LEN 10-K & 10-Q changes, risk factors and insider trading

Demand for our homes is dependent on a variety of macroeconomic factors, such as employment levels, inflation, interest rates, changes in stock market valuations, consumer confidence, consumer income, housing demand, availability and cost of financing for homebuyers, availability and prices of new homes compared to those of previously occupied homes, and demographic trends. These factors can be significantly adversely affected by a variety of factors beyond our control. Currently, potential purchasers of our homes are being affected by inflation and continued high interest rates, bothtariffs and trade policy, all of which increase what homebuyers have to pay for new homes.

Our business success is dependent upon the reputation of the Lennar brand and its association with quality and integrity. If we are unable to maintain the position of the Lennar brand, our business may be adversely affected, which could result in lower sales and earnings. Unfavorable media or investor and analyst reports related to our industry, company, brand, marketing, personnel, operations, business performance, or prospects may affect our stock price and the performance of our business, regardless of its accuracy or inaccuracy. We could be subject to knowingly false statements made for the purpose of impairing our reputation. These statements, even if totally untrue, can spread rapidly through the use of electronic communication, including social media outlets, newsletters, websites and other digital platforms. The harm may be immediate, without affording us an opportunity for redress or correction. Our success in maintaining and enhancing our brand depends on our ability to adaptrecognize, respond to and effectively manage negative publicity in this rapidly changing media environment. Adverse publicity or negative commentary from media outlets could damage our reputation and reduce the demand for our homes, which would adversely affect our business.

Our strategies for our core homebuilding and mortgage finance businesses, and any related initiatives or actions, may not be successful. PrincipalAs amonga result of our currentstrategy strategiesto isbecome continuinga land-lighter company, we continue to reduce the inventory of land that we own (i.e.,and towe becomeinstead a land lighter company), andchoose to control a greater portion of the land we expect to use through options or other contractual arrangements, including through the proposed Millrose Spin-Off.and other land banking entities. We cannot provide assurance that this strategy, or other strategies we will follow, will increase our value. It is possible that the land lighterland-lighter or other strategies will reduce, rather than increase, the value and profitability of our core businesses.

Weaker demand has precluded us from raising home prices enough to keep up with the rate of inflation, which has reduced our profit margins. In addition, in an inflationary environment, our cost of capital, labor and materials can increase and the purchasing power of our cash resources can decline, which have in the past and can in the future have an adverse impact on our business or financial results. Inflation may also accompany higher interest rates, which could adversely impact housing affordability by limiting potential buyers’ ability to obtain financing on favorable terms, thereby decreasing demand for our homes. We are taking steps that we hope will enable us to maintain acceptable operating margins in fiscal 2025.2026. However, it is possible that those steps will not be successful, and that a combination of inflation and reduced demand for new homes driven by an increase in mortgage interest rates will continue to adversely affect our profitability.

We are constantly purchasing land, or acquiring options to purchase land, for use in our homebuilding operations. The value of land suitable for residential development fluctuates depending on local and national market conditions and other factors that affect demand for new homes. When demand for homes fell during the 2007-2010 recession, we were required to take significant write-downs of the carrying value of our land inventory and we elected not to exercise many options to purchase land, which required us to forfeit deposits and write-off pre-acquisition costs. Although we have reduced our exposure to costs of that type, a certain amount of exposure is inherent in our homebuilding business. If market conditions were to deteriorate significantly in the future, we could again be required to make significant write-downs of the carrying value of our land inventory and write-offs of costs relating to decisions not to exercise land purchase options. Because a significant portion of our land inventory is acquired through land purchase option arrangements], in the event of adverse changes in economic, market, or community conditions, we may elect not to exercise our land purchase options and we may not be able to satisfactorily renegotiate the purchase price of the land under option. Such actions could result in the forfeiture of some or all of any deposits, fees or investments paid or made in respect of such arrangements, including any cost overruns. The forfeiture of option deposits or inventory impairments may result in a loss that could have a material adverse effect on our profitability, stock performance, business operations and financial performance.

Our results of operations and financial condition may be adversely affected by public health issues,issues and resulting governmental actionsactions.

The United States has experienced, and may experience in the future, outbreaks of contagious diseases that affect public health and public perception of health risk. The extent to which public health issues impact our results will depend on future developments, which cannot be predicted. IfNew or evolving U.S. government regulations, guidance, executive orders or judicial decisions, including, but not limited to, as a result of public health concerns, could adversely affect our business operations and financial performance. Further, if a contagious disease causes significant negative impacts to economic conditions or consumer confidence, our results of operations, financial condition and cash flows could be materially adversely impacted.

