ý | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Green Brick Partners, Inc. |
Delaware | 20-5952523 | |
(State or other jurisdiction of incorporation) | (IRS Employer Identification Number) | |
2805 Dallas Pkwy, Ste 400 Plano, Texas 75093 | (469) 573-6755 | |
(Address of principal executive offices, including Zip Code) | (Registrant’s telephone number, including area code) |
Title of Each Class | Name of Each Exchange on Which Registered | |
Common Stock, par value $0.01 per share | The Nasdaq Stock Market LLC | |
Preferred Stock Purchase Rights | The Nasdaq Stock Market LLC |
Item 1. | |||
Item 1A. | |||
Item 1B. | |||
Item 2. | |||
Item 3. | |||
Item 4. | |||
Item 5. | |||
Item 6. | |||
Item 7. | |||
Item 7A. | |||
Item 8. | |||
Item 9. | |||
Item 9A. | |||
Item 9B. | |||
Item 10. | |||
Item 11. | |||
Item 12. | |||
Item 13. | |||
Item 14. | |||
Item 15. | |||
• | cyclicality in the homebuilding industry and adverse changes in general economic conditions; |
• | fluctuations and cycles in value of, and demand for, real estate investments; |
• | significant inflation or deflation; |
• | the unavailability of subcontractors; |
• | labor and raw material shortages and price fluctuations; |
• | the failure to recruit, retain and develop highly skilled and competent employees; |
• | an inability to acquire undeveloped land, partially-finished developed lots and finished lots suitable for residential homebuilding at reasonable prices; |
• | an inability to develop communities successfully or within expected timeframes; |
• | an inability to sell properties in response to changing economic, financial and investment conditions; |
• | risks related to participating in the homebuilding business through controlled homebuilding subsidiaries; |
• | risks relating to buy-sell provisions in the operating agreements governing two builder subsidiaries; |
• | risks related to geographic concentration; |
• | risks related to government regulation; |
• | the interpretation of or changes to tax, labor and environmental laws; |
• | the timing of receipt of regulatory approvals and of the opening of projects; |
• | fluctuations in the market value of land, building lots and housing inventories; |
• | volatility of mortgage interest rates; |
• | the unavailability of mortgage financing; |
• | the number of foreclosures in our markets; |
• | interest rate increases or adverse changes in federal lending programs; |
• | increases in unemployment or underemployment; |
• | any limitation on, or reduction or elimination of, tax benefits associated with owning a home; |
• | the occurrence of severe weather or natural disasters; |
• | high cancellation rates; |
• | competition in the homebuilding, land development and financial services industries; |
• | risks related to future growth through strategic investments, joint ventures, partnerships and/or acquisitions; |
• | risks related to holding noncontrolling interests in strategic investments, joint ventures, partnerships and/or acquisitions; |
• | the inability to obtain suitable bonding for the development of housing projects; |
• | difficulty in obtaining sufficient capital; |
• | risks related to environmental laws and regulations; |
• | the occurrence of a major health and safety incident; |
• | poor relations with the residents of our communities; |
• | information technology failures and data security breaches; |
• | product liability claims, litigation and warranty claims; |
• | the seasonality of the homebuilding industry; |
• | utility and resource shortages or rate fluctuations; |
• | the failure of employees or other representatives to comply with applicable regulations and guidelines; |
• | future litigation, arbitration or other claims; |
• | uninsured losses or losses in excess of insurance limits; |
• | cost and availability of insurance and surety bonds; |
• | volatility and uncertainty in the credit markets and broader financial markets; |
• | availability, terms and deployment of capital including with respect to acquisitions, joint ventures and other strategic actions; |
• | our debt and related service obligations; |
• | required accounting changes; |
• | an inability to maintain effective internal control over financial reporting; and |
• | other risks and uncertainties inherent in our business, including those described in Item 1A. “Risk Factors.” |
Controlled Builders | Year Formed | Market | Products Offered | Prices Ranges | ||||
The Providence Group of Georgia L.L.C. (“TPG”) | 2011 | Atlanta | Townhomes | $310,000 to $650,000 | ||||
Single family | $440,000 to $1.1 million | |||||||
CB JENI Homes DFW LLC (“CB JENI”) | 2012 | Dallas | Townhomes | $250,000 to $430,000 | ||||
Single family | $320,000 to $700,000 | |||||||
Centre Living Homes, LLC (“Centre Living”) | 2012 | Dallas | Townhomes | $320,000 to $1.5 million | ||||
Southgate Homes DFW LLC (“Southgate”) | 2013 | Dallas | Luxury homes | $550,000 to $1.3 million |
Years Ended December 31, | Increase (Decrease) | Years Ended December 31, | Increase (Decrease) | |||||||||||||||||||||||||||
2017 | 2016 | Amount | % | 2016 | 2015 | Amount | % | |||||||||||||||||||||||
New homes delivered | 990 | 844 | 146 | 17.3 | % | 844 | 655 | 189 | 28.9 | % | ||||||||||||||||||||
Home sales revenue ($ in thousands) | $ | 435,644 | $ | 365,164 | $ | 70,480 | 19.3 | % | $ | 365,164 | $ | 254,267 | $ | 110,897 | 43.6 | % | ||||||||||||||
Average sales price of home delivered | $ | 440,044 | $ | 432,659 | $ | 7,385 | 1.7 | % | $ | 432,659 | $ | 388,194 | $ | 44,465 | 11.5 | % | ||||||||||||||
Lot sales revenue ($ in thousands) | $ | 18,730 | $ | 15,164 | $ | 3,566 | 23.5 | % | $ | 15,164 | $ | 36,878 | $ | (21,714 | ) | (58.9 | )% |
Years Ended December 31, | Increase (Decrease) | Years Ended December 31, | Increase (Decrease) | |||||||||||||||||||||||||
2017 | 2016 | Amount | % | 2016 | 2015 | Amount | % | |||||||||||||||||||||
Backlog ($ in thousands) | $ | 151,463 | $ | 108,030 | $ | 43,433 | 40.2% | $ | 108,030 | $ | 88,136 | $ | 19,894 | 22.6% |
Neighborhoods | Year of First Delivery(1) | Total Number of Home Sites(2) | Cumulative Homes Closed as of December 31, 2017 | Backlog at December 31, 2017 | Homes Still to be Closed as of December 31, 2017 | Sales Price Range (in thousands) | Home Size Range (sq. ft.) | |||||||||||
Texas | ||||||||||||||||||
CB JENI Viridian | 2013 | 278 | 203 | 9 | 66 | $250 - $310 | 1,500 - 2,300 | |||||||||||
CB JENI Mustang Park | 2014 | 177 | 158 | 8 | 11 | $300 - $380 | 1,500 - 2,300 | |||||||||||
CB JENI Canals at Grand Park | 2015 | 94 | 57 | 7 | 30 | $320 - $430 | 1,700 - 2,300 | |||||||||||
CB JENI Raiford Crossing | 2015 | 53 | 53 | — | — | $270 - $370 | 1,700 - 2,600 | |||||||||||
CB JENI Hometown | 2016 | 96 | 34 | — | 62 | $270 - $320 | 1,700 - 2,300 | |||||||||||
CB JENI Stacy Crossing | 2016 | 145 | 77 | 11 | 57 | $270 - $360 | 1,500 - 2,300 | |||||||||||
CB JENI Stonegate | 2016 | 79 | 28 | 4 | 47 | $260 - $310 | 1,500 - 2,000 | |||||||||||
CB JENI Los Rios | 2016 | 98 | 73 | 5 | 20 | $250 - $320 | 1,400 - 2,100 | |||||||||||
CB JENI McKinney Ranch | 2016 | 71 | 51 | 8 | 12 | $250 - $310 | 1,500 - 2,000 | |||||||||||
CB JENI Heritage Creekside | 2017 | 105 | 2 | 15 | 88 | $310 - $350 | 1,900 - 2,100 | |||||||||||
CB JENI Montgomery Ridge | 2017 | 32 | — | 4 | 28 | $300 - $380 | 1,700 - 2,600 | |||||||||||
CB JENI Sloan Creek | 2017 | 36 | 29 | — | 7 | $260 - $360 | 1,400 - 2,100 | |||||||||||
CB JENI Frisco Springs | 2018 | 154 | — | — | 154 | TBD | TBD | |||||||||||
CB JENI/Normandy Southgate | 2018 | 150 | — | — | 150 | TBD | TBD | |||||||||||
CB JENI Vista del Lago | 2018 | 148 | — | — | 148 | TBD | TBD | |||||||||||
CB JENI Sunset Pointe | 2018 | 115 | — | — | 115 | TBD | TBD | |||||||||||
CB JENI Iron Horse | 2018 | 92 | — | — | 92 | $240 - $260 | 1,500 - 2,000 | |||||||||||
CB JENI Ridgeview Townhomes | 2018 | 91 | — | — | 91 | TBD | TBD | |||||||||||
CB JENI Fairview Apple’s Crossing | 2018 | 87 | — | — | 87 | TBD | TBD | |||||||||||
CB JENI Samoe | 2018 | 83 | — | — | 83 | $250 - $290 | 1,500 - 2,000 |
Neighborhoods | Year of First Delivery(1) | Total Number of Home Sites(2) | Cumulative Homes Closed as of December 31, 2017 | Backlog at December 31, 2017 | Homes Still to be Closed as of December 31, 2017 | Sales Price Range (in thousands) | Home Size Range (sq. ft.) | |||||||||||
CB JENI Terraces at Las Colinas | 2018 | 79 | — | — | 79 | $320 - $370 | 1,500 - 2,000 | |||||||||||
CB JENI Reserves on Parker | 2018 | 63 | — | — | 63 | $300 - $340 | 1,800 - 2,300 | |||||||||||
CB JENI Meridian at Southgate | 2018 | 47 | — | — | 47 | $250 - $275 | 1,500 - 1,800 | |||||||||||
CB JENI Riverset | 2019 | 88 | — | — | 88 | $220 - $260 | 1,500 - 2,000 | |||||||||||
Normandy Cypress Meadows | 2014 | 139 | 98 | 15 | 26 | $490 - $700 | 2,700 - 4,400 | |||||||||||
Normandy Viridian | 2014 | 66 | 47 | 6 | 13 | $375 - $700 | 2,200 - 4,400 | |||||||||||
Normandy Mustang Park | 2015 | 83 | 72 | 8 | 3 | TBD | TBD | |||||||||||
Normandy Cottonwood Crossing | 2015 | 48 | 48 | — | — | $300 - $460 | 1,800 - 3,450 | |||||||||||
Normandy Lakeside | 2015 | 76 | 76 | — | — | $410 - $700 | 2,200 - 4,400 | |||||||||||
Normandy Twin Creeks | 2016 | 72 | 50 | — | 22 | $350 - $500 | 1,800 - 3,450 | |||||||||||
Normandy Watters Branch | 2017 | 48 | 1 | 10 | 37 | $390 - $530 | 2,000 - 4,000 | |||||||||||
Normandy Reserves on Parker Ranch | 2018 | 106 | — | — | 106 | $340 - $400 | 1,700 - 2,900 | |||||||||||
Normandy Southaven | 2018 | 105 | — | — | 105 | TBD | TBD | |||||||||||
Normandy Fairview Apple’s Crossing | 2018 | 95 | — | — | 95 | TBD | TBD | |||||||||||
Normandy Shaddock Estates | 2018 | 92 | — | — | 92 | $530 - $650 | 2,600 - 4,500 | |||||||||||
Normandy Spicewood | 2018 | 82 | — | 7 | 75 | $350 - $380 | 2,200 - 2,600 | |||||||||||
Normandy Edgewood | 2018 | 46 | — | — | 46 | $320 - $360 | 2,200 - 2,700 | |||||||||||
Normandy Park Vista | 2019 | 332 | — | — | 332 | TBD | TBD | |||||||||||
Southgate | 2013 | 54 | 54 | — | — | $640 - $870 | 3,300 - 4,660 | |||||||||||
Southgate Canals at Grand Park | 2015 | 41 | 27 | 9 | 5 | $775 - $865 | 3,934 - 4,571 | |||||||||||
Southgate Bethany Mews | 2016 | 4 | 4 | — | — | $770 - $790 | 3,900 - 3,925 | |||||||||||
Southgate Twin Creeks | 2016 | 91 | 6 | 1 | 84 | $490 - $950 | 1,800 - 3,944 | |||||||||||
Southgate Angel Field West | 2016 | 62 | 36 | 11 | 15 | $560 - $760 | 3,400 - 4,500 | |||||||||||
Southgate Bluffs at Austin Waters | 2016 | 69 | 46 | 20 | 3 | $560 - $880 | 3,100 - 4,400 | |||||||||||
Southgate Homestead | 2017 | 30 | 1 | 4 | 25 | $550 - $609 | 3,406 - 3,840 | |||||||||||
Southgate Oaks of Argyle | 2017 | 10 | — | 2 | 8 | $559 - $679 | 3,238 - 4,242 | |||||||||||
Southgate Edgewood | 2018 | 98 | — | — | 98 | TBD | TBD | |||||||||||
Southgate Garilen | 2018 | 70 | — | — | 70 | $569 - $789 | 2,629 - 4,398 | |||||||||||
Southgate Stoney Creek | 2018 | 50 | — | — | 50 | $599 - $699 | 3,453 - 4,425 | |||||||||||
Southgate Brockdale Estates | 2018 | 43 | — | — | 43 | TBD | TBD | |||||||||||
Southgate North | 2018 | 40 | — | — | 40 | TBD | TBD | |||||||||||
Southgate 5T Ranch | 2018 | 35 | — | 1 | 34 | $559 - $678 | 3,238 - 4,241 | |||||||||||
Southgate Parker/Southgate Ranch | 2018 | 32 | — | — | 32 | TBD | TBD | |||||||||||
Centre Living Homes Residences at Cityline | 2017 | 32 | 3 | 1 | 28 | $525 - $650 | 2,700 - 3,300 | |||||||||||
Centre Living Homes Live Oak Landings | 2017 | 26 | 2 | 4 | 20 | $425 - $475 | 1,450 - 1,850 | |||||||||||
Centre Living Homes Ross Avenue Heights | 2017 | 18 | 2 | — | 16 | $575 - $600 | 2,400 | |||||||||||
Centre Living Homes Caddo Center | 2017 | 10 | — | — | 10 | $320 - $350 | 1,400 | |||||||||||
Centre Living Homes Westside Manor | 2017 | 7 | 4 | — | 3 | $1,100 - $1,500 | 3,000 - 4,000 | |||||||||||
Centre Living Homes Fort Worth Avenue | 2018 | 56 | — | — | 56 | $425 - $475 | 2,000 - 2,400 | |||||||||||
Centre Living Homes Swiss & Haskell | 2018 | 29 | — | — | 29 | $400 - $550 | 1,500 - 2,900 | |||||||||||
Centre Living Homes Roseland Avenue | 2018 | 16 | — | — | 16 | $410 - $425 | 1,500 - 1,800 | |||||||||||
Centre Living Homes Polk Avenue | 2018 | 13 | — | — | 13 | $450 - $600 | 2,200 - 3,000 | |||||||||||
Centre Living Homes Scurry Street | 2018 | 10 | — | — | 10 | $400 - $425 | 1,600 - 1,700 | |||||||||||
Centre Living Homes Bluffview | 2019 | 33 | — | — | 33 | $500 - $600 | 2,100 - 3,000 | |||||||||||
