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Variable Interest Entities ("VIE")
6 Months Ended
Jun. 30, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Variable Interest Entities ("VIE")
Variable Interest Entities (“VIE”)
 
As required by ASC No. 810 (“ASC 810”), “Consolidation of Variable Interest Entities,” a VIE is to be consolidated by a company if that company has a controlling financial interest in the VIE, defined as both the power to direct the VIE’s activities that most significantly impact the VIE’s economic performance, as well as the obligation to absorb its losses or the right to receive its benefits, which are potentially significant to the VIE. ASC 810 also requires disclosures about VIEs that a company is not obligated to consolidate, but in which it has a significant, though not primary, variable interest.
 
The Company enters into joint ventures, from time to time, for the purpose of acquisition and co-development of land parcels and lots. Its investment in these joint ventures may create a variable interest in a VIE, depending on the contractual terms of the arrangement. At June 30, 2015 and December 31, 2014, all of the Company’s joint ventures were unconsolidated and accounted for under the equity method as it did not have a financial controlling interest in the joint ventures. (See Note 12, “Investments in Joint Ventures.”) Additionally, in the ordinary course of business, the Company enters into lot option purchase contracts in order to procure land for the construction of homes. Under such lot option purchase contracts, the Company funds stated deposits in consideration for the right to purchase lots at a future point in time at predetermined prices. The Company’s liability is generally limited to forfeiture of nonrefundable deposits, letters of credit and other nonrefundable amounts incurred. In accordance with the requirements of ASC 810, certain of the Company’s lot option purchase contracts may result in the creation of a variable interest in a VIE.
 
In compliance with the provisions of ASC 810, the Company consolidated $29.7 million and $30.8 million of inventory not owned related to a lot option purchase contract at June 30, 2015 and December 31, 2014, respectively. Although the Company may not have had legal title to the optioned land, under ASC 810 it had the primary variable interest and was required to consolidate the particular VIE’s assets under option at fair value. To reflect the fair value of the inventory consolidated under ASC 810, the Company included $16.1 million and $16.4 million of its related cash deposits for the lot option purchase contract at June 30, 2015 and December 31, 2014, respectively, in “Consolidated inventory not owned” within the Consolidated Balance Sheets. Noncontrolling interest totaled $13.6 million and $14.4 million with respect to the consolidation of this contract at June 30, 2015 and December 31, 2014, respectively, representing the selling entity’s ownership interest in the VIE.

Additionally, the Company had cash deposits and/or letters of credit totaling $27.6 million and $25.0 million at June 30, 2015 and December 31, 2014, respectively, that were associated with lot option purchase contracts having aggregate purchase prices of $377.7 million and $368.7 million, respectively. As the Company did not have the primary variable interest in these contracts, it was not required to consolidate them.