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Investments in Unconsolidated Entities | 12 Months Ended
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Oct. 31, 2019
Investments in and Advances to Unconsolidated Entities [Abstract] |
Investments in Unconsolidated Entities | Investments in Unconsolidated Entities 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”). In fiscal 2019, 2018 and 2017, we recognized income from the unconsolidated entities in which we had an investment of $24.9 million, $85.2 million, and $116.1 million, respectively. The table below provides information as of October 31, 2019, regarding active joint ventures that we are invested in, by joint venture category ($ amounts in thousands):
| Land Development Joint Ventures |  | Home Building Joint Ventures |  | Rental Property Joint Ventures |  | Gibraltar Joint Ventures |  | Total
Number of unconsolidated entities | 8 |  | 4 |  | 20 |  | 9 |  | 41
Investment in unconsolidated entities | $ | 110,306 |  |  | $ | 60,512 |  |  | $ | 174,292 |  |  | $ | 21,142 |  |  | $ | 366,252 |
Number of unconsolidated entities with funding commitments by the Company | 2 |  | 1 |  | 2 |  | 1 |  |  | 6
Company’s remaining funding commitment to unconsolidated entities | $ | 28,586 |  |  | $ | 1,400 |  |  | $ | 539 |  |  | $ | 8,271 |  |  | $ | 38,796 |
Certain joint ventures in which we have investments obtained debt financing to finance a portion of their activities. The table below provides information at October 31, 2019, regarding the debt financing obtained by category ($ amounts in thousands):
| Land Development Joint Ventures |  | Home Building Joint Ventures |  | Rental Property Joint Ventures |  | Total
Number of joint ventures with debt financing | 3 |  | 2 |  | 18 |  | 23
Aggregate loan commitments | $ | 100,859 |  |  | $ | 133,453 |  |  | $ | 1,393,838 |  |  | $ | 1,628,150 |
Amounts borrowed under commitments | $ | 88,252 |  |  | $ | 133,453 |  |  | $ | 1,017,788 |  |  | $ | 1,239,493 |
More specific and/or recent information regarding our investments in and future commitments to these entities is provided below. Land Development Joint Ventures In fiscal 2019, our Land Development Joint Ventures sold approximately 934 lots and recognized revenues of $261.7 million . We acquired 293 of these lots for $137.1 million. Our share of the joint venture income from the lots we acquired was insignificant. We recognized a charge in connection with one Land Development Joint Venture of $1.0 million in fiscal 2019. In fiscal 2018, our Land Development Joint Ventures sold approximately 986 lots and recognized revenues of $351.4 million. We acquired 259 of these lots for $153.2 million. Our share of the income from the lots we acquired of $1.7 million was deferred by reducing our basis in those lots acquired. We recognized charges in connection with two Land Development Joint Ventures of $6.0 million in fiscal 2018. In the fourth quarter of fiscal 2019, we entered into a joint venture with an unrelated party to purchase and develop a parcel of land located in Houston, Texas. The joint venture expects to develop approximately 263 home sites on this land in multiple phases. We have a 50% interest in this joint venture. The joint venture intends to sell approximately 50% of the value of the home sites to each of the members of the joint venture. At October 31, 2019, we had an investment of $5.9 million in this joint venture. The joint venture expects to secure third-party financing at a later date. Home Building Joint Ventures Our Home Building Joint Ventures are delivering homes in New York City and Jupiter, Florida. In fiscal 2019 and 2018, our Home Building Joint Ventures delivered 186 homes with a sales value of $374.6 million, and 100 homes with a sales value of $148.0 million, respectively. Subsequent event In November 2019, one of our Home Building Joint Ventures refinanced its existing $236.5 million construction loan with a $76.6 million post-construction loan that matures November 2021. We and an affiliate of our partner provided certain guarantees under the loan agreement. We estimate that our maximum exposure under these guarantees, if the full amount of the loan commitment was borrowed, would be $76.6 million without taking into account any recoveries from the underlying collateral or any reimbursement from our partner. Rental Property Joint Ventures As of October 31, 2019, our Rental Property Joint Ventures owned 25 for-rent apartment projects and a hotel, which