Quarterly report pursuant to Section 13 or 15(d)

Investments in Unconsolidated Entities (Tables)

v2.4.0.8
Investments in Unconsolidated Entities (Tables)
 6 Months Ended
Jun. 30, 2014
Equity Method Investments and Joint Ventures [Abstract]  
Schedule of Guarantor Obligations [Table Text Block]
(In thousands)
At June 30, 2014
 
At December 31, 2013
Repayment guarantees
$
—

 
$
—

Completion guarantees (1)
—

 
—

South Edge guarantee (2)
13,243

 
13,243

Total guarantees
$
13,243

 
$
13,243

 
(1)
As our completion guarantees are typically backed by funding from a third party, we do not believe these guarantees represent a potential cash obligation for us, as they require only non-financial performance.
(2)
See Note 13 regarding outstanding litigation related to a joint venture project known as “South Edge” or "Inspirada" and the corresponding reserves and charges we have recorded relating thereto.
Financial information related to unconsolidated joint ventures, Balance sheets
Summarized condensed financial information related to unconsolidated joint ventures that are accounted for using the equity method was as follows (in thousands):
 
At June 30, 2014
 
At December 31, 2013
Assets:
 
 
 
Cash
$
3,316

 
$
7,299

Real estate
34,968

 
34,949

Other assets
3,223

 
3,067

Total assets
$
41,507

 
$
45,315

Liabilities and equity:
 
 
 
Accounts payable and other liabilities
$
3,701

 
$
2,889

Notes and mortgages payable
13,555

 
13,453

Equity of:
 
 
 
Meritage (1)
7,841

 
10,332

Other
16,410

 
18,641

Total liabilities and equity
$
41,507

 
$
45,315

Financial information related to unconsolidated joint ventures, operations
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2014
 
2013
 
2014
 
2013
Revenue
$
6,614

 
$
9,994

 
$
11,923

 
$
16,398

Costs and expenses
(3,112
)
 
(3,833
)
 
(5,865
)
 
(6,210
)
Net earnings of unconsolidated entities
$
3,502

 
$
6,161

 
$
6,058

 
$
10,188

Meritage’s share of pre-tax earnings (1)(2)
$
2,236

 
$
3,371

 
$
4,268

 
$
6,005

 
(1)
Balance represents Meritage’s interest, as reflected in the financial records of the respective joint ventures. This balance may differ from the balance reflected in our consolidated financial statements due to the following reconciling items: (i) timing differences for revenue and distributions recognition, (ii) step-up basis and corresponding amortization, (iii) income deferrals as discussed in Note (2) below and (iv) the cessation of allocation of losses from joint ventures in which we have previously written down our investment balance to zero and where we have no commitment to fund additional losses.
(2)
Our share of pre-tax earnings is recorded in “Earnings from financial services unconsolidated entities and other, net” and “Loss from other unconsolidated entities, net” on our consolidated income statements and excludes joint venture profit related to lots we purchased from the joint ventures. Such profit is deferred until homes are delivered by us and title passes to a homebuyer.