Additionally, the cost of insurance has increased significantly in recent years. Also, the coverage offered and the availability of general liability insurance for construction defects is currently limited and policies that can be obtained often include exclusions based upon past losses those insurers suffered as a result of use of defective materials in homes we and many other homebuilders built. As a result, an increasing number of our subcontractors are unable to obtain insurance, and we have in many cases had to waive our customary insurance requirements, which increases our and our insurers’ exposure to claims and increases the possibility that our insurance will not be adequate to protect us against all the costs we incur. This increase in cost and limitation in coverage has also increased our self-insured retentions and decreased our total coverage. It is possible in the future that insurance would not be available at commercially reasonable rates. Even when insurance is available, the high cost of insurance has recently led us to self-insure against some risks .risks.

We incur many costs even before we begin to build homes in a community. Depending on the stage of development a land parcel is in when we acquire it (or when it is acquired by Millrose or another land banking entity), these may include costs of preparing land, finishing and entitling lots, installing roads, sewers, water systems and other utilities, and taxes and other costs related to ownership of the land on which we plan to build homes. If the rate at which we sell and deliver homes slows, or if we delay the opening of new home communities, we may incur increased pre-construction costs and it may take longer for us to recover those costs. In addition, our land bank option contracts often include provisions under which delays in land development and/or longer land takedown periods cause us to incur additional cost.

Our business requires us to finance much of the cost of developing our residential communities. One of the ways we do this is with bank borrowings. At November 30, 2024,2025, we had a $2.9$3.1 billion revolving credit facility with a group of banks (the "Credit Facility"), which had an accordion feature that could increase it to $3.5 billion. In May 2025, we entered into a new unsecured delayed draw term loan facility ("Delayed Draw Term Loan Facility") with total borrowing availability up to $1.7 billion. We also had warehouse borrowing facilities totaling $3.4$3.6 billion to support our residential and commercial mortgage lending activities. The interest on borrowings under the Credit Facility is at rates based on prevailing short-term rates from time to time. In 2022 and 2023, the Federal Reserve steadily raised benchmark interest rates and the Federal Reserve did not begin reducing benchmark interest rates until well into 2024. At November 30, 2024,2025, we had no borrowings under our Credit Facility and outstanding borrowings of $1.7 billion under our Delayed Draw Term Loan Facility. However, if in the future we have a need for significant borrowings under our Credit Facility and interest rates continue to be high, that would increase the cost of the homes we build, which either would make those homes more expensive for homebuyers, which is likely to reduce demand, or would lower our operating margins, or both.

We could be hurt if land banks are not able to raise investor funds needed to enablefinance themland acquisition to supplementmeet landout acquisitions by Millrose.demand.

WeIn formedFebruary and2025, intendwe tocompleted spinthe offspin-off MillroseMillrose, towhich makeserves itas a recycling source of recycled capital for land acquisition funding.acquisitions. However, Millrose willdoes not have the capacity to provide all the land acquisition funding we require, and Millrose’s policies will limit its acquisitions to land we expect to use within five years. WeAs willa lookresult, towe traditionalare reliant on additional land banks to acquire at least some of the land that Millrose will not or cannot acquire.acquire on our behalf. Most land banks are funds that use financial investor capital to finance land acquisitions. If returns to investors in land banksbank investors are not sufficient to attract investor funds and land banks are not able to identify alternative sources of funding, we would no longer have access to financing of land acquisitions by land banks. This could significantly impair our ability to carry out our strategy of reducing our inventory of owned land.

We have made a strategic decision to increase the portion of our potential land inventory that we control through options or contracts and reduce the portionland that we own. This substantially reduces our investment in land. However, if landowners who are parties to thesuch options or contracts, possibly including land banks, were to refuse to honor them,such arrangements, we could lose access to land at the time we want to use it in our homebuilding activities. Any loss of access to our homesites could materially impact both our revenues and our reputation as a reliable homebuilder.

Many of our homebuilding operations are conducted in areas that are subject to natural disasters, including hurricanes, earthquakes, droughts, floods, wildfires and severe weather. The occurrence of natural disasters or severe weather conditions can delay new home deliveries, increase costs by damaging inventories and lead to shortages of labor and materials in areas affected by the disasters, and can negatively impact the demand for new homes in affected areas. Our insurance may not cover business interruptions or losses resulting from these events and our results of operations could be adversely affected by these events. Additionally, natural disasters and severe weather conditions may increase the cost of homeowner's insurance or create difficulties in obtaining homeowners’ insurance at all, which could reduce the number of potential buyers who can afford, or are willing, to purchase homes we build in affected areas. For example, the incidence of large wildfires in California has substantially increased in recent years and the risk of future wildfires is expected to increase. The housing markets in areas affected by California’s recent wildfires have been adversely affected by increased insurance costs and difficulties in obtaining homeowners’ insurance, which we expect to bewas exacerbated by the recentJanuary 2025 wildfires in Los Angeles.