are located in multiple metropolitan areas throughout the country. At October 31, 2019, these joint ventures had approximately 2,000 units that were occupied or ready for occupancy, 1,700 units in the lease-up stage, and 4,100 units in the design phase or under development. In addition, we either own or have under contract, approximately 10,900 units, of which 800 units are under active development; we intend to develop these units in joint ventures with unrelated parties in the future. In fiscal 2019, we entered into five separate joint ventures with unrelated parties to develop luxury for-rent residential apartment projects located in Harrison, New York, Frisco, Texas, Atlanta, Georgia, Orange, California, and Dallas, Texas. Prior to the formation of these joint ventures, we acquired the properties and incurred approximately $145.1 million of land and land development costs. Our partners acquired interests in these entities ranging from 63.5% to 75% for an aggregate amount of $110.0 million and we recognized a gain on land sales of $9.3 million in fiscal 2019. At October 31, 2019, we had an aggregate investment of $48.8 million in these joint ventures. Concurrent with their formation, these joint ventures entered into construction loan agreements for an aggregate amount of $340.1 million. At October 31, 2019, the joint ventures had $39.3 million outstanding borrowings under these construction loan facilities. In addition, in fiscal 2019, we entered into four 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 $79.6 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 October 31, 2019. The carrying value of these joint ventures’ assets totaling $125.0 million are reflected in “Receivables, prepaid expenses, and other assets” in our Consolidated Balance Sheet as of October 31, 2019. Our partners’ interests aggregating $37.9 million in the joint ventures are reflected as a component of “Noncontrolling interest” in our Consolidated Balance Sheet as of October 31, 2019. 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 the second quarter of fiscal 2019, we entered into a joint venture with unrelated parties to develop, build, and operate single-family rental communities. As of October 31, 2019, we have committed to invest up to $60.0 million in this joint venture, of which $1.0 million has been invested. In fiscal 2019, one of our Rental Property Joint Ventures, in which we had a 25% interest, sold its assets to an unrelated party for $77.8 million. The joint venture had owned, developed, and operated a multifamily residential community in Phoenixville, Pennsylvania. In connection with the sale, the joint venture repaid its entire $47.0 million loan. We received cash of $7.4 million and recognized a gain of $3.8 million, which is included in “Income from unconsolidated entities” in our Consolidated Statements of Operations and Comprehensive Income. We have an investment in a joint venture in which we have a 50% interest that developed a luxury hotel in conjunction with a high-rise luxury condominium project in New York City developed by a related Home Building Joint Venture. The hotel commenced operations in February 2017. At October 31, 2019, we had an investment of $21.0 million in this joint venture. In the fourth quarter of fiscal 2019, the joint venture refinanced its existing $80.0 million, three-year term loan with a three-year, $120.0 million term loan, of which $110.0 million was advanced to the joint venture at closing. The proceeds from the refinancing were distributed to the members. In fiscal 2018, we entered into four joint ventures with unrelated parties to develop luxury for-rent residential apartment projects located in suburban Atlanta, Georgia; Belmont, Massachusetts; and Washington, D.C. Prior to the formation of these joint ventures, we acquired the properties and incurred approximately $140.0 million of land and land development costs. Our partners acquired interests in these entities ranging from 50% to 75% for an aggregate amount of $80.3 million. At October 31, 2019, we had an investment of $65.6 million in these joint ventures. In fiscal 2018, several of these joint ventures entered into construction loan agreements for an aggregate amount of $166.1 million to finance the development of these projects. At October 31, 2019, the joint ventures had $156.1 million of outstanding borrowings under the construction loan facilities. In addition, in fiscal 2018 we entered into a joint venture with an unrelated party to