Lennar Multifamily Segment

3 Months Ended

Feb. 28, 2018

Segment Reporting [Abstract]

Operating and Reporting Segments

Operating and Reporting Segments

The Company’s operating segments are aggregated into reportable segments, based primarily upon similar economic characteristics, geography and product type. The Company’s reportable segments consist of:

(1) Homebuilding East

(2) Homebuilding Central

(3) Homebuilding West

(4) Lennar Financial Services

(5) Rialto

(6) Lennar Multifamily

Information about homebuilding activities in states which are not economically similar to other states in the same geographic area is grouped under "Homebuilding Other," which is not considered a reportable segment.

Evaluation of segment performance is based primarily on operating earnings (loss) before income taxes. Operations of the Company’s homebuilding segments primarily include the construction and sale of single-family attached and detached homes as well as the purchase, development and sale of residential land directly and through the Company’s unconsolidated entities. Operating earnings (loss) for the homebuilding segments consist of revenues generated from the sales of homes and land, equity in earnings (loss) from unconsolidated entities and other income (expense), net, less the cost of homes sold and land sold, selling, general and administrative expenses incurred by the segment and loss due to litigation.

The Company’s reportable homebuilding segments and all other homebuilding operations not required to be reported separately have homebuilding divisions located in:

East: Florida, Georgia, Maryland, New Jersey, North Carolina, South Carolina and Virginia

Central: Arizona, Colorado and Texas

West: California and Nevada

Other: Illinois, Indiana, Minnesota, Oregon, Tennessee, Utah and Washington

Operations of the Lennar Financial Services segment include primarily mortgage financing, title insurance, closing services and property and casualty insurance for both buyers of the Company’s homes and others. It also includes a real estate brokerage business acquired as part of the WCI transaction. The Lennar Financial Services segment sells substantially all of the loans it originates within a short period in the secondary mortgage market, the majority of which are sold on a servicing released, non-recourse basis. After the loans are sold, the Company retains potential liability for possible claims by purchasers that it breached certain limited industry-standard representations and warranties in the loan sale agreements. Lennar Financial Services’ operating earnings consist of revenues generated primarily from mortgage financing, title insurance, property and casualty insurance, closing services and real estate brokerage, less the cost of such services and certain selling, general and administrative expenses incurred by the segment. The Lennar Financial Services segment operates generally in the same states as the Company’s homebuilding operations as well as in other states.

Operations of the Rialto segment include raising, investing and managing third-party capital, originating and securitizing commercial mortgage loans as well as investing its own capital in real estate related mortgage loans, properties and related securities. Rialto utilizes its vertically-integrated investment and operating platform to underwrite, diligence, acquire, manage, workout and add value to diverse portfolios of real estate loans, properties and real estate related securities as well as providing

strategic real estate capital. Rialto’s operating earnings(loss) consist of revenues generated primarily from gains from securitization transactions and interest income from the Rialto Mortgage Finance ("RMF") business, interest income associated with portfolios of real estate loans acquired and other portfolios of real estate loans and assets acquired, asset management, due diligence and underwriting fees derived from the real estate investment funds managed by the Rialto segment, fees for sub-advisory services, other income (expense), net and equity in earnings (loss) from unconsolidated entities, less the costs incurred by the segment for managing portfolios, costs related to RMF and other general and administrative expenses.

Operations of the Lennar Multifamily segment include revenues generated from the sales of land, revenue from construction activities and management fees generated from joint ventures and equity in earnings (loss) from unconsolidated entities, less the cost of sales of land sold, expenses related to construction activities and general and administrative expenses.

Each reportable segment follows the same accounting policies described in Note 1 – "Summary of Significant Accounting Policies" to the consolidated financial statements in the Company’s Form 10-K for the year ended November 30, 2017. Operational results of each segment are not necessarily indicative of the results that would have occurred had the segment been an independent, stand-alone entity during the periods presented.