Most purchasers of our homes obtain mortgage loans to finance a substantial portion of the purchase price of the homes they purchase. While the majority of our homebuyers obtain their mortgage financing from our Financial Services segment, others obtain mortgage financing from banks and other independent lenders. Disruptions in the mortgage markets or increased government regulation could adversely affect the ability of potential homebuyers to obtain financing for home purchases, making it difficult for them to purchase our homes. Among other things, changes made by Fannie Mae, Freddie Mac, Ginnie Mae and FHA/VA in recent years to sponsored mortgage programs, as well as changes made in recent years by private mortgage insurance companies, have reduced the ability of a number of potential homebuyers to qualify for mortgages. PrincipalThese among these areinclude higher income requirements, larger required down payments, increased reserves and higher required credit scores. In addition, there has been uncertainty regarding the future of Fannie Mae, Freddie Mac and Ginnie Mae, including proposals that they reduce or terminate their role as the principal sources of liquidity in the secondary market for mortgage loans. It is not clear how, ifIf Fannie Mae, Freddie Mac and Ginnie Mae were to curtail their secondary market mortgage loan purchases, it is not clear how the liquidity they provide would be replaced. There is a substantial possibility that substituting an alternate source of liquidity would increase mortgage interest rates, which would increase the buyers' effective costs of paying for the homes we sell, and therefore could reduce demand for our homes and adversely affect our results of operations.

As of November 30, 2024,2025, we had outstanding senior notes which we had sold into the capital markets over a number of years totaling $2.0$2.1 billion. The indentures governing our senior notes do not restrict our incurrence of future secured or unsecured debt, and the agreement governing our Credit Facility allows us to incur a substantial amount of future unsecured debt. We reducedincreased our outstanding senior notes during fiscal 20242025 by $554.0$200 million, but we still have a significant amount outstanding.million. Sales of senior debt into the capital markets was historically a significant source of funding for our operations and acquisitions. Our level of indebtedness exposes us to a number of risks, including:

During 2025,fiscal 2026, we will have to replace or renew a total of $3.4$3.0 billion of warehouse lines used by Financial Services, including LMF Commercial, as they mature. We expect these facilities to be renewed or replaced with other facilities when they mature. If we are unable to renew or replace these facilities on favorable terms or at all when they mature, that could seriously impede the activities of our Financial Services segment, which would have an impact on our financial results.

We often are required to provide surety bonds to secure our performance of obligations under construction contracts, development agreements and other arrangements. At November 30, 2024,2025, we had outstanding surety bonds of $5.1$5.6 billion including performance surety bonds related to site improvements at various projects (including certain projects of our joint ventures) and financial surety bonds. Although significant development and construction activities have been completed related to these site improvements, these bonds are generally not released until all development and construction activities to which they relate are completed. Our ability to obtain surety bonds primarily depends upon our credit rating, financial condition, past performance and similar factors, the capacity of the surety market and the underwriting practices of surety bond issuers. Our ability to obtain surety bonds also can be impacted by the unwillingness of insurance companies to issue performance bonds for construction and development activities. If we were unable to obtain surety bonds when required, our operations could be adversely affected.

We are also subject to laws and regulations related to workers' health and safety, and there are efforts to subject homebuilders like us to other labor relatedlabor-related laws or rules, some of which may make us responsible for things done by our subcontractors over which we have little or no control.

Our obligation to comply with the laws and regulations under which we operate, and our need to ensure that our associates, subcontractors and other agents comply with these laws and regulations, could result in delays in construction and land development, cause us to incur substantial costs and prohibit or restrict land development and homebuilding activity in certain areas in which we operate. Budget reductions by state and local governmental agencies may increase the time it takes to obtain required approvals and therefore may aggravate the delays we encounter. InAdditionally, 2020U.S. federal government shutdowns have in the past, and 2021, shutdowns of government officesmay in response to the COVID-19future, pandemic often delayeddelay the time it tooktakes to obtain required approvals. Government agencies also routinely initiate audits, reviews or investigations of our business practices to ensure compliance with applicable laws and regulations, which can cause us to incur costs or create other disruptions in our businesses that can be significant.

