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Variable Interest Entities (Tables)

6 Months Ended

May 31, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

The total debt of the Lennar Homebuilding unconsolidated entities in which the Company has investments, including Lennar's maximum recourse exposure, were as follows:



(Dollars in thousands)	May 31, 2016			November 30, 2015
Non-recourse bank debt and other debt (partner’s share of several recourse)	$	49,606		50,411
Non-recourse land seller debt and other debt	323,995			324,000
Non-recourse debt with completion guarantees	141,811			146,760
Non-recourse debt without completion guarantees	301,331			260,734
Non-recourse debt to the Company	816,743			781,905
The Company’s maximum recourse exposure (1)	40,851			10,981
Total debt	$	857,594		792,886
The Company’s maximum recourse exposure as a % of total JV debt	5		%	1	%

(1)

The increase in the Company's maximum recourse exposure was primarily related to the Company providing a repayment guarantee on an unconsolidated entity's debt.Summarized condensed financial information on a combined 100% basis related to Lennar Homebuilding’s unconsolidated entities that are accounted for by the equity method was as follows:Statements of Operations



	Three Months Ended				Six Months Ended
	May 31,				May 31,
(In thousands)	2016			2015	2016		2015
Revenues	$	208,636		180,790	308,362		623,747
Costs and expenses	201,370			154,139	298,570		453,018
Other income	—			—	—		2,943
Net earnings of unconsolidated entities	$	7,266		26,651	9,792		173,672
Lennar Homebuilding equity in earnings (loss) from unconsolidated entities	$	(9,633	)	6,494	(6,633	)	35,393

Balance Sheets



(In thousands)	May 31, 2016		November 30, 2015
Assets:
Cash and cash equivalents	$	373,846	248,980
Inventories	3,081,630		3,059,054
Other assets	921,025		465,404
	$	4,376,501	3,773,438
Liabilities and equity:
Accounts payable and other liabilities	$	283,492	288,192
Debt	857,594		792,886
Equity	3,235,415		2,692,360
	$	4,376,501	3,773,438

The following table reflects Rialto's investments in funds that invest in and manage real estate related assets and other investments:



								May 31, 2016		May 31, 2016		November 30, 2015
(Dollars in thousands)	Inception Year	Equity Commitments		Equity Commitments Called		Commitment to Fund by the Company		Funds Contributed by the Company		Investment
Rialto Real Estate Fund, LP	2010	$	700,006	$	700,006	$	75,000	$	75,000	$	63,182	68,570
Rialto Real Estate Fund II, LP	2012	1,305,000		1,305,000		100,000		100,000		97,417		99,947
Rialto Mezzanine Partners Fund, LP	2013	300,000		300,000		33,799		33,799		28,206		32,344
Rialto Capital CMBS Funds	2014	111,753		111,753		47,057		47,057		46,712		23,233
Rialto Real Estate Fund III	2015	818,248		—		100,000		—		1,685		—
Rialto Credit Partnership, LP	2016	220,000		8,900		19,999		809		797		—
Other investments										741		775
										$	238,740	224,869

Rialto's share of earnings (loss) from unconsolidated entities was as follows:



	Three Months Ended				Six Months Ended
	May 31,				May 31,
(In thousands)	2016			2015	2016		2015
Rialto Real Estate Fund, LP	$	931		3,044	2,270		3,790
Rialto Real Estate Fund II, LP	2,470			2,286	1,748		3,179
Rialto Mezzanine Partners Fund, LP	701			451	1,425		926
Rialto Capital CMBS Funds	1,208			1,533	1,580		2,077
Rialto Real Estate Fund III	1,622			—	1,383		—
Rialto Credit Partnership, LP	(12		)	—	(12	)	—
Other investments	(56		)	14	(33	)	20
Rialto equity in earnings from unconsolidated entities	$	6,864		7,328	8,361		9,992

Summarized condensed financial information on a combined 100% basis related to Rialto’s investments in unconsolidated entities that are accounted for by the equity method was as follows:Balance Sheets



(In thousands)	May 31, 2016		November 30, 2015
Assets:
Cash and cash equivalents	$	122,120	188,147
Loans receivable	388,105		473,997
Real estate owned	597,915		506,609
Investment securities	1,231,257		1,092,476
Investments in partnerships	421,272		429,979
Other assets	42,889		30,340
	$	2,803,558	2,721,548
Liabilities and equity:
Accounts payable and other liabilities	$	24,702	29,462
Notes payable	524,416		374,498
Equity	2,254,440		2,317,588
	$	2,803,558	2,721,548

Statements of Operations



	Three Months Ended			Six Months Ended
	May 31,			May 31,
(In thousands)	2016		2015	2016	2015
Revenues	$	51,240	39,320	95,536	81,058
Costs and expenses	20,704		25,082	41,603	48,087
Other income, net (1)	26,710		55,477	11,548	61,351
Net earnings of unconsolidated entities	$	57,246	69,715	65,481	94,322
Rialto equity in earnings from unconsolidated entities	$	6,864	7,328	8,361	9,992

(1)

Other income, net, included realized and unrealized gains (losses) on investmentsSummarized condensed financial information on a combined 100% basis related to Lennar Multifamily's investments in unconsolidated entities that are accounted for by the equity method was as follows:

Balance Sheets



(In thousands)	May 31, 2016		November 30, 2015
Assets:
Cash and cash equivalents	$	58,962	39,579
Operating properties and equipment	1,748,003		1,398,244
Other assets	41,778		25,925
	$	1,848,743	1,463,748
Liabilities and equity:
Accounts payable and other liabilities	$	241,079	179,551
Notes payable	578,662		466,724
Equity	1,029,002		817,473
	$	1,848,743	1,463,748

