Investments in Unconsolidated Joint Ventures

We have investments in unconsolidated joint ventures that conduct land acquisition, land development and/or other homebuilding activities in various markets where our homebuilding operations are located. Our partners in these unconsolidated joint ventures are unrelated homebuilders and/or land developers and other real estate entities, or commercial enterprises. These investments are designed primarily to reduce market and development risks and to increase the number of lots we own or control. In some instances, participating in unconsolidated joint ventures has enabled us to acquire and develop land that we might not otherwise have had access to due to a project’s size, financing needs, duration of development or other circumstances. While we consider our participation in unconsolidated joint ventures as potentially beneficial to our homebuilding activities, we do not view such participation as essential.

We typically have obtained rights to acquire portions of the land held by the unconsolidated joint ventures in which we currently participate. When an unconsolidated joint venture sells land to our homebuilding operations, we defer recognition of our share of such unconsolidated joint venture’s earnings until a home sale is closed and title passes to a homebuyer, at which time we account for those earnings as a reduction of the cost of purchasing the land from the unconsolidated joint venture.

We and our unconsolidated joint venture partners make initial and/or ongoing capital contributions to these unconsolidated joint ventures, typically on a pro rata basis, equal to our respective equity interests. The obligations to make capital contributions are governed by each such unconsolidated joint venture’s respective operating agreement and related governing documents.

Each unconsolidated joint venture is obligated to maintain financial statements in accordance with GAAP. We share in the profits and losses of these unconsolidated joint ventures generally in accordance with our respective equity interests. In some instances, we recognize profits and losses related to our investment in an unconsolidated joint venture that differ from our equity interest in the unconsolidated joint venture. This may arise from impairments that we recognize related to our investment that differ from the impairments the unconsolidated joint venture recognizes with respect to the unconsolidated joint venture’s assets; differences between our basis in assets we have transferred to the unconsolidated joint venture and the unconsolidated joint venture’s basis in those assets; our deferral of the unconsolidated joint venture earnings from land sales made to our homebuilding operations; or other items. With respect to our investments in unconsolidated joint ventures, our equity in income (loss) of unconsolidated joint ventures included no impairment charges for the three-month and six-month periods ended May 31, 2014 and 2013.

The following table presents combined condensed information from the statements of operations of our unconsolidated joint ventures (in thousands):



	Six Months Ended May 31,						Three Months Ended May 31,
	2014			2013			2014			2013
Revenues	$	6,118		$	6,356		$	—		$	6,356
Construction and land costs	(3,523		)	(3,928		)	—			(3,928		)
Other expenses, net	(2,038		)	(1,891		)	(908		)	(1,036		)
Income (loss)	$	557		$	537		$	(908	)	$	1,392

The revenues and construction and land costs for the six months ended May 31, 2014 and the three months and six months ended May 31, 2013 were solely related to the sale of land by one of our unconsolidated joint ventures.

The following table presents combined condensed balance sheet information for our unconsolidated joint ventures (in thousands):



	May 31, 2014		November 30, 2013
Assets
Cash	$	21,241	$	18,752
Receivables	5,183		4,902
Inventories	156,085		381,195
Other assets	149		1,183
Total assets	$	182,658	$	406,032
Liabilities and equity
Accounts payable and other liabilities	$	19,278	$	85,386
Equity	163,380		320,646
Total liabilities and equity	$	182,658	$	406,032

The following table presents information relating to our investments in unconsolidated joint ventures (dollars in thousands):



	May 31, 2014		November 30, 2013
Number of investments in unconsolidated joint ventures	7		9
Investments in unconsolidated joint ventures	$	67,594	$	130,192
Number of unconsolidated joint venture lots controlled under land option contracts and other similar contracts	673		5,367

As of May 31, 2014, the combined assets of our unconsolidated joint ventures and the number of unconsolidated joint venture lots controlled under land option contracts and other similar contracts each decreased from November 30, 2013, partly due to a distribution of $70.6 million of land we received from Inspirada Builders, LLC (“Inspirada”), our unconsolidated joint venture in Las Vegas, during the first quarter of 2014. In addition, we sold our interest in an unconsolidated joint venture in Maryland for $10.1 million, which resulted in a gain of $3.2 million in the first quarter of 2014 that is included in equity in income of unconsolidated joint ventures in our consolidated statement of operations for the six months ended May 31, 2014. The decrease in the combined assets of our unconsolidated joint ventures also reflected the transfer of a $33.2 million inventory-related obligation to us in connection with the distribution of land we received from Inspirada, as discussed in Note 10. Accrued Expenses and Other Liabilities. This transfer also contributed to the decrease in the combined accounts payable and other liabilities of our unconsolidated joint ventures during the six months ended May 31, 2014.

The decrease in our investments in unconsolidated joint ventures at May 31, 2014, compared to November 30, 2013, reflected the above-mentioned transactions, partly offset by capital contributions made to various unconsolidated joint ventures.

None of our unconsolidated joint ventures had outstanding debt at May 31, 2014 or November 30, 2013.