Note 9 - Investments in Unconsolidated Land Development and Homebuilding Joint Ventures

6 Months Ended

Jun. 30, 2012

Equity Method Investments and Joint Ventures Disclosure [Text Block]

9.       Investments in Unconsolidated Land Development and Homebuilding Joint Ventures

The table set forth below summarizes the combined statements of operations for our unconsolidated land development and homebuilding joint ventures that we accounted for under the equity method:

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
	(Dollars in thousands)
Revenues	$	4,705		$	5,963		$	7,304		$	18,373
Cost of sales and expenses		(4,882	)		(5,302	)		(7,581	)		(15,766	)
Income (loss) of unconsolidated joint ventures	$	(177	)	$	661		$	(277	)	$	2,607
Loss from unconsolidated joint ventures reflected in the accompanying condensed consolidated statements of operations	$	(1,146	)	$	(379	)	$	(2,668	)	$	(636	)

Loss from unconsolidated joint ventures reflected in the accompanying condensed consolidated statements of operations represents our share of the income (loss) of these unconsolidated land development and homebuilding joint ventures.  For the three and six months ended June 30, 2012 and 2011, loss from unconsolidated joint ventures was primarily attributable to our share of losses related to one Southern California land development joint venture, which were allocated based on the provisions of the underlying joint venture operating agreement.

During each of the six months ended June 30, 2012 and 2011, a total of six unconsolidated joint venture projects were reviewed for impairment, with certain joint ventures having multiple real estate projects.  Based on the impairment review, no joint venture projects were determined to be impaired for the six months ended June 30, 2012 and 2011.

The table set forth below summarizes the combined balance sheets for our unconsolidated land development and homebuilding joint ventures that we accounted for under the equity method:

	June 30, 2012		December 31, 2011
	(Dollars in thousands)
Assets:
Cash	$	15,988	$	24,155
Inventories		247,162		230,571
Other assets		9,676		11,190
Total assets	$	272,826	$	265,916
Liabilities and Equity:
Accounts payable and accrued liabilities	$	19,608	$	21,190
Standard Pacific equity		77,670		77,259
Other members' equity		175,548		167,467
Total liabilities and equity	$	272,826	$	265,916
Investments in unconsolidated joint ventures reflected in the accompanying condensed consolidated balance sheets	$	85,465	$	81,807

In some cases our net investment in these unconsolidated joint ventures is not equal to our proportionate share of equity reflected in the table above primarily because of differences between asset impairments that we recorded against our joint venture investments and the impairments recorded by the applicable joint venture.  Our investments in unconsolidated joint ventures also included approximately $12.3 million and $9.1 million of homebuilding interest capitalized to investments in unconsolidated joint ventures as of June 30, 2012 and December 31, 2011, respectively, which capitalized interest is not included in the combined balance sheets above.

Our investments in these unconsolidated joint ventures may represent a variable interest in a VIE depending on, among other things, the economic interests of the members of the entity and the contractual terms of the arrangement.  We analyze all of our unconsolidated joint ventures under the provisions of ASC 810 to determine whether these entities are deemed to be VIEs, and if so, whether we are the primary beneficiary.  As of June 30, 2012, with the exception of one homebuilding joint venture, all of our homebuilding and land development joint ventures with unrelated parties were determined under the provisions of ASC 810 to be unconsolidated joint ventures because they were not deemed to be VIEs.  As of June 30, 2012, we held an interest in one homebuilding joint venture in Northern California that was deemed to be a VIE.  Our investment in this joint venture was approximately $5.8 million, which represents our maximum exposure to loss if we elect to forfeit our membership interest in this entity.  As of June 30, 2012, this joint venture owns approximately $8.4 million of assets, primarily representing real estate inventories, and has no debt outstanding.  We have determined that based on the voting rights with respect to major decisions, as defined in the underlying joint venture operating agreement, both members of this joint venture share equally in the power to direct the activities that most significantly impact the entity’s economic performance.  As a result, we are not required to consolidate this joint venture as neither member is deemed to be the primary beneficiary.