We have investments in various unconsolidated entities. These entities, which are structured as joint ventures (i) develop land for the joint venture participants and for sale to outside builders (“Land Development Joint Ventures”); (ii) develop for-sale homes (“Home Building Joint Ventures”); (iii) develop luxury for-rent residential apartments, commercial space, and a hotel (“Rental Property Joint Ventures”), which includes our investment in Toll Brothers Realty Trust (the “Trust”); and (iv) invest in distressed loans and real estate and provide financing and land banking to residential builders and developers for the acquisition and development of land and home sites (“Gibraltar Joint Ventures”). In fiscal 2019, 2018 and 2017, we recognized income from the unconsolidated entities in which we had an investment of $24.9 million, $85.2 million, and $116.1 million, respectively.

The table below provides information as of October 31, 2019, regarding active joint ventures that we are invested in, by joint venture category ($ amounts in thousands):



	Land Development Joint Ventures		Home Building Joint Ventures		Rental Property Joint Ventures		Gibraltar Joint Ventures		Total
Number of unconsolidated entities	8		4		20		9		41
Investment in unconsolidated entities	$	110,306	$	60,512	$	174,292	$	21,142	$	366,252
Number of unconsolidated entities with funding commitments by the Company	2		1		2		1		6
Company’s remaining funding commitment to unconsolidated entities	$	28,586	$	1,400	$	539	$	8,271	$	38,796

In fiscal 2019, our Land Development Joint Ventures sold approximately 934 lots and recognized revenues of $261.7 million . We acquired 293 of these lots for $137.1 million. Our share of the joint venture income from the lots we acquired was insignificant. We recognized a charge in connection with one Land Development Joint Venture of $1.0 million in fiscal 2019.

In fiscal 2018, our Land Development Joint Ventures sold approximately 986 lots and recognized revenues of $351.4 million. We acquired 259 of these lots for $153.2 million. Our share of the income from the lots we acquired of $1.7 million was deferred by reducing our basis in those lots acquired. We recognized charges in connection with two Land Development Joint Ventures of $6.0 million in fiscal 2018.

In the fourth quarter of fiscal 2019, we entered into a joint venture with an unrelated party to purchase and develop a parcel of land located in Houston, Texas. The joint venture expects to develop approximately 263 home sites on this land in multiple phases. We have a 50% interest in this joint venture. The joint venture intends to sell approximately 50% of the value of the home sites to each of the members of the joint venture. At October 31, 2019, we had an investment of $5.9 million in this joint venture. The joint venture expects to secure third-party financing at a later date.

In November 2019, one of our Home Building Joint Ventures refinanced its existing $236.5 million construction loan with a $76.6 million post-construction loan that matures November 2021. We and an affiliate of our partner provided certain guarantees under the loan agreement. We estimate that our maximum exposure under these guarantees, if the full amount of the loan commitment was borrowed, would be $76.6 million without taking into account any recoveries from the underlying collateral or any reimbursement from our partner.

As of October 31, 2019, our Rental Property Joint Ventures owned 25 for-rent apartment projects and a hotel, which are located in multiple metropolitan areas throughout the country. At October 31, 2019, these joint ventures had approximately 2,000 units that were occupied or ready for occupancy, 1,700 units in the lease-up stage, and 4,100 units in the design phase or under development. In addition, we either own or have under contract, approximately 10,900 units, of which 800 units are under active development; we intend to develop these units in joint ventures with unrelated parties in the future.

In fiscal 2019, we entered into five separate joint ventures with unrelated parties to develop luxury for-rent residential apartment projects located in Harrison, New York, Frisco, Texas, Atlanta, Georgia, Orange, California, and Dallas, Texas. Prior to the formation of these joint ventures, we acquired the properties and incurred approximately $145.1 million of land and land development costs. Our partners acquired interests in these entities ranging from 63.5% to 75% for an aggregate amount of $110.0 million and we recognized a gain on land sales of $9.3 million in fiscal 2019. At October 31, 2019, we had an aggregate investment of $48.8 million in these joint ventures. Concurrent with their formation, these joint ventures entered into construction loan agreements for an aggregate amount of $340.1 million. At October 31, 2019, the joint ventures had $39.3 million outstanding borrowings under these construction loan facilities.

