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Investments in Joint Ventures

9 Months Ended

Sep. 30, 2011

Investments in Joint Ventures

Investments in Joint Ventures

Note 9. Investments in Joint Ventures

The Company enters into joint ventures, from time to time, for the purpose of acquisition and co-development of land parcels and lots. It participates in a number of joint ventures in which it has less than a controlling interest. As of September 30, 2011, the Company participated in five active homebuilding joint ventures in the Austin, Chicago, Denver and Washington, D.C., markets. The Company recognizes its share of the respective joint ventures’ earnings or losses from the sale of lots to other homebuilders. It does not, however, recognize earnings from lots that it purchases from the joint ventures. Instead, the Company reduces its cost basis in each lot by its share of the earnings from the lot.

The following table summarizes each reporting segment’s total estimated share of lots owned and controlled by the Company under its joint ventures:

		SEPTEMBER 30, 2011							DECEMBER 31, 2010
		LOTS		LOTS					LOTS		LOTS
		OWNED		OPTIONED		TOTAL			OWNED		OPTIONED		TOTAL
North		143		-		143			150		-		150
Southeast		-		-		-			-		-		-
Texas 1		27		-		27			54		-		54
West		172		1,300		1,472			166		1,209		1,375
Total		342		1,300		1,642			370		1,209		1,579

1 Additionally, at December 31, 2010, the Company controlled 14 lots, all of which were owned under a joint venture now deemed to be part of its discontinued operations. This joint venture did not control any lots at September 30, 2011.

At September 30, 2011 and December 31, 2010, the Company’s investments in its unconsolidated joint ventures totaled $10.0 million and $13.3 million, respectively, and were classified in “Other” assets within the Consolidated Balance Sheets. For the three months ended September 30, 2011, the Company’s equity in earnings from its unconsolidated joint ventures totaled $349,000, compared to equity in earnings of $62,000 for the same period in 2010. For the nine months ended September 30, 2011, the Company’s equity in losses from its unconsolidated joint ventures totaled $1.3 million, compared to equity in earnings of $218,000 for the same period in 2010. During the second quarter of 2011, the Company recorded a $1.9 million impairment related to a commercial parcel in a joint venture in Chicago.

The entire disclosure for equity investment, or group of investments, for which combined disclosure is appropriate, including: (a) the name of each investee and percentage of ownership of common stock, (b) accounting policies for investments in common stock, (c) difference between the amount at which the investment is carried and the amount of underlying equity in net assets and the accounting treatment of the difference, (d) the total fair value of each identified investment for which a market value is available, (e) summarized information as to assets, liabilities, and results of operations of the investees (for investments in unconsolidated subsidiaries, common stock of joint ventures, or other investments using the equity method), and (f) material effects of possible conversions, exercises, or contingent issuances of the investee. Other disclosures include (a) the names of any investee in which the investor owns 20 percent or more of the voting stock and investment is not accounted for using the equity method, and the reasons why not, and (b) the names of any investee in which the investor owns less than 20 percent of the voting stock and the investment is accounted for using the equity method, and the reasons why it is.

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