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	7		4		17		9		37
Investment in unconsolidated entities	$	116,464	$	58,907	$	157,657	$	21,541	$	354,569
Number of unconsolidated entities with funding commitments by the Company	2		1		1		1		5
Company’s remaining funding commitment to unconsolidated entities	$	21,160	$	1,400	$	785	$	9,621	$	32,966



	Land Development Joint Ventures		Home Building Joint Ventures		Rental Property Joint Ventures		Total
Number of joint ventures with debt financing	3		3		15		21
Aggregate loan commitments	$	100,859	$	218,237	$	1,148,687	$	1,467,783
Amounts borrowed under loan commitments	$	91,635	$	196,891	$	936,268	$	1,224,794

During the nine months ended July 31, 2019, our Land Development Joint Ventures sold approximately 680 lots and recognized revenues of $182.4 million. We acquired 248 of these lots for $116.9 million. Our share of the joint venture income from the lots we acquired was insignificant. During the nine months ended July 31, 2018, our Land Development Joint Ventures sold approximately 675 lots and recognized revenues of $176.4 million. We acquired 125 of these lots for $50.0 million. Our share of the income of $1.4 million from the lots we acquired was deferred by reducing our basis in those lots.

During the three months ended July 31, 2019, our Land Development Joint Ventures sold approximately 182 lots and recognized revenues of $43.5 million. We acquired 53 of these lots for $20.4 million. Our share of the joint venture income from the lots we acquired was insignificant. During the three months ended July 31, 2018, our Land Development Joint Ventures sold approximately 226 lots and recognized revenues of $73.7 million. We acquired 70 of these lots for $42.7 million. Our share of the income of $0.5 million from the lots we acquired was deferred by reducing our basis in those lots.

Our Home Building Joint Ventures are delivering homes in New York, New York, and Jupiter, Florida. During the nine months ended July 31, 2019 and 2018, our Home Building Joint Ventures delivered 105 homes with a sales value of $217.6 million and 73 homes with a sales value of $104.0 million, respectively. During the three months ended July 31, 2019 and 2018, our Home Building Joint Ventures delivered 33 homes with a sales value of $95.8 million and 19 homes with a sales value of $36.0 million, respectively.

As of July 31, 2019, our Rental Property Joint Ventures, including those that we consolidate, owned 22 for-rent apartment projects and a hotel, which are located in multiple metropolitan areas throughout the country. At July 31, 2019, these joint ventures had approximately 1,700 units that were occupied or ready for occupancy, 1,900 units in the lease-up stage, and 3,200 units in the design phase or under development. In addition, we either own, have under contract, or under a letter of intent approximately 13,400 units, including 1,200 units under active development; we intend to develop these units in joint ventures with unrelated parties in the future.

In the third quarter of fiscal 2019, one of our Rental Property Joint Ventures, in which we have 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 Condensed Consolidated Statements of Operations and Comprehensive Income.

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 our first quarter of fiscal 2019. At July 31, 2019, we had an aggregate investment of $14.4 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 July 31, 2019, the joint ventures had $12.1 million outstanding borrowings under these construction loan facilities.

In addition, during the nine months ended July 31, 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 $79.4 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 July 31, 2019. The carrying value of these joint ventures’ assets totaling $119.9 million are reflected in “Receivables, prepaid expenses, and other assets” in our Condensed Consolidated Balance Sheet as of July 31, 2019. Our partners’ interests aggregating $36.4 million in the joint ventures are reflected as a component of “Noncontrolling interest” in our Condensed Consolidated Balance Sheet as of July 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 third quarter of fiscal 2018, we entered into a joint venture with an unrelated party to develop a 289-unit 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/or our obligation to absorb expected losses or receive benefits from the joint venture, we have consolidated this joint venture at July 31, 2019. The carrying value of the joint venture’s assets totaling $20.0 million is reflected in “Receivables, prepaid expenses, and other assets” in our Condensed Consolidated Balance Sheet as of July 31, 2019. Our partner’s 15% interest of $3.0 million in the joint venture is reflected as a component of “Noncontrolling interest” in our Condensed Consolidated Balance Sheet as of July 31, 2019. The joint venture intends to obtain additional equity investors and secure third-party financing at a later date. At such time, it is expected that the entity would no longer be consolidated.

In the third quarter of fiscal 2018, one of our Rental Property Joint Ventures sold its assets to an unrelated party for $65.5 million. The joint venture had owned, developed, and operated a multifamily rental property located in Westborough, Massachusetts. In connection with the sale, the joint venture’s outstanding loan balance of $30.1 million was repaid. We received cash of $12.1 million and recognized a gain of $8.7 million in the nine months and three months ended July 31, 2018, which is included in “Income from unconsolidated entities” in our Condensed Consolidated Statements of Operations and Comprehensive Income.