In addition, in fiscal 2019, we entered into four separate joint ventures with unrelated parties to develop luxury for-rent residential apartment projects and student housing communities located in Boston, Massachusetts, San Diego, California, Tempe, Arizona and Miami, Florida. We contributed an aggregate of $79.6 million for our initial ownership interests in these joint ventures, which ranged from 50% to 98%. Due to our controlling financial interest, our power to direct the activities that most significantly impact each joint venture’s performance, and/or our obligation to absorb expected losses or receive benefits from these joint ventures, we consolidated these joint ventures at October 31, 2019. The carrying value of these joint ventures’ assets totaling $125.0 million are reflected in “Receivables, prepaid expenses, and other assets” in our Consolidated Balance Sheet as of October 31, 2019. Our partners’ interests aggregating $37.9 million in the joint ventures are reflected as a component of “Noncontrolling interest” in our Consolidated Balance Sheet as of October 31, 2019. These joint ventures intend to obtain additional equity investors and secure third-party financing at a later date. At such time, it is expected that these entities would no longer be consolidated.

In fiscal 2019, one of our Rental Property Joint Ventures, in which we had a 25% interest, sold its assets to an unrelated party for $77.8 million. The joint venture had owned, developed, and operated a multifamily residential community in Phoenixville, Pennsylvania. In connection with the sale, the joint venture repaid its entire $47.0 million loan. We received cash of $7.4 million and recognized a gain of $3.8 million, which is included in “Income from unconsolidated entities” in our Consolidated Statements of Operations and Comprehensive Income.

We have an investment in a joint venture in which we have a 50% interest that developed a luxury hotel in conjunction with a high-rise luxury condominium project in New York City developed by a related Home Building Joint Venture. The hotel commenced operations in February 2017. At October 31, 2019, we had an investment of $21.0 million in this joint venture. In the fourth quarter of fiscal 2019, the joint venture refinanced its existing $80.0 million, three-year term loan with a three-year, $120.0 million term loan, of which $110.0 million was advanced to the joint venture at closing. The proceeds from the refinancing were distributed to the members.

In fiscal 2018, we entered into four joint ventures with unrelated parties to develop luxury for-rent residential apartment projects located in suburban Atlanta, Georgia; Belmont, Massachusetts; and Washington, D.C. Prior to the formation of these joint ventures, we acquired the properties and incurred approximately $140.0 million of land and land development costs. Our partners acquired interests in these entities ranging from 50% to 75% for an aggregate amount of $80.3 million. At October 31, 2019, we had an investment of $65.6 million in these joint ventures. In fiscal 2018, several of these joint ventures entered into construction loan agreements for an aggregate amount of $166.1 million to finance the development of these projects. At October 31, 2019, the joint ventures had $156.1 million of outstanding borrowings under the construction loan facilities.

In addition, in fiscal 2018 we entered into a joint venture with an unrelated party to develop a luxury for-rent residential apartment project in a suburb of Boston, Massachusetts. We contributed cash of $15.9 million for our initial 85% ownership interest in this joint venture. Due to our controlling financial interest, our power to direct the activities that most significantly impact the joint venture’s performance, and our obligation to absorb expected losses or receive benefits from the joint venture, we consolidated this joint venture at October 31, 2019. The carrying value of the joint venture’s assets totaling $20.8 million are reflected in “Receivables, prepaid expenses, and other assets” in our Consolidated Balance Sheet at October 31, 2019. Our partner’s 15% interest of $3.1 million in the joint venture is reflected as a component of “Noncontrolling interest” in our Consolidated Balance Sheet as of October 31, 2019. The joint venture expects to admit an additional investor and secure third-party financing at a later date.

