Investment in Unconsolidated Ventures

At second quarter-end 2014, we had ownership interests in 13 ventures that we account for using the equity method. We have no ventures that are accounted for using the cost method.

In first quarter 2014, we entered into the CREA FMF Nashville LLC venture with Massachusetts Mutual Life Insurance Co. to develop a 320-unit multifamily property in Nashville, Tennessee. We contributed $5,897,000 of land and pre-development costs to the venture, net of $7,191,000 of reimbursements received from the venture for pre-development costs we previously incurred. The venture obtained a senior secured construction loan in the amount of $51,950,000 that bears interest at 30-day LIBOR plus 2.50% per annum, of which $14,227,000 was outstanding at second quarter-end 2014. We provided the lender a construction completion guaranty; a guaranty of repayment of 25 percent of the principal balance and unpaid accrued interest; and a nonrecourse carve-out guaranty. The principal guaranty will reduce from 25 percent of principal to zero upon achievement of certain conditions. At second quarter-end 2014, our investment in this venture is $5,655,000.

Combined summarized balance sheet information for our ventures accounted for using the equity method follows:



	Venture Assets				Venture Borrowings^(a)				Venture Equity						Our Investment
	Second Quarter-End		Year-End		Second Quarter-End		Year-End		Second Quarter-End			Year-End			Second Quarter-End		Year-End
	2014		2013		2014		2013		2014			2013			2014		2013
	(In thousands)
242, LLC ^(b)	$	23,139	$	23,751	$	910	$	921	$	19,318		$	19,838		$	8,835	$	9,084
CJUF III, RH Holdings	40,148		36,320		23,022		18,492		14,764			15,415			2,584		3,235
CL Ashton Woods ^(c)	10,940		10,473		—		—		10,001			9,704			3,997		3,544
CL Realty	8,348		8,298		—		—		8,220			8,070			4,110		4,035
CREA FMF Nashville ^(b)	22,289		—		14,227		—		6,125			—			5,655		—
FMF Peakview	36,406		30,673		16,544		12,533		16,915			16,620			3,465		3,406
HM Stonewall Estates ^(c)	3,489		3,781		—		63		3,489			3,718			1,963		2,128
LM Land Holdings ^(c)	33,362		33,298		10,533		9,768		18,051			13,347			9,430		8,283
PSW Communities	10,100		—		5,064		—		4,281			—			3,805		—
Temco	13,313		13,320		—		—		13,074			13,160			6,537		6,580
Other ventures (3)^(d)	12,535		12,723		29,756		29,699		(31,634		)	(31,357		)	423		852
	$	214,069	$	172,637	$	100,056	$	71,476	$	82,604		$	68,515		$	50,804	$	41,147

Combined summarized income statement information for our ventures accounted for using the equity method follows:



	Venture Revenues								Venture Earnings (Loss)												Our Share of Earnings (Loss)
	Second Quarter				First Six Months				Second Quarter						First Six Months						Second Quarter						First Six Months
	2014		2013		2014		2013		2014			2013			2014			2013			2014			2013			2014			2013
	(In thousands)
242, LLC	$	—	$	1,497	$	1,475	$	3,131	$	(53	)	$	354		$	480		$	837		$	(26	)	$	190		$	251		$	448
CJUF III, RH Holdings	707		3		1,070		3		(438		)	(108		)	(651		)	(224		)	(438		)	(108		)	(651		)	(224		)
CL Ashton Woods ^(c)	361		1,419		1,069		2,891		76			293			296			550			135			563			453			1,140
CL Realty	459		373		827		801		322			216			552			452			161			108			276			226
CREA FMF Nashville	—		—		—		—		—			—			(25		)	—			—			—			(25		)	—
FMF Peakview	—		—		—		—		(79		)	(7		)	(152		)	(39		)	(16		)	(2		)	(31		)	(8		)
HM Stonewall Estates ^(c)	434		1,098		1,435		1,098		170			425			522			400			68			182			209			176
LM Land Holdings ^(c)	4,395		3,953		9,293		5,264		4,044			3,160			6,971			3,759			1,220			1,486			1,897			1,654
PSW Communities	—		—		—		—		(4		)	—			(220		)	—			(6		)	—			(195		)	—
Temco	654		206		714		275		134			18			116			6			67			9			58			3
Other ventures (3)	27		788		49		5,150		(141		)	109			(189		)	(522		)	(207		)	138			(293		)	64
	$	7,037	$	9,337	$	15,932	$	18,613	$	4,031		$	4,460		$	7,700		$	5,219		$	958		$	2,566		$	1,949		$	3,479

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^(a)	Total includes current maturities of $77,510,000 at second quarter-end 2014, of which $37,795,000 is non-recourse to us, and $37,966,000 at year-end 2013, of which $37,822,000 is non-recourse to us.


^(b)	Includes unamortized deferred gains on real estate contributed by us to ventures. We recognize deferred gains as income as real estate is sold to third parties. Deferred gains of $1,648,000 are reflected as a reduction to our investment in unconsolidated ventures at second quarter-end 2014.


^(c)	Includes unrecognized basis difference of $2,089,000 which is reflected as a reduction of our investment in unconsolidated ventures at second quarter-end 2014. The difference will be accreted as income or expense over the life of the investment and included in our share of earnings (loss) from the respective ventures.


^(d)	Our investment in other ventures reflects our ownership interests, excluding venture losses that exceed our investment where we are not obligated to fund those losses. Please read Note 16—Variable Interest Entities for additional information.

In first six months 2014, we contributed cash of $4,430,000 to these ventures and received $1,923,000 in cash distributions, and in first six months 2013, we contributed cash of $782,000 to these ventures and received $1,580,000 in cash distributions. Distributions include both return of investments and distribution of earnings.

We have provided performance bonds and letters of credit on behalf of certain ventures that could be drawn on due to failure to satisfy construction obligations as general contractor or for failure to timely deliver streets and utilities in accordance with local codes and ordinances. At second quarter-end 2014, we have $26,906,000 outstanding, of which $26,577,000 is related to development and construction of a 257-unit multifamily property in Austin which is substantially complete.