Annual report pursuant to Section 13 and 15(d)

INVESTMENTS IN UNCONSOLIDATED ENTITIES

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INVESTMENTS IN UNCONSOLIDATED ENTITIES
 12 Months Ended
Dec. 31, 2020
Equity Method Investments and Joint Ventures [Abstract]  
INVESTMENTS IN UNCONSOLIDATED ENTITIES INVESTMENTS IN UNCONSOLIDATED ENTITIES
We may enter into joint ventures as a means of accessing larger parcels of land, expanding our market opportunities, managing our risk profile and leveraging our capital base. While purchasing land through a joint venture can be beneficial, currently we do not view joint ventures as critical to the success of our homebuilding operations. Based on the structure of these joint ventures, they may or may not be consolidated into our results. Our joint venture partners generally are other homebuilders, land sellers or other real estate investors. We generally do not have a controlling interest in these ventures, which means our joint venture partners could cause the venture to take actions we disagree with, or fail to take actions we believe should be undertaken, including the sale of the underlying property to repay debt or recoup all or part of the partners' investments. As of December 31, 2020, we had one active equity-method land venture.
As of December 31, 2020, we also participated in one mortgage joint venture, which is engaged in mortgage activities and primarily provides services to our homebuyers. Our investment in this mortgage joint venture as of December 31, 2020 and December 31, 2019 was $1.0 million and $0.7 million, respectively.
Summarized condensed financial information related to unconsolidated joint ventures that are accounted for using the equity method was as follows (in thousands):
At December 31,
2020 2019
Assets:
Cash
 $ 4,656  $ 6,329 
Real estate
 5,745  6,654 
Other assets
 5,118  4,382 
Total assets $ 15,519  $ 17,365 
Liabilities and equity:
Accounts payable and other liabilities $ 5,588  $ 6,580 
Equity of:
Meritage (1) 5,330  5,678 
Other 4,601  5,107 
Total liabilities and equity $ 15,519  $ 17,365 

  Years Ended December 31,
  2020 2019 2018
Revenue $ 39,823  $ 53,841  $ 43,672 
Costs and expenses (31,918) (31,375) (17,294)
Net earnings of unconsolidated entities $ 7,905  $ 22,466  $ 26,378 
Meritage’s share of pre-tax earnings (1) (2) $ 4,559  $ 11,945  $ 16,396 
(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) capitalization of interest on qualified assets, (iv) income deferrals as discussed in Note (2) below and (v) 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. As discussed in Note 2 to these consolidated financial statements, the balances above do not include $217,000, $279,000 and $454,000 of capitalized interest that is a component of our investment balances at December 31, 2020, 2019 and 2018, respectively.
(2)Our share of pre-tax earnings is recorded in Earnings from financial services unconsolidated entities and other, net or Other income, net, as applicable, 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.

Our total investment in all of these joint ventures is $4.4 million as of December 31, 2020. We believe these ventures are in compliance with their respective debt agreements, if applicable, and such debt is non-recourse to us.