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Multifamily Segment (Tables)

3 Months Ended

Feb. 28, 2019

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



(In thousands)	February 28, 2019		November 30, 2018
Assets:
Homebuilding East	$	6,821,359	7,183,758
Homebuilding Central	2,662,731		2,522,799
Homebuilding Texas	2,476,923		2,311,760
Homebuilding West	10,803,039		10,291,385
Homebuilding Other	968,106		1,013,367
Financial Services	2,243,611		2,778,910
Multifamily	1,003,872		874,219
Lennar Other	574,863		588,959
Corporate and unallocated	1,195,422		1,001,024
Total assets	$	28,749,926	28,566,181
Homebuilding goodwill	$	3,442,359	3,442,359
Financial Services goodwill (1)	$	215,516	237,688


(1)	Decrease in goodwill relates to the Financial Services' segment sale of substantially all of its retail mortgage and its real estate brokerage business.



	Three Months Ended
	February 28,
(In thousands)	2019			2018
Revenues:
Homebuilding East	$	1,226,814		912,963
Homebuilding Central	435,067			254,568
Homebuilding Texas	418,517			356,098
Homebuilding West	1,540,896			1,127,957
Homebuilding Other	2,427			10,507
Financial Services (1)	143,311			196,087
Multifamily	97,394			93,256
Lennar Other	3,656			29,355
Total revenues (2)	$	3,868,082		$	2,980,791
Operating earnings (loss) (3):
Homebuilding East	$	135,383		101,329
Homebuilding Central	30,926			9,036
Homebuilding Texas	32,278			14,013
Homebuilding West	190,661			139,429
Homebuilding Other (4)	(19,653		)	150,120
Total Homebuilding operating earnings	369,595			413,927
Financial Services	18,972			25,862
Multifamily	6,797			(1,201		)
Lennar Other	3,103			2,845
Corporate and unallocated (5)	(79,343		)	(172,005		)
Earnings before income taxes	$	319,124		269,428


(1)	Financial Services revenues are significantly lower period over period primarily due to the loss of revenues as a result of the sales of substantially all of the segment's retail mortgage business and the segment's real estate brokerage business, as well as a decrease in revenue related to RMF due to lower securitization volume and margin.


(2)	Total revenues were net of sales incentives of $222.3 million ($25,300 per home delivered) for the three months ended February 28, 2019, compared to $149.9 million ($22,300 per home delivered) for the three months ended February 28, 2018.


(3)	All Homebuilding segments were impacted by purchase accounting adjustments that totaled $55.0 million for the three months ended February 28, 2018.


(4)	Homebuilding Other operating earnings for the three months ended February 28, 2018 included $164.9 million related to a gain on the sale of an 80% interest in one of Homebuilding's strategic joint ventures, Treasure Island Holdings.

(5)

Corporate and unallocated includes corporate, general and administrative expenses, and for the three months ended February 28, 2018, $104.2 million of acquisition and integration costs related to the CalAtlantic acquisition.The assets and liabilities related to the Financial Services segment were as follows:



(In thousands)	February 28, 2019		November 30, 2018
Assets:
Cash and cash equivalents	$	155,914	188,485
Restricted cash	10,837		17,944
Receivables, net (1)	354,216		731,169
Loans held-for-sale (2)	1,056,984		1,213,889
Loans held-for-investment, net	81,004		70,216
Investments held-to-maturity	210,806		189,472
Investments available-for-sale (3)	5,188		4,161
Goodwill	215,516		237,688
Other assets (4)	153,146		125,886
	$	2,243,611	2,778,910
Liabilities:
Notes and other debts payable	$	1,070,547	1,558,702
Other liabilities (5)	229,458		309,500
	$	1,300,005	1,868,202


(1)	Receivables, net primarily related to loans sold to investors for which the Company had not yet been paid as of February 28, 2019 and November 30, 2018, respectively.


(2)	Loans held-for-sale related to unsold residential and commercial 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, 2019 and November 30, 2018, other assets included mortgage loan commitments carried at fair value of $16.1 million and $16.4 million, respectively, and mortgage servicing rights carried at fair value of $35.4 million and $37.2 million, respectively.