Financial information relating to the Company’s operations was as follows:

(In thousands)	February 28, 2018		November 30, 2017
Assets:
Homebuilding East	$	7,537,607	4,754,581
Homebuilding Central	3,609,537		2,037,905
Homebuilding West	7,668,640		5,165,218
Homebuilding Other	1,547,102		960,541
Lennar Financial Services	1,748,432		1,689,508
Rialto	909,249		1,153,840
Lennar Multifamily	892,830		710,725
Corporate and unallocated	4,030,626		2,272,716
Total assets	$	27,944,023	18,745,034
Lennar Homebuilding goodwill (1)	$	3,433,477	136,566
Lennar Financial Services goodwill (1)	$	210,628	59,838
Rialto goodwill	$	5,396	5,396

(1) In connection with the CalAtlantic acquisition, the Company recorded a provisional amount of homebuilding goodwill of $3.3 billion. The allocation of goodwill by homebuilding reporting segment has not yet been finalized. A provisional amount of goodwill related to the CalAtlantic acquisition of $150 million was allocated to Lennar Financial Services. In connection with the WCI acquisition in 2017, the Company allocated $136.6 million of goodwill to the Lennar Homebuilding East reportable segment and $20.0 million to the Lennar Financial Services segment.

	Three Months Ended
	February 28,
(In thousands)	2018			2017
Revenues:
Homebuilding East	$	1,070,654		767,726
Homebuilding Central	611,780			516,181
Homebuilding West	779,879			552,798
Homebuilding Other	199,780			181,989
Lennar Financial Services	171,140			148,043
Rialto	54,302			82,006
Lennar Multifamily	93,256			88,685
Total revenues (1)	$	2,980,791		2,337,428
Operating earnings (loss) (2):
Homebuilding East (3)	$	105,921		(55,709	)
Homebuilding Central (4)	42,546			52,858
Homebuilding West (5)	251,276			53,360
Homebuilding Other (6)	13,984			20,829
Lennar Financial Services	19,695			20,664
Rialto	9,212			(843	)
Lennar Multifamily	(1,201		)	19,183
Total operating earnings	441,433			110,342
Acquisition and integration costs related to CalAtlantic	104,195			—
Corporate general and administrative expenses	67,810			60,699
Earnings before income taxes	$	269,428		49,643

(1) Total revenues were net of sales incentives of $149.9 million ($22,300 per home delivered) for the three months ended February 28, 2018, compared to $123.5 million ($22,700 per home delivered) for the three months ended February 28, 2017.

(2) All homebuilding segments and Homebuilding other were impacted by purchase accounting adjustments for three months ended February 28, 2018.

(3) Homebuilding East operating earnings for the three months ended February 28, 2017 included a $140 million loss due to litigation (see Note 17).

(4) Homebuilding Central operating earnings for the three months ended February 28, 2018 included a $6.9 million valuation adjustment.

(5) Homebuilding West operating earnings includes $164.9 million related to a gain on the sale of an 80% interest in one of Lennar Homebuilding's strategic joint ventures, Treasure Island Holdings.

(6)

Homebuilding Other operating earnings for the three months ended February 28, 2018 were impacted by the timing of opening and closing of communities.

Lennar Financial Services Segment

The assets and liabilities related to the Lennar Financial Services segment were as follows:

(In thousands)	February 28, 2018		November 30, 2017
Assets:
Cash and cash equivalents	$	165,849	117,410
Restricted cash	11,251		12,006
Receivables, net (1)	366,100		313,252
Loans held-for-sale (2)	689,172		937,516
Loans held-for-investment, net	69,832		44,193
Investments held-to-maturity	60,831		52,327
Investments available-for-sale (3)	57,768		57,439
Goodwill (4)	210,628		59,838
Other (5)	117,001		95,527
	$	1,748,432	1,689,508
Liabilities:
Notes and other debts payable	$	772,240	937,431
Other (6)	232,762		240,383
	$	1,005,002	1,177,814

(1) Receivables, net primarily related to loans sold to investors for which the Company had not yet been paid as of February 28, 2018 and November 30, 2017, respectively.

