUBSIDIARIES

Selected Revenues and Operating Information

(In thousands, except per share amounts)

(unaudited)

Three Months Ended

Six Months Ended

May 31,

2020

2019

2020

2019

Revenues:

Homebuilding

4,949,484

5,195,599

9,121,600

8,819,320

Financial Services

196,263

204,216

394,924

347,527

Multifamily

123,117

147,412

255,734

244,806

Lennar Other

18,509

15,663

20,452

19,319

Total revenues

5,287,373

5,562,890

9,792,710

9,430,972

Homebuilding operating earnings

631,361

581,789

1,091,759

951,384

Financial Services operating earnings

147,326

56,217

194,643

75,189

Multifamily operating earnings (loss)

(638)

(4,322)

1,147

2,475

Lennar Other operating earnings (loss)

(18,021)

1,828

(17,122)

4,931

Corporate general and administrative expenses

(83,451)

(76,113)

(170,298)

(155,456)

Earnings before income taxes

676,577

559,399

1,100,129

878,523

Provision for income taxes

(160,479)

(140,530)

(192,808)

(220,230)

Net earnings (including net loss attributable to
noncontrolling interests)

516,098

418,869

907,321

658,293

Less: Net loss attributable to noncontrolling interests

(1,308)

(2,603)

(8,537)

(3,089)

Net earnings attributable to Lennar

517,406

421,472

915,858

661,382

Average shares outstanding:

Basic

308,373

320,329

309,793

320,834

Diluted

308,373

320,330

309,794

320,839

Earnings per share:

Basic

1.66

1.31

2.92

2.05

Diluted

1.65

1.30

2.91

2.03

Supplemental information:

Interest incurred (1)

90,907

108,176

184,198

212,559

EBIT (2):

Net earnings attributable to Lennar

517,406

421,472

915,858

661,382

Provision for income taxes

160,479

140,530

192,808

220,230

Interest expense included in:

Costs of homes sold

81,698

96,162

154,520

157,473

Costs of land sold

335

668

532

950

Homebuilding other expense, net

5,743

2,867

11,678

5,875

Total interest expense

87,776

99,697

166,730

164,298

EBIT

765,661

661,699

1,275,396

1,045,910

(1) Amount represents interest incurred related to homebuilding debt.
(2) EBIT is a non-GAAP financial measure defined as earnings before interest and taxes. This financial measure has been presented because
       the Company finds it important and useful in evaluating its performance and believes that it helps readers of the Company's financial
       statements compare its operations with those of its competitors. Although management finds EBIT to be an important measure in
       conducting and evaluating the Company's operations, this measure has limitations as an analytical tool as it is not reflective of the actual
       profitability generated by the Company during the period. Management compensates for the limitations of using EBIT by using this non-
       GAAP measure only to supplement the Company's GAAP results. Due to the limitations discussed, EBIT should not be viewed in isolation,
       as it is not a substitute for GAAP measures.

LENNAR CORPORATION AND SUBSIDIARIES
Segment Information
(In thousands)
(unaudited)

Three Months Ended

Six Months Ended

May 31,

2020

2019

2020

2019

Homebuilding revenues:

Sales of homes

4,925,081

5,176,116

9,065,848

8,784,245

Sales of land

19,833

16,455

46,700

30,238

Other homebuilding

4,570

3,028

9,052

4,837

Total homebuilding revenues

4,949,484

5,195,599

9,121,600

8,819,320

Homebuilding costs and expenses:

Costs of homes sold

3,862,771

4,137,529

7,154,550

7,019,579

Costs of land sold

43,369

14,008

70,504

27,534

Selling, general and administrative

407,191

435,722

786,083

778,981

Total homebuilding costs and expenses

4,313,331

4,587,259

8,011,137

7,826,094

Homebuilding operating margins

636,153

608,340

1,110,463

993,226

Homebuilding equity in earnings (loss) from unconsolidated
entities

(9,100)

19,614

(13,646)

5,858

Homebuilding other income (expense), net

4,308

(46,165)

(5,058)

(47,700)

Homebuilding operating earnings

631,361

581,789

1,091,759

951,384

Financial Services revenues

196,263

204,216

394,924

347,527

Financial Services costs and expenses

110,355

147,999

261,699

272,338

Financial Services gain on deconsolidation

61,418

—

61,418

—

Financial Services operating earnings

147,326

56,217

194,643

75,189

Multifamily revenues

123,117

147,412

255,734

244,806

Multifamily costs and expenses

123,473

148,716

260,821

249,894

Multifamily equity in earnings (loss) from unconsolidated
entities and other gain

(282)