Centre Living Homes Bayonne | 2019 | 30 | — | — | 30 | $425 - $500 | 2,000 - 2,400 | |||||||||||
Centre Living Homes Canty | 2019 | 23 | — | — | 23 | $425 - $500 | 1,800 - 2,400 | |||||||||||
Centre Living Homes Neely/Crawford | 2019 | 16 | — | — | 16 | $425 - $500 | 1,800 - 2,400 | |||||||||||
Centre Living Homes Ervay | 2019 | 15 | — | — | 15 | $425 - $500 | 1,600 - 2,000 | |||||||||||
Centre Living Homes Tyler | 2019 | 13 | — | — | 13 | $400 - $450 | 1,800 - 2,400 |
Neighborhoods | Year of First Delivery(1) | Total Number of Home Sites(2) | Cumulative Homes Closed as of December 31, 2017 | Backlog at December 31, 2017 | Homes Still to be Closed as of December 31, 2017 | Sales Price Range (in thousands) | Home Size Range (sq. ft.) | |||||||||||
Future Developments at Twin Creeks | 2018 | 465 | — | — | 465 | $490 - $950 | 1,800 - 3,450 | |||||||||||
Texas Total | 5,392 | 1,342 | 170 | 3,880 | ||||||||||||||
Georgia | ||||||||||||||||||
The Providence Group Custom Homes | 2012 | 50 | 50 | — | — | $800 - $850 | 3,800 - 4,200 | |||||||||||
The Providence Group & Associates | 2013 | 14 | 14 | — | — | $690 - $730 | 3,700 - 4,400 | |||||||||||
TPG Homes at Ruth’s Farm | 2014 | 33 | 26 | — | 7 | $645 - $845 | 3,700 - 4,200 | |||||||||||
TPG Homes at Seven Norcross | 2014 | 44 | 44 | — | — | $300 - $465 | 2,000 - 3,000 | |||||||||||
TPG Homes at Bellmoore Park | 2015 | 618 | 129 | 30 | 459 | $440 - $900 | 2,300 - 4,600 | |||||||||||
TPG Homes – Highpointe at Vinings | 2015 | 84 | 57 | 3 | 24 | $580 - $750 | 2,800 - 4,500 | |||||||||||
TPG Homes at Traditions | 2015 | 154 | 73 | 8 | 73 | $495 - $700 | 2,300 - 4,300 | |||||||||||
TPG Homes at The Reserve at Providence | 2015 | 23 | 13 | — | 10 | $950 - $1,100 | 3,700 - 5,800 | |||||||||||
TPG Homes at East Village | 2015 | 62 | 54 | 3 | 5 | $335 - $385 | 2,000 - 2,300 | |||||||||||
TPG Homes at Rivers Edge | 2015 | 130 | 130 | — | — | $280 - $425 | 2,000 - 2,800 | |||||||||||
TPG Homes at Central Park at Deerfield Township | 2016 | 283 | 51 | 18 | 214 | $440 - $625 | 2,000 - 4,200 | |||||||||||
TPG Homes at Brookmere | 2016 | 194 | 75 | 11 | 108 | $330 - $675 | 2,000 - 4,600 | |||||||||||
TPG Homes at Townes at Chastain | 2016 | 162 | 52 | 9 | 101 | $440 - $650 | 2,200 - 2,800 | |||||||||||
TPG Homes at Glens Sugarloaf | 2016 | 92 | 36 | 7 | 49 | $330 - $400 | 2,000 - 2,700 | |||||||||||
TPG Homes at Roswell Towneship | 2016 | 92 | 35 | 12 | 45 | $370 - $450 | 2,000 - 2,300 | |||||||||||
TPG Homes at Dunwoody Township | 2016 | 40 | 26 | 4 | 10 | $480 - $505 | 2,300 - 2,500 | |||||||||||
TPG Homes at Cogburn | 2016 | 19 | 16 | 1 | 2 | $540 - $650 | 3,200 - 4,300 | |||||||||||
TPG Homes at Suwanee Station | 2017 | 70 | 16 | 9 | 45 | $310 - $350 | 2,000 | |||||||||||
TPG Homes at East of Main | 2017 | 83 | 31 | 14 | 38 | $500 - $900 | 2,200 - 3,400 | |||||||||||
TPG Homes at Cresslyn | 2017 | 49 | 10 | 5 | 34 | $380 - $495 | 2,000 - 2,700 | |||||||||||
TPG Homes at Stringer Road | 2018 | 195 | — | — | 195 | $380 - $650 | 1,800 - 4,200 | |||||||||||
TPG Homes at Grant Circle | 2018 | 150 | — | — | 150 | TBD | 1,400 - 2,300 | |||||||||||
TPG Homes at Woodstock | 2018 | 57 | — | — | 57 | $425 - $600 | 2,070 - 2,600 | |||||||||||
TPG Homes at Chelsea Walk | 2018 | 49 | — | 6 | 43 | $475 - $620 | 2,000 - 2,800 | |||||||||||
TPG Homes at Orion Drive | 2018 | 41 | — | — | 41 | TBD | 1,975 - 2,070 | |||||||||||
TPG Homes at Tiffany Square | 2018 | 22 | — | — | 22 | $650 - $800 | 3,000 - 3,200 | |||||||||||
TPG Homes at Cricket Lane | 2018 | 20 | — | — | 20 | TBD | 3,000 - 3,200 | |||||||||||
TPG Homes at Westside Village | 2018 | 19 | — | — | 19 | TBD | 1,975 - 2,070 | |||||||||||
Georgia Total | 2,849 | 938 | 140 | 1,771 | ||||||||||||||
Total Homes | 8,241 | 2,280 | 310 | 5,651 |
(1) | Years subsequent to 2017 are anticipated. |
(2) | Number of homes in each neighborhood is subject to change due to changes in zoning, building design, construction, and similar matters, including local regulations which impose restrictive zoning and density requirements in order to limit the number of homes that can eventually be built within the boundaries of a particular locality. |
Year Ended December 31, | |||||||||||||||||||||
2017 | 2016 | 2015 | |||||||||||||||||||
Neighborhoods | Home Sales | Homes Delivered | Home Sales | Homes Delivered | Home Sales | Homes Delivered | |||||||||||||||
($ in thousands) | |||||||||||||||||||||
Homes | |||||||||||||||||||||
Texas | |||||||||||||||||||||
CB JENI Berkshire Place | $ | — | — | $ | 5,770 | 22 | $ | 12,752 | 52 | ||||||||||||
CB JENI Brick Row Townhomes | $ | — | — | $ | 5,414 | 17 | $ | 6,030 | 20 | ||||||||||||
CB JENI Canals at Grand Park | $ | 1,770 | 5 | $ | 16,393 | 47 | $ | 1,581 | 5 | ||||||||||||
CB JENI Heritage Creekside | $ | 652 | 2 | $ | — | — | $ | — | — | ||||||||||||
CB JENI Hometown | $ | 5,160 | 17 | $ | 4,873 | 17 | $ | — | — | ||||||||||||
CB JENI Los Rios | $ | 14,375 | 50 | $ | 6,260 | 23 | $ | — | — | ||||||||||||
CB JENI McKinney Ranch | $ | 11,541 | 43 | $ | 1,995 | 8 | $ | — | — | ||||||||||||
CB JENI Mustang Park | $ | 15,187 | 45 | $ | 17,371 | 56 | $ | 14,950 | 54 | ||||||||||||
CB JENI Pecan Park | $ | — | — | $ | — | — | $ | 4,583 | 20 | ||||||||||||
CB JENI Raiford Crossing | $ | 1,580 | 5 | $ | 13,419 | 43 | $ | 1,497 | 5 | ||||||||||||
CB JENI Sloan Creek | $ | 8,875 | 29 | $ | — | — | $ | — | — | ||||||||||||
CB JENI Stacy Crossing | $ | 17,238 | 55 | $ | 6,573 | 22 | $ | — | — | ||||||||||||
CB JENI Stonegate | $ | 7,936 | 28 | $ | — | — | $ | — | — | ||||||||||||
CB JENI Viridian | $ | 19,061 | 72 | $ | 5,237 | 21 | $ | 9,900 | 42 | ||||||||||||
Normandy Alto Vista Irving | $ | — | — | $ | — | — | $ | 6,307 | 12 | ||||||||||||
Normandy Cottonwood Crossing | $ | 3,682 | 10 | $ | 12,542 | 36 | $ | 676 | 2 | ||||||||||||
Normandy Cypress Meadows | $ | 18,640 | 32 | $ | 19,240 | 34 | $ | 15,700 | 28 | ||||||||||||
Normandy Lake Vista Coppell | $ | — | — | $ | — | — | $ | 2,582 | 6 | ||||||||||||
Normandy Lakeside | $ | 490 | 1 | $ | 13,513 | 27 | $ | 15,765 | 28 | ||||||||||||
Normandy Mustang Park | $ | 18,526 | 35 | $ | 16,436 | 34 | $ | 1,307 | 3 | ||||||||||||
Normandy Pecan Park | $ | — | — | $ | — | — | $ | 8,968 | 22 | ||||||||||||
Normandy Twin Creeks | $ | 11,299 | 27 | $ | 9,558 | 23 | $ | — | — | ||||||||||||
Normandy Viridan | $ | 3,794 | 11 | $ | 2,533 | 7 | $ | 7,951 | 27 | ||||||||||||
Normandy Watters Branch | $ | 394 | 1 | $ | — | — | $ | — | — | ||||||||||||
Southgate | $ | 3,488 | 4 | $ | 14,623 | 20 | $ | 9,409 | 13 | ||||||||||||
Southgate Angel Field West | $ | 13,915 | 20 | $ | 10,155 | 15 | $ | — | — | ||||||||||||
Southgate Bethany Mews | $ | 1,300 | 2 | $ | — | — | $ | — | — | ||||||||||||
Southgate Bluffs at Austin Waters | $ | 14,462 | 20 | $ | 7,479 | 11 | $ | — | — | ||||||||||||
Southgate Canals at Grand Park | $ | 16,850 | 19 | $ | 6,251 | 8 | $ | — | — | ||||||||||||
Southgate Homestead | $ | 578 | 1 | $ | — | — | $ | — | — | ||||||||||||
Southgate Twin Creeks | $ | 2,298 | 4 | $ | 1,193 | 2 | $ | — | — | ||||||||||||
Centre Living | $ | — | — | $ | 4,645 | 8 | $ | 2,021 | 2 | ||||||||||||
Centre Living Homes Live Oak Landings | $ | 850 | 2 | $ | — | — | $ | — | — | ||||||||||||
Centre Living Homes Residences at Cityline | $ | 1,645 | 3 | $ | — | — | $ | — | — | ||||||||||||
Centre Living Homes Ross Avenue Heights | $ | 967 | 2 | $ | — | — | $ | — | — | ||||||||||||
Centre Living Homes Westside Manor | $ | 4,334 | 4 | $ | — | — | $ | — | — | ||||||||||||
Texas Total | $ | 220,887 | 549 | $ | 201,473 | 501 | $ | 121,979 | 341 |
Year Ended December 31, | |||||||||||||||||||||
2017 | 2016 | 2015 | |||||||||||||||||||
Neighborhoods | Home Sales | Homes Delivered | Home Sales | Homes Delivered | Home Sales | Homes Delivered | |||||||||||||||
($ in thousands) | |||||||||||||||||||||
Homes | |||||||||||||||||||||
Georgia | |||||||||||||||||||||
Providence Luxury Homes | $ | — | — | $ | 1,640 | 1 | $ | 3,183 | 4 | ||||||||||||
The Providence Group & Associates | $ | — | — | $ | 2,750 | 4 | $ | 1,871 | 3 | ||||||||||||
The Providence Group Custom Homes | $ | 2,241 | 3 | $ | 2,469 | 5 | $ | 34,308 | 58 | ||||||||||||
TPG Homes | $ | — | — | $ | — | — | $ | 27,479 | 74 | ||||||||||||
TPG Homes at Bellmoore Park | $ | 39,515 | 62 | $ | 29,414 | 49 | $ | 11,070 | 18 | ||||||||||||
TPG Homes at Bluffs at Lennox | $ | — | — | $ | 8,332 | 15 | $ | — | — | ||||||||||||
TPG Homes at Brookmere | $ | 19,240 | 48 | $ | 11,333 | 27 | $ | — | — | ||||||||||||
TPG Homes at Byers Landing | $ | — | — | $ | 429 | 1 | $ | — | — | ||||||||||||
TPG Homes at Central Park at Deerfield Township | $ | 16,071 | 32 | $ | 9,682 | 19 | $ | — | — | ||||||||||||
TPG Homes at Cogburn | $ | 5,302 | 9 | $ | 4,351 | 7 | $ | — | — | ||||||||||||
TPG Homes at Crabapple | $ | — | — | $ | — | — | $ | 849 | 2 | ||||||||||||
TPG Homes at Cresslyn | $ | 4,094 | 10 | $ | — | — | $ | — | — | ||||||||||||
TPG Homes at Dunwoody Township | $ | 11,314 | 25 | $ | 466 | 1 | $ | — | — | ||||||||||||
TPG Homes at East of Main | $ | 19,983 | 31 | $ | — | — | $ | — | — | ||||||||||||
TPG Homes at East Village | $ | 5,912 | 17 | $ | 9,911 | 29 | $ | — | — | ||||||||||||
TPG Homes at Highlands | $ | — | — | $ | — | — | $ | 2,650 | 9 | ||||||||||||
TPG Homes at Jamestown | $ | — | — | $ | — | — | $ | 9,917 | 34 | ||||||||||||
TPG Homes at Nesbitt Reserve | $ | — | — | $ | 440 | 1 | $ | — | — | ||||||||||||
TPG Homes at Rivers Edge | $ | 12,761 | 37 | $ | 19,978 | 61 | $ | — | — | ||||||||||||
TPG Homes at Roswell Towneship | $ | 11,131 | 27 | $ | 3,025 | 8 | $ | — | — | ||||||||||||
TPG Homes at Ruth’s Farm | $ | — | — | $ | 7,463 | 10 | $ | 10,332 | 14 | ||||||||||||
TPG Homes at Seven Norcross | $ | 1,687 | 4 | $ | 8,516 | 23 | $ | — | — | ||||||||||||
TPG Homes at Sugarloaf (Glens) | $ | 8,533 | 24 | $ | 4,129 | 12 | $ | — | — | ||||||||||||
TPG Homes at Suwanee Station | $ | 5,102 | 16 | $ | — | — | $ | — | — | ||||||||||||
TPG Homes at The Reserve at Providence | $ | 3,625 | 4 | $ | 1,191 | 1 | $ | — | — | ||||||||||||
TPG Homes at Three Bridges | $ | — | — | $ | — | — | $ | 15,508 | 53 | ||||||||||||
TPG Homes at Townes at Chastain | $ | 23,532 | 49 | $ | 1,459 | 3 | $ | — | — | ||||||||||||
TPG Homes at Traditions | $ | 11,551 | 22 | $ | 16,878 | 33 | $ | — | — | ||||||||||||
TPG Homes at Whitfield Parc | $ | — | — | $ | 1,017 | 3 | $ | 15,121 | 45 | ||||||||||||
TPG Homes – Highpointe at Vinings | $ | 13,163 | 21 | $ | 18,818 | 30 | $ | — | — | ||||||||||||
Georgia Total | $ | 214,757 | 441 | $ | 163,691 | 343 | $ | 132,288 | 314 | ||||||||||||
Total Homes | $ | 435,644 | 990 | $ | 365,164 | 844 | $ | 254,267 | 655 |
(1) | Lots owned and developed to build homes sold to a third-party developer. |
Year Ended December 31, | |||||||||||||||||||||
2017 | 2016 | 2015 | |||||||||||||||||||
Neighborhoods | Lot Sales | Lots Delivered | Lot Sales | Lots Delivered | Lot Sales | Lots Delivered | |||||||||||||||
($ in thousands) | |||||||||||||||||||||
Lots | |||||||||||||||||||||
Texas | |||||||||||||||||||||
Angel Field | $ | 173 | 1 | $ | 167 | 1 | $ | — | — | ||||||||||||
Austin Waters | $ | 168 | 1 | $ | — | — | $ | — | — | ||||||||||||
Bethany Mews | $ | — | — | $ | — | — | $ | 265 | 1 | ||||||||||||
Chateau du Lac | $ | 950 | 3 | $ | 1,440 | 5 | $ | 1,770 | 6 | ||||||||||||
Cypress Meadows | $ | 4,775 | 34 | $ | 4,953 | 37 | $ | 4,772 | 37 | ||||||||||||
Hamilton Hills | $ | — | — | $ | — | — | $ | — | — | ||||||||||||
Hardin Lake | $ | — | — | $ | — | — | $ | 1,505 | 20 | ||||||||||||
Hawthorne Estates | $ | — | — | $ | — | — | $ | 644 | 6 | ||||||||||||
Heritage Creekside | $ | 1,260 | 10 | $ | — | — | $ | — | — | ||||||||||||
Inwood Hills | $ | — | — | $ | — | — | $ | — | — | ||||||||||||
Lakeside | $ | — | — | $ | 215 | 1 | $ | 6,164 | 61 | ||||||||||||
Mustang Park | $ | — | — | $ | 1,986 | 20 | $ | 7,439 | 76 | ||||||||||||
Sunset Place | $ | 871 | 1 | $ | — | — | $ | — | — | ||||||||||||
The Landings | $ | — | — | $ | 4,329 | 39 | $ | 8,539 | 81 | ||||||||||||
Twin Creeks | $ | 9,731 | 89 | $ | 761 | 8 | $ | 5,780 | 48 | ||||||||||||
Westside Circle | $ | — | — | $ | 350 | 1 | $ | — | — | ||||||||||||
Texas Total | $ | 17,928 | 139 | $ | 14,201 | 112 | $ | 36,878 | 336 | ||||||||||||
Georgia | |||||||||||||||||||||
Arbor Cove | $ | 615 | 4 | $ | — | — | $ | — | — | ||||||||||||
Reserve at Providence | $ | — | — | $ | 250 | 1 | $ | — | — | ||||||||||||
Ruth’s Farm | $ | 187 | 1 | $ | 713 | 4 | $ | — | — | ||||||||||||