Stuart Miller, our Executive Chairman and Co-ChiefChief Executive Officer, through family and personal holdings of Class B, and to a lesser extent Class A, common stock, has the power to cast approximately 40%42% of the votes that can be cast by the holders of all our outstanding Class A and Class B common stock combined. This gives Mr. Miller substantial influence regarding the election of our directors and the approval of most other matters that are presented to our stockholders. Mr. Miller's voting power might discourage someone from making a significant equity investment in us, even if we needed the investment to meet our obligations or to operate our business. Also, because of his voting power, Mr. Miller may be able to cause our stockholders to approve actions that are contrary to many of our other stockholders' desires.

Our Class B common stock is less liquid thanthan, and has traded at a price substantially lower than that ofof, our Class A common stock.

We have substantial investments in real estate relatedestate-related funds and businesses in which we are a minority investor.

We rely extensively on information technology ("IT") systems, including Internet sites, data hosting facilities and other hardware and software platforms, some of which are hosted by third parties, to assist in conducting our businesses. These IT systems, like those used by most companies, may be vulnerable to a variety of disruptions, including, but not limited to, those caused by natural disasters, telecommunications failures, hackers, and other security issues. Moreover, these IT systems, like those of most companies, are subject to the possibility of computer viruses or other malicious codes, and to security breaches, cyber incidents, ransomware attacks or phishing-attacks. Cyber intrusion efforts are becoming increasingly frequent and sophisticated, including as a result of the use of artificial intelligence,intelligence (“AI”), and it is possible that any controls we or third parties have installed could at some time be breached in a material respect. In addition, we are in the early stages of integrating AI into our business to support our business operations and customer-facing systems. Our development and adoption of AI and other new technologies may present new technological threats, vulnerabilities and uncertainties, which may expose us to legal, reputational and financial harm. While, to date, we have not had a cybersecurity disruption, failure, breach or attack that had a material impact on our business or results of operations, if we were to be subject to a material successful cyber-incident, that could result in remediation or service restoration costs, increased cyber protection costs, lost revenues or loss of customers, litigation or regulatory actions by governmental authorities, increased insurance premiums, reputational damage and damage to our competitiveness, our stock price and our long-term stockholder value. We may be required to incur significant costs to protect against damages caused by information technology failures or security breaches (including through the provision of insurance).

In connection with our business we and the third parties we work with collect and retain personally identifiable information (e.g., information regarding our customers, suppliers and employees), and our customers, suppliers and employees have an expectation that we will adequately protect that information. The U.S. regulatory environment surrounding information security and privacy is increasingly demanding. A significant theft, loss or fraudulent use of the personally identifiable information we [or third parties] maintain, or of our data, by cyber-criminals or otherwise could adversely impact our reputation and could result in significant costs, fines and litigation. We may be required to incur significant costs to protect against damages caused by the failure to satisfy privacy and data protection laws and regulations in the future as legal requirements continue to increase, including through the provision of insurance

We have made investments in companies that are engaged in applying technology to improve the homebuilding industry and real estate related aspects of the financial services industry. Our investments in Blend, Hippo, Opendoor, SmartRent, Sonder, and Sunnova, all of which have publicly traded shares of common stock are carried on our books at their fair values, which will change depending on the value of the Company’s shareholdings on the last day of each quarter. As a result, our net earnings could be significantly affected by mark-to-market gains or losses on our investments.

Our net earnings attributable to Lennar were $2.1 billion, or $7.98 per diluted and basic share for the year ended November 30, 2025 and $3.9 billion, or $14.31 per diluted and basic share infor 2024the year ended November 30, 2024. Excluding mark-to-market gains on technology investments of $130.2 million and $3.9one-time loss of $156.1 million on the Millrose Properties, Inc. exchange offer ("Millrose Exchange Offer"), net earnings attributable to Lennar for the year ended November 30, 2025 were $2.1 billion, or $13.73$8.06 per diluted and basic share in 2023.share. Excluding mark-to-market gains of $25.2 million on technology investments, one-time items of $90.0 million in our Multifamily segment and a $46.5 million one-time gain on the sale of a technology investment, net earnings attributable to Lennar infor the year ended November 30, 2024 were $3.8 billion, or $13.86 per diluted share. Excluding mark-to-market losses of $50.2 million on technology investments, a $65.0 million write-off of one of our non-public technology investments and other one-time items, net earnings attributable to Lennar in 2023 were $4.1 billion or $14.25 per diluted share.

