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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

Commission File Number: 1-11749

Lennar Corporation

(Exact name of registrant as specified in its charter)

700 Northwest 107th Avenue, Miami, Florida 33172

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code (305) 559-4000

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  YES  x  NO  ¨

Common shares outstanding as of June 30, 2003:

Part I. Financial Information

Lennar Corporation and Subsidiaries

Consolidated Condensed Balance Sheets

(In thousands, except per share amounts)

See accompanying notes to consolidated condensed financial statements.

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Lennar Corporation and Subsidiaries

Consolidated Condensed Statements of Earnings

(Unaudited)

(In thousands, except per share amounts)

See accompanying notes to consolidated condensed financial statements.

2

Lennar Corporation and Subsidiaries

Consolidated Condensed Statements of Cash Flows

(Unaudited)

(In thousands)

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See accompanying notes to consolidated condensed financial statements.

4

Lennar Corporation and Subsidiaries

Notes to Consolidated Condensed Financial Statements

(Unaudited)

(1) Basis of Presentation

The accompanying consolidated condensed financial statements include the accounts of Lennar Corporation and all subsidiaries, partnerships and other entities (the “Company”) in which the Company has a controlling interest or is the primary beneficiary (see Note 12). All significant intercompany transactions and balances have been eliminated in consolidation. The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. These financial statements should be read in conjunction with the November 30, 2002 audited financial statements in the Company’s Annual Report on Form 10-K for the year then ended. In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for the fair presentation of the accompanying consolidated condensed financial statements have been made. Certain prior year amounts in the consolidated condensed financial statements have been reclassified to conform with the current period presentation.

The Company historically has experienced, and expects to continue to experience, variability in quarterly results. The consolidated condensed statements of earnings for the three and six months ended May 31, 2003 are not necessarily indicative of the results to be expected for the full year.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

As discussed in Note 9, basic and diluted earnings per share amounts, weighted average shares outstanding and certain other share data have been adjusted for the three and six months ended May 31, 2003 and 2002 to reflect the effect of an April 2003 stock distribution.

(2) Operating and Reporting Segments

The Company has two operating and reporting segments: Homebuilding and Financial Services. The Company’s reportable segments are strategic business units that offer different products and services.

Homebuilding operations primarily include the sale and construction of single-family attached and detached homes, as well as the purchase, development and sale of residential land directly and through unconsolidated partnerships.

The Financial Services Division provides mortgage financing, title insurance, closing services and insurance agency services for both buyers of the Company’s homes and others. It sells the loans it originates in the secondary mortgage market. The Financial Services Division also provides high-speed Internet access, cable television, and alarm installation and monitoring services for both the Company’s homebuyers and other customers.

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(3) Acquisitions

During 2003, the Company acquired two homebuilders which expanded the Company’s presence in California and South Carolina. In connection with these acquisitions, total consideration, including debt of the acquired companies, amounted to approximately $100 million. The results of operations of the acquired homebuilders are included in the Company’s results of operations since their respective acquisition dates. The pro forma effect of these acquisitions on the results of operations is not presented as their effect is not considered material.

(4) Earnings Per Share

Basic earnings per share is computed by dividing net earnings attributable to common shareholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company. Basic and diluted earnings per share were calculated as follows:

Basic and diluted earnings per share amounts and weighted average shares outstanding have been adjusted for the three and six months ended May 31, 2003 and 2002 to reflect the effect of an April 2003 stock distribution.

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(4) Earnings Per Share, Continued

In 2001, the Company issued zero-coupon convertible senior subordinated notes due 2021. The notes are convertible into the Company’s Class A common stock during limited periods after the market price of the Company’s Class A common stock exceeds 110% of the accreted conversion price, and under other special circumstances, at the rate of approximately 7.1 Class A common shares per $1,000 face amount at maturity, which would total approximately 4.5 million shares (adjusted for an April 2003 stock distribution). These shares were not included in the calculation of diluted earnings per share for the three and six months ended May 31, 2003 and 2002 because the average closing price of the Company’s Class A common stock over the last twenty trading days of each quarter did not exceed 110% ($62.95 per share at May 31, 2003) of the accreted conversion price.

