We have investments in various unconsolidated entities. These entities, which are structured as joint ventures, (i) develop land for the joint venture participants and for sale to outside builders (“Land Development Joint Ventures”); (ii) develop for-sale homes (“Home Building Joint Ventures”); (iii) develop luxury for-rent residential apartments, commercial space, and a hotel (“Rental Property Joint Ventures”), which includes our investment in Toll Brothers Realty Trust (the “Trust”); and (iv) invest in distressed loans and real estate and provide financing and land banking to residential builders and developers for the acquisition and development of land and home sites (“Gibraltar Joint Ventures”).


	Land Development Joint Ventures		Home Building Joint Ventures		Rental Property Joint Ventures		Gibraltar Joint Ventures		Total
Number of unconsolidated entities	8		4		22		7		41
Investment in unconsolidated entities	$	103,301	$	42,961	$	197,377	$	20,402	$	364,041
Number of unconsolidated entities with funding commitments by the Company	2		—		3		1		6
Company’s remaining funding commitment to unconsolidated entities	$	27,530	$	—	$	11,514	$	6,232	$	45,276

During the six months ended April 30, 2020, our Land Development Joint Ventures sold approximately 333 lots and recognized revenues of $43.9 million. We acquired 86 of these lots for $7.8 million. During the six months ended April 30, 2019, our Land Development Joint Ventures sold approximately 498 lots and recognized revenues of $138.8 million. We acquired 195 of these lots for $96.5 million. Our share of the joint venture income from the lots we acquired was insignificant.

During the six months ended April 30, 2020 and 2019, our Home Building Joint Ventures delivered 32 homes with a sales value of $91.4 million and 72 homes with a sales value of $121.8 million, respectively. During the three months ended April 30, 2020 and 2019, our Home Building Joint Ventures delivered 9 homes with a sales value of $24.3 million and 55 homes with a sales value of $94.6 million, respectively. We recognized an other than temporary impairment charge in connection with one Home Building Joint Venture of $3.0 million during the six months and three months ending April 30, 2020, which is included in “Income from unconsolidated entities” in our Condensed Consolidated Statements of Operations and Comprehensive Income. No charges were recognized in the six-month or three-month periods ending April 30, 2019.

In our first quarter of fiscal 2020, one of our Home Building Joint Ventures refinanced its existing $236.5 million construction loan with a $76.6 million post-construction loan that extended the maturity date of the loan to November 2021 and revised certain guarantees provided for under the original construction loan. At April 30, 2020, this joint venture had $62.4 million of borrowings outstanding under the post-construction loan.

As of April 30, 2020, our Rental Property Joint Ventures, including those that we consolidate, owned 25 for-rent apartment projects and a hotel, which are located in multiple metropolitan areas throughout the country. At April 30, 2020, these joint ventures had approximately 2,000 units that were occupied or ready for occupancy, 1,850 units in the lease-up stage, and 4,200 units in the design phase or under development. In addition, we either own, have under contract, or under a letter of intent approximately 13,050 units, including 200 units under active development; we intend to develop these units in joint ventures with unrelated parties in the future.

In the first quarter of fiscal 2020, we sold all of our ownership interest in one of our Rental Property Joint Ventures to our partner for cash of $16.8 million, net of closing costs. The joint venture had owned, developed, and operated multifamily residential apartments in northern New Jersey. In connection with the sale, the joint venture’s existing $76.0 million loan was assumed by our partner. We recognized a gain of $10.7 million in the six months ended April 30, 2020, which is included in “Income from unconsolidated entities” in our Condensed Consolidated Statements of Operations and Comprehensive Income.