Revenues from home sales increaseddecreased 4%5% in the year ended November 30, 20242025 to $33.8$32.1 billion from $32.5$33.8 billion in the year ended November 30, 2023.2024. Revenues were higherlower primarily due to a 10% increase in the number of home deliveries, partially offset by a 5%8% decrease in the average sales price of homes delivered.delivered, partially offset by a 3% increase in the number of home deliveries. New home deliveries increased to 82,583 homes in the year ended November 30, 2025 from 80,210 homes in the year ended November 30, 2024 from 73,087 homes in the year ended November 30, 2023.2024. The average sales price of homes delivered was $391,000 in the year ended November 30, 2025, compared to $423,000 in the year ended November 30, 2024, compared to $446,000 in the year ended November 30, 2023.2024. The decrease in average sales price of homes delivered in the year ended November 30, 20242025 compared to the same period last year was primarily due to pricingcontinued toweakness in the market throughand an increased use of sales incentives andoffered productto mix.homebuyers.

Gross margins on home sales were $5.7 billion, or 17.7%, in the year ended November 30, 2025, compared to $7.5 billion, or 22.3%, in the year ended November 30, 2024, compared to $7.6 billion, or 23.3%, in the year ended November 30, 2023.2024. During the year ended November 30, 2024,2025, gross margins decreased primarily becausedue to a lower revenue per square foot decreasedand whilehigher land costs increased year over year, which waswere partially offset by a decrease in costsconstruction percosts, squarereflecting foot due to lower costs of materials as weour continued to focus on constructioncost-saving cost savings.initiatives.

Selling, general and administrative expenses were $2.7 billion in the year ended November 30, 2025, compared to $2.5 billion in the year ended November 30, 2024, compared to $2.2 billion in the year ended November 30, 2023.2024. As a percentage of revenues from home sales, selling, general and administrative expenses increased to 8.3% in the year ended November 30, 2025, from 7.3% in the year ended November 30, 2024, from 6.9% in the year ended November 30, 2023, primarily due to less leverage as a result of lower revenues and an increase in professional expenses, insurance costs and digital marketing and advertisingselling costs to generate more direct sales.expenses.

During the years ended November 30, 20242025 and 2023,2024, our homebuilding operating earnings included $164.8$54.2 million and $141.2$164.8 million of interest income, respectively,respectively. The decrease in interest income was primarily due to an increase inlower cash balances and higher interest rates. During the year endedover November 30, 2023, this was partially offset by an impairment of $36.8 million of an investment in a joint venture.year.

East: Alabama, Florida, New Jersey and Pennsylvania

Central: Alabama, Georgia, Illinois, Indiana, Maryland, Minnesota, North Carolina, South Carolina, Tennessee and Virginia South Central: Arkansas, Kansas, Missouri, Oklahoma and Texas West: Arizona, California, Colorado, Idaho, Nevada, Oregon, Utah and Washington Other: Urban divisions and other homebuilding related investments primarily in California, including FivePoint TheHoldings, followingLLC tables set forth selected financial and operational information related to our homebuilding operations for the years indicated:("FivePoint").

(1)Net margins (losslosses) on sales of homes include selling, general and administrative expenses.

(2)For the years ended November 30, 20242025 and 2023,2024, gross margins (losslosses) on sales of land included $5.1$23.1 million and $19.9$5.1 million of deposit write-offs as we walked away from 6,30015,500 and 10,6006,300 controlled homesites, respectively.

(3)Negative gross and net margins were due to period costs and/or impairments in Urban divisions that impact costs of homes sold without sufficient sales of homes revenue to offset those costs.

(1) Sales incentives relate to homehomes deliveriesdelivered during the period,years ended November 30, 2025 and 2024, excluding deliverieshomes delivered by unconsolidated entities.

Backlog (3):

Backlog represents the number of homes under sales contracts. Homes are sold using sales contracts, which are generally accompanied by sales deposits. In some instances, purchasers are permitted to cancel sales if they fail to qualify for financing or under certain other circumstances. Various state and federal laws and regulations may sometimes give purchasers a right to cancel contracts homes in backlog. We do not recognize revenue on homes under sales contracts until the sales are closed and title passes to the new homeowners.

Homebuilding TexasEast: Revenues from home sales increaseddecreased in 20242025 compared to 2023,2024, primarily due to an increasedecreases in the number of homehomes deliveries,delivered which was partially offset by a decrease inand the average sales price of homes delivered.delivered in all the states of the segment except in New Jersey. The increaseoverall decrease in the number of homehomes deliveriesdelivered was primarily due to ana increasedecrease in the number of homes delivered per active communities.community due to the timing of homes delivered. The overall decrease in the average sales price of homes delivered was primarily due to pricing to market.market through an increased use of sales incentives. For the year ended November 30, 2024,2025, agross decreasemargin inpercentage revenuesof homes delivered decreased due to lower revenue per square foot wasand higher land costs year over year, partially offset by a decrease in costsconstruction per square foot. In addition, land costs increased year over year. Overall, the gross margin percentage of home deliveries decreased year over year.costs.

