Company: LEN
Filing Date: 2025-07-01
Form Type: 10-Q
Source: 0001628280-25-033777
Chunk: 41

Company: LENNAR CORP /NEW/
Filing Date: 2025-07-01
Form: 10-Q
Item: Item 1
Chunk 41
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 primary beneficiary of certain of these option contracts. Although the Company does not have legal title to the optioned land, if the Company is deemed to be the primary beneficiary and makes a significant deposit or pre-acquisition cost investment for optioned land, or is otherwise economically compelled to takedown the optioned land, it may need to consolidate the land under option at the purchase price of the optioned land. As of May 31, 2025, land under option with third parties that the Company was compelled to takedown was $1.8 billion, of which $1.1 billion were land purchase contract obligations due to land banks upon maturity of the contracts. The Company's intention is to have other land banks close on the land purchase commitments and the Company will option the land from the land banks. Land under option with third parties is included in consolidated inventory not owned. Consolidated inventory not owned related to land financing transactions, which are land sale transactions that did not meet the criteria for revenue recognition and derecognition of land by the Company as a result of the Company maintaining an option to repurchase the land in the future, was $869.0 million as of May 31, 2025.During the six months ended May 31, 2025, consolidated inventory not owned decreased by $1.4 billion with a $1.2 billion decrease to liabilities related to consolidated inventory not owned in the accompanying condensed consolidated balance sheet as of May 31, 2025. The decrease was primarily due to the reassessment of certain option contracts due to the amendment of various contract terms. This reassessment resulted in a decrease of $1.6 billion of consolidated inventories not owned with a corresponding decrease of $1.4 billion of liabilities related to consolidated inventories not owned. The decrease was partially offset by the consolidation of homesites under option that the Company is economically compelled to takedown, which resulted in an increase of $668.9 million of consolidated inventories not owned with a corresponding increase of $612.7 million of liabilities related to consolidated inventories not owned. To reflect the purchase price of the homesite takedowns, the Company had a net reclass related to option deposits from consolidated inventory not owned to finished homes and construction in progress in the accompanying condensed consolidated balance sheet as of May 31, 2025. The liabilities related to consolidated inventory not owned primarily represent the difference between the option exercise prices for the optioned land and the Company’s cash deposits.The Company's exposure to losses on its option