Georgia Total | $ | 802 | 5 | $ | 963 | 5 | $ | — | — | ||||||||||||
Lots Total | $ | 18,730 | 144 | $ | 15,164 | 117 | $ | 36,878 | 336 | ||||||||||||
Company Total (Homes and Lots) | $ | 454,374 | 1,134 | $ | 380,328 | 961 | $ | 291,145 | 991 |
December 31, | |||||
2017 | 2016 | ||||
Lots Owned(1) | |||||
Texas | 3,196 | 2,998 | |||
Georgia | 1,299 | 1,237 | |||
Total | 4,495 | 4,235 | |||
Lots Controlled(1) | |||||
Texas | 1,390 | 554 | |||
Georgia | 334 | 400 | |||
Total | 1,724 | 954 | |||
Total Lots Owned and Controlled(2) | 6,219 | 5,189 |
(1) | The “land use” assumptions used in the above table may change over time. |
(2) | Total lots excludes homes under construction. |
Name | Age | Position |
James R. Brickman | 66 | Chief Executive Officer and Director |
Richard A. Costello | 59 | Chief Financial Officer |
Jed Dolson | 40 | President of Texas Region |
Summer Loveland | 46 | Chief Accounting Officer |
• | adverse changes in international, national or local economic and demographic conditions; |
• | adverse changes in financial conditions of buyers and sellers of properties, particularly residential homes and land suitable for development of residential homes; |
• | competition from other real estate investors with significant capital, including other real estate operating companies and developers and institutional investment funds; |
• | fluctuations in interest rates, which could adversely affect the ability of homebuyers to obtain financing on favorable terms or at all; |
• | unanticipated increases in expenses, including, without limitation, insurance costs, development costs, real estate assessments and other taxes and costs of compliance with laws, regulations and governmental policies; and |
• | changes in enforcement of laws, regulations and governmental policies, including, without limitation, health, safety, environmental, zoning and tax laws. |
Year ended December 31, 2017 | High | Low | ||||||
First Quarter | $ | 10.30 | $ | 8.90 | ||||
Second Quarter | $ | 11.45 | $ | 9.70 | ||||
Third Quarter | $ | 11.90 | $ | 8.90 | ||||
Fourth Quarter | $ | 12.05 | $ | 9.80 | ||||
Year ended December 31, 2016 | ||||||||
First Quarter | $ | 7.77 | $ | 4.99 | ||||
Second Quarter | $ | 7.80 | $ | 6.67 | ||||
Third Quarter | $ | 8.39 | $ | 6.79 | ||||
Fourth Quarter | $ | 10.40 | $ | 7.65 |
2012 | 2013 | 2014 | 2015 | 2016 | 2017 | ||||||
Green Brick Partners | $100.00 | $46.67 | $341.67 | $300.00 | $418.75 | $470.83 | |||||
Russell 2000 Index | $100.00 | $137.00 | $141.84 | $133.74 | $159.78 | $180.79 | |||||
Nasdaq Composite Index | $100.00 | $138.32 | $156.85 | $164.85 | $178.28 | $228.63 |
As of December 31, | |||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||
(in thousands) | |||||||||||||||||||
Assets | |||||||||||||||||||
Cash | $ | 36,684 | $ | 35,157 | $ | 21,207 | $ | 22,976 | $ | 16,683 | |||||||||
Inventory | 495,655 | 410,297 | 344,132 | 275,141 | 228,777 | ||||||||||||||
Notes receivable, net | — | — | — | — | 7,556 | ||||||||||||||
Deferred income tax assets, net | 31,211 | 67,598 | 80,663 | 89,197 | — | ||||||||||||||
Other | 48,680 | 27,932 | 27,874 | 13,011 | 15,392 | ||||||||||||||
Total assets | $ | 612,230 | $ | 540,984 | $ | 473,876 | $ | 400,325 | $ | 268,408 | |||||||||
Liabilities and stockholders’ equity | |||||||||||||||||||
Borrowings on lines of credit | $ | 107,000 | $ | 75,000 | $ | 47,500 | $ | 14,061 | $ | 17,208 | |||||||||
Notes payable | 9,926 | 10,948 | 10,158 | 12,151 | 26,595 | ||||||||||||||
Term loan facility | — | — | — | 150,000 | — | ||||||||||||||
Other | 62,266 | 53,551 | 44,363 | 42,516 | 25,786 | ||||||||||||||
Total liabilities | 179,192 | 139,499 | 102,021 | 218,728 | 69,589 | ||||||||||||||
Total stockholders’ equity | 433,038 | 401,485 | 371,855 | 181,597 | 198,819 | ||||||||||||||
Total liabilities and stockholders’ equity | $ | 612,230 | $ | 540,984 | $ | 473,876 | $ | 400,325 | $ | 268,408 |
For the Years Ended December 31, | |||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||
(in thousands, except per share data) | |||||||||||||||||||
Sale of residential units | $ | 435,644 | $ | 365,164 | $ | 254,267 | $ | 200,650 | $ | 168,591 | |||||||||
Sale of land and lots | 18,730 | 15,164 | 36,878 | 45,452 | 33,735 | ||||||||||||||
Total revenues | 454,374 | 380,328 | 291,145 | 246,102 | 202,326 | ||||||||||||||
Cost of residential units | 342,065 | 283,454 | 201,768 | 153,799 | 125,424 | ||||||||||||||
Cost of land and lots | 13,856 | 10,499 | 27,125 | 34,082 | 21,513 | ||||||||||||||
Total cost of sales | 355,921 | 293,953 | 228,893 | 187,881 | 146,937 | ||||||||||||||
Total gross profit | 98,453 | 86,375 | 62,252 | 58,221 | 55,389 | ||||||||||||||
Salary expense and management fees expense - related party | 21,823 | 21,871 | 16,272 | 12,694 | 8,968 | ||||||||||||||
Selling, general and administrative expense | 17,193 | 16,758 | 13,704 | 9,840 | 6,406 | ||||||||||||||
Operating profit | 59,437 | 47,746 | 32,276 | 35,687 | 40,015 | ||||||||||||||
Interest expense | — | — | 281 | 1,393 | 315 | ||||||||||||||
Equity in income of unconsolidated entity | 2,746 | — | — | — | — | ||||||||||||||
Other income, net | 2,054 | 2,808 | 2,721 | 1,915 | 4,943 | ||||||||||||||
Income before taxes | 64,237 | 50,554 | 34,716 | 36,209 | 44,643 | ||||||||||||||
Income tax provision (benefit) | 39,031 | 15,381 | 9,171 | (24,853 | ) | 327 | |||||||||||||
Net income | 25,206 | 35,173 | 25,545 | 61,062 | 44,316 | ||||||||||||||
Less: net income attributable to noncontrolling interests | 10,236 | 11,417 | 10,220 | 11,036 | 12,309 | ||||||||||||||
Net income attributable to Green Brick Partners, Inc. | $ | 14,970 | $ | 23,756 | $ | 15,325 | $ | 50,026 | $ | 32,007 | |||||||||
Net income attributable to Green Brick Partners, Inc. per common share: | |||||||||||||||||||
Basic | $0.30 | $0.49 | $0.38 | $3.40 | $2.88 | ||||||||||||||
Diluted | $0.30 | $0.49 | $0.38 | $3.40 | $2.88 | ||||||||||||||
Weighted average common shares used in the calculation of net income attributable to Green Brick Partners, Inc. per common share: | |||||||||||||||||||
Basic | 49,597 | 48,879 | 40,068 | 14,712 | 11,109 | ||||||||||||||
Diluted | 49,683 | 48,886 | 40,099 | 14,712 | 11,109 |
Controlled Builders | Year Formed | Market | Products Offered | Prices Ranges | ||||
The Providence Group of Georgia L.L.C. (“TPG”) | 2011 | Atlanta | Townhomes | $310,000 to $650,000 | ||||
Single family | $440,000 to $1.1 million | |||||||
CB JENI Homes DFW LLC (“CB JENI”) | 2012 | Dallas | Townhomes | $250,000 to $430,000 | ||||
Single family | $320,000 to $700,000 | |||||||
Centre Living Homes, LLC (“Centre Living”) | 2012 | Dallas | Townhomes | $320,000 to $1.5 million | ||||
Southgate Homes DFW LLC (“Southgate”) | 2013 | Dallas | Luxury homes | $550,000 to $1.3 million |
For the Years Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
(in thousands, except per share data) | |||||||||||
Sale of residential units | $ | 435,644 | $ | 365,164 | $ | 254,267 | |||||
Sale of land and lots | 18,730 | 15,164 | 36,878 | ||||||||
Total revenues | 454,374 | 380,328 | 291,145 | ||||||||
Cost of residential units | 342,065 | 283,454 | 201,768 | ||||||||
Cost of land and lots | 13,856 | 10,499 | 27,125 | ||||||||
Total cost of sales | 355,921 | 293,953 | 228,893 | ||||||||
Total gross profit | 98,453 | 86,375 | 62,252 | ||||||||
Salary expense | 21,823 | 21,871 | 16,272 | ||||||||
Selling, general and administrative expense | 17,193 | 16,758 | 13,704 | ||||||||
Operating profit | 59,437 | 47,746 | 32,276 | ||||||||
Interest expense | — | — | 281 | ||||||||
Equity in income of unconsolidated entity | 2,746 | — | — | ||||||||
Other income, net | 2,054 | 2,808 | 2,721 | ||||||||
Income before taxes | 64,237 | 50,554 | 34,716 | ||||||||
Income tax provision | 39,031 | 15,381 | 9,171 | ||||||||
Net income | 25,206 | 35,173 | 25,545 | ||||||||
Less: net income attributable to noncontrolling interests | 10,236 | 11,417 | 10,220 | ||||||||
Net income attributable to Green Brick Partners, Inc. | $ | 14,970 | $ | 23,756 | $ | 15,325 | |||||
Net income attributable to Green Brick Partners, Inc. per common share: | |||||||||||
Basic | $0.30 | $0.49 | $0.38 | ||||||||
Diluted | $0.30 | $0.49 | $0.38 | ||||||||
Weighted average common shares used in the calculation of net income attributable to Green Brick Partners, Inc. per common share: | |||||||||||
Basic | 49,597 | 48,879 | 40,068 | ||||||||
Diluted | 49,683 | 48,886 | 40,099 |
Years Ended December 31, | Increase (Decrease) | |||||||||||||
New Home Orders and Backlog | 2017 | 2016 | Change | % | ||||||||||
Net new home orders | 1,063 | 880 | 183 | 20.8% | ||||||||||
Number of cancellations | 188 | 135 | 53 | 39.3% | ||||||||||
Cancellation rate | 15.0 | % | 13.3 | % | 1.7 | % | 12.8% | |||||||
Average selling communities | 54 | 47 | 7 | 14.9% | ||||||||||
Selling communities at end of period | 55 | 50 | 5 | 10.0% | ||||||||||
Backlog ($ in thousands) | $ | 151,463 | $ | 108,030 | $ | 43,433 | 40.2% | |||||||
Backlog (units) | 310 | 237 | 73 | 30.8% | ||||||||||
Average sales price of backlog | $ | 488,590 | $ | 455,823 | $ | 32,767 | 7.2% |
Years Ended December 31, | Increase (Decrease) | |||||||||||||
New Homes Delivered and Home Sales Revenue | 2017 | 2016 | Change | % | ||||||||||
New homes delivered | 990 | 844 | 146 | 17.3% | ||||||||||
Home sales revenue ($ in thousands) | $ | 435,644 | $ | 365,164 | $ | 70,480 | 19.3% | |||||||
Average sales price of homes delivered | $ | 440,044 | $ | 432,659 | $ | 7,385 | 1.7% |
Years Ended December 31, | ||||||||||||||
Homebuilding ($ in thousands) | 2017 | % | 2016 | % | ||||||||||
Home sales revenue | $ | 435,644 | 100.0 | % | $ | 365,164 | 100.0 | % | ||||||
Cost of home sales | 342,065 | 78.5 | % | 283,454 | 77.6 | % | ||||||||
Homebuilding gross margin | $ | 93,579 | 21.5 | % | $ | 81,710 | 22.4 | % |
($ in thousands) | Years Ended December 31, | As Percentage of Relevant Revenue | ||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||
Land development | $ | 341 | $ | 324 | 1.8 | % | 2.1 | % | ||||||
Builder operations | $ | 21,482 | $ | 21,547 | 4.9 | % | 5.9 | % |
($ in thousands) | Years Ended December 31, | As Percentage of Relevant Revenue | ||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||
Land development | $ | 801 | $ | 1,039 | 4.3 | % | 6.9 | % | ||||||
Builder operations | $ | 16,392 | $ | 15,719 | 3.8 | % | 4.3 | % |
Years Ended December 31, | Increase (Decrease) | |||||||||||||
New Home Orders & Backlog | 2016 | 2015 | Change | % | ||||||||||
Net new home orders | 880 | 647 | 233 | 36.0% | ||||||||||
Number of cancellations | 135 | 108 | 27 | 25.0% | ||||||||||
Cancellation rate | 13.3 | % | 14.3 | % | (1.0 | )% | (7.0)% | |||||||
Average selling communities | 47 | 41 | 6 | 14.6% | ||||||||||
Selling communities at end of period | 50 | 43 | 7 | 16.3% | ||||||||||
Backlog ($ in thousands) | $ | 108,030 | $ | 88,136 | $ | 19,894 | 22.6% | |||||||
Backlog (units) | 237 | 201 | 36 | 17.9% | ||||||||||
Average sales price of backlog | $ | 455,823 | $ | 438,488 | $ | 17,335 | 4.0% |
Years Ended December 31, | Increase (Decrease) | |||||||||||||
New Homes Delivered and Home Sales Revenue | 2016 | 2015 | Change | % | ||||||||||
New homes delivered | 844 | 655 | 189 | 28.9% | ||||||||||
Home sales revenue ($ in thousands) | $ | 365,164 | $ | 254,267 | $ | 110,897 | 43.6% | |||||||
Average sales price of homes delivered | $ | 432,659 | $ | 388,194 | $ | 44,465 | 11.5% |
Years Ended December 31, | ||||||||||||||
Homebuilding ($ in thousands) | 2016 | % | 2015 | % | ||||||||||
Home sales revenue | $ | 365,164 | 100.0 | % | $ | 254,267 | 100.0 | % | ||||||
Cost of home sales | 283,454 | 77.6 | % | 201,768 | 79.4 | % | ||||||||
Homebuilding gross margin | $ | 81,710 | 22.4 | % | $ | 52,499 | 20.6 | % |
($ in thousands) | Years Ended December 31, | As Percentage of Relevant Revenue | ||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||
Land development | $ | 324 | $ | 809 | 2.1 | % | 2.2 | % | ||||||
Builder operations | $ | 21,547 | $ | 15,463 | 5.9 | % | 6.1 | % |
($ in thousands) | Years Ended December 31, | As Percentage of Relevant Revenue | ||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||
Land development | $ | 1,039 | $ | 1,470 | 6.9 | % | 4.0 | % | ||||||
Builder operations | $ | 15,719 | $ | 12,234 | 4.3 | % | 4.8 | % |
December 31, | ||||||||
2017 | 2016 | 2015 | ||||||
Lots Owned(1) | ||||||||
Texas | 3,196 | 2,998 | 2,659 | |||||