develop a luxury for-rent residential apartment project in a suburb of Boston, Massachusetts. We contributed cash of $15.9 million for our initial 85% ownership interest in this joint venture. Due to our controlling financial interest, our power to direct the activities that most significantly impact the joint venture’s performance, and our obligation to absorb expected losses or receive benefits from the joint venture, we consolidated this joint venture at October 31, 2019. The carrying value of the joint venture’s assets totaling $20.8 million are reflected in “Receivables, prepaid expenses, and other assets” in our Consolidated Balance Sheet at October 31, 2019. Our partner’s 15% interest of $3.1 million in the joint venture is reflected as a component of “Noncontrolling interest” in our Consolidated Balance Sheet as of October 31, 2019. The joint venture expects to admit an additional investor and secure third-party financing at a later date. In fiscal 2018, three of our Rental Property Joint Ventures sold their assets to unrelated parties for $477.5 million. These joint ventures had owned, developed, and operated multifamily rental properties located in suburban Washington, D.C. and Westborough, Massachusetts, and a student housing community in College Park, Maryland. In connection with these sales, the joint ventures’ aggregate outstanding loan balance of $239.6 million was repaid. From our investment in these joint ventures, we received cash of $79.1 million and recognized gains from these sales of $67.2 million in fiscal 2018, which is included in “Income from unconsolidated entities” in our Consolidated Statement of Operations and Comprehensive Income. In fiscal 2017, we sold one-half of our 50% interest in two of our Rental Property Joint Ventures to an unrelated party. In connection with these sales, we, along with our partners, recapitalized the joint ventures and refinanced the existing $166.3 million in construction loans with 10-year fixed rate loans totaling $189.0 million. As a result of these transactions, we received cash of $54.9 million and recognized gains of $26.7 million in fiscal 2017, which is included in “Income from unconsolidated entities” in our Consolidated Statements of Operations and Comprehensive Income. At October 31, 2019, we had a 25% interest in each of these joint ventures. 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 October 31, 2019, 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 amounts of $1.0 million, $2.0 million, and $2.0 million in fiscal 2019, 2018 and 2017, respectively. In fiscal 2019 and 2018, we received distributions of $3.9 million and $27.7 million, respectively, from the Trust, of which the full amount was recognized as income and included in “Income from unconsolidated entities” in our fiscal 2019 and 2018 Consolidated Statements of Operations and Comprehensive Income. No distributions were received from the Trust in fiscal 2017. Subsequent events In November 2019, we entered into a joint venture with an unrelated party to develop a for-rent residential apartment project in Dallas, Texas. Prior to the formation of this joint venture, we acquired the property and incurred approximately $19.0 million of land and land development costs. Our partner acquired a 50% interest in this entity for approximately $9.2 million, of which $7.7 million was distributed to us. Our initial investment is $11.9 million. Concurrent with its formation, the joint venture entered into a $42.0 million construction loan agreement to finance the development of this project. We and an affiliate of our partner provided certain guarantees under the construction loan agreement. We estimate that our maximum exposure under these guarantees, if the full amount of the loan commitment was borrowed, would be $42.0 million without taking into account any recoveries from the underlying collateral or any reimbursement from our partner. In December 2019, 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 expect to recognize a gain of approximately $10.0 million in the first quarter of fiscal 2019 from the sale. In December 2019, we entered into a joint venture with an unrelated party to develop a for-rent student housing community in State College, Pennsylvania. Prior to the formation of this joint venture, we acquired the property and incurred approximately $32.0 million of land and land development costs. Our partner acquired a 70% interest in this entity for approximately $22.2 million, of which $17.9 