In fiscal 2018, three of our Rental Property Joint Ventures sold their assets to unrelated parties for $477.5 million. These joint ventures had owned, developed, and operated multifamily rental properties located in suburban Washington, D.C. and Westborough, Massachusetts, and a student housing community in College Park, Maryland. In connection with these sales, the joint ventures’ aggregate outstanding loan balance of $239.6 million was repaid. From our investment in these joint ventures, we received cash of $79.1 million and recognized gains from these sales of $67.2 million in fiscal 2018, which is included in “Income from unconsolidated entities” in our Consolidated Statement of Operations and Comprehensive Income.

In fiscal 2017, we sold one-half of our 50% interest in two of our Rental Property Joint Ventures to an unrelated party. In connection with these sales, we, along with our partners, recapitalized the joint ventures and refinanced the existing $166.3 million in construction loans with 10-year fixed rate loans totaling $189.0 million. As a result of these transactions, we received cash of $54.9 million and recognized gains of $26.7 million in fiscal 2017, which is included in “Income from unconsolidated entities” in our Consolidated Statements of Operations and Comprehensive Income. At October 31, 2019, we had a 25% interest in each of these joint ventures.

In 1998, we formed the Trust to invest in commercial real estate opportunities. The Trust is effectively owned one-third by us; one-third by current and former members of our senior management; and one-third by an unrelated party. As of October 31, 2019, our investment in the Trust was zero as cumulative distributions received from the Trust have been in excess of the carrying amount of our net investment. We provide development, finance, and management services to the Trust and recognized fees under the terms of various agreements in the amounts of $1.0 million, $2.0 million, and $2.0 million in fiscal 2019, 2018 and 2017, respectively. In fiscal 2019 and 2018, we received distributions of $3.9 million and $27.7 million, respectively, from the Trust, of which the full amount was recognized as income and included in “Income from unconsolidated entities” in our fiscal 2019 and 2018 Consolidated Statements of Operations and Comprehensive Income. No distributions were received from the Trust in fiscal 2017.

In November 2019, we entered into a joint venture with an unrelated party to develop a for-rent residential apartment project in Dallas, Texas. Prior to the formation of this joint venture, we acquired the property and incurred approximately $19.0 million of land and land development costs. Our partner acquired a 50% interest in this entity for approximately $9.2 million, of which $7.7 million was distributed to us. Our initial investment is $11.9 million. Concurrent with its formation, the joint venture

entered into a $42.0 million construction loan agreement to finance the development of this project. We and an affiliate of our partner provided certain guarantees under the construction loan agreement. We estimate that our maximum exposure under these guarantees, if the full amount of the loan commitment was borrowed, would be $42.0 million without taking into account any recoveries from the underlying collateral or any reimbursement from our partner.

In December 2019, we sold all of our ownership interest in one of our Rental Property Joint Ventures to our partner for cash of $16.8 million, net of closing costs. The joint venture had owned, developed, and operated multifamily residential apartments in northern New Jersey. In connection with the sale, the joint venture’s existing $76.0 million loan was assumed by our partner. We expect to recognize a gain of approximately $10.0 million in the first quarter of fiscal 2019 from the sale.

In December 2019, we entered into a joint venture with an unrelated party to develop a for-rent student housing community in State College, Pennsylvania. Prior to the formation of this joint venture, we acquired the property and incurred approximately $32.0 million of land and land development costs. Our partner acquired a 70% interest in this entity for approximately $22.2 million, of which $17.9 million was distributed to us. Our initial investment is $12.9 million. Concurrent with its formation, the joint venture entered into a $79.5 million construction loan agreement to finance the development of this project. We and an affiliate of our partner provided certain guarantees under the construction loan agreement. We estimate that our maximum exposure under these guarantees, if the full amount of the loan commitment was borrowed, would be $79.5 million without taking into account any recoveries from the underlying collateral or any reimbursement from our partner.