Georgia | 1,299 | 1,237 | 991 | |||||
Total | 4,495 | 4,235 | 3,650 | |||||
Lots Controlled(1) | ||||||||
Texas | 1,390 | 554 | 326 | |||||
Georgia | 334 | 400 | 758 | |||||
Total | 1,724 | 954 | 1,084 | |||||
Total Lots Owned and Controlled(2) | 6,219 | 5,189 | 4,734 |
(1) | The “land use” assumptions used in the above table may change over time. |
(2) | Total lots excludes homes under construction. |
• | Operating activities. Net cash used in operating activities for the year ended December 31, 2017 was $18.8 million, compared to $5.2 million during the year ended December 31, 2016. The change was primarily attributable to changes in working capital associated with (i) inventory, as inventory increased by 20.8% for the year ended December 31, 2017, compared to a 19.2% increase in inventory for the year ended December 31, 2016, (ii) an increase in accrued expenses of $4.2 million for the year ended December 31, 2017 compared to an increase of $8.6 million for the year ended December 31, 2016, due to an increase in accrued job costs on land and home closings and management bonuses, (iii) an increase in earnest money deposits of $3.9 million for the year ended December 31, 2017 compared to $0.3 million for the year ended December 31, 2016, due to an increase in the land option contracts entered into during 2017 compared to 2016, (iv) an increase in other assets of $1.7 million for the year ended December 31, 2017 compared to a decrease of $1.3 million for the year ended December 31, 2016, due to an increase in pursuit costs and prepaid expenses in 2017, and (v) an increase in accounts payable of $7.2 million for the year ended December 31, 2017 compared to an increase of $1.6 million for the year ended December 31, 2016, due to an an increase in development spending for the year ended December 31, 2017. |
• | Investing activities. Net cash used in investing activities for the year ended December 31, 2017 of $0.4 million remained flat compared to the year ended December 31, 2016. |
• | Financing activities. Net cash provided by financing activities for the year ended December 31, 2017 was $19.9 million, compared to $21.5 million during the year ended December 31, 2016. The decrease was primarily due to (i) an increase in repayments of notes payable and lines of credit of $20.2 million and (ii) a net increase in distributions to noncontrolling interests and contributions from noncontrolling interests of $3.6 million, partially offset by (iii) an increase in line of credit borrowings and proceeds from notes payable of $22.8 million for the year ended December 31, 2017. |
• | Operating activities. Net cash used in operating activities for the year ended December 31, 2016 was $5.2 million, compared to net cash used of $45.4 million during the year ended December 31, 2015. The change was primarily attributable to changes in working capital associated with (i) an increase in accrued expenses of $8.6 million for the year ended December 31, 2016 compared to a decrease of $3.5 million for the year ended December 31, 2015, due to an increase in accrued job costs on land and home closings, and management bonuses being paid subsequent to the year ended December 31, 2016, (ii) an increase in earnest money deposits of $0.3 million for the year ended December 31, 2016 compared to $11.2 million for the year ended December 31, 2015, due to an increase in the land option contracts entered into during 2015 compared to 2016, (iii) an increase in customer and builder deposits of $7.2 million for the year ended December 31, 2016 compared to a decrease of $2.8 million for the year ended December 31, 2015, due to the increase in sales volume during the year ended December 31, 2016 and (iv) a decrease in other assets of $1.3 million for the year ended December 31, 2016 compared to an increase of $1.9 million for the year ended December 31, 2015, due to a decrease in prepaid development costs during the year ended December 31, 2016. |
• | Investing activities. Net cash used in investing activities for the year ended December 31, 2016 was $0.5 million, compared to net cash provided of $2.5 million during the year ended December 31, 2015. The change was primarily due to a decrease in proceeds from investment in direct financing leases of $2.8 million since there was no investment in direct financing lease activity during the year ended December 31, 2016. |
• | Financing activities. Net cash provided by financing activities for the year ended December 31, 2016 was $21.5 million, compared to net cash provided of $43.8 million during the year ended December 31, 2015. The change was primarily due to (i) a decrease in cash received of $19.9 million from net proceeds from equity offerings less the repayment of the Term Loan Facility, and (ii) a net decrease in lines of credit and notes payable borrowings of $28.3 million for the year ended December 31, 2016 compared to a $31.4 million reduction in lines of credit and notes payable borrowings for the year ended December 31, 2015. |
Payments Due by Period (in thousands) | ||||||||||||||||||||
Contractual Obligations | Total | Less Than 1 Year | 1 - 3 Years | 3 - 5 Years | Years 5 and Beyond | |||||||||||||||
Debt obligations(1) | $ | 116,926 | $ | 9,926 | $ | 107,000 | $ | — | $ | — | ||||||||||
Operating leases | 4,494 | 877 | 1,829 | 1,345 | 443 | |||||||||||||||
Purchase obligations(2) | 206,993 | 137,548 | 63,680 | 5,765 | — | |||||||||||||||
Total | $ | 328,413 | $ | 148,351 | $ | 172,509 | $ | 7,110 | $ | 443 |
(1) | Represents principal due on our lines of credit and notes payable. |
(2) | Represents the full contractual amount, including escalators, on our commitments to purchase land and lots, for which there may be existing deposits that net against such amount. If we do not purchase the land or lots under contract, we may forfeit our deposit related to the land or lots. |
Level 1 — | unadjusted quoted prices for identical assets or liabilities in active markets accessible by us; |
Level 2 — | inputs that are observable in the marketplace other than those classified as Level 1; and |
Level 3 — | inputs that are unobservable in the marketplace and significant to the valuation. |
Year of Maturity | Fair Value at December 31, 2017 | |||||||||||||||||||
2018 | 2019 | 2020 | Total | |||||||||||||||||
Lines of Credit | ||||||||||||||||||||
Variable debt | $ | — | $ | 32,000 | $ | 75,000 | $ | 107,000 | $ | 107,000 | ||||||||||
Weighted average interest rate | — | % | 4.5 | % | 4.0 | % | — | % | n/a | |||||||||||
Notes payable | ||||||||||||||||||||
Fixed debt | $ | 9,926 | $ | — | $ | — | $ | 9,926 | $ | 9,926 | ||||||||||
Weighted average interest rate | 5.7 | % | — | % | — | % | — | % | n/a |
Name | Age | Position |
Elizabeth K. Blake | 66 | Director |
Harry Brandler | 46 | Director |
James R. Brickman | 66 | Chief Executive Officer and Director |
David Einhorn | 49 | Chairman of the Board |
John R. Farris | 45 | Director |
Kathleen Olsen | 46 | Director |
Richard S. Press | 79 | Director |
• | retaining, compensating, overseeing and terminating any registered public accounting firm in connection with the preparation or issuance of an audit report, and approving all audit services and any permissible non-audit services provided by the independent registered public accounting firm; |
• | receiving direct reports from any registered public accounting firm engaged to prepare or issue an audit report; |
• | reviewing and discussing annual audited and quarterly unaudited financial statements with management and the independent registered public accounting firm; |
• | reviewing with the independent registered public accounting firm any audit problems and management’s response; |
• | discussing earnings releases, financial information and earnings guidance provided to analysts and rating agencies; |
• | periodically meeting separately with management, internal auditors and the independent registered public accounting firm; |
• | establishing procedures to receive, retain and treat complaints regarding accounting, internal accounting controls or auditing matters and the confidential anonymous submission by employees of concerns regarding questionable accounting or auditing matters; |
• | obtaining and reviewing, at least annually, an independent registered public accounting firm report describing the independent registered public accounting firm internal quality-control procedures and any material issues raised by the most recent internal quality-control review of the independent registered public accounting firm or any inquiry by governmental authorities; |
• | approving and recommending to the Board the hiring of any employees or former employees of the independent registered public accounting firm; |
• | retaining independent counsel and other outside advisors, including experts in the area of accounting, as it determines necessary to carry out its duties; and |
• | reporting regularly to the full Board with respect to any issues raised by the foregoing. |
• | reviewing key employee compensation policies, plans and programs; |
• | reviewing and approving the compensation of the Chief Executive Officer and other executive officers of the Company and its subsidiaries; |
• | reviewing and approving any employment contracts or similar arrangements between the Company and any executive officer of the Company; |
• | reviewing and consulting with the Chairman and Chief Executive Officer of the Company concerning performance of individual executives and related matters; and |
• | administering the Company’s stock plans, incentive compensation plans and other similar plans that the Board may from time to time adopt and exercising all the powers, duties and responsibilities of the Board with respect to the plans. |
• | recommending to the Board proposed nominees for election to the Board by the stockholders at annual meetings, including an annual review as to the re-nominations of incumbents and proposed nominees for election by the Board to fill vacancies that occur between stockholder meetings; |
• | reviewing and approving or ratifying related party transactions under the Company’s Related Party Policy; |
• | making recommendations to the Board regarding corporate governance matters and practices; and |
• | assisting the Board and its other committees that oversee specific risk related issues and serving as a resource to management by overseeing the Company’s enterprise risk management function, including risks related to information technology security. |
Named Executive Officers | Title | |
James R. Brickman | Chief Executive Officer | |
Richard A. Costello | Chief Financial Officer | |
Jed Dolson | President of Texas Region | |
Summer Loveland | Chief Accounting Officer |
• | providing cash compensation opportunities to executive officers that, in the aggregate, reflect general industry practice; |
• | rewarding superior overall Company and individual performance using annual bonuses and special bonuses in certain cases, when appropriate; and |
• | allowing individual pay levels to vary considerably with individual executive responsibilities, capabilities and performance. |
• | Support an environment that rewards performance and value creation for the Company’s investors; and |
• | Integrate its incentive compensation program with the Company’s short-and long-term success. |
• | Attract and retain highly qualified executives; |
• | Provide executives with compensation that is competitive within the industry in which it operates; |
• | Establish compensation packages that take into consideration the executive’s role, qualifications, experience, responsibilities, leadership potential, individual goals and performance; and |
• | Align executive compensation to support the Company’s objectives. |
• | base salaries; |
• | annual bonus opportunities; |
• | equity-based compensation; and |
• | limited perquisites and other personal benefits. |
Named Executive Officers | 2017 Fiscal Year End Base Salary ($) | ||
James R. Brickman | 1,400,000 | ||
Richard A. Costello | 400,000 | ||
Jed Dolson | 550,000 | ||
Summer Loveland | 300,000 |
Named Executive Officers | 2017 Target Bonus (% of Base Salary as in effect on December 31, 2017) | 2017 Target Bonus ($) | ||||
James R. Brickman | 100 | % | 1,400,000 | |||
Richard A. Costello | 100 | % | 400,000 | |||
Jed Dolson | 95.74 | % | 526,575 |
Named Executive Officers | 2017 Actual Bonus ($) | ||
