Investment in Joint Venture Arrangements

The Company has periodically partnered with other land developers or homebuilders to share in the cost of land investment and development of a property through joint ownership and development agreements, joint ventures, and other similar arrangements. For such joint venture arrangements where a special purpose entity is established to own the property, we have determined that we do not have substantive control over any of these entities; therefore, they are recorded using the equity method of accounting. We believe the Company’s maximum exposure related to its investment in these joint venture arrangements as of December 31, 2017 is the total amount invested of $20.5 million which is reported as Investment in Joint Venture Arrangements on our Consolidated Balance Sheets, although we expect to invest further amounts in these joint venture arrangements as development of the properties progresses.

The Company evaluates its investment in joint venture arrangements for potential impairment on a quarterly basis. If the fair value of the investment (please see Notes 1 and 3 to our Consolidated Financial Statements) is less than the investment’s carrying value, and the Company determines the decline in value was other than temporary, the Company writes down the investment to fair value.

Summarized condensed combined financial information for the joint venture arrangements that are included in the homebuilding segments as of December 31, 2017 and 2016 and for the years ended December 31, 2017, 2016 and 2015 is as follows:

Summarized Condensed Combined Balance Sheets:



	December 31,
(In thousands)	2017		2016
Assets:
Single-family lots, land and land development costs ^{(a) (b)}	$	13,289	$	30,794
Other assets	5,143		1,040
Total assets	$	18,432	$	31,834
Liabilities and partners’ equity:
Liabilities:
Notes payable	$	261	$	1,287
Other liabilities	1,544		2,723
Total liabilities	1,805		4,010
Partners’ equity:
Company’s equity ^{(a) (b)}	$	8,328	$	16,015
Other equity	8,299		11,809
Total partners’ equity	$	16,627	$	27,824
Total liabilities and partners’ equity	$	18,432	$	31,834


(a)	For the years ended December 31, 2017 and 2016, impairment expenses and other miscellaneous adjustments totaling $1.7 million and $0.5 million, respectively, were excluded from the table above.


(b)	For the years ended December 31, 2017 and 2016, the table above excludes the Company’s investment in joint development arrangements for which a special purpose entity was not established, totaling $13.9 million and $12.5 million, respectively.

Summarized Condensed Combined Statements of Operations:



	Year Ended December 31,
(In thousands)	2017		2016		2015
Revenue	$	10,286	$	5,995	$	5,800
Costs and expenses	6,817		5,849		3,527
Income	$	3,469	$	146	$	2,273

The Company’s total equity in the income relating to the above homebuilding joint venture arrangements was $0.5 million for 2017, 2016 and 2015.