We, through our wholly owned subsidiary, Gibraltar Capital and Asset Management, LLC (“Gibraltar”), have entered into eight ventures with an institutional investor to provide builders and developers with land banking and venture capital, two of which were formed in fiscal 2019. These ventures will finance builders’ and developers’ acquisition and development of land and home sites and pursue other complementary investment strategies. We are also a member in a separate venture with the same institutional investor, which purchased, from Gibraltar, certain foreclosed real estate owned and distressed loans in fiscal 2016. Our ownership interest in these ventures is approximately 25%. We may invest up to $100.0 million in these ventures. As of October 31, 2019, we had an investment of $20.5 million in these ventures.

The unconsolidated entities in which we have investments generally finance their activities with a combination of partner equity and debt financing. In some instances, we and our partners have guaranteed debt of certain unconsolidated entities. These guarantees may include any or all of the following: (i) project completion guarantees, including any cost overruns; (ii) repayment guarantees, generally covering a percentage of the outstanding loan; (iii) carry cost guarantees, which cover costs such as interest, real estate taxes, and insurance; (iv) an environmental indemnity provided to the lender that holds the lender harmless from and against losses arising from the discharge of hazardous materials from the property and non-compliance with applicable environmental laws; and (v) indemnification of the lender from “bad boy acts” of the unconsolidated entity.

In some instances, the guarantees provided in connection with loans to an unconsolidated entity are joint and several. In these situations, we generally have a reimbursement agreement with our partner that provides that neither party is responsible for more than its proportionate share or agreed upon share of the guarantee; however, if the joint venture partner does not have adequate financial resources to meet its obligations under the reimbursement agreement, we may be liable for more than our proportionate share.

We believe that, as of October 31, 2019, in the event we become legally obligated to perform under a guarantee of an obligation of an unconsolidated entity due to a triggering event, the collateral in such entity should be sufficient to repay a significant portion of the obligation. If it is not, we and our partners would need to contribute additional capital to the venture. At October 31, 2019, certain unconsolidated entities have loan commitments aggregating $1.53 billion, of which, if the full amount of the debt obligations were borrowed, we estimate $299.1 million to be our maximum exposure related solely to repayment and carry cost guarantees. At October 31, 2019, the unconsolidated entities had borrowed an aggregate of $1.14 billion, of which we estimate $239.6 million to be our maximum exposure related solely to repayment and carry cost guarantees. The terms of these guarantees generally range from 2 months to 9.7 years. These maximum exposure estimates do not take into account any recoveries from the underlying collateral or any reimbursement from our partners.

At October 31, 2019 and 2018, we determined that 18 and 11, respectively, of our joint ventures were VIEs under the guidance within ASC 810. For 13 and 10 of these VIEs as of October 31, 2019 and 2018, respectively, we concluded that we were not the primary beneficiary of these VIEs because the power to direct the activities of such VIEs that most significantly impact their performance was either shared by us and such VIEs’ other partners or such activities were controlled by our partner. For VIEs where the power to direct significant activities is shared, business plans, budgets, and other major decisions are required to be unanimously approved by all members. Management and other fees earned by us are nominal and believed to be at market rates, and there is no significant economic disproportionality between us and other members. The information presented below regarding the investments, commitments, and guarantees in unconsolidated entities deemed to be VIEs is also included in the information provided above.

As of October 31, 2019, we have consolidated five Rental Property Joint Ventures. We had one consolidated Rental Property Joint Venture as of October 31, 2018. The carrying value of these joint ventures’ assets totaled $145.8 million and $19.7 million as reflected in “Receivables, prepaid expenses, and other assets” in our Consolidated Balance Sheet as of October 31, 2019 and 2018, respectively. Our partners’ interests aggregating $41.0 million and $2.8 million in the joint ventures are reflected as a component of “Noncontrolling interest” in our Consolidated Balance Sheet as of October 31, 2019 and 2018, respectively. These joint ventures were determined to be VIEs due to their current inability to finance their activities without additional subordinated financial support as well as our partners’ inability to participate in the significant decisions of the joint venture and their lack of substantive kick-out rights. We further concluded that we are the primary beneficiary of these VIEs due to our controlling financial interest in such ventures as we have the power to direct the activities that most significantly impact the joint ventures’ performance and the obligation to absorb expected losses or receive benefits from the joint ventures. The assets of these VIEs can only be used to settle the obligations of the VIEs. In addition, in certain of the joint ventures, in the event additional contributions are required to be funded to the joint ventures prior to the admission of any additional investor at a future date, we will fund 100% of such contributions, including our partner’s pro rata share, which we expect would be funded through an interest-bearing loan.