James R. Brickman | 1,400,000 | ||
Richard A. Costello | 300,000 | ||
Jed Dolson | 526,575 |
Respectfully Submitted, | |
Richard S. Press (Chair) | |
Kathleen Olsen | |
Elizabeth K. Blake |
Name and Principal Position | Year | Salary ($)(1) | Bonus ($) | Stock Awards ($)(2) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | All Other Compensation ($)(3) | Total ($) | |||||||||||||||
James R. Brickman, | |||||||||||||||||||||||
Chief Executive Officer | 2017 | 1,400,000 | — | 1,079,204 | — | 700,000 | 10,621 | 3,189,825 | |||||||||||||||
2016 | 1,400,000 | — | 343,542 | — | 700,000 | 10,359 | 2,453,901 | ||||||||||||||||
2015 | 1,400,000 | — | — | — | 350,000 | 8,140 | 1,758,140 | ||||||||||||||||
Richard A. Costello, | |||||||||||||||||||||||
Chief Financial Officer | 2017 | 400,000 | — | 302,198 | — | 150,000 | 15,339 | 867,537 | |||||||||||||||
2016 | 400,000 | — | 73,613 | — | 200,000 | 6,666 | 680,279 | ||||||||||||||||
2015 | 288,846 | — | — | — | 75,000 | 6,315 | 370,161 | ||||||||||||||||
Jed Dolson, | |||||||||||||||||||||||
President of Texas Region | 2017 | 426,731 | — | 545,146 | — | 263,288 | 190,048 | 1,425,213 | |||||||||||||||
2016 | 400,000 | — | 229,861 | — | 200,000 | 181,075 | 1,010,936 | ||||||||||||||||
2015 | 300,000 | — | 156,250 | — | 75,000 | 174,353 | 705,603 | ||||||||||||||||
Summer Loveland, | |||||||||||||||||||||||
Chief Accounting Officer | 2017 | 39,808 | — | — | — | — | 1,069 | 40,877 |
(1) | Mr. Costello’s base salary in fiscal year 2015 was pro-rated based on the number of days he was employed by the Company in fiscal year 2015, which commenced on January 15, 2015. Mr. Dolson’s base salary was increased in October 2017 from $400,000 to $550,000. Ms. Loveland’s annual base salary in fiscal year 2017 was pro-rated based on the number of days she was employed by the Company in fiscal year 2017, which commenced on November 14, 2017. |
(2) | The amounts in this column represent the aggregate grant date fair value of the common stock issued to Messrs. Brickman, Costello and Dolson in accordance with ASC 718. Messrs. Brickman, Costello and Dolson were awarded discretionary stock bonuses on January 2, 2017, as described above, and the remaining 50% of their annual bonuses for each year were paid in shares of common stock in the immediately following year and are reported in this table in the year in which they were granted. Mr. Dolson received additional shares of common stock in satisfaction of 50% of the payment due to him in 2017, 2016 and 2015 in respect of the cancellation of his Profits Interests, as described in footnote 5 below. |
(3) | The table below includes items of All Other Compensation paid to the NEOs in 2017. |
Name | Medical, Dental and Vision Insurance Premiums ($) | HSA Employer Contribution ($) | 401(k) Employer Match ($) | Life Insurance Premiums, AD&D and Disability Premiums ($) | Car and Cell Phone Allowance ($) | Profits Interests Cancellation Award ($)(4) | Total ($) | ||||||||||||||
James R. Brickman | 7,345 | 2,000 | — | 1,276 | — | — | 10,621 | ||||||||||||||
Richard A. Costello | 4,929 | 958 | 8,100 | 1,352 | — | — | 15,339 | ||||||||||||||
Jed Dolson | 11,975 | 2,000 | 8,100 | 1,523 | 10,200 | 156,250 | 190,048 | ||||||||||||||
Summer Loveland | 803 | 167 | — | 99 | — | — | 1,069 |
(4) | Mr. Dolson received a one-time award of $1,250,000 in respect of the cancellation of his Profits Interests, which was payable in four equal installments on October 27, 2014 and each of the next three anniversaries thereof. In 2017, 50% of the amount due to Mr. Dolson was paid in the form of cash and the remaining 50% was paid in shares of common stock. |
Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(1) | All Other Stock Awards: | Grant Date Fair Value of | ||||||||||||
Named Executive Officers | Grant Date | Approval Date | Threshold ($) | Target ($) | Number of Shares (#)(2) | Stock and Option Awards ($)(3) | ||||||||
James R. Brickman | 350,000 | 700,000 | ||||||||||||
1/2/2017 | 12/6/2016 | 32,085 | 322,454 | |||||||||||
3/28/2017 | 3/6/2017 | 75,675 | 756,750 | |||||||||||
Richard A. Costello | 100,000 | 200,000 | ||||||||||||
1/2/2017 | 12/6/2016 | 8,556 | 85,988 | |||||||||||
3/28/2017 | 3/6/2017 | 21,621 | 216,210 | |||||||||||
Jed Dolson | 131,644 | 263,288 | ||||||||||||
1/2/2017 | 12/6/2016 | 17,112 | 171,976 | |||||||||||
3/28/2017 | 3/6/2017 | 21,621 | 216,210 | |||||||||||
11/8/2017 | 10/2/2017 | 14,400 | 156,960 |
(1) | 50% of annual bonuses in respect of 2017 will be paid in cash under the Company’s annual bonus plan and 50% of annual bonuses in respect of 2017 will be paid in stock under the Company’s 2014 Equity Plan. The amounts shown represent the portion payable in cash. Any portion paid in stock will be reported in the “Stock Awards” column and in the Grants of Plan-Based Awards table, in each case, in the year of grant. The threshold amount represents 50% of the quantitative bonus, which represents 25% of the annual bonus opportunity that would be paid in cash if the threshold level of adjusted pre-tax income is attained by the Company. The target amount represents 50% of the target bonus opportunity that would be paid in cash if the adjusted pre-tax income and individual qualitative performance goals are attained or exceeded. |
(2) | On January 2, 2017, Messrs. Brickman, Costello and Dolson, were granted 32,085, 8,556, and 17,112 shares of fully vested common stock, respectively, to supplement current executive compensation and to maintain total compensation which is competitive within the industry in which the Company operates. On March 28, 2017, Messrs. Brickman, Costello and Dolson were granted 75,675, 21,621 and 21,261 shares of common stock, respectively, under the 2014 Equity Plan in satisfaction of 50% of the 2016 annual bonuses. On November 8, 2017, Mr. Dolson was also granted 14,400 shares of fully vested common stock in satisfaction of 50% of the amount due to him in 2017 in respect of the cancellation of his Profits Interests. |
(3) | Reflects the grant date fair value of the shares of the common stock awarded to Messrs. Brickman, Costello and Dolson, as calculated in accordance with ASC 718. |
Option Awards | ||||||||||||
Named Executive Officer | Number of Shares Underlying Unexercised Options Exercisable (#)(1) | Number of Shares Underlying Unexercised Options Unexercisable (#)(1) | Option Exercise Price ($/Sh) | Option Expiration Date | ||||||||
James R. Brickman | 300,000 | 200,000 | $7.49 | 10/27/2024 | ||||||||
Richard A. Costello | — | — | — | — | ||||||||
Jed Dolson | — | — | — | — | ||||||||
Summer Loveland | — | — | — | — |
(1) | On October 27, 2014, Mr. Brickman was granted stock options to purchase 500,000 shares of the Company’s common stock, which vest and become exercisable in five substantially equal installments on each of the first five anniversaries of the date of grant. |
Option Exercises and Stock Vested | ||||||||||||
Option Awards | Stock Awards | |||||||||||
Named Executive Officers | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#)(1) | Value Realized on Vesting ($)(2) | ||||||||
James R. Brickman | — | — | 107,760 | 1,079,204 | ||||||||
Richard A. Costello | — | — | 30,177 | 302,198 | ||||||||
Jed Dolson | — | — | 53,133 | 545,146 | ||||||||
Summer Loveland | — | — | — | — |
(1) | On January 2, 2017, Messrs. Brickman, Costello and Dolson were granted 32,085, 8,556, and 17,112 shares of common stock, respectively, to supplement current executive compensation and to maintain total compensation which is competitive within the industry in which the Company operates. On March 28, 2017, Messrs. Brickman, Costello and Dolson were granted 75,675, 21,621, and 21,261 shares of common stock, respectively, in satisfaction of 50% of the 2016 annual bonuses. On November 8, 2017, Mr. Dolson was also granted 14,400 shares of common stock in satisfaction of 50% of the amount due to him in 2017 in respect of the cancellation of his Profits Interests. |
(2) | Reflects the grant date fair value of the shares of the Company’s common stock awarded to Messrs. Brickman, Costello and Dolson, as calculated in accordance with ASC 718. |
James R. Brickman | Richard A. Costello | Jed Dolson | Summer Loveland | |||||
Termination by the Company without Cause/Resignation by Executive for Good Reason | • A cash severance payment equal to $5,600,000, calculated as two times (2x) the sum (i) base salary ($1,400,000) plus (ii) target bonus ($1,400,000). • Full acceleration of outstanding unvested stock options on a termination without Cause only.(1) | • A cash severance payment equal to $1,200,000, calculated as one and one-half times (1.5x) the sum (i) base salary ($400,000) plus (ii) bonus for prior year ($400,000). | • A cash severance payment equal to $1,425,000, calculated as one and one-half times (1.5x) the sum (i) base salary ($550,000) plus (ii) bonus for prior year ($400,000)). | • A cash severance payment equal to $300,000 | ||||
Termination by the Company for Cause/Resignation by Executive without Good Reason | Accrued Obligations only. | Accrued Obligations only. | Accrued Obligations only. | Accrued Obligations only. | ||||
Death/Disability | Accrued Obligations only. | Accrued Obligations only. | Accrued Obligations only. | Accrued Obligations only. | ||||
Expiration of Term | Accrued Obligations only. | Accrued Obligations only. | Accrued Obligations only. | Accrued Obligations only. |
(1) | Based on the closing price per share of the Company’s common stock as of December 29, 2017, the last business day of the year, equal to $11.30, the acceleration of Mr. Brickman’s unvested stock options would be worth $762,000. |
• | the median of the annual total compensation of all our employees (other than our CEO) was $103,042; and |
• | the annual total compensation of our CEO was $3,189,825. |
Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | Total ($) | ||||
David Einhorn | 50,000 | — | 50,000 | |||
James R. Brickman(2) | — | — | — | |||
Elizabeth K. Blake | 30,136 | 147,836 | 177,972 | |||
Harry Brandler | 50,000 | — | 50,000 | |||
John R. Farris | 68,818 | 103,484 | 172,302 | |||
Kathleen Olsen | 81,310 | 68,983 | 150,293 | |||
Richard S. Press | 90,726 | 68,983 | 159,709 |
(1) | On May 24, 2017, the Company awarded restricted shares of the Company’s common stock to certain directors pursuant to the 2014 Equity Plan. The restricted stock awards become fully vested on the earlier to occur of (i) the first anniversary of the grant date, or (ii) the date of the Company’s 2018 annual meeting of stockholders. The grant date fair value of the restricted stock awards is included in the table in accordance with ASC 718. |
(2) | As an employee of the Company, Mr. Brickman does not receive any additional compensation for his service as a director. |
• | each person who is known by the Company to beneficially own 5% or more of the outstanding shares of common stock; |
• | each member of the Board who beneficially owns any shares of common stock; |
• | each of the Company’s named executive officers; and |
• | all members of the Board and the Company’s executive officers as a group. |
Beneficial Owner | Number of Shares of Common Stock | Total Number of Shares Beneficially Owned | Percentage of Common Stock Outstanding | ||||||
Greenlight Capital, Inc. and its affiliates(1) 2 Grand Central Tower 140 East 45th Street, 24th floor New York, NY 10017 | 24,127,590 | 24,127,590 | 47.7 | % | |||||
Third Point Funds and its affiliates(2) 390 Park Avenue, 18th floor New York, NY10022 | 8,211,267 | 8,211,267 | 16.2 | % | |||||
James R. Brickman(3) | 1,590,706 | 1,800,142 | 3.6 | % | |||||
Richard A. Costello | 26,514 | 26,514 | * | ||||||
Jed Dolson | 74,583 | 74,583 | * | ||||||
Summer Loveland | — | — | — | ||||||
David Einhorn(1) | 8,922 | 8,922 | * | ||||||
Elizabeth K. Blake | 110,546 | 110,546 | * | ||||||
Harry Brandler | — | — | — | ||||||
John R. Farris | 56,788 | 56,788 | * | ||||||
Kathleen Olsen | 45,282 | 45,282 | * | ||||||
Richard S. Press | 39,222 | 39,222 | * | ||||||
All Directors and Executive Officers as a group, 10 persons(4) | 26,071,231 | 26,280,667 | 51.9 | % |
