Financial Instruments (Tables)
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9 Months Ended |
Aug. 31, 2014
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Fair Value Disclosures [Abstract] |
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Carrying Amounts And Estimated Fair Value Of Financial Instruments |
| | | | | | | | | | | | | | | | | | | August 31, 2014 | | November 30, 2013 | | Fair Value | | Carrying | | Fair | | Carrying | | Fair | (In thousands) | Hierarchy | | Amount | | Value | | Amount | | Value | ASSETS | | | | | | | | | | Rialto Investments: | | | | | | | | | | Loans receivable, net | Level 3 | | $ | 174,286 |
| | 182,004 |
| | 278,392 |
| | 305,810 |
| Investments held-to-maturity | Level 3 | | $ | 16,968 |
| | 16,839 |
| | 16,070 |
| | 15,952 |
| Lennar Financial Services: | | | | | | | | | | Loans held-for-investment, net | Level 3 | | $ | 26,821 |
| | 27,066 |
| | 26,356 |
| | 26,095 |
| Investments held-to-maturity | Level 2 | | $ | 57,023 |
| | 57,163 |
| | 62,344 |
| | 62,580 |
| LIABILITIES | | | | | | | | | | Lennar Homebuilding senior notes and other debts payable | Level 2 | | $ | 4,692,880 |
| | 5,510,800 |
| | 4,194,432 |
| | 4,971,500 |
| Rialto Investments notes and other debts payable | Level 2 | | $ | 582,659 |
| | 581,420 |
| | 441,883 |
| | 438,373 |
| Lennar Financial Services notes and other debts payable | Level 2 | | $ | 522,047 |
| | 522,047 |
| | 374,166 |
| | 374,166 |
| Lennar Multifamily notes payable | Level 2 | | $ | — |
| | — |
| | 13,858 |
| | 13,858 |
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Fair Value Measured On Recurring Basis |
The Company’s financial instruments measured at fair value on a recurring basis are summarized below: | | | | | | | | | | Financial Instruments | Fair Value Hierarchy | | Fair Value at August 31, 2014 | | Fair Value at November 30, 2013 | (In thousands) | | | | | | Lennar Financial Services: | | | | | | Loans held-for-sale (1) | Level 2 | | $ | 539,988 |
| | 414,231 |
| Mortgage loan commitments | Level 2 | | $ | 14,276 |
| | 7,335 |
| Forward contracts | Level 2 | | $ | (4,052 | ) | | 1,444 |
| Mortgage servicing rights | Level 3 | | $ | 19,387 |
| | 11,455 |
| Lennar Homebuilding: | | | | | | Investments available-for-sale | Level 3 | | $ | 16,865 |
| | 40,032 |
| Rialto Investments Financial Assets: | | | | | | Loans held-for-sale (2) | Level 3 | | $ | 164,923 |
| | 44,228 |
| Credit default swaps | Level 2 | | $ | 1,331 |
| | 788 |
| Rialto Investments Financial Liabilities: | | | | | | Interest rate swaps and swap futures | Level 1 | | $ | 1,393 |
| | 31 |
| Credit default swaps | Level 2 | | $ | 1,561 |
| | 318 |
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| | (1) | The aggregate fair value of Lennar Financial Services loans held-for-sale of $540.0 million at August 31, 2014 exceeds their aggregate principal balance of $517.0 million by $23.0 million. The aggregate fair value of loans held-for-sale of $414.2 million at November 30, 2013 exceeds their aggregate principal balance of $399.0 million by $15.3 million. |
| | (2) | The aggregate fair value of Rialto Investments loans held-for-sale of $164.9 million at August 31, 2014 exceeds their aggregate principal balance of $163.4 million by $1.6 million. The aggregate fair value of loans held-for-sale of $44.2 million at November 30, 2013 exceeds their aggregate principal balance of $44.0 million by $0.2 million |
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Schedule Of Gains And Losses Of Financial Instruments |
The changes in fair values for Level 1 and Level 2 financial instruments measured on a recurring basis that are included in operating earnings are shown, by financial instrument and financial statement line item below: | | | | | | | | | | | | | | | Three Months Ended | | Nine Months Ended | | August 31, | | August 31, | (In thousands) | 2014 | | 2013 | | 2014 | | 2013 | Changes in fair value included in Lennar Financial Services revenues: | | | | | | | | Loans held-for-sale | $ | 588 |
