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Investments in Unconsolidated Joint Ventures
 9 Months Ended
Aug. 31, 2019
Equity Method Investments and Joint Ventures [Abstract]  
Investments in Unconsolidated Joint Ventures
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. 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, according 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. For distributions we receive from these unconsolidated joint ventures, we have elected to use the cumulative earnings approach for our consolidated statements of cash flows. Under the cumulative earnings approach, distributions up to the amount of cumulative equity in earnings recognized are treated as returns on investment within operating cash flows and those in excess of that amount are treated as returns of investment within investing cash flows.

The following table presents combined condensed information from the statements of operations of our unconsolidated joint ventures (in thousands):
 
Three Months Ended August 31,
 
Nine Months Ended August 31,
 
2019
 
2018
 
2019
 
2018
Revenues
$
5,729

 
$
35,391

 
$
21,707

 
$
52,015

Construction and land costs
(5,686
)
 
(22,211
)
 
(21,704
)
 
(38,866
)
Other expense, net
(708
)
 
(226
)
 
(1,946
)
 
(2,209
)
Income (loss)
$
(665
)
 
$
12,954

 
$
(1,943
)
 
$
10,940


The year-over-year decrease in combined revenues and income for three months and nine months ended August 31, 2019 mainly reflected the sale of land by an unconsolidated joint venture in Arizona, and contingent consideration (profit participation revenues) earned by an unconsolidated joint venture in California in the year-earlier periods.
The following table presents combined condensed balance sheet information for our unconsolidated joint ventures (in thousands):
 
August 31,
2019
 
November 30,
2018
Assets
 
 
 
Cash
$
27,282

 
$
18,567

Inventories
134,524

 
131,074

Other assets
969

 
530

Total assets
$
162,775

 
$
150,171

 
 
 
 
Liabilities and equity
 
 
 
Accounts payable and other liabilities
$
14,133

 
$
11,374

Notes payable (a)
37,340

 
17,956

Equity
111,302

 
120,841

Total liabilities and equity
$
162,775

 
$
150,171


(a)
As of August 31, 2019 and November 30, 2018, one of our unconsolidated joint ventures had a construction loan agreement with a third-party lender to finance its land development activities, with the outstanding debt secured by the underlying property and related project assets and non-recourse to us. All of the outstanding secured debt at August 31, 2019 is scheduled to mature in February 2020. None of our other unconsolidated joint ventures had outstanding debt at August 31, 2019 or November 30, 2018.
The following table presents additional information relating to our investments in unconsolidated joint ventures (dollars in thousands):
 
 
August 31,
2019
 
November 30,
2018
Number of investments in unconsolidated joint ventures
 
6

 
6

Investments in unconsolidated joint ventures
 
$
57,168

 
$
61,960

Number of unconsolidated joint venture lots controlled under land option contracts and other similar contracts
 
8

 
36


We and our partner in the unconsolidated joint venture that has the above-noted outstanding construction loan agreement at August 31, 2019 provide certain guarantees and indemnities to the lender, including a guaranty to complete the construction of improvements for the project; a guaranty against losses the lender suffers due to certain bad acts or failures to act by the unconsolidated joint venture or its partners; and an indemnity of the lender from environmental issues. Our actual responsibility under the foregoing guaranty and indemnity obligations is limited to our pro rata interest in the unconsolidated joint venture. We do not have a guaranty or any other obligation to repay or to support the value of the collateral underlying the outstanding
secured debt. However, various financial and non-financial covenants apply with respect to the outstanding secured debt and the related guaranty and indemnity obligations, and a failure to comply with such covenants could result in a default and cause the lender to seek to enforce such guaranty and indemnity obligations, if and as may be applicable. As of August 31, 2019, we were in compliance with the applicable terms of our relevant covenants with respect to the construction loan agreement. We do not believe that our existing exposure under our guaranty and indemnity obligations related to the outstanding secured debt is material to our consolidated financial statements.
We are committed to purchase all 8 unconsolidated joint venture lots controlled under land option and other similar contracts at August 31, 2019 from one of our unconsolidated joint ventures. The purchase will be made in quarterly takedowns over the next year for an aggregate purchase price of $3.8 million under agreements that we entered into with the unconsolidated joint venture in 2016.