(1) | Greenlight Capital, Inc. is the investment manager for Greenlight Capital Qualified, L.P., Greenlight Capital, L.P. and Greenlight Capital Offshore Partners, and as such has voting and dispositive power over 5,739,103 shares of common stock held by Greenlight Capital Qualified, L.P., 1,290,810 shares of common stock held by Greenlight Capital, L.P., and 10,161,908 shares of common stock held by Greenlight Capital Offshore Partners. DME Advisors, LP (“DME Advisors”) is the investment manager for Greenlight Reinsurance, Ltd., and as such has voting and dispositive power over 3,466,793 shares of common stock held by Greenlight Reinsurance, Ltd. DME Capital Management, LP (“DME Management”) is the investment manager for Greenlight Capital (Gold), LP, and Greenlight Capital Offshore Master (Gold), Ltd., and as such has voting and dispositive power over 1,741,395 shares of common stock held by Greenlight Capital (Gold), LP and 1,718,659 shares of common stock held by Greenlight Capital Offshore Master (Gold), Ltd. DME Advisors GP, LLC (“DME GP”) is the general partner of DME Advisors and DME Management, and as such has voting and dispositive power over 6,926,847 shares of common stock. David Einhorn, one of our directors, is the principal of Greenlight Capital, Inc., DME Advisors, DME Management and DME GP, and as such has voting and dispositive power over 24,127,590 shares of common stock held by these affiliates of Greenlight Capital, Inc. Mr. Einhorn disclaims beneficial ownership of these shares, except to the extent of any pecuniary interest therein. Also includes 8,922 shares held by Mr. Einhorn. |
(2) | Includes 8,083,022 shares held of record by Third Point Offshore Master Fund LP, Third Point Partners LP, Third Point Partners Qualified LP, Third Point Ultra Master Fund LP and Third Point Reinsurance Company Ltd., which are investment funds managed by Third Point LLC, and 128,245 shares held by Daniel S. Loeb, who has the power to vote and dispose of the shares held by him and the investment funds managed by Third Point LLC. |
(3) | Mr. Brickman may be deemed to indirectly beneficially own (i) 100,968 shares of common stock directly held by the Roger E. Brickman GST Marital Trust (the “Marital Trust“) by virtue of his position as a co-trustee of the Marital Trust, (ii) 15,000 shares of common stock directly held by the Brickman Living Trust (the “Living Trust“) by virtue of his position as the trustee of the Living Trust, and (iii) 93,468 shares of common stock directly held by the L. Loraine Brickman Revocable Trust (the “Revocable Trust”) by virtue of his position as a co-trustee of the Revocable Trust. Mr. Brickman disclaims beneficial ownership of the shares of common stock of the Company directly held by the Marital Trust, the Living Trust and the Revocable Trust, except to the extent of his pecuniary interest therein. |
(4) | Includes shares held by Greenlight Capital, Inc., and its affiliates described in Note 1, which are controlled by one of our directors, David Einhorn. |
Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) | Weighted-average exercise price of outstanding options, warrants and rights (b) | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) | |||
Equity compensation plans approved by security holders | — | — | 1,956,979 | |||
Equity compensation plans not approved by security holders | — | — | — | |||
Total | — | — | 1,956,979 |
2017 | 2016 | ||||||
Audit fees(1) | $ | 700,671 | $ | 879,958 | |||
Audit-related fees | — | — | |||||
Tax fees | — | — | |||||
All other fees | — | — | |||||
Total fees | $ | 700,671 | $ | 879,958 |
(1) | Audit fees for 2017 include professional services rendered by RSM US LLP for the audit of the Company’s consolidated financial statements included in the Company’s Annual Report on Form 10-K, review of the Company’s condensed consolidated financial statements included in the Company’s Quarterly Reports on Form 10-Q, and audit of the Company’s internal control over financial reporting. Audit fees for 2016 include professional services rendered by RSM US LLP for the audit of the Company’s consolidated financial statements included in the Company’s Annual Report on Form 10-K, review of the Company’s condensed consolidated financial statements included in the Company’s third quarter Quarterly Report on Form 10-Q, and audit of the Company’s internal control over financial reporting. |
2017 | 2016 | ||||||
Audit fees(1) | $ | 79,500 | $ | 410,040 | |||
Audit-related fees | — | — | |||||
Tax fees | — | — | |||||
All other fees | — | — | |||||
Total fees | $ | 79,500 | $ | 410,040 |
(1) | Audit fees for 2017 include professional services rendered by Grant Thornton LLP related to a consent and successor auditor services for the Company’s consolidated financial statements for the year ended December 31, 2015. Audit fees for 2016 include professional services rendered by Grant Thornton for the audit of the Company’s consolidated financial statements included in the Company’s 2015 Annual Report on Form 10-K, review of the Company’s condensed consolidated financial statements included in the Company’s first and second quarters Quarterly Reports on Form 10-Q, and successor auditor services, such as, the reissuance of opinion in the Company’s 2016 Annual Report on Form 10-K. |
Green Brick Partners, Inc. - Consolidated Financial Statements | |
(a)(2) Financial Statement Schedules. Financial statements schedules are omitted because they are not required or applicable or the required information is included in the consolidated financial statements or notes thereto. | |
Green Brick Partners, Inc. - Consolidated Financial Statements | |
As of December 31, | |||||||
2017 | 2016 | ||||||
Assets | |||||||
Cash | $ | 36,684 | $ | 35,157 | |||
Restricted cash | 3,605 | 4,445 | |||||
Accounts receivable | 1,605 | 2,448 | |||||
Inventory | 495,655 | 410,297 | |||||
Investment in unconsolidated entity | 16,878 | — | |||||
Property and equipment, net | 804 | 892 | |||||
Earnest money deposits | 22,038 | 18,143 | |||||
Deferred income tax assets, net | 31,211 | 67,598 | |||||
Other assets, net | 3,750 | 2,004 | |||||
Total assets | $ | 612,230 | $ | 540,984 | |||
Liabilities and stockholders’ equity | |||||||
Accounts payable | $ | 22,354 | $ | 15,113 | |||
Accrued expenses | 18,465 | 14,290 | |||||
Customer and builder deposits | 21,447 | 14,088 | |||||
Obligations related to land not owned under option contracts | — | 10,060 | |||||
Borrowings on lines of credit | 107,000 | 75,000 | |||||
Notes payable | 9,926 | 10,948 | |||||
Total liabilities | 179,192 | 139,499 | |||||
Commitments and contingencies | — | — | |||||
Stockholders’ equity | |||||||
Green Brick Partners, Inc. stockholders’ equity | |||||||
Preferred stock, $0.01 par value: 5,000,000 shares authorized; none issued and outstanding, respectively | — | — | |||||
Common shares, $0.01 par value: 100,000,000 shares authorized; 50,598,901 and 48,955,909 issued and outstanding as of December 31, 2017 and 2016, respectively | 506 | 490 | |||||
Additional paid-in capital | 289,938 | 273,149 | |||||
Retained earnings | 125,903 | 110,933 | |||||
Total Green Brick Partners, Inc. stockholders’ equity | 416,347 | 384,572 | |||||
Noncontrolling interests | 16,691 | 16,913 | |||||
Total stockholders’ equity | 433,038 | 401,485 | |||||
Total liabilities and stockholders’ equity | $ | 612,230 | $ | 540,984 |
For the Year Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Sale of residential units | $ | 435,644 | $ | 365,164 | $ | 254,267 | |||||
Sale of land and lots | 18,730 | 15,164 | 36,878 | ||||||||
Total revenues | 454,374 | 380,328 | 291,145 | ||||||||
Cost of residential units | 342,065 | 283,454 | 201,768 | ||||||||
Cost of land and lots | 13,856 | 10,499 | 27,125 | ||||||||
Total cost of sales | 355,921 | 293,953 | 228,893 | ||||||||
Total gross profit | 98,453 | 86,375 | 62,252 | ||||||||
Salary expense | 21,823 | 21,871 | 16,272 | ||||||||
Selling, general and administrative expense | 17,193 | 16,758 | 13,704 | ||||||||
Operating profit | 59,437 | 47,746 | 32,276 | ||||||||
Interest expense | — | — | 281 | ||||||||
Equity in income of unconsolidated entity | 2,746 | — | — | ||||||||
Other income, net | 2,054 | 2,808 | 2,721 | ||||||||
Income before taxes | 64,237 | 50,554 | 34,716 | ||||||||
Income tax provision | 39,031 | 15,381 | 9,171 | ||||||||
Net income | 25,206 | 35,173 | 25,545 | ||||||||
Less: net income attributable to noncontrolling interests | 10,236 | 11,417 | 10,220 | ||||||||
Net income attributable to Green Brick Partners, Inc. | $ | 14,970 | $ | 23,756 | $ | 15,325 | |||||
Net income attributable to Green Brick Partners, Inc. per common share: | |||||||||||
Basic | $0.30 | $0.49 | $0.38 | ||||||||
Diluted | $0.30 | $0.49 | $0.38 | ||||||||
Weighted average common shares used in the calculation of net income attributable to Green Brick Partners, Inc. per common share: | |||||||||||
Basic | 49,597 | 48,879 | 40,068 | ||||||||
Diluted | 49,683 | 48,886 | 40,099 |
Common Stock | Additional Paid-in Capital | Retained Earnings | Total Green Brick Partners, Inc. Stockholders’ Equity | Noncontrolling Interests | Total Stockholders’ Equity | |||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||
Balance as of December 31, 2014 | 31,346,084 | $ | 313 | $ | 101,626 | $ | 69,919 | $ | 171,858 | $ | 9,739 | $ | 181,597 | |||||||||||||
Share-based compensation | — | — | 383 | — | 383 | — | 383 | |||||||||||||||||||
Issuance of common stock under 2014 Equity Plan | 42,342 | — | — | — | — | — | — | |||||||||||||||||||
Amortization of deferred share-based compensation | — | — | 91 | — | 91 | — | 91 | |||||||||||||||||||
Issuance of common stock in connection with secondary offering, net of issuance costs | 17,444,897 | 175 | 169,767 | — | 169,942 | — | 169,942 | |||||||||||||||||||
Contributions | — | — | — | — | — | 87 | 87 | |||||||||||||||||||
Distributions | — | — | — | — | — | (7,723 | ) | (7,723 | ) | |||||||||||||||||
Out-of-period adjustment | — | — | — | 1,933 | 1,933 | — | 1,933 | |||||||||||||||||||
Net income | — | — | — | 15,325 | 15,325 | 10,220 | 25,545 | |||||||||||||||||||
Balance as of December 31, 2015 | 48,833,323 | $ | 488 | $ | 271,867 | $ | 87,177 | $ | 359,532 | $ | 12,323 | $ | 371,855 | |||||||||||||
Share-based compensation | — | — | 361 | — | 361 | — | 361 | |||||||||||||||||||
Issuance of common stock under 2014 Equity Plan | 122,586 | 2 | 647 | — | 649 | — | 649 | |||||||||||||||||||
Amortization of deferred share-based compensation | — | — | 274 | — | 274 | — | 274 | |||||||||||||||||||
Contributions | — | — | — | — | — | 2,928 | 2,928 | |||||||||||||||||||
Distributions | — | — | — | — | — | (9,755 | ) | (9,755 | ) | |||||||||||||||||
Net income | — | — | — | 23,756 | 23,756 | 11,417 | 35,173 | |||||||||||||||||||
Balance as of December 31, 2016 | 48,955,909 | $ | 490 | $ | 273,149 | $ | 110,933 | $ | 384,572 | $ | 16,913 | $ | 401,485 | |||||||||||||
Share-based compensation | — | — | 289 | — | 289 | — | 289 | |||||||||||||||||||
Issuance of common stock under 2014 Equity Plan | 229,049 | 2 | 1,924 | — | 1,926 | — | 1,926 | |||||||||||||||||||
Amortization of deferred share-based compensation | — | — | 356 | — | 356 | — | 356 | |||||||||||||||||||
Withholdings of taxes from vesting of restricted stock awards | (63,057 | ) | (1 | ) | (585 | ) | — | (586 | ) | — | (586 | ) | ||||||||||||||
Common stock issued in connection with the investment in unconsolidated entity | 1,477,000 | 15 | 14,607 | — | 14,622 | — | 14,622 | |||||||||||||||||||
Common stock issuable in connection with the investment in unconsolidated entity | — | — | 198 | — | 198 | — | 198 | |||||||||||||||||||
Contributions | — | — | — | — | — | 438 | 438 | |||||||||||||||||||
Distributions | — | — | — | — | — | (10,896 | ) | (10,896 | ) | |||||||||||||||||
Net income | — | — | — | 14,970 | 14,970 | 10,236 | 25,206 | |||||||||||||||||||
Balance as of December 31, 2017 | 50,598,901 | $ | 506 | $ | 289,938 | $ | 125,903 | $ | 416,347 | $ | 16,691 | $ | 433,038 |
For the Year Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | 25,206 | $ | 35,173 | $ | 25,545 | |||||
Adjustment to reconcile net income to net cash used in operating activities: | |||||||||||
Depreciation and amortization expense | 325 | 286 | 865 | ||||||||
Share-based compensation | 2,571 | 1,284 | 474 | ||||||||
Deferred income taxes, net | 36,299 | 13,147 | 8,352 | ||||||||
Equity in income of unconsolidated entity | (2,746 | ) | — | — | |||||||
Cash distributions of income from unconsolidated entity | 974 | — | — | ||||||||
Changes in operating assets and liabilities | |||||||||||
Decrease (increase) in accounts receivable | 843 | 866 | (2,566 | ) | |||||||