(2) Loans held-for-sale related to unsold loans carried at fair value.

(3) Investments available-for-sale are carried at fair value with changes in fair value recorded as a component of accumulated other comprehensive income (loss) on the condensed consolidated balance sheet.

(4) As of February 28, 2018, goodwill included $20.0 million of goodwill related to the WCI acquisition. The assignment of goodwill to the Company's reporting segments related to the CalAtlantic acquisition has not been completed yet, however, a provisional amount of goodwill of approximately $150 million was allocated to Lennar Financial Services (see Note 2).

(5) As of February 28, 2018 and November 30, 2017, other assets included mortgage loan commitments carried at fair value of $11.7 million and $9.9 million, respectively, and mortgage servicing rights carried at fair value of $36.8 million and $31.2 million, respectively. In addition, other assets also included forward contracts carried at fair value of $4.8 million and $1.7 million as of February 28, 2018 and November 30, 2017, respectively.

(6) As of February 28, 2018 and November 30, 2017, other liabilities included $57.2 million and $57.7 million, respectively, of certain of the Company’s self-insurance reserves related to construction defects, general liability and workers’ compensation.

At February 28, 2018, the Lennar Financial Services segment warehouse facilities were as follows:

(In thousands)	Maximum Aggregate Commitment
364-day warehouse repurchase facility that matures March 2018 (1)	$	150,000
364-day warehouse repurchase facility that matures June 2018	400,000
364-day warehouse repurchase facility that matures June 2018 (2)	300,000
364-day warehouse repurchase facility that matures September 2018	300,000
364-day warehouse repurchase facility that matures December 2018 (3)	400,000
Total	$	1,550,000

(1) Maximum aggregate commitment includes an uncommitted amount of $75 million. Subsequent to February 28, 2018, the warehouse repurchase facility maturity was extended to March 2019.

(2) Maximum aggregate commitment includes an uncommitted amount of $300 million.

(3) Maximum aggregate commitment includes an uncommitted amount of $250 million.

The Lennar Financial Services segment uses these facilities to finance its lending activities until the mortgage loans are sold to investors and the proceeds are collected. The facilities are non-recourse to the Company and are expected to be renewed or replaced with other facilities when they mature. Borrowings under the facilities and their prior year predecessors were $772.1 million and $937.2 million at February 28, 2018 and November 30, 2017, respectively, and were collateralized by mortgage loans and receivables on loans sold to investors but not yet paid for with outstanding principal balances of $800.2 million and $974.1 million at February 28, 2018 and November 30, 2017, respectively. If the facilities are not renewed or replaced, the borrowings under the lines of credit will be paid off by selling the mortgage loans held-for-sale to investors and by

collecting on receivables on loans sold but not yet paid for. Without the facilities, the Lennar Financial Services segment would have to use cash from operations and other funding sources to finance its lending activities.

Substantially all of the loans the Lennar Financial Services segment originates are sold within a short period in the secondary mortgage market on a servicing released, non-recourse basis. After the loans are sold, the Company retains potential liability for possible claims by purchasers that it breached certain limited industry-standard representations and warranties in the loan sale agreements. Over the last several years there has been an industry-wide effort by purchasers to defray their losses by purporting to have found inaccuracies related to sellers’ representations and warranties in particular loan sale agreements. Mortgage investors could seek to have the Company buy back mortgage loans or compensate them for losses incurred on mortgage loans that the Company has sold based on claims that the Company breached its limited representations or warranties. The Company’s mortgage operations have established accruals for possible losses associated with mortgage loans previously originated and sold to investors. The Company establishes accruals for such possible losses based upon, among other things, an analysis of repurchase requests received, an estimate of potential repurchase claims not yet received and actual past repurchases and losses through the disposition of affected loans as well as previous settlements. While the Company believes that it has adequately reserved for known losses and projected repurchase requests, given the volatility in the mortgage industry and the uncertainty regarding the ultimate resolution of these claims, if either actual repurchases or the losses incurred resolving those repurchases exceed the Company’s expectations, additional recourse expense may be incurred. Loan origination liabilities are included in Lennar Financial Services’ liabilities in the Company's condensed consolidated balance sheets.

