XML 31 R19.htm IDEA: XBRL DOCUMENT v3.10.0.1
Related Party Transactions (Notes)
6 Months Ended
Jun. 30, 2018
Related Party Transactions [Abstract]  
Related Party Transactions Disclosure [Text Block]
Related Party Transactions
On October 6, 2017, we entered into a Shared Services Agreement with D.R. Horton whereby D.R. Horton will provide us with certain administrative, compliance, operational and procurement services. During the three and six months ended June 30, 2018, we paid D.R. Horton $322,000 and $584,000 for these shared services and $230,000 and $648,000 for the cost of health insurance and other employee benefits. These expenses are included within other operating expenses and general and administrative in our consolidated statement of operations.
Under the terms of the Master Supply Agreement with D.R. Horton, both companies are proactively identifying land development opportunities to expand our portfolio of assets. At June 30, 2018, we owned or controlled through option purchase contracts approximately 19,100 residential lots, of which over 4,400 are under contract to sell to D.R. Horton. Additionally, D.R. Horton has the right of first offer on nearly 6,700 of these residential lots based on executed purchase and sale agreements. At June 30, 2018 and December 31, 2017, we had earnest money deposit liabilities of $36,285,000 and $1,201,000 related to earnest money deposits from D.R. Horton in respect of land and lot option purchase contracts for lots to be sold to D.R. Horton. During the three months ended June 30, 2018, we sold 141 residential lots to D.R. Horton for $6,858,000 generating segment earnings of $1,989,000 and we sold 79 residential tract acres to D.R. Horton for $1,990,000 generating segment earnings of $1,222,000. As a result of our continuing involvement in the development of 56 lots sold to D.R. Horton in three months ended June 30, 2018 we deferred $3,233,000 of revenue and $400,000 of profit which will be recognized on a percentage of completion basis. During the six months ended June 30, 2018, we sold 324 residential lots to D.R. Horton for $15,357,000 generating segment earnings of $3,811,000 and we sold 79 residential tract acres to D.R. Horton for $1,990,000 generating segment earnings of $1,222,000.
During the three and six months ended June 30, 2018, we reimbursed D.R. Horton approximately $2,924,000 and $14,677,000 for previously paid earnest money and $4,647,000 and $10,540,000 for pre-acquisition and other due diligence and development costs related to land purchase contracts whereby D.R. Horton assigned their rights under these land purchase contracts to us.
At June 30, 2018, entitled, developed and under development projects includes $34,916,000 related to undeveloped land which we acquired during the three months ended June 30, 2018. We have the contractual right to sell this undeveloped land to D.R. Horton within a year of our purchase of the asset or earlier at D.R. Horton's discretion at a sales price equal to our carrying value at the time of sale in addition to holding and closing costs plus 12% per annum.
At June 30, 2018, other accrued expenses on our consolidated balance sheet included $3,181,000 owed to D.R. Horton for any accrued and unpaid shared services, earnest money and due diligence cost reimbursements and other development cost reimbursements. We had no material amounts due to or from D.R. Horton as of December 31, 2017.