In the second quarter of fiscal 2020, a joint venture that we had previously consolidated due to our controlling financial interest entered into a separate unconsolidated joint venture to admit an unrelated capital member that acquired a 75% interest for an aggregate amount of $19.1 million. This unconsolidated joint venture purchased the assets of the consolidated joint venture and we recognized a gain on land sale of $0.9 million in the six and three months ended April 30, 2020. This unconsolidated joint venture is developing a luxury for-rent residential apartment project located in suburban Boston, Massachusetts. At April 30, 2020, we had an aggregate investment of $7.0 million in the unconsolidated joint venture. Concurrent with its formation, the unconsolidated joint venture entered into a construction loan agreement for an aggregate amount of $75.4 million to finance the development of this project. At April 30, 2020, the unconsolidated joint venture had no outstanding borrowings under this construction loan facility.

In the first quarter of fiscal 2020, we entered into two separate joint ventures with unrelated parties to develop (i) a luxury for-rent residential apartment project located in Dallas, Texas and (ii) a student housing community in State College, Pennsylvania. Prior to the formation of these joint ventures, we acquired the properties and incurred an aggregate of approximately $51.0 million of land and land development costs. Our partners acquired interests in these entities ranging from 50% to 70% for an aggregate amount of $26.2 million. At April 30, 2020, we had an aggregate investment of $24.9 million in these joint ventures. Concurrent with their formation, these joint ventures entered into construction loan agreements for an aggregate amount of $121.5 million to finance the development of these projects. At April 30, 2020, the joint ventures had $11.4 million outstanding borrowings under these construction loan facilities.

In the first quarter of fiscal 2019, we entered into two separate joint ventures with unrelated parties to develop luxury for-rent residential apartment projects located in Harrison, New York and Frisco, Texas. Prior to the formation of these joint ventures, we acquired the properties and incurred approximately $41.9 million of land and land development costs. Our partners each acquired a 75% interest in these entities for an aggregate amount of $39.8 million and we recognized a gain on land sale of $8.4 million in the six months ended April 30, 2019. At April 30, 2020, we had an aggregate investment of $15.7 million in these joint ventures. Concurrent with their formation, these joint ventures entered into construction loan agreements for an aggregate amount of $134.4 million. At April 30, 2020, the joint ventures had $62.6 million outstanding borrowings under these construction loan facilities.

In fiscal 2019 and 2018, we entered into five separate joint ventures with unrelated parties to develop luxury for-rent residential apartment projects and student housing communities located in Boston, Massachusetts, San Diego, California, Tempe, Arizona and Miami, Florida. We contributed an aggregate of $95.5 million for our initial ownership interests in these joint ventures, which ranged from 50% to 98%. Due to our controlling financial interest, our power to direct the activities that most significantly impact each joint venture’s performance, and/or our obligation to absorb expected losses or receive benefits from these joint ventures, we consolidated these joint ventures at April 30, 2020 and October 31, 2019. The carrying value of these joint ventures’ assets totaling $142.6 million and $145.8 million are reflected in “Receivables, prepaid expenses, and other assets” in our Condensed Consolidated Balance Sheet as of April 30, 2020 and October 31, 2019, respectively. Our partners’ interests aggregating $42.3 million and $41.0 million in the joint ventures are reflected as a component of “Noncontrolling interest” in our Condensed Consolidated Balance Sheet as of April 30, 2020 and October 31, 2019, respectively. These joint ventures intend to obtain additional equity investors and secure third-party financing at a later date. At such time, it is expected that these entities would no longer be consolidated.

In 1998, we formed the Trust to invest in commercial real estate opportunities. The Trust is effectively owned one-third by us; one-third by current and former members of our senior management; and one-third by an unrelated party. As of April 30, 2020, our investment in the Trust was zero as cumulative distributions received from the Trust have been in excess of the carrying amount of our net investment. We provide development, finance, and management services to the Trust and recognized fees under the terms of various agreements in the amount of $0.5 million in each of the six-month periods ended April 30, 2020 and 2019.

