Lennar Homebuilding Investments in Unconsolidated Entities (Tables)

9 Months Ended

Aug. 31, 2017

Equity Method Investments and Joint Ventures [Abstract]

Equity Method Investments

Balance Sheets

(In thousands)	August 31, 2017		November 30, 2016
Assets:
Cash and cash equivalents	$	806,972	221,334
Inventories	3,785,662		3,889,795
Other assets	1,227,756		1,334,116
	$	5,820,390	5,445,245
Liabilities and equity:
Accounts payable and other liabilities	$	697,065	791,245
Debt (1)	754,749		888,664
Equity	4,368,576		3,765,336
	$	5,820,390	5,445,245

(1) Debt presented above is net of debt issuance costs of $5.4 million and $4.2 million, as of August 31, 2017 and November 30, 2016, respectively.

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)	August 31, 2017			November 30, 2016
Non-recourse bank debt and other debt (partner’s share of several recourse)	$	68,302		48,945
Non-recourse land seller debt and other debt (1)	1,997			323,995
Non-recourse debt with completion guarantees	275,959			147,100
Non-recourse debt without completion guarantees	342,987			320,372
Non-recourse debt to the Company	689,245			840,412
The Company’s maximum recourse exposure (2)	70,929			52,438
Debt issuance costs	(5,425		)	(4,186	)
Total debt	$	754,749		888,664
The Company’s maximum recourse exposure as a % of total JV debt	9		%	6	%

(1) Non-recourse land seller debt and other debt as of November 30, 2016 included a $320 million non-recourse note related to a transaction between one of the Company's unconsolidated entities and another unconsolidated joint venture, which was settled in December 2016.

(2) As of August 31, 2017 and November 30, 2016, the Company's maximum recourse exposure was primarily related to the Company providing repayment guarantees on three unconsolidated entities' debt and one unconsolidated entity's debt, respectively.

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					Nine Months Ended
	August 31,					August 31,
(In thousands)	2017			2016		2017		2016
Revenues	$	144,966		43,889		323,689		352,251
Costs and expenses	151,643			110,649		421,554		409,219
Other income	12,578			—		18,695		—
Net earnings (loss) of unconsolidated entities	$	5,901		(66,760	)	(79,170	)	(56,968	)
Lennar Homebuilding equity in loss from unconsolidated entities	$	(9,651	)	(18,034	)	(42,691	)	(24,667	)

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

								August 31, 2017		August 31, 2017		November 30, 2016
(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	$	46,623	58,116
Rialto Real Estate Fund II, LP	2012	1,305,000		1,305,000		100,000		100,000		81,169		96,192
Rialto Mezzanine Partners Fund, LP	2013	300,000		300,000		33,799		33,799		20,632		23,643
Rialto Capital CMBS Funds	2014	119,174		119,174		52,474		52,474		50,545		50,519
Rialto Real Estate Fund III	2015	1,887,000		469,150		140,000		33,533		33,268		9,093
Rialto Credit Partnership, LP	2016	220,000		150,786		19,999		13,707		13,800		5,794
Other investments										3,514		2,384
										$	249,551	245,741

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)	August 31, 2017		November 30, 2016
Assets:
Cash and cash equivalents	$	80,337	230,229
Loans receivable	595,149		406,812
Real estate owned	307,669		439,191
Investment securities	1,700,572		1,379,155
Investments in partnerships	409,670		398,535
Other assets	49,452		29,036
	$	3,142,849	2,882,958
Liabilities and equity:
Accounts payable and other liabilities	$	40,239	36,131
Notes payable (1)	587,813		532,264
Equity	2,514,797		2,314,563
	$	3,142,849	2,882,958

(1) Notes payable are net of debt issuance costs of $3.4 million and $2.9 million, as of August 31, 2017 and November 30, 2016, respectively.

Statements of Operations

	Three Months Ended			Nine Months Ended
	August 31,			August 31,
(In thousands)	2017		2016	2017	2016
Revenues	$	64,267	51,485	182,453	147,021
Costs and expenses	26,752		24,472	83,753	66,075
Other income, net (1)	245		28,947	9,893	40,495
Net earnings of unconsolidated entities	$	37,760	55,960	108,593	121,441
Rialto equity in earnings from unconsolidated entities	$	4,858	5,976	11,310	14,337

(1) Other income, net, included realized and unrealized gains (losses) on investments.

Summarized 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)	August 31, 2017		November 30, 2016
Assets:
Cash and cash equivalents	$	51,725	43,658
Operating properties and equipment	2,832,790		2,210,627
Other assets	35,848		33,703
	$	2,920,363	2,287,988
Liabilities and equity:
Accounts payable and other liabilities	$	220,881	196,617
Notes payable (1)	821,500		577,085
Equity	1,877,982		1,514,286
	$	2,920,363	2,287,988

(1) Notes payable are net of debt issuance costs of $17.4 million and $12.3 million, as of August 31, 2017 and November 30, 2016, respectively.

Statements of Operations

	Three Months Ended			Nine Months Ended
	August 31,			August 31,
(In thousands)	2017		2016	2017	2016
Revenues	$	18,822	13,796	44,414	31,759
Costs and expenses	28,904		24,611	75,727	50,341
Other income, net	47,210		20,335	125,939	90,729
Net earnings of unconsolidated entities	$	37,128	9,520	94,626	72,147
Lennar Multifamily equity in earnings from unconsolidated entities (1)	$	11,645	5,060	44,219	38,754

(1) During three and nine months ended August 31, 2017, the Lennar Multifamily segment sold two and five operating properties, respectively, through its unconsolidated entities resulting in the segment's $15.4 million and $52.9 million share of gains, respectively. During the three and nine months ended August 31, 2016, the Lennar Multifamily segment sold one and three operating properties, respectively, through its unconsolidated entities resulting in the segment's $8.0 million and $43.8 million share of gains, respectively.

The Company’s recorded investments in unconsolidated entities were as follows:

(In thousands)	August 31, 2017		November 30, 2016
Lennar Homebuilding	$	1,016,588	811,723
Rialto	$	249,551	245,741
Lennar Multifamily	$	397,119	318,559