| | 3,982 |
| | 7,740 |
| | (13,422 | ) | Mortgage loan commitments | $ | (756 | ) | | 4,944 |
| | 6,942 |
| | (1,950 | ) | Forward contracts | $ | 2,262 |
| | (13,600 | ) | | (5,497 | ) | | 4,391 |
| Changes in fair value included in Rialto Investments revenues: | | | | | | | | Financial Assets: | | | | | | | | Interest rate swap futures | $ | — |
| | 607 |
| | — |
| | 607 |
| Credit default swaps | $ | (431 | ) | | 1,343 |
| | — |
| | 1,343 |
| Financial Liabilities: | | | | | | | | Interest rate swaps and swap futures | $ | (969 | ) | | (701 | ) | | (1,363 | ) | | (701 | ) | Credit default swaps | $ | 390 |
| | — |
| | 62 |
| | — |
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Reconciliation Of Beginning And Ending Balance For The Company's Level 3 Recurring Fair Value Measurements |
The following table represents a reconciliation of the beginning and ending balance for the Lennar Financial Services Level 3 recurring fair value measurements (mortgage servicing rights) included in the Lennar Financial Services segment’s other assets: | | | | | | | | | | | | | | | Three Months Ended | | Nine Months Ended | | August 31, | | August 31, | | 2014 | | 2013 | | 2014 | | 2013 | Mortgage servicing rights, beginning of period | $ | 18,242 |
| | 7,307 |
| | 11,455 |
| | 4,749 |
| Purchases and retention of mortgage servicing rights (1) | 441 |
| | 1,838 |
| | 8,977 |
| | 3,560 |
| Disposals | (622 | ) | | (122 | ) | | (1,190 | ) | | (571 | ) | Changes in fair value (2) | 1,326 |
| | 835 |
| | 145 |
| | 2,120 |
| Mortgage servicing rights, end of period | $ | 19,387 |
| | 9,858 |
| | 19,387 |
| | 9,858 |
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| | (1) | For the nine months ended August 31, 2014, purchases and retention of mortgage servicing rights include the $5.9 million acquisition of a portfolio of mortgage servicing rights. |
| | (2) | Amount represents changes in fair value included in Lennar Financial Services revenues. |
The following table represents a reconciliation of the beginning and ending balance for the Lennar Homebuilding Level 3 recurring fair value measurements (investments available-for-sale) included in the Lennar Homebuilding segment’s other assets: | | | | | | | | | | | | | | | Three Months Ended | | Nine Months Ended | | August 31, | | August 31, | (In thousands) | 2014 | | 2013 | | 2014 | | 2013 | Investments available-for-sale, beginning of period | $ | 20,416 |
| | 33,338 |
| | 40,032 |
| | 19,591 |
| Purchases and other (1) | — |
| | 13,291 |
| | 21,274 |
| | 25,518 |
| Sales | (1,655 | ) | | (2,486 | ) | | (46,234 | ) | | (2,486 | ) | Changes in fair value (2) | 2,229 |
| | (772 | ) | | 7,379 |
| | 748 |
| Settlements (3) | (4,125 | ) | | — |
| | (5,586 | ) | | — |
| Investments available-for-sale, end of period | $ | 16,865 |
| | 43,371 |
| | 16,865 |
| | 43,371 |
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| | (1) | Represents investments in community development district bonds that mature at various dates between 2037 and 2039. |
| | (2) | The changes in fair value were not included in other comprehensive income because the changes in fair value were deferred as a result of the Company's continuing involvement in the underlying real estate collateral. |
| | (3) | The investments available-for-sale that were settled during the three and nine months ended August 31, 2014 related to investments in community development district bonds, which were in default by the borrower and regarding which the Company redeemed the bonds. |
The following table represents a reconciliation of the beginning and ending balance for Rialto Investments Level 3 recurring fair value measurements (loans held-for-sale): | | | | | | | | | | | | | | | Three Months Ended | | Nine Months Ended | | August 31, | | August 31, | (In thousands) | 2014 | | 2013 | | 2014 | | 2013 | Rialto Investments loans held-for-sale, beginning of period | $ | 45,065 |