Increase in inventory | (95,418 | ) | (74,281 | ) | (58,728 | ) | |||||
Increase in earnest money deposits | (3,895 | ) | (298 | ) | (11,169 | ) | |||||
(Increase) decrease in other assets | (1,746 | ) | 1,341 | (1,887 | ) | ||||||
Increase (decrease) in accounts payable | 7,241 | 1,583 | (21 | ) | |||||||
Increase (decrease) in accrued expenses | 4,175 | 8,571 | (3,465 | ) | |||||||
Increase (decrease) in customer and builder deposits | 7,359 | 7,150 | (2,814 | ) | |||||||
Net cash used in operating activities | (18,812 | ) | (5,178 | ) | (45,414 | ) | |||||
Cash flows from investing activities: | |||||||||||
Proceeds from sale of investment in direct financing leases | — | — | 2,768 | ||||||||
Acquisition of investment in unconsolidated entity | (286 | ) | — | — | |||||||
Acquisition of property and equipment | (149 | ) | (458 | ) | (307 | ) | |||||
Net cash (used in) provided by investing activities | (435 | ) | (458 | ) | 2,461 | ||||||
Cash flows from financing activities: | |||||||||||
Borrowings from lines of credit | 88,500 | 63,000 | 86,000 | ||||||||
Proceeds from notes payable | — | 2,660 | 3,206 | ||||||||
Repayments of lines of credit | (56,500 | ) | (35,500 | ) | (52,561 | ) | |||||
Repayments of notes payable | (1,022 | ) | (1,870 | ) | (5,199 | ) | |||||
Repayment of term loan facility | — | — | (150,000 | ) | |||||||
Proceeds from equity offering, net of issuance costs | — | — | 169,942 | ||||||||
Withholdings of taxes from vesting of restricted stock awards | (586 | ) | — | — | |||||||
Contributions from noncontrolling interests | 438 | 2,928 | 87 | ||||||||
Distributions to noncontrolling interests | (10,896 | ) | (9,755 | ) | (7,723 | ) | |||||
Net cash provided by financing activities | 19,934 | 21,463 | 43,752 | ||||||||
Net increase in cash and restricted cash | 687 | 15,827 | 799 | ||||||||
Cash and restricted cash at beginning of period | 39,602 | 23,775 | 22,976 | ||||||||
Cash and restricted cash at end of period | $ | 40,289 | $ | 39,602 | $ | 23,775 | |||||
Supplemental disclosure of cash flow information: | |||||||||||
Cash paid for interest, net of capitalized interest | $ | — | $ | — | $ | 2,764 | |||||
Cash paid for taxes | $ | 2,941 | $ | 1,503 | $ | 1,339 | |||||
Supplemental disclosure of noncash investing and financing activities: | |||||||||||
Decrease (increase) in land not owned under option contracts | $ | — | $ | 6,921 | $ | (8,935 | ) | ||||
Accrued debt issuance costs | $ | — | $ | — | $ | 52 | |||||
Out-of-period equity adjustment | $ | — | $ | — | $ | 1,933 | |||||
Equity issuance related to investment in unconsolidated entity | $ | 14,622 | $ | — | $ | — |
As of December 31, | |||||||
2017 | 2016 | ||||||
Completed home inventory and residential lots held for sale | $ | 106,043 | $ | 127,679 | |||
Work in process and land under development | 389,612 | 269,255 | |||||
Undeveloped land | — | 4,070 | |||||
Land not owned under option contracts | — | 9,293 | |||||
Total inventory | $ | 495,655 | $ | 410,297 |
2017 | 2016 | 2015 | |||||||||
Interest capitalized at beginning of year | $ | 9,417 | $ | 9,085 | $ | 3,713 | |||||
Interest incurred | 4,456 | 3,218 | 9,625 | ||||||||
Interest charged to cost of sales | (3,399 | ) | (2,886 | ) | (3,972 | ) | |||||
Interest charged to interest expense | — | — | (281 | ) | |||||||
Interest capitalized at end of year | $ | 10,474 | $ | 9,417 | $ | 9,085 |
Years End December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Net income attributable to Green Brick Partners, Inc. per share | |||||||||||
Net income attributable to Green Brick Partners, Inc. | $ | 14,970 | $ | 23,756 | $ | 15,325 | |||||
Weighted average number of shares outstanding —basic | 49,597 | 48,879 | 40,068 | ||||||||
Basic net income attributable to Green Brick Partners, Inc. per share | $ | 0.30 | $ | 0.49 | $ | 0.38 | |||||
Weighted average number of shares outstanding —basic | 49,597 | 48,879 | 40,068 | ||||||||
Dilutive effect of stock options and restricted stock awards | 86 | 7 | 30 | ||||||||
Weighted average number of shares outstanding —diluted | 49,683 | 48,886 | 40,099 | ||||||||
Diluted net income attributable to Green Brick Partners, Inc. per share | $ | 0.30 | $ | 0.49 | $ | 0.38 |
Years End December 31, | ||||||||
2017 | 2016 | 2015 | ||||||
Antidilutive options to purchase common stock | — | 144 | 62 |
Level 1 — | unadjusted quoted prices for identical assets or liabilities in active markets accessible by the Company; |
Level 2 — | inputs that are observable in the marketplace other than those classified as Level 1; and |
Level 3 — | inputs that are unobservable in the marketplace and significant to the valuation. |
Consideration transferred at closing | |||
Green Brick common stock issued | 1,477 | ||
Price per share of Green Brick common stock(1) | $ | 9.90 | |
Fair value of common stock consideration | $ | 14,622 | |
Acquisition related costs | $ | 241 | |
Total fair value of consideration transferred at closing | $ | 14,863 | |
Potential future consideration | |||
Holdback Shares | 20 | ||
Price per share of Green Brick common stock(1) | $ | 9.90 | |
Total fair value of potential future consideration | $ | 198 | |
Total fair value of consideration | $ | 15,061 |
(1) | Based upon closing price of the Company’s common stock upon the parties’ execution of the Challenger Agreement. |
December 31, 2017 | |||
Cash | $ | 3,981 | |
Accounts receivable | 1,494 | ||
Inventory | 57,841 | ||
Goodwill | 4,615 | ||
Noncompete intangible asset | 202 | ||
Other assets | 5,098 | ||
Total assets | $ | 73,231 | |
Accounts payable | $ | 5,060 | |
Accrued expenses and other liabilities | 2,857 | ||
Notes payable | 36,923 | ||
Equity | 28,391 | ||
Total liabilities and equity | $ | 73,231 | |
For the Five Months Ended December 31, 2017 | |||
Revenues | $ | 58,958 | |
Gross profit | $ | 13,989 | |
Income before taxes | $ | 5,502 |
December 31, 2017 | December 31, 2016 | ||||||
Office furniture and equipment | $ | 399 | $ | 333 | |||
Leasehold improvements | 271 | 166 | |||||
Computers and equipment | 903 | 836 | |||||
Field trailers | 10 | 10 | |||||
Design center | 470 | 470 | |||||
2,053 | 1,815 | ||||||
Less: accumulated depreciation | (1,249 | ) | (923 | ) | |||
Total property and equipment, net | $ | 804 | $ | 892 |
December 31, 2017 | December 31, 2016 | ||||||
Revolving credit facility(1) | $ | 32,000 | $ | 15,000 | |||
Unsecured revolving credit facility(2) | 75,000 | 60,000 | |||||
Total lines of credit | $ | 107,000 | $ | 75,000 |
(1) | On July 30, 2015, the Company entered into a revolving credit facility (the “Credit Facility”) with Inwood National Bank, which initially provided for up to $50.0 million. Amounts outstanding under the Credit Facility are secured by mortgages on real property and security interests in certain personal property (to the extent that such personal property is connected with the use and enjoyment of the real property) that is owned by certain of the Company’s subsidiaries. Outstanding borrowings under the Credit Facility bear interest payable monthly at a floating rate per annum equal to the rate announced by Bank of America, N.A., from time to time, as its “Prime Rate” (the “Index”) with such adjustments to the interest rate being made on the effective date of any change in the Index. Notwithstanding the foregoing, the interest may not, at any time, be less than 4% per annum or more than the lesser amount of 18% and the highest maximum rate allowed by applicable law. The entire unpaid principal balance and any accrued but unpaid interest is due and payable on the maturity date. As of December 31, 2017, the interest rate on outstanding borrowings under the Credit Facility was 4.5% per annum. |
(2) | On December 15, 2015, the Company entered into a credit agreement (the “Credit Agreement”) with the lenders named therein, and Citibank, N.A., as administrative agent, providing for a senior, unsecured revolving credit facility with aggregate lending commitments of up to $40.0 million (the “Unsecured Revolving Credit Facility”). Before the First Amendment (as defined and discussed below) increased the maximum amount of the Unsecured Revolving Credit Facility, the Company could, at its option and subject to certain terms and conditions, prior to the termination date, increase the amount of the Unsecured Revolving Credit Facility up to a maximum aggregate amount of $75.0 million. Before the Second Amendment (as defined and discussed below), commitments under the Unsecured Revolving Credit Facility were available until the period ending December 14, 2018. Citibank, N.A. and Credit Suisse AG, Cayman Islands Branch (“Credit Suisse”) initially committed to provide $25.0 million and $15.0 million, respectively. |
December 31, 2017 | December 31, 2016 | ||||||
Notes payable to unrelated third parties: | |||||||
Briar Ridge Investments, LTD(1) | $ | 9,000 | $ | 9,000 | |||
Wretched Land, LP(2) | — | 713 | |||||
Graham Mortgage Corporation(3) | 926 | 1,235 | |||||
Total notes payable | $ | 9,926 | $ | 10,948 |
(1) | On December 13, 2013, a subsidiary of JBGL signed a promissory note for $9.0 million maturing on December 13, 2017, bearing interest at 6.0% collateralized by land purchased in Allen, Texas. Accrued interest as of December 31, 2017 was $0. In December 2016, this note was extended through December 31, 2018. |
(2) | On August 19, 2016, a subsidiary of JBGL signed a promissory note for $1.4 million maturing on January 1, 2017, bearing interest at 2.0% per annum and collateralized by land located in Allen, Texas. A repayment of $0.7 million was made during September 2016. In December 2016, this note was extended through March 1, 2017. The note was paid off on March 1, 2017. |
(3) | On November 30, 2016, a subsidiary of JBGL signed a promissory note for $1.2 million maturing on December 1, 2018, bearing interest at 3.0% per annum and collateralized by land located in Sunnyvale, Texas. |
Line of Credit | Notes Payable | Total | |||||||||
2018 | $ | — | $ | 9,926 | $ | 9,926 | |||||
2019 | 32,000 | — | 32,000 | ||||||||
2020 | 75,000 | — | 75,000 | ||||||||
$ | 107,000 | $ | 9,926 | $ | 116,926 |
Number of Shares (in thousands) | Weighted Average Grant Date Fair Value per Share | |||||
Nonvested, December 31, 2016 | 38 | $ | 7.51 | |||
Granted | 229 | $ | 10.11 | |||
Vested | (229 | ) | $ | 9.66 | ||
Forfeited | — | $ | — | |||
Nonvested, December 31, 2017 | 38 | $ | 10.25 |
Number of Shares (in thousands) | Weighted Average Exercise Price per Share | Weighted Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value (in thousands) | |||||||||
Options outstanding, December 31, 2016 | 500 | $ | 7.49 | |||||||||
Granted | — | — | ||||||||||
Exercised | — | — | ||||||||||
Forfeited | — | — | ||||||||||
Options outstanding, December 31, 2017 | 500 | $ | 7.49 | 6.82 | $ | 1,905 | ||||||
Options exercisable, December 31, 2017 | 300 | $ | 7.49 | 6.82 | $ | 1,143 |
Number of Shares (in thousands) | Weighted Average Per Share Grant Date Fair Value | |||||
Unvested, December 31, 2016 | 300 | $ | 2.88 | |||
Granted | — | $ | — | |||
Vested | (100 | ) | $ | 2.88 | ||
Forfeited | — | $ | — | |||
Unvested, December 31, 2017 | 200 | $ | 2.88 |
Years Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Current expense: | |||||||||||
Federal | $ | 999 | $ | 158 | $ | — | |||||
State | 1,733 | 2,076 | 819 | ||||||||
Total current expense | 2,732 | 2,234 | 819 | ||||||||
Deferred expense (benefit): | |||||||||||
Federal | 36,569 | 13,146 | 8,412 | ||||||||
State | (270 | ) | 1 | (60 | ) | ||||||
Total deferred expense | 36,299 | 13,147 | 8,352 | ||||||||
Total income tax provision | $ | 39,031 | $ | 15,381 | $ | 9,171 |
December 31, 2017 | December 31, 2016 | ||||||
Deferred tax assets: | |||||||
Accrued bonuses | $ | 591 | $ | 1,120 | |||
Accrued payroll | 75 | 101 | |||||
Stock-based compensation | 268 | 291 | |||||
Federal net operating loss carryover | 14,078 | 40,800 | |||||
State net operating loss carryover | 1,353 | 1,147 | |||||
Basis in partnerships | 13,377 | 22,922 | |||||
Warranty accrual | 483 | 444 | |||||
Inventory (Section 263A) | 944 | 945 | |||||
Accrued job costs | 178 | 503 | |||||
Reserve to complete | 91 | 345 | |||||
Alternative minimum tax credit carryover | 1,145 | 158 | |||||
Other | 28 | 126 | |||||
Deferred tax assets, gross | 32,611 | 68,902 | |||||
Valuation allowance | (1,346 | ) | (1,147 | ) | |||
Deferred tax assets, net | $ | 31,265 | $ | 67,755 | |||
