Investments in Partnerships and LLCs

We participate in entities with equity interests ranging from 20% to 58.2% for the purpose of acquiring and/or developing land in which we may or may not have a controlling interest or be the primary beneficiary. We determine the method for accounting for our investment at inception or upon a reconsideration event.

Consolidated Investments

In May 2012, we entered into an agreement with JEN Arizona 4, LLC to form a limited liability company, EM 646, LLC (“EM 646”). We hold a 58.2% interest in the venture, which was organized for the purpose of acquiring, entitling, developing, and distributing specific sections of real property located in Mesa, Arizona. The property was acquired in November 2012 and will be distributed to the partners at cost, once certain entitlements and development activities are completed.

As of March 31, 2014 and December 31, 2013, our consolidated balance sheets include $34,525 and $33,997, respectively, in Land and Other Inventories owned by EM 646.

We and our equity partners make initial or ongoing capital contributions to the consolidated entity on a pro rata basis. The obligation to make capital contributions is governed by the consolidated entity’s operating agreement.

As of March 31, 2014, the consolidated entity was financed by partner equity and does not have third-party debt. In addition, we have not provided any guarantees to the entity or our equity partner. The assets of our investee can only be used to settle obligations of the investee.

Equity Method Investments

We own non-controlling equity interests ranging from 20% to 50% in entities formed for the purpose of acquiring and/or developing land. We analyze these entities when they are entered into or upon a reconsideration event. These investments are accounted for under the equity method.

We share in the profits and losses of these unconsolidated entities generally in accordance with our ownership interests. We and our equity partners make initial and ongoing capital contributions to these unconsolidated entities on a pro rata basis. The obligation to make capital contributions is governed by each unconsolidated entity’s respective operating agreement. We made contributions totaling $0 and $83 to our unconsolidated entities during the three months ended March 31, 2014 and 2013, respectively. The balance of our investments in unconsolidated entities was $1,231 and $1,230 at March 31, 2014 and December 31, 2013, respectively.

The following are the combined condensed balance sheets of the entities we account for under the equity method as of March 31, 2014 and December 31, 2013:



	March 31, 2014		December 31, 2013
Assets:
Cash	$	60	$	70
Land and other inventory	6,126		6,131
Other assets	5		5
Total assets	$	6,191	$	6,206
Liabilities and Partners’ Capital:
Accounts payable and accrued liabilities	$	52	$	80
Partners’ capital of:
AV Homes	1,231		1,230
Equity partners	4,908		4,896
Total liabilities and partners’ capital	$	6,191	$	6,206

The following are the combined condensed statements of operations of these entities for the three months ended March 31, 2014 and 2013:



	2014			2013
Revenues	$	—		$	—
Costs and expenses	(9		)	138
Net income (loss) from unconsolidated entities	$	9		$	(138	)
AV Homes' share of income (loss) from unconsolidated entities	$	1		$	(63	)