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, the Company’s joint venture arrangements 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, 2018 is the total amount invested of $35.9 million (reported as Investment in Joint Venture Arrangements on our Consolidated Balance Sheets), which amount may increase as a result of further investments that are expected 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, and for which a special purpose entity was established, as of December 31, 2018 and 2017 and for the years ended December 31, 2018, 2017 and 2016 is as follows:

Summarized Condensed Combined Balance Sheets:



	December 31,
(In thousands)	2018		2017
Assets:
Single-family lots, land and land development costs ^{(a) (b)}	$	11,182	$	13,289
Other assets	938		5,143
Total assets	$	12,120	$	18,432
Liabilities and partners’ equity:
Liabilities:
Notes payable	$	2,318	$	261
Other liabilities	599		1,544
Total liabilities	2,917		1,805
Partners’ equity:
Company’s equity ^{(a) (b)}	$	2,525	$	8,328
Other equity	6,678		8,299
Total partners’ equity	$	9,203	$	16,627
Total liabilities and partners’ equity	$	12,120	$	18,432


(a)	For the years ended December 31, 2018 and 2017, impairment expenses and other miscellaneous adjustments totaling less than ($0.1 million) and $1.7 million, respectively, were excluded from the table above.


(b)	For the years ended December 31, 2018 and 2017, the table above excludes the Company’s investment in joint development arrangements for which a special purpose entity was not established, totaling $33.3 million and $13.9 million, respectively.

Summarized Condensed Combined Statements of Operations:



	Year Ended December 31,
(In thousands)	2018		2017		2016
Revenue	$	4,632	$	10,286	$	5,995
Costs and expenses	2,748		6,817		5,849
Income	$	1,884	$	3,469	$	146


(a)	For the years ended December 31, 2018 and 2017, the table above excludes the Company’s investment in joint development arrangements for which a special purpose entity was not established.

The Company’s total equity in the income relating to the above homebuilding joint venture arrangements was $0.3 million for 2018 and $0.5 million for each of 2017 and 2016.