At October 31, 2019 and 2018, our investments in our unconsolidated entities deemed to be VIEs, which are included in “Investments in unconsolidated entities” in our Consolidated Balance Sheets, totaled $37.0 million and $33.8 million, respectively. At October 31, 2019, the maximum exposure of loss to our investments in these entities was limited to our investments in the unconsolidated VIEs, except with regard to $76.0 million of loan guarantees and $8.3 million of additional commitments to fund the VIEs. Of our potential exposure for these loan guarantees, $76.0 million is related to repayment and carry cost guarantees, of which $76.0 million was borrowed at October 31, 2019. At October 31, 2018, the maximum exposure of loss to our investments in these entities was limited to our investments in the unconsolidated VIEs, except with regard to $70.0 million of loan guarantees and $10.8 million of additional commitments to fund the VIEs. Of our potential exposure for these loan guarantees, $70.0 million is related to repayment and carry cost guarantees, of which $70.0 million was borrowed at October 31, 2018.



	October 31, 2019
	Land Develop- ment Joint Ventures		Home Building Joint Ventures		Rental Property Joint Ventures		Gibraltar Joint Ventures		Total
Cash and cash equivalents	$	23,669	$	38,115	$	20,647	$	3,388	$	85,819
Inventory	247,866		313,991				17,369		579,226
Loan receivables, net							56,545		56,545
Rental properties					1,021,848				1,021,848
Rental properties under development					535,197				535,197
Real estate owned							12,267		12,267
Other assets	96,602		78,916		36,879		364		212,761
Total assets	$	368,137	$	431,022	$	1,614,571	$	89,933	$	2,503,663
Debt, net of deferred financing costs	$	88,050	$	132,606	$	1,006,201			$	1,226,857
Other liabilities	49,302		33,959		84,735		7,831		175,827
Members’ equity	230,785		264,457		523,635		81,686		1,100,563
Noncontrolling interest							416		416
Total liabilities and equity	$	368,137	$	431,022	$	1,614,571	$	89,933	$	2,503,663
Company’s net investment in unconsolidated entities (1)	$	110,306	$	60,512	$	174,292	$	21,142	$	366,252



	October 31, 2018
	Land Develop- ment Joint Ventures		Home Building Joint Ventures		Rental Property Joint Ventures		Gibraltar Joint Ventures		Total
Cash and cash equivalents	$	47,409	$	22,834	$	23,750	$	8,469	$	102,462
Inventory	403,670		557,157				13,163		973,990
Loan receivables, net							40,065		40,065
Rental properties					808,785				808,785
Rental properties under development					437,586				437,586
Real estate owned							14,838		14,838
Other assets	93,322		49,723		21,917		1,067		166,029
Total assets	$	544,401	$	629,714	$	1,292,038	$	77,602	$	2,543,755
Debt, net of deferred financing costs	$	125,557	$	284,959	$	735,482	$	—	$	1,145,998
Other liabilities	29,096		72,897		51,992		4,585		158,570
Members’ equity	389,748		271,858		504,564		69,804		1,235,974
Noncontrolling interest							3,213		3,213
Total liabilities and equity	$	544,401	$	629,714	$	1,292,038	$	77,602	$	2,543,755
Company’s net investment in unconsolidated entities (1)	$	176,593	$	65,936	$	171,216	$	18,068	$	431,813



