Lennar Corp.'s earnings call March 27 will provide the first glimpse at how the spring selling season is unfolding in the large public builder universe--and nobody's expecting it to be a pretty view.

But that vision's unsightliness may pale in comparison to another potentially apocalyptic scene that could be revealed during the call: a peek at what's happening within the company's huge joint venture investments, some of which are rumored to be crumbling.

Kyle Canyon Gateway, a Las Vegas joint venture of which Lennar is a part, is in default. And rumors have been thick that the company's innovative financial arrangement with its Landsource joint venture is unraveling as well as land values collapse.

The executives of Lennar, which has the largest investment in joint ventures of all the national vendors, can expect to be peppered with questions from analysts about the state of its off-balance sheet investments during the call.

Analysts have consistently penalized the company because of the lack of transparency of those investments. And that criticism intensified in the wake of the implications of TOUSA's Transeastern JV gone bad, which can be given a lion's share of the blame for forcing that company into bankruptcy court for reorganization after it had to take the upside-down company onto its balance sheet.

In response to continuous questions and concerns about its joint ventures, Lennar released information about the maximum amount of recourse that might lie within its JV investments should they go bad in its 2007 10-K. It listed its maximum recourse exposure to be more than $1 billion, but its net recourse exposure was listed at about $795 million.

Lennar promised its creditors in a January amendment to its credit facility to reduce the recourse debt in its JVs by $300 million in fiscal 2008 and $200 million in 2009.

The company's massive land holdings have already wrecked havoc on its balance sheet, resulting in a $1.8 billion charge last quarter. Analysts are expecting more to be booked for the first quarter of its fiscal year, which started Dec. 1.

Despite the heavy charges last year, Lennar was able to generate significant cash. Analyst Stephen East of Pali Capital isn't expecting much cash generation to have been generated in its first quarter of 2008. "Given the seasonality of the business, cash generation should be negligible this quarter then grow in subsequent quarters," East wrote.

East also expects revenues to be down by 62% and closings down by 58% for the quarter. Selling prices are expected to fall approximately about 14%. He expects orders to have taken an upward move, but at the expense of selling price.

UBS has rated Lennar a "sell" because of its larger land position (eight years' supply versus seven years' supply in the group of builders), its larger exposures to off-balance sheet risks, its focus on even-flow production, and its "Everything Included" model.

"In our view, trying to even-flow production during a period of elevated cancellation rates and declining demand leads to building more spec homes," wrote UBS analyst David Goldberg. "Lennar will be forced to liquidate this inventory through price reductions, thereby reducing profitability. Furthermore we believe most buyers prefer choice over an 'everything's included' model; over time, Lennar will be competing with builders that offer greater customization to capture a shrinking buyer pool."

Lennar shares (NYSE:LEN) were priced at $17.62, down 6.6%, on average volume in mid-afternoon trading Wednesday as the rest of the builder group took similar losses on the day.