| | — |
| | 44,228 |
| | — |
| Loan originations | 411,683 |
| | 245,223 |
| | 1,103,839 |
| | 245,223 |
| Origination loans sold, including those not settled | (292,099 | ) | | — |
| | (983,635 | ) | | — |
| Interest and principal paydowns | (811 | ) | | 529 |
| | (835 | ) | | 529 |
| Changes in fair value (1) | 1,085 |
| | (1,086 | ) | | 1,326 |
| | (1,086 | ) | Rialto Investments loans held-for-sale, end of period | $ | 164,923 |
| | 244,666 |
| | 164,923 |
| | 244,666 |
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| | (1) | Amount represents changes in fair value included in Rialto Investments revenues. |
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Fair Value Measurements, Nonrecurring |
The Company’s assets measured at fair value on a nonrecurring basis are those assets for which the Company has recorded valuation adjustments and write-offs. The fair values included in the tables below represent only those assets whose carrying value were adjusted to fair value during the respective periods disclosed. The assets measured at fair value on a nonrecurring basis are summarized below: | | | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended August 31, 2014 | | Three Months Ended August 31, 2013 | (In thousands) | Fair Value Hierarchy | | Carrying Value | | Fair Value | | Total Gains (Losses) (1) | | Carrying Value | | Fair Value | | Total Gains (Losses) (1) | Financial assets | | | | | | | | | | | | | | Rialto Investments: | | | | | | | | | | | | | | Impaired loans receivable | Level 3 | | $ | 103,732 |
| | 99,574 |
| | (4,158 | ) | | 161,432 |
| | 157,955 |
| | (3,477 | ) | Non-financial assets | | | | | | | | | | | | | | Lennar Homebuilding: | | | | | | | | | | | | | | Investments in unconsolidated entities (2) | Level 3 | | $ | — |
| | — |
| | — |
| | 20,885 |
| | 20,024 |
| | (861 | ) | Rialto Investments: | | | | | | | | | | | | | | REO - held-for-sale (3): | | | | | | | | | | | | | | Upon acquisition/transfer | Level 3 | | $ | 7,133 |
| | 6,705 |
| | (428 | ) | | 12,200 |
| | 14,833 |
| | 2,633 |
| Upon management periodic valuations | Level 3 | | $ | 15,453 |
| | 9,794 |
| | (5,659 | ) | | 169 |
| | — |
| | (169 | ) | REO - held-and-used, net (4): | | | | | | | | | | | | | | Upon acquisition/transfer | Level 3 | | $ | 14,275 |
| | 14,530 |
| | 255 |
| | 13,864 |
| | 14,154 |
| | 290 |
| Upon management periodic valuations | Level 3 | | $ | 8,056 |
| | 6,723 |
| | (1,333 | ) | | 7,176 |
| | 2,050 |
| | (5,126 | ) |
| | (1) | Represents losses due to valuation adjustments, write-offs, gains (losses) from transfers or acquisitions of real estate through foreclosure and REO impairments recorded during the three months ended August 31, 2014 and 2013. |
| | (2) | Valuation adjustments were included in Lennar Homebuilding other income, net in the Company's condensed consolidated statement of operations for the three months ended August 31, 2013. |
| | (3) | REO held-for-sale assets are initially recorded at fair value less estimated costs to sell at the time of the transfer or acquisition through, or in lieu of, loan foreclosure. The fair value of REO held-for-sale is based upon appraised value at the time of foreclosure or management's best estimate. In addition, management periodically performs valuations of its REO held-for-sale. The gains (losses) upon the transfer or acquisition of REO and impairments were included in Rialto Investments other income (expense), net, in the Company’s condensed consolidated statement of operations for the three months ended August 31, 2014 and 2013. |