Homebuilding WestSouth Central: Revenues from home sales increased in 20242025 compared to 2023,2024, primarily due to the Rausch acquisition which resulted in an increase in the number of homehomes deliveriesdelivered in all the states in the segment except in Colorado, which wassegment, partially offset by a decrease in the average sales price of homes delivered in Arizona, Colorado and Washington.Texas. The overall increase in the number of homehomes deliveries in Arizona, California, Idaho, Nevada, Oregon, Utah and Washingtondelivered was primarily due to an increase in the number of active communities.communities The decrease in the number of home deliveries in Colorado was primarily due to a decrease in the number of activeincluding communities dueacquired tofrom the timing of opening and closing of communities.Rausch. The decrease in the average sales price of homes delivered in Arizona, Colorado and Washington was primarily due to pricing to market through an increased use of incentives and product mix. The increase in the average sales price of homes delivered in California, Idaho, Nevada, Oregon and Utah was primarily due to product mix.incentives. For the year ended November 30, 2024,2025, angross increasemargin inpercentage revenuesof homes delivered decreased due to lower revenue per square foot and higher land costs year over year, partially offset by a decrease in costsconstruction per square foot resulted in an increase in gross margin percentage of home deliveries. In addition, land costs increased year over year.costs.

We have been actively involved, primarily through unconsolidated entities, in the development, constructiondevelopment and property managementconstruction of multifamily rental properties. Our Multifamily segment focuses on developing a geographically diversified portfolio of institutional quality multifamily rental properties in select U.S. markets.

The Multifamily segment manages and has investments in Multifamily Venture Fund I (the "LMV I") and Multifamily Venture Fund II LP (the "LMV II"), which are long-term multifamily development investment vehicles involved in the development, construction and ownership of class-A multifamily rental properties. Details of eachLMV as ofI and duringLMV II and the yearInstitutional ended November 30, 2024JV are included below:

As of November 30, 2023, there were 38 rental operation projects in LMV I. During the second half of fiscal year 2024, the LMV I partners decided to liquidate and sell all of theits individual38 rental operation projects of LMV I as the fund has come to the end of its contractual life. InDuring the secondyear halfended ofNovember 30, 2024, 33 LMV I rental operation projects were sold to various third partythird-party buyers. We recognized a net gain of $211.5 million onDuring the saleyear ofended theseNovember 30, 2025, two additional LMV I rental operation projects whichwere wassold recordedto asthird-party equity in earnings (losses) in the condensed consolidated statement of operations. As a result, we received net cash distributions of $199.5 million.buyers.

For the thirdfourth quarter of 2026, we expect new orders to be in the range of 21,00019,500 to 22,00020,500 homes, with continued focus on matching starts and sales pace. We anticipate third quarter deliveries to be in the range of 20,50022,000 to 21,50023,000 homes as we maintain even-flow production and convert inventory to cash. Our average sales price on those deliveries is expected to be between $375,000$370,000 and $380,000. We expect gross marginsmargin in the range of 15.5% to be approximately 16%,16.0%, and our SG&A percentage should be in the range of 8.8%8.7% to 9.0%. ForThese expectations are dependent on market conditions and may change as the fullquarter 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.progresses.

We historically have experienced, and expect to continue to experience, variability in quarterly results. Our results of operations for the three and sixnine months ended MayAugust 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.

Our secondthird quarter net earnings attributable to Lennar in 2026 were $304.8$283.9 million, or $1.24$1.19 per diluted share, compared to our secondthird quarter net earnings attributable to Lennar in 2025 of $477.4$591.0 million, or $1.81$2.29 per diluted share. Excluding pretax mark-to-market losses of $23.3 million and $29.4$53.3 million on technology investments,investments respectively,and a benefit related to one-time items of $39.2 million, net, in our secondFinancial Services segment, third quarter net earnings attributable to Lennar in 2026 were $322.1$294.3 million, or $1.31$1.23 per diluted share, compared to $499.5$516.0 millionmillion, or $1.90$2.00 per diluted shareshare, excluding mark-to-market gains of $99.2 million on technology investments, in the secondthird quarter of 2025.

