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Investment in Unconsolidated Subsidiaries
12 Months Ended
Dec. 31, 2018
Investment in Unconsolidated Subsidiaries [Abstract]  
Investment in Unconsolidated Subsidiaries





9. Investment in Unconsolidated Subsidiaries



On November 1, 2016, we acquired a 50% ownership interest in WJH LLC, which is the successor to Wade Jurney Homes, Inc. and Wade Jurney of Florida, Inc., for $15.0 million.  As a result of the transaction, we subsequently owned 50% of WJH and Wade Jurney Jr., an individual, owned the other 50% interest.  Each party contributed an additional $3.0 million in capital to WJH upon its formation.  The Company and Wade Jurney Jr. shared responsibility for all of WJH’s strategic decisions, with Wade Jurney Jr. continuing to manage the day-to-day operations under the existing operating model.  Our investment in WJH was treated as an unconsolidated investment under the equity method of accounting.



Our aggregate investment in WJH at December 31, 2017 of $28.2 million was more than our share of the underlying net assets of WJH, resulting in outside basis of approximately $5.4 million.  Of the $5.4 million in outside basis, $1.1 million and $4.4 million are attributed to the underlying trade names and goodwill of WJH, respectively.  Amounts allocated to intangible assets were amortized to equity in earnings over approximately 10 years.  



As discussed in Footnote 3 to the Consolidated Financial Statements, on June 14, 2018, we acquired the remaining 50% ownership interest in WJH for $37.5 million, whereby WJH became a 100% owned subsidiary of the Company. 



For the period from January 1, 2018 through June 14, 2018, we recognized $14.8 million of equity in income of unconsolidated subsidiaries, and received $7.4 million in in operating distributions.  During the year ended December 31, 2017, we recognized $12.2 million of equity in income of unconsolidated subsidiaries, made capital contributions totaling $3.0 million and received operating distributions from WJH of $5.2 million.



The following table provides unaudited selected financial information for WJH as of and for the year ended December 31, 2017 (in thousands):







 

 

 



 

 

 



 

December 31, 2017 (unaudited)

Inventories

 

$

101,649 

Total assets

 

$

136,531 

Total liabilities

 

$

91,002 

Partners' capital

 

$

45,529 

Homebuilding revenues

 

$

271,653 

Income before income tax expense

 

$

26,185