XML 46 R13.htm IDEA: XBRL DOCUMENT v3.20.1
Investments in Unconsolidated Joint Ventures
 3 Months Ended
Feb. 29, 2020
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.
The following table presents combined condensed information from the statements of operations of our unconsolidated joint ventures (in thousands):
 
Three Months Ended
 
February 29, 2020
 
February 28, 2019
Revenues
$
27,547

 
$
12,192

Construction and land costs
(21,543
)
 
(12,220
)
Other expense, net
(2,107
)
 
(628
)
Income (loss)
$
3,897

 
$
(656
)

The higher combined revenues and income for the three months ended February 29, 2020, as compared to the year-earlier period, mainly reflected homes delivered from an unconsolidated joint venture in California. In the three months ended February 28, 2019, our unconsolidated joint ventures did not deliver any homes.
The following table presents combined condensed balance sheet information for our unconsolidated joint ventures (in thousands):
 
February 29,
2020
 
November 30,
2019
Assets
 
 
 
Cash
$
38,454

 
$
23,965

Inventories
126,240

 
139,536

Other assets
730

 
792

Total assets
$
165,424

 
$
164,293

 
 
 
 
Liabilities and equity
 
 
 
Accounts payable and other liabilities
$
13,352

 
$
13,282

Notes payable (a)
39,463

 
40,672

Equity
112,609

 
110,339

Total liabilities and equity
$
165,424

 
$
164,293


(a)
As of both February 29, 2020 and November 30, 2019, we had investments in five unconsolidated joint ventures, one of which had a construction loan agreement with a third-party lender to finance its land development activities. The outstanding debt is secured by the underlying property and related project assets and is non-recourse to us. All of the outstanding secured debt at February 29, 2020 is scheduled to mature in February 2021. However, the loan agreement provides for a one-year extension beyond this date. None of our other unconsolidated joint ventures had outstanding debt at February 29, 2020 or November 30, 2019.
We and our partner in the unconsolidated joint venture that has the above-noted outstanding construction loan agreement at February 29, 2020 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. 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.