We, through our wholly owned subsidiary, Gibraltar Capital and Asset Management, LLC (“Gibraltar”), have entered into six ventures with an institutional investor to provide builders and developers with land banking and venture capital. These ventures will finance builders’ and developers’ acquisition and development of land and home sites and pursue other complementary investment strategies. We also are a member in a separate venture with the same institutional investor, which purchased, from Gibraltar, certain foreclosed real estate owned and distressed loans in fiscal 2016. Our ownership interest in these ventures is approximately 25%. We may invest up to $100.0 million in these ventures. As of April 30, 2020, we had an aggregate investment of $20.4 million in these ventures.

The unconsolidated entities in which we have investments generally finance their activities with a combination of partner equity and debt financing. In some instances, we and our partners have guaranteed debt of certain unconsolidated entities. These guarantees may include any or all of the following: (i) project completion guarantees, including any cost overruns; (ii) repayment guarantees, generally covering a percentage of the outstanding loan; (iii) carry cost guarantees, which cover costs such as interest, real estate taxes, and insurance; (iv) an environmental indemnity provided to the lender that holds the lender harmless from and against losses arising from the discharge of hazardous materials from the property and non-compliance with applicable environmental laws; and (v) indemnification of the lender from “bad boy acts” of the unconsolidated entity.

In some instances, the guarantees provided in connection with loans to an unconsolidated entity are joint and several. In these situations, we generally have a reimbursement agreement with our partner that provides that neither party is responsible for more than its proportionate share or agreed upon share of the guarantee; however, if a joint venture partner does not have adequate financial resources to meet its obligations under the reimbursement agreement, we may be liable for more than our proportionate share.

We believe that, as of April 30, 2020, in the event we become legally obligated to perform under a guarantee of an obligation of an unconsolidated entity due to a triggering event, the collateral in such entity should be sufficient to repay a significant portion of the obligation. If it is not, we and our partners would need to contribute additional capital to the venture. At April 30, 2020, certain unconsolidated entities have loan commitments aggregating $1.35 billion, of which, if the full amount of the debt obligations were borrowed, we estimate $190.6 million to be our maximum exposure related to repayment and carry cost guarantees. At April 30, 2020, the unconsolidated entities had borrowed an aggregate of $897.7 million, of which we estimate $137.2 million to be our maximum exposure related to repayment and carry cost guarantees. The terms of these guarantees generally range from 4 months to 4.0 years. These maximum exposure estimates do not take into account any recoveries from the underlying collateral or any reimbursement from our partners.

At April 30, 2020 and October 31, 2019, we determined that 16 and 18 of our joint ventures, respectively, were VIEs under the guidance of ASC 810, “Consolidation.” For 11 and 13 of these VIEs as of April 30, 2020 and October 31, 2019, respectively, we concluded that we were not the primary beneficiary of these VIEs because the power to direct the activities of such VIEs that most significantly impact their performance was either shared by us and such VIEs’ other partners or such activities were controlled by our partner. For VIEs where the power to direct significant activities is shared, business plans, budgets, and other major decisions are required to be unanimously approved by all members. Management and other fees earned by us are nominal and believed to be at market rates, and there is no significant economic disproportionality between us and the other members. The information presented below regarding the investments, commitments, and guarantees in unconsolidated entities deemed to be VIEs is also included in the information provided above.

As of April 30, 2020, we have consolidated five Rental Property Joint Ventures. The carrying value of these joint ventures’ assets totaling $142.6 million is reflected in “Receivables, prepaid expenses, and other assets” in our Condensed Consolidated Balance Sheet as of April 30, 2020. Our partners’ interests aggregating $42.3 million in the joint ventures are reflected as a component of “Noncontrolling interest” in our Condensed Consolidated Balance Sheet as of April 30, 2020. These joint ventures were determined to be VIEs due to their current inability to finance their activities without additional subordinated financial support as well as our partners’ inability to participate in the significant decisions of the joint venture and their lack of substantive kick-out rights. We further concluded that we are the primary beneficiary of these VIEs due to our controlling financial interest in such ventures as we have the power to direct the activities that most significantly impact the joint ventures’ performance and the obligation to absorb expected losses or receive benefits from the joint ventures. The assets of these VIEs can only be used to settle the obligations of the VIEs. In addition, in certain of the joint ventures, in the event additional contributions are required to be funded to the joint ventures prior to the admission of any additional investor at a future date, we will fund 100% of such contributions, including our partner’s pro rata share, which we expect would be funded through an interest-bearing loan.