Three Months Ended MayAugust 31, 2026 versus Three Months Ended MayAugust 31, 2025

Revenues from home sales decreased 2%6% in the secondthird quarter of 2026 to $7.6$7.7 billion from $7.8$8.2 billion in the secondthird quarter of 2025. Revenues were lower primarily due to both a 5%3% decrease in the average sales price of homes delivered, partially offset byand a 2%3% increasedecrease in the number of home deliveries. New home deliveries were 20,51920,840 homes in the secondthird quarter of 2026, compared to 20,13121,584 homes in the secondthird quarter of 2025. The average sales price of homes delivered was $371,000$372,000 in the secondthird quarter of 2026, compared to $389,000$383,000 in the secondthird quarter of 2025. The decrease in average sales price of homes delivered in the secondthird quarter of 2026 compared to the same period last year was primarily due to continued weakness in the market.

Gross margins on home sales were $1.2 billion, or 15.6%,15.8%, in the secondthird quarter of 2026, compared to $1.4 billion, or 17.8%,17.5%, in the secondthird quarter of 2025. During the secondthird 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.

Selling, general and administrative expenses were $698.4$714.0 million in the secondthird quarter of 2026, compared to $688.8$676.5 million in the secondthird quarter of 2025. As a percentage of revenues from home sales, selling, general and administrative expenses increased to 9.2% in the secondthird quarter of 2026, from 8.8%8.2% in the secondthird quarter of 2025, primarily due to less leverage as a result of lower revenues and an increase in marketing and selling expenses.

Operating earnings for the Financial Services segment were $100.2$129.5 million in the secondthird quarter of 2026, compared to $156.6operating earnings of $177.4 million in the secondthird quarter of 2025, both amounts are net of noncontrolling interest. The operating earnings in the third quarter of 2026 included a benefit related to one-time items of $39.2 million, net, primarily due to a litigation accrual reversal resulting from a court judgment. Excluding the benefit related to one-time items in the current quarter, the decrease in operating earnings was primarily due to lower profit per locked loan and lower lock volume in the mortgage business.

Operating earningsloss for the Multifamily segment werewas $36.2$2.9 million in the sixthird monthsquarter ended May 31,of 2026, compared to an operating loss of $14.5$16.4 million in the sixthird monthsquarter ended May 31,of 2025. Operating loss for the Lennar Other segment was $44.2$83.6 million in the sixthird monthsquarter ended May 31,of 2026, compared to an operating lossearnings of $142.2$62.5 million in the sixthird monthsquarter ended May 31,of 2025. The Lennar Other operating loss for thethird sixquarter months ended May 31,of 2026 was dueprimarily todriven operating losses andby mark-to-market losses of $8.4$53.3 million on our technology investments. The Lennar Other operating lossearnings for thethird sixquarter months ended May 31,of 2025 waswere primarily duedriven toby mark-to-market lossesgains of $91.9$99.2 million on our technology investments.

In the sixthird monthsquarter ended May 31,of 2026 and 2025, we had tax provisions of $174.2$101.6 million and $329.6$190.9 million, which resulted in an overall effective income tax rate of 24.6%26.4% and 24.8%,24.4%, respectively. For both periods, our effective income tax rate included state income tax expense and non-deductible executive compensation, partially offset by tax credits. The increase in the effective tax rate for the three months ended August 31, 2026 compared to the prior period was primarily due to our spin-off of Millrose Properties, Inc.

At MayAugust 31, 2026, our reportable Homebuilding segments and Homebuilding Other are outlined in Note 2 of the Notes to Condensed Consolidated Financial Statements. The following tables set forth selected financial and operational information related to our homebuilding operations for the periods indicated:

Of the total homes delivered listed above, 7351 homes with a dollar value of $47.9$37.5 million and an average sales price of $656,000$735,000 represent homes from unconsolidated entities for the three months ended MayAugust 31, 2026, compared to 113146 homes with a dollar value of $51.1$65.1 million and an average sales price of $452,000$446,000 for the three months ended MayAugust 31, 2025.

Of the total homes delivered listed above, 157208 homes with a dollar value of $119.7$157.2 million and an average sales price of $763,000$756,000 represent homes from unconsolidated entities for the sixnine months ended MayAugust 31, 2026, compared to 193339 homes with a dollar value of $92.0$157.1 million and an average sales price of $477,000$463,000 for the sixnine months ended MayAugust 31, 2025.

Of the total new orders listed above, 5737 homes with a dollar value of $30.9$32.0 million and an average sales price of $542,000$864,000 represent homes in five active communities from unconsolidated entities for the three months ended MayAugust 31, 2026, compared to 141104 homes with a dollar value of $69.8$56.7 million and an average sales price of $495,000$546,000 in 10nine active communities for the three months ended MayAugust 31, 2025.

Of the total new orders listed above, 128165 homes with a dollar value of $62.1$94.1 million and an average sales price of $485,000$570,000 represent homes from unconsolidated entities for the sixnine months ended MayAugust 31, 2026, compared to 242346 homes with a dollar value of $129.7$186.4 million and an average sales price of $536,000$539,000 for the sixnine months ended MayAugust 31, 2025.