The activity in the Company’s loan origination liabilities was as follows:

	Three Months Ended
	February 28,
(In thousands)	2018			2017
Loan origination liabilities, beginning of period	$	22,543		24,905
Provision for losses	647			878
Origination liabilities assumed related to CalAtlantic acquisition	3,959			—
Payments/settlements	(39		)	(780	)
Loan origination liabilities, end of period	$	27,110		25,003

Rialto Segment

The assets and liabilities related to the Rialto segment were as follows:

(In thousands)	February 28, 2018		November 30, 2017
Assets:
Cash and cash equivalents	$	113,582	241,861
Restricted cash (1)	20,536		22,466
Loans held-for-sale (2)	125,013		236,018
Loans receivable, net	1,932		1,933
Real estate owned, net	63,284		86,047
Investments in unconsolidated entities	275,850		265,418
Investments held-to-maturity	210,882		179,659
Other	98,170		120,438
	$	909,249	1,153,840
Liabilities:
Notes and other debts payable (3)	$	438,879	625,081
Other	49,225		94,975
	$	488,104	720,056

(1) Restricted cash primarily consisted of cash set aside for future investments on behalf of a real estate investment trust that Rialto is a sub-advisor to. It also included upfront deposits and application fees Rialto Mortgage Finance ("RMF") receives before originating loans and is recognized as income once the loan has been originated, as well as cash held in escrow by the Company’s loan servicer provider on behalf of customers and lenders and is disbursed in accordance with agreements between the transacting parties.

(2) Loans held-for-sale related to unsold loans originated by RMF carried at fair value and loans in the FDIC Portfolios carried at lower of cost or market.

(3) As of February 28, 2018 and November 30, 2017, notes and other debts payable primarily included $249.1 million and $349.4 million, respectively, related to Rialto's 7.00% senior notes due December 2018, and $45.9 million and $162.1 million, respectively, related to

Rialto's warehouse repurchase facilities. Subsequent to February 28, 2018, the remaining principal balance of Rialto's 7.00% senior notes due December 2018 was paid off.

Rialto Mortgage Finance - loans held-for-sale

During the three months ended February 28, 2018, RMF originated loans with a total principal balance of $238.0 million, all of which was recorded as loans held-for-sale, and sold $347.7 million of loans into three separate securitizations. During the three months ended February 28, 2017, RMF originated loans with a total principal balance of $403.7 million of which $394.3 million were recorded as loans held-for-sale and $9.3 million as accrual loans within loans receivable, net, and sold $477.7 million of loans into three separate securitizations. As of February 28, 2018 and November 30, 2017, there were no unsettled transactions.

FDIC Portfolios

In 2010, the Rialto segment acquired indirectly 40% managing member equity interests in two limited liability companies ("LLCs") in partnership with the FDIC ("FDIC Portfolios"). The LLCs met the accounting definition of VIEs and since the Company was determined to be the primary beneficiary, the Company consolidated the LLCs. The Company was determined to be the primary beneficiary because it has the power to direct the activities of the LLCs that most significantly impact the LLCs' performance through Rialto's management and servicer contracts.

In February 2017, the FDIC exercised its “clean-up call rights” under the Amended and Restated Limited Liability Company Agreement. As a result, Rialto had until July 10, 2017 to liquidate and sell the assets in the FDIC Portfolios. On July 10, 2017, Rialto and the FDIC entered into an agreement which extended the original agreement date to January 10, 2018. At February 28, 2018, the consolidated LLCs had total combined assets of $20.0 million, which primarily included $10.1 million in cash, $7.4 million of real estate owned, net, and $1.6 million of loans held-for-sale. Since January 11, 2018, (1) the FDIC has had the right, at its discretion, to sell any remaining assets, or (2) Rialto has had the option to purchase the FDIC's interest in the portfolios. At February 28, 2018, the consolidated LLCs had total combined assets of $20.0 million, which primarily included $10.1 million in cash, $7.4 million of real estate owned, net, and $1.6 million of loans held-for-sale. At February 28, 2018, all remaining assets with carrying values were under contract to be sold. At November 30, 2017, the consolidated LLCs had total combined assets of $48.8 million, which primarily included $23.8 million in cash, $20.0 million of real estate owned, net and $1.6 million of loans held-for-sale.