At April 30, 2020 and October 31, 2019, our investments in the unconsolidated entities deemed to be VIEs totaled $43.4 million and $37.0 million, respectively. At April 30, 2020 and October 31, 2019, the maximum exposure of loss to our investments in these entities was limited to our investments in the unconsolidated VIEs, except with regard to $42.0 million and $76.0 million, respectively, of loan guarantees and $14.9 million and $8.3 million, respectively, of additional commitments to the VIEs. Of our potential exposure for these loan guarantees at April 30, 2020 and October 31, 2019, $11.1 million and $76.0 million, respectively, is related to loan repayment and carry cost guarantees, of which $1.5 million and $76.0 million was borrowed at April 30, 2020 and October 31, 2019, respectively.


	April 30, 2020		October 31, 2019
Cash and cash equivalents	$	112,569	$	85,819
Inventory	487,705		579,226
Loans receivable, net	33,287		56,545

Rental properties	1,000,062		1,021,848
Rental properties under development	708,022		535,197
Real estate owned	12,298		12,267
Other assets	170,698		212,761
Total assets	$	2,524,641	$	2,503,663
Debt, net of deferred financing costs	$	1,229,197	$	1,226,857
Other liabilities	186,831		175,827
Members’ equity	1,108,232		1,100,563
Noncontrolling interest	381		416
Total liabilities and equity	$	2,524,641	$	2,503,663
Company’s net investment in unconsolidated entities (1)	$	364,041	$	366,252

(1) Differences between our net investment in unconsolidated entities and our underlying equity in the net assets of the entities are primarily a result of other than temporary impairments related to our investments in unconsolidated entities; interest capitalized on our investments; the estimated fair value of the guarantees provided to the joint ventures; unrealized gains on our retained joint venture interests; gains recognized from the sale of our ownership interests; and distributions from entities in excess of the carrying amount of our net investment.


	Six months ended April 30,						Three months ended April 30,
	2020		2019		2020		2019
Revenues	$	212,282	$	331,617	$	79,112	$	178,388
Cost of revenues	145,349		288,951		50,041		157,196
Other expenses	73,182		41,354		32,066		22,879
Total expenses	218,531		330,305		82,107		180,075
Gain on disposition of loans and real estate owned	—		3,694		—		—
(Loss) income from operations	(6,249)		5,006		(2,995)		(1,687)
Other income (loss)	529		1,737		(84)		1,090
(Loss) income before income taxes	(5,720)		6,743		(3,079)		(597)
Income tax (benefit) provision	(147)		225		(287)		(40)
Net (loss) income including earnings from noncontrolling interests	(5,573)		6,518		(2,792)		(557)
Less: income (loss) attributable to noncontrolling interest	—		(2,078)		—		31
Net (loss) income attributable to controlling interest	$	(5,573)	$	4,440	$	(2,792)	$	(526)


Company’s equity in earnings of unconsolidated entities (1)	$	7,870	$	10,559	$	(4,271)	$	4,419

(1) Differences between our equity in earnings of unconsolidated entities and the underlying net income of the entities are primarily a result of distributions from entities in excess of the carrying amount of our net investment; other than temporary impairments related to our investments in unconsolidated entities; recoveries of previously incurred charges; unrealized gains on our retained joint venture interests; gains recognized from the sale of our investment to our joint venture partner; and our share of the entities’ profits related to home sites purchased by us which reduces our cost basis of the home sites acquired.