Investments in Unconsolidated Entities

12 Months Ended

Dec. 31, 2017

Investments in Unconsolidated Entities

Investments in Unconsolidated Entities

Note 5 - Investments in Unconsolidated Entities

We participate in entities with less than 100% equity interests. One entity in which we have a 58% equity interest, was formed for the purpose of acquiring and developing land in our Encore active adult community in Arizona while the other is a mortgage joint venture in which we have a 50% equity interest,  was formed in the fourth quarter of 2017 to serve as a preferred lender for homebuyers in our markets along with other related services.

We determine the method for accounting for our investment at inception or upon a reconsideration event. We share in the profits and losses of unconsolidated entities generally in accordance with our ownership interests. Earnings from investments in unconsolidated entities is included within interest income and other in our consolidated statement of operations. 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 or other governing documents. We made contributions totaling less than $0.3 million, less than $0.1 million and $2.9 million to our unconsolidated entities during the years ended December 31, 2017,  2016 and 2015, respectively. The balance of our investments in unconsolidated entities was $0.3 million and $1.2 million as of December 31, 2017 and December 31, 2016, respectively, and is included in prepaid expenses and other assets in our consolidated balance sheets.