Warehouse Facilities

At February 28, 2018, Rialto's warehouse facilities were as follows:

(In thousands)	Maximum Aggregate Commitment
364-day warehouse repurchase facility that matures October 2018 (one year extension)	$	400,000
364-day warehouse repurchase facility that matures November 2018	200,000
364-day warehouse repurchase facility that matures December 2018	200,000
364-day warehouse repurchase facility that matures December 2019	200,000
Total - Loan origination and securitization business (RMF)	$	1,000,000
Warehouse repurchase facility that matures August 2018 (two - one year extensions) (1)	100,000
Total	$	1,100,000

(1) Rialto uses this warehouse repurchase facility to finance the origination of floating rate accrual loans, which are reported as accrual loans within loans receivable, net. There were no borrowings under this facility as of both February 28, 2018 and November 30, 2017.

Borrowings under the facilities that finance RMF's loan originations and securitization activities were $45.9 million and $162.1 million as of February 28, 2018 and November 30, 2017, respectively, and were secured by a 75% interest in the originated commercial loans financed. The facilities require immediate repayment of the 75% interest in the secured commercial loans when the loans are sold in a securitization and the proceeds are collected. These warehouse repurchase facilities are non-recourse to the Company and are expected to be renewed or replaced with other facilities when they mature. If the facilities are not renewed or replaced, the borrowings under the lines of credit will be paid off by selling the loans held-for-sale to investors. Without the facilities, the Rialto segment would have to use cash from operations and other funding sources to finance its lending activities.

Investments in Unconsolidated Entities

Generally, all of Rialto's investments in funds have the attributes of an investment company in accordance with ASC 946, Financial Services – Investment Companies, as amended by ASU 2013-08, Financial Services - Investment Companies (Topic 946): Amendments to the Scope, Measurement, and Disclosure Requirements, the attributes of which are different from the

attributes that would cause a company to be an investment company for purposes of the Investment Company Act of 1940. As a result, the assets and liabilities of the funds in which Rialto has investments in are recorded at fair value with increases/decreases in fair value recorded in their respective statements of operations and the Company’s share is recorded in Rialto equity in earnings from unconsolidated entities in the Company's statement of operations.

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

								February 28, 2018		February 28, 2018		November 30, 2017
(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	$	41,871	41,860
Rialto Real Estate Fund II, LP	2012	1,305,000		1,305,000		100,000		100,000		87,884		86,904
Rialto Mezzanine Partners Fund, LP	2013	300,000		300,000		33,799		33,799		14,917		19,189
Rialto Capital CMBS Funds	2014	119,174		119,177		52,474		52,474		54,409		54,018
Rialto Real Estate Fund III	2015	1,887,000		699,590		140,000		49,962		49,882		41,223
Rialto Credit Partnership, LP	2016	220,000		208,181		19,999		18,925		17,190		13,288
Other investments										9,697		8,936
										$	275,850	265,418

During the three months ended February 28, 2018 and 2017, Rialto received $3.1 million and $0.9 million, respectively, of advance distributions with regard to Rialto's carried interests in its real estate funds in order to cover income tax obligations resulting from allocations of taxable income to Rialto's carried interests in these funds. In addition, during the three months ended February 28, 2018 and 2017, Rialto received $2.4 million and $10.0 million, respectively, of distributions with regard to its carried interest in Rialto Real Estate Fund, LP. These incentive income distributions are not subject to clawbacks and therefore are included in Rialto's revenues.