(3,018)

6,234

7,563

Multifamily operating earnings (loss)

(638)

(4,322)

1,147

2,475

Lennar Other revenues

18,509

15,663

20,452

19,319

Lennar Other costs and expenses

(1,072)

3,194

1,502

4,816

Lennar Other equity in earnings (loss) from unconsolidated
entities

(26,642)

(4,978)

(26,523)

3,352

Lennar Other expense, net

(10,960)

(5,663)

(9,549)

(12,924)

Lennar Other operating earnings (loss)

(18,021)

1,828

(17,122)

4,931

LENNAR CORPORATION AND SUBSIDIARIES
Summary of Deliveries, Communities, New Orders and Backlog
(Dollars in thousands, except average sales price)
(unaudited)

Lennar's reportable homebuilding segments and all other homebuilding operations not required to be reported separately have
divisions located in:

East: Florida, New Jersey, North Carolina, Pennsylvania and South Carolina
Central: Georgia, Illinois, Indiana, Maryland, Minnesota, Tennessee and Virginia
Texas: Texas
West: Arizona, California, Colorado, Nevada, Oregon, Utah and Washington
Other: Urban divisions and other homebuilding related investments primarily in California, including FivePoint

For the Three Months Ended May 31,

2020

2019

2020

2019

2020

2019

Deliveries:

Homes

Dollar Value

Average Sales Price

East

4,630

5,061

1,582,360

1,735,165

342,000

343,000

Central

1,763

1,568

684,440

609,195

388,000

389,000

Texas

2,462

2,149

694,110

687,011

282,000

320,000

West

3,804

3,934

1,957,435

2,140,638

515,000

544,000

Other

13,013

17,273

1,001,000

1,016,000

Total

12,672

12,729

4,931,358

5,189,282

389,000

408,000

Of the total homes delivered listed above, 19 homes with a dollar value of $6.3 million and an average sales price of $330,000 represent home
deliveries from unconsolidated entities for the three months ended May 31, 2020, compared to 23 homes with a dollar value of $13.2 million
and an average sales price of $572,000 for the three months ended May 31, 2019.

At May 31,

For the Three Months Ended May 31,

2020

2019

2020

2019

2020

2019

2020

2019

New Orders:

Active Communities

Homes

Dollar Value

Average Sales Price

East

423

458

4,919

5,591

1,644,275

1,939,901

334,000

347,000

Central

246

253

1,906

2,062

740,968

798,080

389,000

387,000

Texas

221

246

2,582

2,424

670,139

744,586

260,000

307,000

West

352

364

3,608

4,420

1,802,705

2,298,540

500,000

520,000

Other

—

15,238

—

726,000

Total

1,245

1,325

13,015

14,518

4,858,087

5,796,345

373,000

399,000

Of the total new orders listed above, 25 homes with a dollar value of $9.0 million and an average sales price of $361,000 represent new orders in four active communities from unconsolidated entities for the three months ended May 31, 2020, compared to 32 homes with a dollar value of $15.1 million and an average sales price of $471,000 in five active communities for the three months ended May 31, 2019.

For the Six Months Ended May 31,

2020

2019

2020

2019

2020

2019

Deliveries:

Homes

Dollar Value

Average Sales Price

East

8,695

8,673

2,988,027

2,961,600

344,000

341,000

Central

3,129

2,692

1,219,186

1,042,320

390,000

387,000

Texas

4,039

3,400

1,157,907

1,099,440

287,000

323,000

West

7,108

6,759

3,688,948

3,678,141

519,000

544,000

Other

21,052

25,032

957,000

1,001,000

Total

22,993

21,549

9,075,120

8,806,533

395,000

409,000

Of the total homes delivered listed above, 27 homes with a dollar value of $9.3 million and an average sales price of $343,000 represent home
deliveries from unconsolidated entities for the six months ended May 31, 2020, compared to 41 homes with a dollar value of $22.3 million
and an average sales price of $544,000 for the six months ended May 31, 2019.

For the Six Months Ended May 31,

2020

2019

2020

2019

2020

2019

New Orders:

Homes

Dollar Value

Average Sales Price

East

9,544

10,084

3,241,573

3,461,332

340,000

343,000

Central

3,679

3,484

1,436,466

1,335,676

390,000

383,000

Texas

4,581

3,848

1,243,218

1,201,545

271,000

312,000

West

7,573

7,532

3,928,337

3,928,354

519,000

522,000

Other

13,581

26,551

970,000

805,000

Total

25,391

24,981

9,863,175

9,953,458

388,000

398,000

Of the total new orders listed above, 51 homes with a dollar value of $17.1 million and an average sales price of $335,000 represent new orders from unconsolidated entities for the six months ended May 31, 2020, compared to 47 homes with a dollar value of $24.8 million and an average sales price of $527,000 for the six months ended May 31, 2019.