In the first quarter of fiscal 2018, one of our Rental Property Joint Ventures sold its assets to an unrelated party for $219.0 million. The joint venture had owned, developed, and operated a student housing community in College Park, Maryland. In connection with the sale, the joint venture repaid its existing $110.0 million loan. We received cash of $39.3 million and

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 July 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 amount of $0.8 million and $1.7 million in the nine-month periods ended July 31, 2019 and 2018, respectively.

In the fourth quarter of fiscal 2019, we entered into a joint venture with unrelated parties to develop a luxury for-rent residential apartment project located in Atlanta, Georgia. Prior to the formation of this joint venture, we acquired the property and incurred approximately $43.4 million of land and land development costs. Our partner acquired a 75% interest in this entity for an aggregate amount of $33.8 million. Concurrent with its formation, the joint venture entered into a $63.7 million construction loan agreement. We provided certain guarantees under the construction loan agreement. We estimate that the maximum exposure under these guarantees, if the full amount of the loan commitment was borrowed, would be $63.7 million without taking into account any recoveries from the underlying collateral.

We, through our wholly owned subsidiary, Gibraltar Capital and Asset Management, LLC (“Gibraltar”), have entered into seven 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 July 31, 2019, we had an aggregate investment of $21.5 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 July 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 July 31, 2019, certain unconsolidated entities have loan commitments aggregating $1.37 billion, of which, if the full amount of the debt obligations were borrowed, we estimate $299.2 million to be our maximum exposure related to repayment and carry cost guarantees. At July 31, 2019, the unconsolidated entities had borrowed an aggregate of $1.13 billion, of which we estimate $265.6 million to be our maximum exposure related to repayment and carry cost guarantees. The terms of these guarantees generally range from 5 months to 9.9 years. These maximum exposure estimates do not take into account any recoveries from the underlying collateral or any reimbursement from our partners.

At July 31, 2019 and October 31, 2018, we determined that 18 and 11, respectively, of our joint ventures were VIEs under the guidance of ASC 810, “Consolidation.” For 13 and 10 of these VIEs as of July 31, 2019 and October 31, 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 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 July 31, 2019, we have consolidated five Rental Property Joint Ventures. The carrying value of these joint ventures’ assets totaling $139.9 million is reflected in “Receivables, prepaid expenses, and other assets” in our Condensed Consolidated Balance Sheet as of July 31, 2019. Our partners’ interests aggregating $39.4 million in the joint ventures are reflected as a component of “Noncontrolling interest” in our Condensed Consolidated Balance Sheet as of July 31, 2019. 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 July 31, 2019 and October 31, 2018, our investments in the unconsolidated entities deemed to be VIEs totaled $37.8 million and $33.8 million, respectively. At July 31, 2019 and 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 $76.0 million and $70.0 million, respectively, of loan guarantees and $9.6 million and $10.8 million, respectively, of additional commitments to the VIEs. Of our potential exposure for these loan guarantees at July 31, 2019 and October 31, 2018, $76.0 million and $70.0 million, respectively, is related to loan repayment and carry cost guarantees, of which $76.0 million and $70.0 million, respectively, was borrowed.



	July 31, 2019		October 31, 2018
Cash and cash equivalents	$	101,034	$	102,462
Inventory	729,583		973,990
Loans receivable, net	56,954		40,065
Rental properties	1,022,461		808,785
Rental properties under development	377,210		437,586
Real estate owned	12,316		14,838
Other assets	169,746		166,029
Total assets	$	2,469,304	$	2,543,755
Debt, net of deferred financing costs	$	1,217,077	$	1,145,998
Other liabilities	169,554		158,570
Members’ equity	1,072,233		1,235,974
Noncontrolling interest	10,440		3,213
Total liabilities and equity	$	2,469,304	$	2,543,755
Company’s net investment in unconsolidated entities (1)	$	354,569	$	431,813



	Nine months ended July 31,						Three months ended July 31,
	2019			2018			2019			2018
Revenues	$	511,226		$	393,522		$	179,608		$	117,239
Cost of revenues	443,740			303,209			154,787			93,799
Other expenses	64,027			64,462			22,674			19,880
Total expenses	507,767			367,671			177,461			113,679
Gain on disposition of loans and real estate owned	4,383			52,444			689			25,964
Income from operations	7,842			78,295			2,836			29,524
Other income	31,584			106,141			29,846			25,275
Income before income taxes	39,426			184,436			32,682			54,799
Income tax provision	596			587			201			238
Net income including earnings from noncontrolling interests	38,830			183,849			32,481			54,561
Less: income attributable to noncontrolling interest	(9,600		)	(28,017		)	(7,521		)	(16,079		)
Net income attributable to controlling interest	$	29,230		$	155,832		$	24,960		$	38,482
Company’s equity in earnings of unconsolidated entities (1)	$	17,759		$	53,913		$	7,200		$	12,469

Differences between our equity in earnings of unconsolidated entities and the underlying net income 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.