During 2015, Rialto adopted a Carried Interest Incentive Plan (the "Plan"), under which participating employees in the aggregate may receive up to 40% of the equity units of a limited liability company (a "Carried Interest Entity") that is entitled to carried interest distributions made by a fund or other investment vehicle (a "Fund") managed by a subsidiary of Rialto. As such, those employees receiving equity units in a Carried Interest Entity may benefit from distributions made by a Fund to the extent the Carried Interest Entity makes distributions to its equity holders. The units issued to employees are equity awards and are subject to vesting schedules and forfeiture or repurchase provisions in the case of a termination of employment.

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)	February 28, 2018		November 30, 2017
Assets:
Cash and cash equivalents	$	44,270	95,552
Loans receivable	591,157		538,317
Real estate owned	346,320		348,601
Investment securities	1,942,045		1,849,795
Investments in partnerships	416,311		393,874
Other assets	58,014		42,949
	$	3,398,117	3,269,088
Liabilities and equity:
Accounts payable and other liabilities	$	42,177	48,374
Notes payable (1)	535,790		576,810
Equity	2,820,150		2,643,904
	$	3,398,117	3,269,088

(1) Notes payable are net of debt issuance costs of $4.1 million and $3.1 million, as of February 28, 2018 and November 30, 2017, respectively.

Statements of Operations

	Three Months Ended
	February 28,
(In thousands)	2018		2017
Revenues	$	89,764	57,156
Costs and expenses	22,071		28,001
Other income, net (1)	49,187		327
Net earnings of unconsolidated entities	$	116,880	29,482
Rialto equity in earnings from unconsolidated entities	$	9,114	722

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

Investments held-to-maturity

At February 28, 2018 and November 30, 2017, the carrying value of Rialto's commercial mortgage-backed securities ("CMBS") was $210.9 million and $179.7 million, respectively. These securities were purchased at discounts ranging from 9% to 84% with coupon rates ranging from 1.3% to 5.0%, stated and assumed final distribution dates between November 2020 and December 2027, and stated maturity dates between November 2043 and March 2059.

The Rialto segment reviews changes in estimated cash flows periodically to determine if an other-than-temporary impairment has occurred on its CMBS. Based on the Rialto segment’s assessment, no impairment charges were recorded during either the three months ended February 28, 2018 or 2017. The Rialto segment classifies these securities as held-to-maturity based on its intent and ability to hold the securities until maturity.)

Lennar Multifamily Segment

The Company is actively involved, primarily through unconsolidated entities, in the development, construction and property management of multifamily rental properties. The Lennar Multifamily segment focuses on developing a geographically diversified portfolio of institutional quality multifamily rental properties in select U.S. markets.

The assets and liabilities related to the Lennar Multifamily segment were as follows:

(In thousands)	February 28, 2018		November 30, 2017
Assets:
Cash and cash equivalents	$	16,249	8,676
Receivables (1)	72,613		69,678
Land under development	332,291		208,618
Investment in unconsolidated entities	437,367		407,544
Other assets	34,310		16,209
	$	892,830	710,725
Liabilities:
Accounts payable and other liabilities	$	141,057	149,715

(1) Receivables primarily related to general contractor services, net of deferrals and management fee income receivables due from unconsolidated entities.

The unconsolidated entities in which the Lennar Multifamily segment has investments usually finance their activities with a combination of partner equity and debt financing. In connection with many of the loans to Lennar Multifamily unconsolidated entities, the Company (or entities related to them) has been required to give guarantees of completion and cost over-runs to the lenders and partners. Those completion guarantees may require that the guarantors complete the construction of the improvements for which the financing was obtained. Additionally, the Company guarantees the construction costs of the project as construction cost over-runs would be paid by the Company. Generally, these payments would be increases to the Company's investment in the entities and would increase its share of funds the entities distribute after the achievement of certain thresholds. As of both February 28, 2018 and November 30, 2017, the fair value of the completion guarantees was immaterial. Additionally, as of February 28, 2018 and November 30, 2017, the Lennar Multifamily segment had $4.6 million and $4.7 million, respectively, of letters of credit outstanding primarily for credit enhancements for the bank debt of certain of its unconsolidated entities and deposits on land purchase contracts. These letters of credit outstanding are included in the disclosure in Note 12 related to the Company's performance and financial letters of credit. As of February 28, 2018 and November 30, 2017, Lennar Multifamily segment's unconsolidated entities had non-recourse debt with completion guarantees of $977.1 million and $896.7 million, respectively.