(2)Homes represent the number of new sales contracts executed with homebuyers, net of cancellations, during the three and sixnine months ended MayAugust 31, 2026 and 2025.

Of the total homes in backlog listed above, 5036 homes with a backlog dollar value of $28.4$22.8 million and an average sales price of $568,000$635,000 represent the backlog from unconsolidated entities at MayAugust 31, 2026, compared to 12886 homes with a backlog dollar value of $101.4$93.1 million and an average sales price of $792,000$1.1 million at MayAugust 31, 2025.

Three Months Ended MayAugust 31, 2026 versus Three Months Ended MayAugust 31, 2025

Homebuilding East: Revenues from home sales decreasedincreased in the secondthird quarter of 2026 compared to the secondthird quarter of 2025 primarily due to a decreaseincreases in the average sales price of homes delivered in allFlorida states of the segment, partially offset by an increaseand in the number of homes delivered in Florida and New Jersey. The overall decreaseincrease in the average sales price of homes delivered was primarily due to pricingproduct to market through an increased use of sales incentives.mix. The overall increase in the number of homes delivered was primarily due to an increase in the number of deliveries per active communities.community. During the secondthird quarter of 2026, gross margin percentage on homes delivered increased primarily due to higher revenue per square foot and a decrease in construction costs, partially offset by lower revenue per square foot and higher land costs year over year.

Homebuilding Central: Revenues from home sales decreased in the secondthird quarter of 2026 compared to the secondthird quarter of 2025 primarily due to a decrease in the average sales price of homes delivered in all states of the segment,segment except in Illinois, partially offset by an increase inwhile the number of homes delivered inwas Alabama,consistent Georgia,with Illinois,the andprior South Carolina.period. The overall decrease in the average sales price of homes delivered was primarily due to pricing to market through ana increased use of sales incentives. The overall increasedecrease in thebase number of homes delivered was primarily due to an increase in the number of active communities.prices. During the secondthird 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.

Homebuilding South Central: Revenues from home sales decreased in the secondthird quarter of 2026 compared to the secondthird quarter of 2025 primarily due to decreases in the average sales price of homes delivered in ArkansasTexas and Texas, partially offset by an increase in the number of homes delivered in all states of the segment.segment, except in Kansas. The overall decrease in the average sales price of homes delivered was primarily due to pricing to market through ana increaseddecrease usein ofbase sales incentives.prices. The increaseoverall decrease in the number of homes delivered was primarily due to ana increasedecrease in the number of deliveries per active communities.community. During the secondthird 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.

Homebuilding West: Revenues from home sales decreased in the secondthird quarter of 2026 compared to the secondthird quarter of 2025 primarily due to a decreasedecreases in the average sales price of homes delivered in California, Colorado, Oregon and Washington,Washington partially offset by an increaseand in the number of homes delivered in Arizona,all California,states Idaho,of andthe Oregon.segment, except in Idaho. The overall decrease in the average sales price of homes delivered was primarily due to pricing to market through a decrease in base prices and an increased use of sales incentives. The overall increasedecrease in the number of homes delivered was primarily due to ana increasedecrease in the number of deliveries per active community.communities. During the secondthird 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.

SixNine Months Ended MayAugust 31, 2026 versus SixNine Months Ended MayAugust 31, 2025

Homebuilding WestEast: Revenues from home sales decreased in the sixnine months ended MayAugust 31, 2026 compared to the sixnine months ended MayAugust 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 IdahoNew Jersey and Oregon. The overalla decrease in the average sales price of homes delivered was primarily due to pricing to market through an increased use of sales incentives.delivered. The overall decrease in the number of homes delivered was primarily due to a decrease in the number of deliveries per active community.communities. During the sixnine months ended MayAugust 31, 2026, gross margin percentage on homes delivered slightly decreased primarily due to lower revenue per square foot and higher land costs year over year, partially offset by a decrease in construction costs.

At MayAugust 31, 2026 and November 30, 2025, the carrying value of Financial Services' commercial mortgage-backed securities was $129.3$124.4 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.

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. DuringAs the year endedof November 30, 2025, 35 LMV I rental operation projects were sold to various third-party buyers. During the sixnine months ended MayAugust 31, 2026, one additional LMV I rental operation project was sold to a third-party buyer.

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 MayAugust 31, 2026 and November 30, 2025, we had $800.4$696.2 million and $897.6 million, respectively, of assets in our Lennar Other segment, which included investments in unconsolidated entities of $364.5$363.4 million and $368.0 million, respectively.