Investments in Affiliates

Our investments in affiliates balance is related to our investments in unconsolidated non-construction entities that we account for using the equity method of accounting, including investments in real estate entities and a non-real estate entity.

The real estate entities were formed to accomplish specific real estate development projects in which our wholly-owned subsidiary, Granite Land Company (“GLC”), participates with third-party partners. The non-real estate entity is a 50% interest in a limited liability company which owns and operates an asphalt terminal and operates an emulsion plant in Nevada.

We have determined that the real estate entities are not consolidated because although they are VIEs, we are not the primary beneficiary. We have determined that the non-real estate entity is not consolidated because it is not a VIE and we do not hold the majority voting interest. As such, this entity is accounted for using the equity method. We account for our share of the operating results of the equity method investments in other income in the consolidated statements of operations and as a single line item in the consolidated balance sheets as investments in affiliates.

Our investments in affiliates balance consists of the following (in thousands):



December 31,	2017		2016
Equity method investments in real estate affiliates	$	29,472	$	25,911
Equity method investments in other affiliate	8,997		9,757
Total investments in affiliates	$	38,469	$	35,668

The following table provides summarized balance sheet information for our affiliates accounted for under the equity method on a combined basis (in thousands):



December 31,	2017		2016
Current assets	$	31,320	$	30,836
Noncurrent assets	129,039		124,670
Total assets	160,359		155,506
Current liabilities	30,131		18,485
Long-term liabilities¹	31,636		37,217
Total liabilities	61,767		55,702
Net assets	98,592		99,804
Granite’s share of net assets	$	38,469	$	35,668

¹The balance primarily relates to debt associated with our real estate investments. See Note 11 for further discussion.

The equity method investments in real estate affiliates included $24.3 million and $20.8 million in residential real estate in Texas as of December 31, 2017 and 2016, respectively. The remaining balances were in commercial real estate in Texas. Of the $160.4 million in total assets as of December 31, 2017, real estate entities had total assets ranging from less than $1.6 million to $68.5 million and the non-real estate entity had total assets of $28.1 million.

The following table provides summarized statement of operations information for our affiliates accounted for under the equity method on a combined basis (in thousands):



Years Ended December 31,	2017		2016		2015
Revenue	$	56,372	$	56,127	$	47,457
Gross profit	23,007		22,398		19,117
Income before taxes	17,154		19,117		8,446
Net income	17,154		19,117		8,446
Granite’s interest in affiliates’ net income	7,107		7,177		3,210