In many instances, the Lennar Multifamily segment is appointed as the construction, development and property manager for certain of its Lennar Multifamily unconsolidated entities and receives fees for performing this function. During the three months ended February 28, 2018 and 2017, the Lennar Multifamily segment recorded fee income, net of deferrals, from its unconsolidated entities of $11.5 million and $13.0 million, respectively.

The Lennar Multifamily segment also provides general contractor services for construction of some of the rental properties owned by unconsolidated entities in which the Company has an investment. During the three months ended February 28, 2018 and 2017, the Lennar Multifamily segment provided general contractor services, net of deferrals totaling $81.7 million and $75.7 million, respectively, which were partially offset by costs related to those services of $78.6 million and $73.7 million, respectively.

The Lennar Multifamily Venture (the "Venture") is a long-term multifamily development investment vehicle involved in the development, construction and property management of class-A multifamily assets with $2.2 billion in equity commitments, including a $504 million co-investment commitment by Lennar comprised of cash, undeveloped land and preacquisition costs. During the three months ended February 28, 2018, $131.9 million in equity commitments were called, of which the Company contributed its portion of $31.7 million. During the three months ended February 28, 2018, the Company received $0.9 million distributions as a return of capital from the Venture. As of February 28, 2018, $1.6 billion of the $2.2 billion in equity commitments had been called, of which the Company has contributed $382.4 million, representing its pro-rata portion of the called equity, resulting in a remaining equity commitment for the Company of $121.6 million. As of February 28, 2018 and November 30, 2017, the carrying value of the Company's investment in the Venture was $353.4 million and $323.8 million, respectively.

In March 2018, the Lennar Multifamily segment completed the first closing of a second Lennar Multifamily Venture, Lennar Multifamily Venture II LP ("Venture II") for the development, construction and property management of class-A multifamily assets. With the first close, Venture II will have approximately $500 million of equity commitments, including a $255 million co-investment commitment by Lennar comprised of cash, undeveloped land and preacquisition costs. It will be seeded initially with six undeveloped multifamily assets that were previously purchased by the Lennar Multifamily segment totaling approximately 2,200 apartments with projected project costs of approximately $900 million.

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)	February 28, 2018		November 30, 2017
Assets:
Cash and cash equivalents	$	33,666	37,073
Operating properties and equipment	3,167,040		2,952,070
Other assets	31,431		36,772
	$	3,232,137	3,025,915
Liabilities and equity:
Accounts payable and other liabilities	$	211,429	212,123
Notes payable (1)	959,563		879,047
Equity	2,061,145		1,934,745
	$	3,232,137	3,025,915

(1) Notes payable are net of debt issuance costs of $17.6 million as of both February 28, 2018 and November 30, 2017, respectively.

Statements of Operations

	Three Months Ended
	February 28,
(In thousands)	2018			2017
Revenues	$	23,952		11,617
Costs and expenses	31,795			22,346
Other income, net	7,307			50,539
Net earnings (loss) of unconsolidated entities	$	(536	)	39,810
Lennar Multifamily equity in earnings from unconsolidated entities (1)	$	2,742		23,147

(1)

During the three months ended February 28, 2018, the Lennar Multifamily segment sold one operating property through an unconsolidated entity resulting in the segment's $4.1 million share of gains. During the three months ended February 28, 2017, the Lennar Multifamily segment sold two operating properties through its unconsolidated entities resulting in the segment's $26.0 million share of gains.