Lennar Homebuilding Investments in Unconsolidated Entities (Tables)

9 Months Ended

Aug. 31, 2018

Equity Method Investments and Joint Ventures [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)	August 31, 2018			November 30, 2017
Non-recourse bank debt and other debt (partner’s share of several recourse)	$	51,364		64,197
Non-recourse land seller debt and other debt	1,497			1,997
Non-recourse debt with completion guarantees	234,310			255,903
Non-recourse debt without completion guarantees (1)	869,486			351,800
Non-recourse debt to the Company	1,156,657			673,897
The Company’s maximum recourse exposure (2)	69,005			69,181
Debt issuance costs	(13,192		)	(5,747	)
Total debt	$	1,212,470		737,331
The Company’s maximum recourse exposure as a % of total JV debt	6		%	9	%


(1)	The increase in non-recourse debt without completion guarantees was primarily related to $500 million of senior notes issued by FivePoint.

(2)

As of both August 31, 2018 and November 30, 2017, the Company's maximum recourse exposure was primarily related to the Company providing repayment guarantees on three unconsolidated entities' debt.Balance Sheets



(In thousands)	August 31, 2018		November 30, 2017
Assets:
Cash and cash equivalents	$	912,250	953,261
Inventories	4,251,673		3,751,525
Other assets	1,200,761		1,061,507
	$	6,364,684	5,766,293
Liabilities and equity:
Accounts payable and other liabilities	$	839,694	832,151
Debt (1)	1,212,470		737,331
Equity	4,312,520		4,196,811
	$	6,364,684	5,766,293

(1)

Debt presented above is net of debt issuance costs of $13.2 million and $5.7 million, as of August 31, 2018 and November 30, 2017, respectively. The increase in debt was primarily related to $500 million of senior notes issued by FivePoint.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)	2018			2017		2018		2017
Revenues	$	153,968		144,966		324,584		323,689
Costs and expenses	199,337			151,643		458,660		421,554
Other income (1)	66,690			12,578		180,231		18,695
Net earnings (loss) of unconsolidated entities	$	21,321		5,901		46,155		(79,170	)
Lennar Homebuilding equity in loss from unconsolidated entities	$	(15,391	)	(9,651	)	(41,904	)	(42,691	)

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



								August 31, 2018		August 31, 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	$	39,608	41,860
Rialto Real Estate Fund II, LP	2012	1,305,000		1,305,000		100,000		100,000		84,606		86,904
Rialto Mezzanine Partners Fund, LP	2013	300,000		300,000		33,799		33,799		13,314		19,189
Rialto Capital CMBS Funds	2014	119,174		119,174		52,474		52,474		52,916		54,018
Rialto Real Estate Fund III	2015	1,887,000		1,074,561		140,000		75,917		71,293		41,223
Rialto Credit Partnership, LP	2016	220,000		217,556		19,999		19,777		12,257		13,288
Other investments										20,471		8,936
										$	294,465	265,418

Statements of Operations



	Three Months Ended				Nine Months Ended
	August 31,				August 31,
(In thousands)	2018			2017	2018		2017
Revenues	$	97,973		64,267	283,510		182,453
Costs and expenses	23,299			26,752	66,735		83,753
Other income (expense), net (1)	(22,644		)	245	(1,166	)	9,893
Net earnings of unconsolidated entities	$	52,030		37,760	215,609		108,593
Rialto equity in earnings from unconsolidated entities	$	5,266		4,858	18,496		11,310

(1)

Other income (expense), net, includes realized and unrealized gains (losses) on investments.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, 2018		November 30, 2017
Assets:
Cash and cash equivalents	$	36,406	95,552
Loans receivable	697,262		538,317
Real estate owned	266,406		348,601
Investment securities	2,219,660		1,849,795
Investments in partnerships	406,600		393,874
Other assets	43,046		42,949
	$	3,669,380	3,269,088
Liabilities and equity:
Accounts payable and other liabilities	$	32,081	48,374
Notes payable (1)	591,329		576,810
Equity	3,045,970		2,643,904
	$	3,669,380	3,269,088

(1)

Notes payable are net of debt issuance costs of $2.9 million and $3.1 million, as of August 31, 2018 and November 30, 2017, respectively.

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, 2018		November 30, 2017
Assets:
Cash and cash equivalents	$	30,472	37,073
Operating properties and equipment	3,623,800		2,952,070
Other assets	38,309		36,772
	$	3,692,581	3,025,915
Liabilities and equity:
Accounts payable and other liabilities	$	201,301	212,123
Notes payable (1)	1,287,488		879,047
Equity	2,203,792		1,934,745
	$	3,692,581	3,025,915


(1)	Notes payable are net of debt issuance costs of $17.4 million and $17.6 million, as of both August 31, 2018 and November 30, 2017, respectively.

Statements of Operations



	Three Months Ended				Nine Months Ended
	August 31,				August 31,
(In thousands)	2018			2017	2018	2017
Revenues	$	31,907		18,822	82,980	44,414
Costs and expenses	47,235			28,904	122,512	75,727
Other income, net	13,588			47,210	52,457	125,939
Net earnings (loss) of unconsolidated entities	$	(1,740	)	37,128	12,925	94,626
Lennar Multifamily equity in earnings (loss) from unconsolidated entities (1)	$	(1,730	)	11,645	15,293	44,219

(1)

During the three and nine months ended August 31, 2018, the Lennar Multifamily segment sold one and four operating properties, respectively, through its unconsolidated entities resulting in the segment's $1.7 million and $23.3 million share of gains, respectively. During the 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.The Company’s recorded investments in unconsolidated entities were as follows:



(In thousands)	August 31, 2018		November 30, 2017
Lennar Homebuilding	$	997,488	900,769
Rialto	$	294,465	265,418
Lennar Multifamily	$	482,241	407,544