(5) Financial Services

The assets and liabilities related to the Company’s financial services operations are summarized as follows:

At May 31, 2003, the Financial Services Division had warehouse lines of credit totaling $505 million to fund its mortgage loan activities. Borrowings under the facilities were $487.4 million at May 31, 2003. The warehouse lines of credit mature in May 2004 ($150 million) and in October 2004 ($355 million), at which time the Division expects both facilities to be renewed. Additionally, the line of credit maturing in May 2004 has an incremental $100 million commitment available at each fiscal quarter-end. At May 31, 2003, the Division had advances under a conduit funding agreement with a major financial institution amounting to $138.8 million. The Division also had a $20 million revolving line of credit with a bank. Borrowings under the revolving line of credit were $15.5 million at May 31, 2003.

(6) Cash

Cash as of May 31, 2003 and November 30, 2002 included $63.3 million and $56.2 million, respectively, of funds primarily held in escrow for approximately three days and $14.3 million and $20.9 million, respectively, of restricted deposits.

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(7) Debt

In May 2003, the Company amended and restated its senior secured credit facilities (the “Credit Facilities”) to provide the Company with up to $1.3 billion of financing. The Credit Facilities consist of a $712 million revolving credit facility maturing in May 2008, a $315 million 364-day revolving credit facility maturing in May 2004 and a $300 million term loan B maturing in December 2008. The Company may elect to convert borrowings under the 364-day revolving credit facility to a term loan, which would mature in May 2008. The Credit Facilities are collateralized by the stock of certain of the Company’s subsidiaries and are also guaranteed on a joint and several basis by substantially all of the Company’s subsidiaries, other than subsidiaries primarily engaged in mortgage and title reinsurance activities. At May 31, 2003, $298.0 million was outstanding under the term loan B and zero was outstanding under the revolving credit facilities. Interest rates are LIBOR-based and the margins are set by a pricing grid with thresholds that adjust based on changes in the Company’s leverage ratio and the Credit Facilities’ credit rating. At May 31, 2003, the Company had letters of credit outstanding in the amount of $500.1 million. The majority of these letters of credit are posted with regulatory bodies to guarantee the Company’s performance of certain development and construction activities and are also posted in lieu of cash deposits on option contracts. Of the Company’s total letters of credit, $301.2 million were collateralized against certain borrowings available under the Credit Facilities.

In February 2003, the Company issued $350 million of 5.95% senior notes due 2013 at a price of 98.287%. The senior notes are guaranteed on a joint and several basis by substantially all of the Company’s subsidiaries, other than subsidiaries primarily engaged in mortgage and title reinsurance activities. Proceeds from the offering, after underwriting discount and expenses, were approximately $342 million. The Company used $116 million of the proceeds to repay outstanding indebtedness and added the remainder to its general working capital. The senior notes were issued under the Company’s shelf registration statement.

In June 2003, the Company called its 3 ⁷/8% zero-coupon senior convertible debentures due 2018 (the “Debentures”) for redemption. The redemption date for the Debentures will be July 29, 2003, which is the earliest date on which the Company has the right to redeem the Debentures. The Debentures can be converted into Class A common stock at any time prior to the redemption date. Each $1,000 principal amount at maturity of Debentures is convertible into 13.7407 shares of Class A common stock (inclusive of the adjustment for an April 2003 stock distribution), which equates to a redemption price of approximately $40.92 per share of Class A common stock. If the Debentures are not converted, the Company intends to repay the Debentures at the redemption price of $562.31 per $1,000 principal amount at maturity. As of June 30, 2003, approximately 26% of the Debentures had been converted into approximately 1.8 million shares of Class A common stock.

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(8) Guarantees

In November 2002, the Financial Accounting Standards Board (“FASB”) issued Interpretation No. 45 (“FIN 45”), Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others. In accordance with the provisions of FIN 45, the Company adopted the initial recognition and measurement provisions on a prospective basis to guarantees issued after December 31, 2002. The implementation of FIN 45 did not have a material impact on the Company’s financial condition, results of operations or cash flows.

Warranty and similar reserves for homes are established in an amount estimated to be adequate to cover potential costs for materials and labor with regard to warranty-type claims to be incurred subsequent to the delivery of a home. Reserves are determined based on historical data and trends with respect to similar product types and geographical areas. The following table sets forth the activity in the Company’s warranty reserve for the six months ended May 31, 2003:

In some instances, the Company and/or its partners have provided varying levels of guarantees of debt of unconsolidated partnerships. At May 31, 2003, the Company had recourse guarantees of $67.5 million and limited maintenance guarantees of $122.3 million of debt of unconsolidated partnerships. When the Company provides a guarantee, the partnership generally receives more favorable terms from its lenders. The limited maintenance guarantees only apply if a partnership defaults on its loan arrangements and the carrying value of the collateral (generally land and improvements) is less than a specified percentage of the loan balance. If the Company is required to make a payment under a limited maintenance guarantee to bring the carrying value of the collateral above the specified percentage of the loan balance, the payment would constitute a capital contribution or loan to the unconsolidated partnership and increase the Company’s share of any funds the unconsolidated partnership distributes. There were no assets held as collateral that, upon the occurrence of any triggering event or condition under a guarantee, the Company could obtain and liquidate to recover all or a portion of the amounts paid under a guarantee.