	For the year ended October 31, 2019
	Land Develop- ment Joint Ventures		Home Building Joint Ventures		Rental Property Joint Ventures			Gibraltar Joint Ventures			Total
Revenues	$	261,677	$	374,587	$	99,401		$	21,377		$	757,042
Cost of revenues	247,070		333,008		68,502			13,234			661,814
Other expenses	4,662		15,389		58,928			1,880			80,859
Total expenses	251,732		348,397		127,430			15,114			742,673
Gain on disposition of loans and REO								4,383			4,383
Income (loss) from operations	9,945		26,190		(28,029		)	10,646			18,752
Other income	3,079		6,144		16,651			12,793			38,667
Income (loss) before income taxes	13,024		32,334		(11,378		)	23,439			57,419
Income tax provision	193		457								650
Net income (loss) including earnings from noncontrolling interests	12,831		31,877		(11,378		)	23,439			56,769
Less: income attributable to noncontrolling interest								(9,593		)	(9,593		)
Net income (loss) attributable to controlling interest	$	12,831	$	31,877	$	(11,378	)	$	13,846		$	47,176
Company’s equity (deficit) in earnings of unconsolidated entities (2)	$	6,160	$	17,004	$	(824	)	$	2,528		$	24,868



	For the year ended October 31, 2018
	Land Develop- ment Joint Ventures		Home Building Joint Ventures		Rental Property Joint Ventures			Gibraltar Joint Ventures			Total
Revenues	$	351,397	$	148,002	$	121,276		$	19,592		$	640,267
Cost of revenues	317,363		112,469		74,946			17,817			522,595
Other expenses	9,125		8,630		61,502			3,201			82,458
Total expenses	326,488		121,099		136,448			21,018			605,053
Gain on disposition of loans and REO								53,192			53,192
Income (loss) from operations	24,909		26,903		(15,172		)	51,766			88,406
Other income	5,939		2,134		222,744			1,937			232,754
Income before income taxes	30,848		29,037		207,572			53,703			321,160
Income tax provision	86		767								853
Net income including earnings from noncontrolling interests	30,762		28,270		207,572			53,703			320,307
Less: income attributable to noncontrolling interest								(28,297		)	(28,297		)
Net income attributable to controlling interest	$	30,762	$	28,270	$	207,572		$	25,406		$	292,010
Company’s equity in earnings of unconsolidated entities (2)	$	3,392	$	14,069	$	62,204		$	5,575		$	85,240



	For the year ended October 31, 2017
	Land Develop- ment Joint Ventures		Home Building Joint Ventures		Rental Property Joint Ventures			Gibraltar Joint Ventures			Total
Revenues	$	288,440	$	475,260	$	115,519		$	10,090		$	889,309
Cost of revenues	191,965		286,446		70,108			14,428			562,947
Other expenses	6,508		13,102		59,503			3,942			83,055
Total expenses	198,473		299,548		129,611			18,370			646,002
Gain on disposition of loans and REO								48,079			48,079
Income (loss) from operations	89,967		175,712		(14,092		)	39,799			291,386
Other income	4,723		7,317		1,556			432			14,028
Income (loss) before income taxes	94,690		183,029		(12,536		)	40,231			305,414
Income tax provision	94		7,473		95						7,662
Net income (loss) including earnings from noncontrolling interests	94,596		175,556		(12,631		)	40,231			297,752
Less: income attributable to noncontrolling interest								(20,439		)	(20,439		)
Net income (loss) attributable to controlling interest	94,596		175,556		(12,631		)	19,792			277,313
Company’s equity in earnings of unconsolidated entities (2)	$	13,007	$	77,339	$	21,458		$	4,262		$	116,066

Differences between our equity in earnings of unconsolidated entities and the underlying net income (loss) of the entities are primarily a result of a basis difference of an acquired joint venture interest; distributions from entities in excess of the carrying amount of our net investment; recoveries of previously incurred charges; unrealized gains on our retained joint venture interests; and our share of the entities’ profits related to home sites purchased by us which reduces our cost basis of the home sites acquired.