(5)

As of February 28, 2019 and November 30, 2018, other liabilities included $58.5 million and $60.3 million, respectively, of certain of the Company’s self-insurance reserves related to construction defects, general liability and workers’ compensation. In addition, as of February 28, 2019 and November 30, 2018, other liabilities also included forward contracts carried at fair value of $1.5 million and $10.4 million, respectively.The assets and liabilities related to the Multifamily segment were as follows:



(In thousands)	February 28, 2019		November 30, 2018
Assets:
Cash and cash equivalents	$	13,594	7,832
Receivables (1)	74,508		73,829
Land under development	332,642		277,894
Investments in unconsolidated entities	485,140		481,129
Other assets	97,988		33,535
	$	1,003,872	874,219
Liabilities:
Accounts payable and other liabilities	$	170,349	170,616
Notes payable (2)	39,616		—
	$	209,965	170,616


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

(2)

Notes payable are net of debt issuance costs.The assets and liabilities related to Lennar Other were as follows:



(In thousands)	February 28, 2019		November 30, 2018
Assets:
Cash and cash equivalents	$	15,843	24,334
Restricted cash	975		7,175
Real estate owned, net	23,874		25,632
Investments in unconsolidated entities	428,385		424,104
Investments held-to-maturity	60,204		59,974
Other assets	45,582		47,740
	$	574,863	588,959
Liabilities:
Notes and other debts payable	$	15,046	14,488
Other liabilities	18,182		53,020
	$	33,228	67,508

Equity Method Investments

Balance Sheets



(In thousands)	February 28, 2019		November 30, 2018
Assets:
Cash and cash equivalents	$	741,581	781,833
Inventories	4,315,061		4,291,470
Other assets	1,041,639		1,045,274
	$	6,098,281	6,118,577
Liabilities and equity:
Accounts payable and other liabilities	$	868,466	874,355
Debt (1)	1,219,163		1,202,556
Equity	4,010,652		4,041,666
	$	6,098,281	6,118,577
Homebuilding investments in unconsolidated entities (2)	$	924,056	870,201


(1)	Debt presented above is net of debt issuance costs of $11.3 million and $12.4 million, as of February 28, 2019 and November 30, 2018, respectively.

(2)

Homebuilding investments in unconsolidated entities as of February 28, 2019 and November 30, 2018, do not include $67.0 million and $62.0 million, respectively, of the negative investment balance for one unconsolidated entity as it was reclassed to other liabilities.Summarized condensed financial information on a combined 100% basis related to Homebuilding’s unconsolidated entities that are accounted for by the equity method was as follows:Statements of Operations



	Three Months Ended
	February 28,
(In thousands)	2019		2018
Revenues	90,644		68,189
Costs and expenses	123,751		107,424
Other income	197		—
Net loss of unconsolidated entities	(32,910	)	(39,235	)
Homebuilding equity in loss from unconsolidated entities	(13,756	)	(14,128	)

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



(Dollars in thousands)	February 28, 2019			November 30, 2018
Non-recourse bank debt and other debt (partner’s share of several recourse)	$	41,816		48,313
Non-recourse debt with completion guarantees	233,115			239,568
Non-recourse debt without completion guarantees	896,219			861,371
Non-recourse debt to the Company	1,171,150			1,149,252
The Company’s maximum recourse exposure (1)	59,266			65,707
Debt issuance costs	(11,253		)	(12,403	)
Total debt	$	1,219,163		1,202,556
The Company’s maximum recourse exposure as a % of total JV debt	5		%	5	%

(1)

As of February 28, 2019 and November 30, 2018, the Company's maximum recourse exposure was primarily related to the Company providing repayment guarantees on three and four unconsolidated entities' debt, respectively.Summarized condensed financial information on a combined 100% basis related to Multifamily's investments in unconsolidated entities that are accounted for by the equity method was as follows:

Balance Sheets



(In thousands)	February 28, 2019		November 30, 2018
Assets:
Cash and cash equivalents	$	37,533	61,571
Operating properties and equipment	3,798,753		3,708,613
Other assets	43,746		40,899
	$	3,880,032	3,811,083
Liabilities and equity:
Accounts payable and other liabilities	$	186,555	199,119
Notes payable (1)	1,449,294		1,381,656
Equity	2,244,183		2,230,308
	$	3,880,032	3,811,083
Multifamily investments in unconsolidated entities	$	485,140	481,129


(1)	Notes payable are net of debt issuance costs of $18.2 million and $15.7 million, as of February 28, 2019 and November 30, 2018, respectively.

Statements of Operations



	Three Months Ended
	February 28,
(In thousands)	2019		2018
Revenues	$	35,371	23,952
Costs and expenses	56,128		31,795
Other income, net	21,400		7,307
Net earnings (loss) of unconsolidated entities	$	643	(536	)
Multifamily equity in earnings (loss) from unconsolidated entities and other gain (1)	$	10,581	2,742

(1)

During the three months ended February 28, 2019, the Multifamily segment sold, through its unconsolidated entities, one operating property and an investment in an operating property resulting in the segment's $15.5 million share of gains. The gain of $11.9 million recognized on the sale of the investment in an operating property and recognition of the Company's share of deferred development fees that were capitalized at the joint venture level are included in Multifamily equity in earnings (loss) from unconsolidated entities and other gain, and are not included in net earnings (loss) of unconsolidated entities. During the three months ended February 28, 2018, the Multifamily segment sold one operating property through an unconsolidated entity resulting in the segment's $4.1 million share of gains.