(9) Stockholders’ Equity

On April 8, 2003, at the Company’s Annual Meeting of Stockholders, the Company’s stockholders approved an amendment to its certificate of incorporation that eliminated the restrictions on transfer of the Company’s Class B common stock and eliminated a difference between the dividends on the common stock (renamed Class A common stock) and the Class B common stock. The only significant remaining difference between the Class A common stock and the Class B common stock is that the Class A common stock entitles holders to one vote per share and the Class B common stock entitles holders to ten votes per share.

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(9) Stockholders’ Equity, Continued

Because stockholders approved the change to the terms of the Class B common stock, the Company distributed to the holders of record of its stock at the close of business on April 9, 2003, one share of Class B common stock for each ten shares of Class A common stock or Class B common stock held at that time. The distribution occurred on April 21, 2003 and the Company’s Class B common stock became listed on the New York Stock Exchange (“NYSE”). The Company’s Class A common stock was already listed on the NYSE.

Additionally, the Company’s stockholders approved an amendment to the certificate of incorporation increasing the number of shares of common stock the Company is authorized to issue to 300 million shares of Class A common stock and 90 million shares of Class B common stock. However, the Company has committed to Institutional Shareholder Services that it will not issue, without a subsequent stockholder vote, shares that would increase the outstanding Class A common stock to more than 170 million shares or increase the outstanding Class B common stock to more than 45 million shares.

In accordance with Statement of Financial Accounting Standards (“SFAS”) No. 128, Earnings per Share, basic and diluted earnings per share amounts and weighted average shares outstanding have been adjusted for the three and six months ended May 31, 2003 and 2002 to reflect the effect of the distribution of Class B common stock. The impact of the stock distribution on the consolidated condensed balance sheet as of May 31, 2003 was an increase to Class B common stock of $0.7 million, an increase to additional paid-in capital of $352.0 million and a decrease to retained earnings of $352.7 million. Approximately 6.5 million shares of Class B common stock were issued as a result of the stock distribution.

(10) Comprehensive Income

The Company has various interest rate swap agreements which effectively convert variable interest rates to fixed interest rates on approximately $300 million of outstanding debt related to its homebuilding operations. The swap agreements have been designated as cash flow hedges and, accordingly, are reflected at their fair value in the consolidated condensed balance sheets. The related loss is deferred, net of tax, in stockholders’ equity as accumulated other comprehensive loss.

Comprehensive income represents changes in stockholders’ equity from non-owner sources. For the three and six months ended May 31, 2003 and 2002, the change in the fair value of interest rate swaps was the only other amount besides the Company’s net earnings in deriving comprehensive income. Comprehensive income was $158.5 million and $260.7 million for the three and six months ended May 31, 2003, respectively, compared to $107.1 million and $180.0 million for the same periods last year.

(11) Stock-Based Compensation

The Company accounts for its stock option grants under the recognition and measurement principles of Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, and related Interpretations. No compensation expense is recognized because all stock options granted have exercise prices not less than the market value of the Company’s stock on the date of the grant. Restricted stock grants are valued based on the market price of the common stock on the date of the grant. Unearned compensation arising from the restricted stock grants is amortized to expense using the straight-line method over the period of the restrictions. Unearned restricted stock is shown as a reduction of stockholders’ equity in the consolidated condensed balance sheets.

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(11) Stock-Based Compensation, Continued

The following table illustrates the effect on net earnings and earnings per share if the Company had applied the fair value recognition provisions of SFAS No. 123, Accounting for Stock-Based Compensation, as amended by SFAS No. 148, Accounting for Stock-Based Compensation – Transition and Disclosure, to stock-based employee compensation:

(12) Consolidation of Variable Interest Entities

In January 2003, the FASB issued Interpretation No. 46 (“FIN 46”), Consolidation of Variable Interest Entities. FIN 46 requires the consolidation of entities in which an enterprise absorbs a majority of the entity’s expected losses, receives a majority of the entity’s expected residual returns, or both, as a result of ownership, contractual or other financial interests in the entity. Prior to the issuance of FIN 46, entities were generally consolidated by an enterprise when it had a controlling financial interest through ownership of a majority voting interest in the entity. FIN 46 applied immediately to variable interest entities created after January 31, 2003, and with respect to variable interests held before February 1, 2003, FIN 46 will apply beginning September 1, 2003.