Statements of Operations



	Three Months Ended				Six Months Ended
	May 31,				May 31,
(In thousands)	2016		2015		2016	2015
Revenues	$	9,649	3,075		17,963	5,169
Costs and expenses	14,058		5,081		25,730	8,075
Other income, net	30,272		—		70,394	—
Net earnings (loss) of unconsolidated entities	$	25,863	(2,006	)	62,627	(2,906	)
Lennar Multifamily equity in earnings (loss) from unconsolidated entities (1)	$	14,008	(422	)	33,694	(600	)

(1)

For the three months ended May 31, 2016, Lennar Multifamily equity in earnings from unconsolidated entities included the segment's $15.4 million share of a gain as a result of the sale of an operating property by one of its unconsolidated entities. For the six months ended May 31, 2016, Lennar Multifamily equity in earnings from unconsolidated entities included the segment's $35.8 million share of gains as a result of the sale of two operating properties by its unconsolidated entities.The Company’s recorded investments in unconsolidated entities were as follows:



(In thousands)	May 31, 2016		November 30, 2015
Lennar Homebuilding	$	785,883	741,551
Rialto	$	238,740	224,869
Lennar Multifamily	$	304,171	250,876

Estimated Maximum Exposure To Loss

The Company’s recorded investment in unconsolidated VIEs and its estimated maximum exposure to loss were as follows:

As of May 31, 2016



(In thousands)	Investments in Unconsolidated VIEs		Lennar’s Maximum Exposure to Loss
Lennar Homebuilding (1)	$	99,026	130,137
Rialto (2)	60,076		60,076
Lennar Multifamily (3)	227,795		586,195
	$	386,897	776,408

As of November 30, 2015



(In thousands)	Investments in Unconsolidated VIEs		Lennar’s Maximum Exposure to Loss
Lennar Homebuilding (1)	$	102,706	111,215
Rialto (2)	25,625		25,625
Lennar Multifamily (3)	177,359		586,842
	$	305,690	723,682

(1)

At May 31, 2016, the maximum exposure to loss of Lennar Homebuilding’s investments in unconsolidated VIEs was limited to its investments in the unconsolidated VIEs, except with regard to $31.0 million repayment guarantee on an unconsolidated entity's debt. At November 30, 2015, the maximum exposure to loss of Lennar Homebuilding’s investments in unconsolidated VIEs was limited to its investments in the unconsolidated VIEs, except with regard to $8.3 million remaining commitment to fund an unconsolidated entity for further expenses up until the unconsolidated entity obtains permanent financing.

(2)

At both May 31, 2016 and November 30, 2015, the maximum recourse exposure to loss of Rialto’s investments in unconsolidated VIEs was limited to its investments in the unconsolidated VIEs. At May 31, 2016 and November 30, 2015, investments in unconsolidated VIEs and Lennar’s maximum exposure to loss included $60.1 million and $25.6 million, respectively, related to Rialto’s investments held-to-maturity.

(3)

As of May 31, 2016 and November 30, 2015, the remaining equity commitment of $324.5 million and $378.3 million, respectively, to fund the Venture for future expenditures related to the construction and development of its projects is included in Lennar's maximum exposure to loss. In addition, at May 31, 2016 and November 30, 2015, the maximum exposure to loss of Lennar Multifamily's investments in unconsolidated VIEs was limited to its investments in the unconsolidated VIEs, except with regard to $29.1 million and $30.0 million, respectively, of letters of credit outstanding for certain of the unconsolidated VIEs that could be drawn upon in the event of default under their debt agreements.

- Definition

Tabular disclosure of the significant judgments and assumptions made in determining whether a variable interest (as defined) held by the entity requires the variable interest entity (VIE) (as defined) to be consolidated and (or) disclose information about its involvement with the VIE, individually or in aggregate (as applicable); the nature of restrictions, if any, on the consolidated VIE's assets and on the settlement of its liabilities reported by an entity in its statement of financial position, including the carrying amounts of such assets and liabilities; the nature of, and changes in, the risks associated with involvement in the VIE; how involvement with the VIE affects the entity's financial position, financial performance, and cash flows; the lack of recourse if creditors (or beneficial interest holders) of the consolidated VIE have no recourse to the general credit of the primary beneficiary (if applicable); the terms of arrangements, giving consideration to both explicit arrangements and implicit variable interests, if any, that could require the entity to provide financial support to the VIE, including events or circumstances that could expose the entity to a loss; the methodology used by the entity for determining whether or not it is the primary beneficiary of the variable interest entity; the significant factors considered and judgments made in determining that the power to direct the activities of a VIE that most significantly impact the VIE's economic performance are shared (as defined); the carrying amounts and classification of assets and liabilities of the VIE included in the statement of financial position; the entity's maximum exposure to loss, if any, as a result of its involvement with the VIE, including how the maximum exposure is determined and significant sources of the entity's exposure to the VIE; a comparison of the carrying amounts of the assets and liabilities and the entity's maximum exposure to loss; information about any liquidity arrangements, guarantees, and (or) other commitments by third parties that may affect the fair value or risk of the entity's variable interest in the VIE; whether or not the entity has provided financial support or other support (explicitly or implicitly) to the VIE that it was not previously contractually required to provide or whether the entity intends to provide that support, including the type and amount of the support and the primary reasons for providing the support; and supplemental information the entity determines necessary to provide.

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