million was distributed to us. Our initial investment is $12.9 million. Concurrent with its formation, the joint venture entered into a $79.5 million construction loan agreement to finance the development of this project. We and an affiliate of our partner provided certain guarantees under the construction loan agreement. We estimate that our maximum exposure under these guarantees, if the full amount of the loan commitment was borrowed, would be $79.5 million without taking into account any recoveries from the underlying collateral or any reimbursement from our partner. Gibraltar Joint Ventures We, through our wholly owned subsidiary, Gibraltar Capital and Asset Management, LLC (“Gibraltar”), have entered into eight ventures with an institutional investor to provide builders and developers with land banking and venture capital, two of which were formed in fiscal 2019. These ventures will finance builders’ and developers’ acquisition and development of land and home sites and pursue other complementary investment strategies. We are also 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 October 31, 2019, we had an investment of $20.5 million in these ventures. Guarantees 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 the 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 October 31, 2019, 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 October 31, 2019, certain unconsolidated entities have loan commitments aggregating $1.53 billion, of which, if the full amount of the debt obligations were borrowed, we estimate $299.1 million to be our maximum exposure related solely to repayment and carry cost guarantees. At October 31, 2019, the unconsolidated entities had borrowed an aggregate of $1.14 billion, of which we estimate $239.6 million to be our maximum exposure related solely to repayment and carry cost guarantees. The terms of these guarantees generally range from 2 months to 9.7 years. These maximum exposure estimates do not take into account any recoveries from the underlying collateral or any reimbursement from our partners. As of October 31, 2019, the estimated aggregate fair value of the guarantees provided by us related to debt and other obligations of certain unconsolidated entities was approximately $5.6 million. We have not made payments under any of the guarantees, nor have we been called upon to do so. Variable Interest Entities At October 31, 2019 and 2018, we determined that 18 and 11, respectively, of our joint ventures were VIEs under the guidance within ASC 810. For 13 and 10 of these VIEs as of October 31, 2019 and 2018, 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 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 October 31, 2019, we have consolidated five Rental Property Joint Ventures. We had one consolidated Rental Property Joint Venture as of October 31, 2018. The carrying value of these joint ventures’ assets totaled $145.8 million and $19.7 million as reflected in “Receivables, prepaid expenses, and other assets” in our Consolidated Balance Sheet as of October 31, 2019 and 2018, respectively. Our partners’ interests aggregating $41.0 million and $2.8 million in the joint ventures are reflected as a component of “Noncontrolling interest” in our Consolidated Balance Sheet as of October 31, 2019 and 2018, respectively. 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 October 31, 2019 and 2018, our investments in our unconsolidated entities deemed to be VIEs, which are included in “Investments in unconsolidated entities” in our Consolidated Balance Sheets, totaled $37.0 million and $33.8 million, respectively. At 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 $76.0 million of loan guarantees and $8.3 million of additional commitments to fund the VIEs. Of our potential exposure for these loan guarantees, $76.0 million is related to repayment and carry cost guarantees, of which $76.0 million was borrowed at October 31, 2019. At October 31, 2018, the maximum exposure of loss to our investments in these entities was limited to our investments in the unconsolidated VIEs, except with regard to $70.0 million of loan guarantees and $10.8 million of additional commitments to fund the VIEs. Of our potential exposure for these loan guarantees, $70.0 million is related to repayment and carry cost guarantees, of which $70.0 million was borrowed at October 31, 2018. Joint Venture Condensed Financial Information The Condensed Balance Sheets, as of the dates indicated, and the Condensed Statements of Operations and Comprehensive Income, for the periods indicated, for the unconsolidated entities in which we have an investment, aggregated by type of business, are included below (in thousands). Condensed Balance Sheets:
| October 31, 2019
| Land Develop- ment Joint Ventures |  | Home Building Joint Ventures |  | Rental Property Joint Ventures |  | Gibraltar Joint Ventures |  | Total
Cash and cash equivalents | $ | 23,669 |  |  | $ | 38,115 |  |  | $ | 20,647 |  |  | $ | 3,388 |  |  | $ | 85,819 |
Inventory | 247,866 |  |  | 313,991 |  |  |  |  |  | 17,369 |  |  | 579,226 |
Loan receivables, net |  |  |  |  |  |  | 56,545 |  |  | 56,545 |
Rental properties |  |  |  |  | 1,021,848 |  |  |  |  | 1,021,848 |
Rental properties under development |  |  |  |  | 535,197 |  |  |  |  |  | 535,197 |
Real estate owned |  |  |  |  |  |  |  | 12,267 |  |  | 12,267 |
Other assets | 96,602 |  |  | 78,916 |  |  | 36,879 |  |  | 364 |  |  | 212,761 |
Total assets | $ | 368,137 |  |  | $ | 431,022 |  |  | $ | 1,614,571 |  |  | $ | 89,933 |  |  | $ | 2,503,663 |
Debt, net of deferred financing costs | $ | 88,050 |  |  | $ | 132,606 |  |  | $ | 1,006,201 |  |  |  |  |  | $ | 1,226,857 |
Other liabilities | 49,302 |  |  | 33,959 |  |  | 84,735 |  |  | 7,831 |  |  | 175,827 |
Members’ equity | 230,785 |  |  | 264,457 |  |  | 523,635 |  |  | 81,686 |  |  | 1,100,563 |
Noncontrolling interest |  |  |  |  |  |  | 416 |  |  | 416 |
Total liabilities and equity | $ | 368,137 |  |  | $ | 431,022 |  |  | $ | 1,614,571 |  |  | $ | 89,933 |  |  | $ | 2,503,663 |
Company’s net investment in unconsolidated entities (1) | $ | 110,306 |  |  | $ | 60,512 |  |  | $ | 174,292 |  |  | $ | 21,142 |  |  | $ | 366,252 |
| October 31, 2018
| Land Develop- ment Joint Ventures |  | Home Building Joint Ventures |  | Rental Property Joint Ventures |  | Gibraltar Joint Ventures |  | Total
Cash and cash equivalents | $ | 47,409 |  |  | $ | 22,834 |  |  | $ | 23,750 |  |  | $ | 8,469 |  |  | $ | 102,462 |
Inventory | 403,670 |  |  | 557,157 |  |  |  |  |  | 13,163 |  |  | 973,990 |
Loan receivables, net |  |  |  |  |  |  | 40,065 |  |  | 40,065 |
Rental properties |  |  |  |  | 808,785 |  |  |  |  | 808,785 |
Rental properties under development |  |  |  |  | 437,586 |  |  |  |  |  | 437,586 |
Real estate owned |  |  |  |  |  |  |  | 14,838 |  |  | 14,838 |
Other assets | 93,322 |  |  | 49,723 |  |  | 21,917 |  |  | 1,067 |  |  | 166,029 |
Total assets | $ | 544,401 |  |  | $ | 629,714 |  |  | $ | 1,292,038 |  |  | $ | 77,602 |  |  | $ | 2,543,755 |
Debt, net of deferred financing costs | $ | 125,557 |  |  | $ | 284,959 |  |  | $ | 735,482 |  |  | $ | — |  |  | $ | 1,145,998 |
Other liabilities | 29,096 |  |  | 72,897 |  |  | 51,992 |  |  | 4,585 |  |  | 158,570 |
Members’ equity | 389,748 |  |  | 271,858 |  |  | 504,564 |  |  | 69,804 |  |  | 1,235,974 |
Noncontrolling interest |  |  |  |  |  |  | 3,213 |  |  | 3,213 |
Total liabilities and equity | $ | 544,401 |  |  | $ | 629,714 |  |  | $ | 1,292,038 |  |  | $ | 77,602 |  |  | $ | 2,543,755 |
Company’s net investment in unconsolidated entities (1) | $ | 176,593 |  |  | $ | 65,936 |  |  | $ | 171,216 |  |  | $ | 18,068 |  |  | $ | 431,813 |
(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 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.
Condensed Statements of Operations and Comprehensive Income:
| For the year ended October 31, 2019
| Land Develop- ment Joint Ventures |  | Home Building Joint Ventures |  | Rental Property Joint Ventures |  | Gibraltar Joint Ventures |  | Total
Revenues | $ | 261,677 |  |  | $ | 374,587 |  |  | $ | 99,401 |  |  | $ | 21,377 |  |  | $ | 757,042 |
Cost of revenues | 247,070 |  |  | 333,008 |  |  | 68,502 |  |  | 13,234 |  |  | 661,814 |
Other expenses | 4,662 |  |  | 15,389 |  |  | 58,928 |  |  | 1,880 |  |  | 80,859 |
Total expenses | 251,732 |  |  | 348,397 |  |  | 127,430 |  |  | 15,114 |  |  | 742,673 |
Gain on disposition of loans and REO |  |  |  |  |  |  |  | 4,383 |  |  | 4,383 |
Income (loss) from operations | 9,945 |  |  | 26,190 |  |  | (28,029 | ) |  | 10,646 |  |  | 18,752 |
Other income | 3,079 |  |  | 6,144 |  |  | 16,651 |  |  | 12,793 |  |  | 38,667 |
Income (loss) before income taxes | 13,024 |  |  | 32,334 |  |  | (11,378 | ) |  | 23,439 |  |  | 57,419 |
Income tax provision | 193 |  |  | 457 |  |  |  |  |  |  |  | 650 |
Net income (loss) including earnings from noncontrolling interests | 12,831 |  |  | 31,877 |  |  | (11,378 | ) |  | 23,439 |  |  | 56,769 |