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(12) Consolidation of Variable Interest Entities, Continued

The Company evaluated partnership agreements and option contracts entered into subsequent to January 31, 2003 under FIN 46. The Company did not consolidate any of its partnerships created after January 31, 2003 as the Company determined it was not the primary beneficiary, as defined in FIN 46. Additionally, the Company evaluated its option contracts for land entered into subsequent to January 31, 2003 and determined it is the primary beneficiary of certain of these option contracts. Although the Company does not have legal title to the optioned land, under FIN 46, the Company, as the primary beneficiary, is required to consolidate the land under option at fair value (the exercise price). The effect of the consolidation was an increase of $12.2 million to consolidated inventory not owned with a corresponding increase to liabilities related to consolidated inventory not owned in the accompanying consolidated condensed balance sheet as of May 31, 2003. The liabilities represent the difference between the exercise price of the optioned land and the Company’s deposits. Additionally, to reflect the fair value of the inventory consolidated under FIN 46, the Company reclassified $2.4 million of related option deposits from land under development to consolidated inventory not owned.

The Company is in the process of evaluating the remainder of its investments in unconsolidated partnerships and option contracts that may be deemed variable interest entities under the provisions of FIN 46. At May 31, 2003, the Company’s maximum exposure to loss with regard to unconsolidated partnerships was its recorded investment in these partnerships totaling $313.1 million plus the guarantees discussed in Note 8. Additionally, at May 31, 2003, the Company had non-refundable option deposits and/or letters of credit related to inventory with estimated aggregate exercise prices totaling approximately $2 billion. The Company has not yet determined the anticipated impact of adopting FIN 46 for its partnership agreements and option contracts that existed as of January 31, 2003. However, it may require the consolidation of the assets, liabilities and operations of certain of its unconsolidated partnerships and consolidation of land held under certain of its option contracts. Although the Company does not believe the full adoption of FIN 46 will have an impact on net earnings, the Company cannot make any definitive conclusion until it completes its evaluation.

(13) New Accounting Pronouncements

In April 2003, the FASB issued SFAS No. 149, Amendment of Statement 133 on Derivative Instruments and Hedging Activities. This statement amends and clarifies financial accounting and reporting for derivative instruments, including certain derivative instruments embedded in other contracts (collectively referred to as derivatives) and for hedging activities under SFAS No. 133. This statement is effective for contracts entered into or modified after June 30, 2003. Management does not believe that the implementation of SFAS No. 149 will have a material impact on the Company’s financial condition, results of operations or cash flows.

In May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity. This statement establishes standards for the classification and measurement of certain financial instruments with characteristics of both liabilities and equity. SFAS No. 150 is effective for financial instruments entered into or modified after May 31, 2003 and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003. It is to be implemented by reporting the cumulative effect of a change in an accounting principle for financial instruments created before the issuance date of the statement and still existing at the beginning of the interim period of adoption. Management does not believe that the implementation of SFAS No. 150 will have a material impact on the Company’s financial condition, results of operations or cash flows.

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(14) Supplemental Financial Information

The Company’s obligations to pay principal, premium, if any, and interest under certain debt instruments are guaranteed on a joint and several basis by substantially all of its subsidiaries, other than subsidiaries primarily engaged in mortgage and title reinsurance activities. The guarantees are full and unconditional and the guarantor subsidiaries are 100% owned by Lennar Corporation. The Company has determined that separate, full financial statements of the guarantors would not be material to investors and, accordingly, supplemental financial information for the guarantors is presented.

Consolidating Condensed Balance Sheet

May 31, 2003

(Unaudited)

13

(14) Supplemental Financial Information, Continued

Consolidating Condensed Balance Sheet

November 30, 2002

14

(14) Supplemental Financial Information, Continued

Consolidating Condensed Statement of Earnings

Three Months Ended May 31, 2003

(Unaudited)

Consolidating Condensed Statement of Earnings

Three Months Ended May 31, 2002

(Unaudited)

15

(14) Supplemental Financial Information, Continued

Consolidating Condensed Statement of Earnings

Six Months Ended May 31, 2003

(Unaudited)