| | (4) | REO held-and-used, net, assets are initially recorded at fair value at the time of acquisition through, or in lieu of, loan foreclosure. The fair value of REO held-and-used, net, is based upon the appraised value at the time of foreclosure or management’s best estimate. In addition, management periodically performs valuations of its REO held-and-used, net. The gains (losses) upon acquisition of REO held-and-used, net and impairments were included in Rialto Investments other income (expense), net, in the Company’s condensed consolidated statement of operations for the three months ended August 31, 2014 and 2013. |
| | | | | | | | | | | | | | | | | | | | | | | | | Nine Months Ended August 31, 2014 | | Nine Months Ended August 31, 2013 | (In thousands) | Fair Value Hierarchy | | Carrying Value | | Fair Value | | Total Gains (Losses) (1) | | Carrying Value | | Fair Value | | Total Gains (Losses) (1) | Financial assets | | | | | | | | | | | | | | Rialto Investments: | | | | | | | | | | | | | | Impaired loans receivable | Level 3 | | $ | 191,471 |
| | 146,731 |
| | (44,740 | ) | | 200,856 |
| | 186,768 |
| | (14,088 | ) | Non-financial assets | | | | | | | | | | | | | | Lennar Homebuilding: | | | | | | | | | | | | | | Finished homes and construction in progress (2) | Level 3 | | $ | — |
| | — |
| | — |
| | 16,454 |
| | 12,247 |
| | (4,207 | ) | Land and land under development (2) | Level 3 | | $ | 7,013 |
| | 6,143 |
| | (870 | ) | | — |
| | — |
| | — |
| Investments in unconsolidated entities (3) | Level 3 | | $ | — |
| | — |
| | — |
| | 20,921 |
| | 20,024 |
| | (897 | ) | Rialto Investments: | | | | | | | | | | | | | | REO - held-for-sale (4): | | | | | | | | | | | | | | Upon acquisition/transfer | Level 3 | | $ | 20,183 |
| | 18,972 |
| | (1,211 | ) | | 14,193 |
| | 16,166 |
| | 1,973 |
| Upon management periodic valuations | Level 3 | | $ | 39,193 |
| | 31,494 |
| | (7,699 | ) | | 23,040 |
| | 18,687 |
| | (4,353 | ) | REO - held-and-used, net (5): | | | | | | | | | | | | | | Upon acquisition/transfer | Level 3 | | $ | 54,727 |
| | 48,657 |
| | (6,070 | ) | | 39,655 |
| | 38,882 |
| | (773 | ) | Upon management periodic valuations | Level 3 | | $ | 20,489 |
| | 17,653 |
| | (2,836 | ) | | 10,011 |
| | 4,482 |
| | (5,529 | ) |
| | (1) | Represents losses due to valuation adjustments, write-offs, gains (losses) from transfers or acquisitions of real estate through foreclosure and REO impairments recorded during the nine months ended August 31, 2014 and 2013. |
| | (2) | Valuation adjustments were included in Lennar Homebuilding costs and expenses in the Company's condensed consolidated statement of operations for the nine months ended August 31, 2014 and 2013. |
| | (3) | Valuation adjustments were included in Lennar Homebuilding other income, net in the Company's condensed consolidated statement of operations for the nine months ended August 31, 2013. |
| | (4) | REO held-for-sale assets are initially recorded at fair value less estimated costs to sell at the time of the transfer or acquisition through, or in lieu of, loan foreclosure. The fair value of REO held-for-sale is based upon appraised value at the time of foreclosure or management's best estimate. In addition, management periodically performs valuations of its REO held-for-sale. The gains (losses) upon the transfer or acquisition of REO and impairments were included in Rialto Investments other income (expense), net, in the Company’s condensed consolidated statement of operations for the nine months ended August 31, 2014 and 2013. |
| | (5) | REO held-and-used, net, assets are initially recorded at fair value at the time of acquisition through, or in lieu of, loan foreclosure. The fair value of REO held-and-used, net, is based upon the appraised value at the time of foreclosure or management’s best estimate. In addition, management periodically performs valuations of its REO held-and-used, net. The gains (losses) upon acquisition of REO held-and-used, net and impairments were included in Rialto Investments other income (expense), net, in the Company’s condensed consolidated statement of operations for the nine months ended August 31, 2014 and 2013. |
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