Less: income attributable to noncontrolling interest |  |  |  |  |  |  |  |  |  | (9,593 | ) |  | (9,593 | )
Net income (loss) attributable to controlling interest | $ | 12,831 |  |  | $ | 31,877 |  |  | $ | (11,378 | ) |  | $ | 13,846 |  |  | $ | 47,176 |
Company’s equity (deficit) in earnings of unconsolidated entities (2) | $ | 6,160 |  |  | $ | 17,004 |  |  | $ | (824 | ) |  | $ | 2,528 |  |  | $ | 24,868 |
| For the year ended October 31, 2018
| Land Develop- ment Joint Ventures |  | Home Building Joint Ventures |  | Rental Property Joint Ventures |  | Gibraltar Joint Ventures |  | Total
Revenues | $ | 351,397 |  |  | $ | 148,002 |  |  | $ | 121,276 |  |  | $ | 19,592 |  |  | $ | 640,267 |
Cost of revenues | 317,363 |  |  | 112,469 |  |  | 74,946 |  |  | 17,817 |  |  | 522,595 |
Other expenses | 9,125 |  |  | 8,630 |  |  | 61,502 |  |  | 3,201 |  |  | 82,458 |
Total expenses | 326,488 |  |  | 121,099 |  |  | 136,448 |  |  | 21,018 |  |  | 605,053 |
Gain on disposition of loans and REO |  |  |  |  |  |  |  | 53,192 |  |  | 53,192 |
Income (loss) from operations | 24,909 |  |  | 26,903 |  |  | (15,172 | ) |  | 51,766 |  |  | 88,406 |
Other income | 5,939 |  |  | 2,134 |  |  | 222,744 |  |  | 1,937 |  |  | 232,754 |
Income before income taxes | 30,848 |  |  | 29,037 |  |  | 207,572 |  |  | 53,703 |  |  | 321,160 |
Income tax provision | 86 |  |  | 767 |  |  |  |  |  |  |  |  | 853 |
Net income including earnings from noncontrolling interests | 30,762 |  |  | 28,270 |  |  | 207,572 |  |  | 53,703 |  |  | 320,307 |
Less: income attributable to noncontrolling interest |  |  |  |  |  |  |  |  |  | (28,297 | ) |  | (28,297 | )
Net income attributable to controlling interest | $ | 30,762 |  |  | $ | 28,270 |  |  | $ | 207,572 |  |  | $ | 25,406 |  |  | $ | 292,010 |
Company’s equity in earnings of unconsolidated entities (2) | $ | 3,392 |  |  | $ | 14,069 |  |  | $ | 62,204 |  |  | $ | 5,575 |  |  | $ | 85,240 |
| For the year ended October 31, 2017
| Land Develop- ment Joint Ventures |  | Home Building Joint Ventures |  | Rental Property Joint Ventures |  | Gibraltar Joint Ventures |  | Total
Revenues | $ | 288,440 |  |  | $ | 475,260 |  |  | $ | 115,519 |  |  | $ | 10,090 |  |  | $ | 889,309 |
Cost of revenues | 191,965 |  |  | 286,446 |  |  | 70,108 |  |  | 14,428 |  |  | 562,947 |
Other expenses | 6,508 |  |  | 13,102 |  |  | 59,503 |  |  | 3,942 |  |  | 83,055 |
Total expenses | 198,473 |  |  | 299,548 |  |  | 129,611 |  |  | 18,370 |  |  | 646,002 |
Gain on disposition of loans and REO |  |  |  |  |  |  |  | 48,079 |  |  | 48,079 |
Income (loss) from operations | 89,967 |  |  | 175,712 |  |  | (14,092 | ) |  | 39,799 |  |  | 291,386 |
Other income | 4,723 |  |  | 7,317 |  |  | 1,556 |  |  | 432 |  |  | 14,028 |
Income (loss) before income taxes | 94,690 |  |  | 183,029 |  |  | (12,536 | ) |  | 40,231 |  |  | 305,414 |
Income tax provision | 94 |  |  | 7,473 |  |  | 95 |  |  |  |  |  | 7,662 |
Net income (loss) including earnings from noncontrolling interests | 94,596 |  |  | 175,556 |  |  | (12,631 | ) |  | 40,231 |  |  | 297,752 |
Less: income attributable to noncontrolling interest |  |  |  |  |  |  |  |  |  | (20,439 | ) |  | (20,439 | )
Net income (loss) attributable to controlling interest | 94,596 |  |  | 175,556 |  |  | (12,631 | ) |  | 19,792 |  |  | 277,313 |
Company’s equity in earnings of unconsolidated entities (2) | $ | 13,007 |  |  | $ | 77,339 |  |  | $ | 21,458 |  |  | $ | 4,262 |  |  | $ | 116,066 |
(2) Differences between our equity in earnings of unconsolidated entities and the underlying net income (loss) of the entities are primarily a result of a basis difference of an acquired joint venture interest; distributions from entities in excess of the carrying amount of our net investment; recoveries of previously incurred charges; unrealized gains on our retained joint venture interests; and our share of the entities’ profits related to home sites purchased by us which reduces our cost basis of the home sites acquired.

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- Definition The entire disclosure for the information summarizing investments in and advances to majority-owned subsidiaries, other controlled companies, and other affiliates. It reflects specified information about ownership, financial results from, and financial position in such entities. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 946 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2324412 + Details
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