At May 31,

2020

2019

2020

2019

2020

2019

Backlog:

Homes

Dollar Value

Average Sales Price

East (1)

7,676

8,499

2,702,044

3,025,598

352,000

356,000

Central

2,563

2,778

1,039,118

1,083,608

405,000

390,000

Texas

2,712

2,596

798,648

862,826

294,000

332,000

West

5,023

5,174

2,547,649

2,737,664

507,000

529,000

Other

1,138

10,507

1,138,000

751,000

Total

17,975

19,061

7,088,597

7,720,203

394,000

405,000

Of the total homes in backlog listed above, 55 homes with a backlog dollar value of $18.0 million and an average sales price of $327,000
represent the backlog from unconsolidated entities at May 31, 2020, compared to 13 homes with a backlog dollar value of $5.2 million and an
average sales price of $397,000 at May 31, 2019.

(1) During the three and six months ended May 31, 2019, the Company acquired 13 homes in backlog.

Lennar Corporation and Subsidiaries Condensed Consolidated Balance Sheets (In thousands, except per share amounts) (unaudited)

	May 31,		November 30,
	2020		2019
ASSETS
Homebuilding:
Cash and cash equivalents	$	1,398,682	1,200,832
Restricted cash	9,569		9,698
Receivables, net	299,494		329,124
Inventories:
Finished homes and construction in progress	9,609,146		9,195,721
Land and land under development	7,938,451		8,267,647
Consolidated inventory not owned	399,809		313,139
Total inventories	17,947,406		17,776,507
Investments in unconsolidated entities	973,044		1,009,035
Goodwill	3,442,359		3,442,359
Other assets	1,080,186		1,021,684
	25,150,740		24,789,239
Financial Services	2,577,805		3,006,024
Multifamily	1,127,929		1,068,831
Lennar Other	452,551		495,417
Total assets	$	29,309,025	29,359,511

LIABILITIES AND EQUITY
Homebuilding:
Accounts payable	$	1,033,558	1,069,179
Liabilities related to consolidated inventory not owned	344,074		260,266
Senior notes and other debts payable, net	7,495,674		7,776,638
Other liabilities	1,900,970		1,900,955
	10,774,276		11,007,038
Financial Services	1,663,548		2,056,450
Multifamily	222,387		232,155
Lennar Other	16,190		30,038
Total liabilities	12,676,401		13,325,681
Stockholders' equity:
Preferred stock	—		—
Class A common stock of $0.10 par value	29,804		29,712
Class B common stock of $0.10 par value	3,944		3,944
Additional paid-in capital	8,630,442		8,578,219
Retained earnings	9,132,714		8,295,001
Treasury stock	(1,253,863)		(957,857)
Accumulated other comprehensive income (loss)	(338)		498
Total stockholders' equity	16,542,703		15,949,517
Noncontrolling interests	89,921		84,313
Total equity	16,632,624		16,033,830
Total liabilities and equity	$	29,309,025	29,359,511

LENNAR CORPORATION AND SUBSIDIARIES Supplemental Data (Dollars in thousands) (unaudited)

	May 31,			November 30,		May 31,
	2020			2019		2019
Homebuilding debt	$	7,495,674		7,776,638		9,390,941
Stockholders' equity	16,542,703			15,949,517		15,159,304
Total capital	$	24,038,377		23,726,155		24,550,245
Homebuilding debt to total capital	31.2		%	32.8	%	38.3	%

Homebuilding debt	$	7,495,674		7,776,638		9,390,941
Less: Homebuilding cash and cash equivalents	1,398,682			1,200,832		800,678
Net homebuilding debt	$	6,096,992		6,575,806		8,590,263
Net homebuilding debt to total capital (1)	26.9		%	29.2	%	36.2	%

(1) Net homebuilding debt to total capital is a non-GAAP financial measure defined as net homebuilding debt (homebuilding debt less homebuilding cash and cash equivalents) divided by total capital (net homebuilding debt plus stockholders' equity). The Company believes the ratio of net homebuilding debt to total capital is a relevant and a useful financial measure to investors in understanding the leverage employed in homebuilding operations. However, because net homebuilding debt to total capital is not calculated in accordance with GAAP, this financial measure should not be considered in isolation or as an alternative to financial measures prescribed by GAAP. Rather, this non-GAAP financial measure should be used to supplement the Company's GAAP results.