Deferred tax liabilities: | |||||||
Prepaid insurance | $ | (17 | ) | $ | (43 | ) | |
Other | (37 | ) | (114 | ) | |||
Deferred tax liabilities | $ | (54 | ) | $ | (157 | ) |
Years Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Tax on pre-tax book income (before reduction for noncontrolling interests) | $ | 22,483 | $ | 17,693 | $ | 12,151 | |||||
Tax effect of noncontrolled earnings post Transaction | (3,630 | ) | (3,996 | ) | (3,577 | ) | |||||
State tax expense, net | 1,213 | 1,153 | 533 | ||||||||
Change in federal statutory tax rate | 19,017 | — | — | ||||||||
Other | (52 | ) | 531 | 64 | |||||||
Total tax expense | $ | 39,031 | $ | 15,381 | $ | 9,171 | |||||
Effective tax rate | 60.8 | % | 30.4 | % | 26.4 | % |
Years Ended December 31, | |||||||
2017 | 2016 | ||||||
Valuation allowance at beginning of the year | $ | 1,147 | $ | 1,161 | |||
Release of Colorado net operating loss valuation allowance | (8 | ) | — | ||||
Change in federal benefit tax rate - deferred | 240 | — | |||||
Expiration of state net operating losses | (33 | ) | (14 | ) | |||
Valuation allowance at end of the year | $ | 1,346 | $ | 1,147 |
Years Ended December 31, | |||||||
2017 | 2016 | ||||||
Uncertain tax positions at beginning of year | $ | 249 | $ | — | |||
Change related to Georgia state income taxes | (249 | ) | 249 | ||||
Uncertain tax positions at end of year | $ | — | $ | 249 |
2017 | 2016 | 2015 | |||||||||
Beginning balance | $ | 1,210 | $ | 474 | $ | 460 | |||||
Additions | 1,936 | 1,399 | 667 | ||||||||
Charges | (1,063 | ) | (663 | ) | (653 | ) | |||||
Ending balance | $ | 2,083 | $ | 1,210 | $ | 474 |
2018 | $ | 877 | |
2019 | 895 | ||
2020 | 934 | ||
2021 | 763 | ||
2022 and thereafter | 1,025 | ||
$ | 4,494 |
Total | |||
2018 | $ | 137,548 | |
2019 | 47,588 | ||
2020 | 16,092 | ||
2021 | 5,765 | ||
$ | 206,993 |
Years End December 31, | |||||||||||
(in thousands) | 2017 | 2016 | 2015 | ||||||||
Revenues:(1) | |||||||||||
Builder Operations | |||||||||||
Texas | $ | 220,887 | $ | 201,473 | $ | 121,979 | |||||
Georgia | 214,757 | 163,942 | 132,288 | ||||||||
Corporate and Other(2) | — | — | — | ||||||||
Land Development | 18,730 | 14,913 | 36,878 | ||||||||
$ | 454,374 | $ | 380,328 | $ | 291,145 | ||||||
Gross profit (loss):(1)(3)(4) | |||||||||||
Builder Operations | |||||||||||
Texas | $ | 53,240 | $ | 50,320 | $ | 29,992 | |||||
Georgia | 49,052 | 37,114 | 31,733 | ||||||||
Corporate and Other(2) | (9,293 | ) | (5,659 | ) | (9,108 | ) | |||||
Land Development | 5,454 | 4,600 | 9,635 | ||||||||
$ | 98,453 | $ | 86,375 | $ | 62,252 | ||||||
Income (loss) before taxes:(4) | |||||||||||
Builder Operations | |||||||||||
Texas | $ | 36,224 | $ | 34,939 | $ | 19,945 | |||||
Georgia | 34,636 | 24,639 | 21,744 | ||||||||
Corporate and Other(2)(5) | (10,943 | ) | (12,635 | ) | (12,091 | ) | |||||
Land Development | 4,320 | 3,611 | 5,118 | ||||||||
$ | 64,237 | $ | 50,554 | $ | 34,716 | ||||||
Inventory:(3) | |||||||||||
Builder Operations | |||||||||||
Texas | $ | 110,872 | $ | 76,878 | $ | 61,403 | |||||
Georgia | 99,613 | 90,859 | 86,707 | ||||||||
Corporate and Other(2)(6) | 12,628 | 9,834 | 7,869 | ||||||||
Land Development | 272,542 | 232,726 | 188,153 | ||||||||
$ | 495,655 | $ | 410,297 | $ | 344,132 |
(1) | Builder operations segment revenue does not equal revenue from the sale of residential units included in the consolidated statements of income in periods when our controlled builders have sales of land or lots. Revenue from such sales is included in builder operations segment revenue as it relates to builder operations, and included in revenue from sale of land and lots in the consolidated statements of income. |
(2) | Corporate and other is comprised principally of general corporate expenses associated with administrative functions such as finance, treasury, information technology and human resources. |
(3) | Due to the change in our segments in 2016, as discussed in Note 2, we reclassified (i) $0.1 million in gross profit from the land development segment to the builder operations segment for the year ended December 31, 2015 and (ii) $63.4 million in inventory from the builder operations segment to the land development segment for the year ended December 31, 2015. |
(4) | Certain indirect project costs previously classified as salary expense and selling, general and administrative expense have been reclassified as cost of residential units for the year ended December 31, 2015 to properly present cost of residential units, salary expense, and selling, general and administrative expense. Therefore, amounts presented differ from the amounts previously reported in our Annual Report on Form 10-K for the year ended December 31, 2015. See Note 2 for further discussion on this change in classification. |
(5) | Results from Green Brick Title and Challenger Subsidiary are included in income (loss) before taxes for the corporate and other operating segment. |
(6) | Corporate and other inventory consists of capitalized overhead and interest related to work in process and land under development. |
Year ended December 31, 2017 | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | ||||||||||||
Revenues | $ | 99,337 | $ | 104,951 | $ | 113,706 | $ | 136,380 | ||||||||
Gross profit | 21,286 | 22,926 | 25,410 | 28,831 | ||||||||||||
Net income (loss) attributable to Green Brick Partners, Inc.(1) | 6,197 | 7,689 | 9,280 | (8,196 | ) | |||||||||||
Net income (loss) attributable to Green Brick Partners, Inc. per common share:(2) | ||||||||||||||||
Basic | $0.13 | $0.16 | $0.19 | $(0.16) | ||||||||||||
Diluted | $0.13 | $0.16 | $0.19 | $(0.16) | ||||||||||||
Year ended December 31, 2016 | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | ||||||||||||
Revenues | $ | 69,958 | $ | 98,936 | $ | 91,670 | $ | 119,764 | ||||||||
Gross profit | 14,414 | 22,116 | 20,644 | 29,201 | ||||||||||||
Net income attributable to Green Brick Partners, Inc. | 3,094 | 6,743 | 6,243 | 7,676 | ||||||||||||
Net income attributable to Green Brick Partners, Inc. per common share: | ||||||||||||||||
Basic | $0.06 | $0.14 | $0.13 | $0.16 | ||||||||||||
Diluted | $0.06 | $0.14 | $0.13 | $0.16 |
(1) | Net loss attributable to Green Brick Partners, Inc. in the fourth quarter is due to the remeasurement of our deferred tax assets as a result of the change in federal statutory tax rate which resulted in additional tax expense of $19.0 million. |
(2) | Per share amounts for the four quarters do not add to per share amounts for the year due to rounding differences in quarterly amounts and due to the impact of differences between the quarterly and annual weighted average share calculations. |
Number | Description | |
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10.46 | ||
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101.INS* | XBRL Instance Document. | |
101.SCH* | XBRL Taxonomy Extension Schema Document. | |
101.CAL* | XBRL Taxonomy Extension Calculation Linkbase Document. | |
101.DEF* | XBRL Taxonomy Extension Definition Linkbase Document. | |
101.LAB* | XBRL Taxonomy Extension Label Linkbase Document. | |
101.PRE* | XBRL Taxonomy Extension Presentation Linkbase Document. |
# | The Company hereby undertakes to furnish supplementally a copy of any omitted schedule or exhibit to such agreement to the U.S. Securities and Exchange Commission upon request. |
/s/ James R. Brickman | |
By: James R. Brickman | |
Its: Chief Executive Officer |
Signature | Title | Date | ||
/s/ James R. Brickman | Chief Executive Officer and Director (Principal Executive Officer) | March 12, 2018 | ||
James R. Brickman | ||||
/s/ Richard A. Costello | Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | March 12, 2018 | ||
Richard A. Costello | ||||
/s/ Elizabeth K. Blake | Director | March 12, 2018 | ||
Elizabeth K. Blake | ||||
/s/ Harry Brandler | Director | March 12, 2018 | ||
Harry Brandler | ||||
/s/ David Einhorn | Chairman of the Board | March 12, 2018 | ||
David Einhorn | ||||
/s/ John R. Farris | Director | March 12, 2018 | ||
John R. Farris | ||||
/s/ Kathleen Olsen | Director | March 12, 2018 | ||
Kathleen Olsen | ||||
/s/ Richard S. Press | Director | March 12, 2018 | ||
Richard S. Press |
Subsidiary | Jurisdiction |
CB JENI - Brick Row Townhomes, LLC | Texas |
CB JENI - Chase Oaks Village II, LLC | Texas |
CB JENI - Hemingway Court, LLC | Texas |
CB JENI - Lake Vista Coppell, LLC | Texas |
CB JENI - Settlement at Craig Ranch, LLC | Texas |
CB JENI Acquisitions, LLC | Texas |
CB JENI Berkshire Place LLC | Texas |
CB JENI Frisco Springs, LLC | Texas |
CB JENI Homes Heritage Creekside, LLC | Texas |
CB JENI Homes DFW LLC | Texas |
CB JENI Homes Grand Park, LLC | Texas |
CB JENI Homes Raiford Crossing, LLC | Texas |
CB JENI Hometown, LLC | Texas |
CB JENI Los Rios, LLC | Texas |
CB JENI Management, LLC | Texas |
CB JENI McKinney Ranch, LLC | Texas |
CB JENI Montgomery Ridge, LLC | Texas |
CB JENI Mustang Park LLC | Texas |
CB JENI Parker Ranch, LLC | Texas |
CB JENI Pecan Park, LLC | Texas |
CB JENI Sloan Creek, LLC | Texas |
CB JENI Southgate, LLC | Texas |
CB JENI Stacy Crossing, LLC | Texas |
CB JENI Stonegate, LLC | Texas |
CB JENI Sunset Place, LLC | Texas |
CB JENI Viridian, LLC | Texas |
Centre Commercial Construction, LLC | Texas |
Centre Living CityLine, LLC | Texas |
Centre Living Condominiums, LLC | Texas |
Centre Living Homes, LLC | Texas |
Centre Living Live Oak LLC | Texas |
Centre Living Swiss, LLC | Texas |
GB Challenger, LLC | Texas |
GRBK Academy, LLC | Georgia |
GRBK Edgewood LLC | Texas |
GRBK Frisco LLC | Texas |
GRBK Suwanee Station, LLC | Georgia |
Green Brick Title, LLC | Texas |
JBGL 21 TPG EM, LLC | Georgia |
JBGL Atlanta Development 2014, LLC | Georgia |
JBGL Atlanta Development, LLC | Georgia |
JBGL Avignon, LLC | Texas |
JBGL Builder Finance LLC | Texas |
Subsidiary | Jurisdiction |
JBGL Chateau, LLC | Texas |
JBGL Exchange LLC | Texas |
JBGL Hawthorne, LLC | Texas |
JBGL Inwood LLC | Texas |
JBGL Kittyhawk, LLC | Texas |
JBGL Land Fund, LLC | Georgia |
JBGL Mustang LLC | Texas |
JBGL Ownership LLC | Delaware |
JBGL Willow Crest LLC | Texas |
Johns Creek 206, LLC | Georgia |
Normandy Homes - Alto Vista Irving, LLC | Texas |
Normandy Homes Cottonwood Crossing, LLC | Texas |
Normandy Homes Cypress Meadows, LLC | Texas |
Normandy Homes Grand Park, LLC | Texas |
Normandy Homes Lake Vista Coppell, LLC | Texas |
Normandy Homes Lakeside, LLC | Texas |
Normandy Homes Mustang Park, LLC | Texas |
Normandy Homes Parker Ranch, LLC | Texas |
Normandy Homes Pecan Creek, LLC | Texas |
Normandy Homes Shaddock Estates, LLC | Texas |
Normandy Homes Southgate, LLC | Texas |
Normandy Homes Spicewood, LLC | Texas |
Normandy Homes Twin Creeks, LLC | Texas |
Normandy Homes Viridian, LLC | Texas |
Normandy Homes Watters Branch, LLC | Texas |
Normandy Homes, LLC | Texas |
Providence Luxury Homes, L.L.C. | Georgia |
Southgate Homes - Angel Field West, LLC | Texas |
Southgate Homes - Austin Waters, LLC | Texas |
Southgate Homes - Brockdale, LLC | Texas |
Southgate Homes - Canals at Grand Park, LLC | Texas |
Southgate Homes - Edgewood, LLC | Texas |
Southgate Homes - Garilen, LLC | Texas |
Southgate Homes - Stoney Creek, LLC | Texas |
Southgate Homes - Suburban Living, LLC | Texas |
Southgate Homes - Twin Creeks, LLC | Texas |
Southgate Homes DFW LLC | Texas |
Southgate Ranch, LLC | Texas |
The Providence Group & Associates, L.L.C. | Georgia |
The Providence Group of Georgia Custom Homes, L.L.C. | Georgia |
The Providence Group of Georgia, L.L.C. | Georgia |
The Providence Group Realty, L.L.C. | Georgia |
TPG Development, L.L.C. | Georgia |
TPG Homes 2017, L.L.C. | Georgia |
TPG Homes at Bellmoore, L.L.C. | Georgia |
Subsidiary | Jurisdiction |
TPG Homes at Three Bridges, L.L.C. | Georgia |
TPG Homes at Whitfield Parc, L.L.C. | Georgia |
TPG Homes, L.L.C. | Georgia |
1. | I have reviewed this Annual Report on Form 10-K of Green Brick Partners, Inc. for the fiscal year ended December 31, 2017; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
By: | /s/ James R. Brickman |
Name: | James R. Brickman |
Title: | Chief Executive Officer |
1. | I have reviewed this Annual Report on Form 10-K of Green Brick Partners, Inc. for the fiscal year ended December 31, 2017; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
By: | /s/ Richard A. Costello |
Name: | Richard A. Costello |
Title: | Chief Financial Officer |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
By: | /s/ James R. Brickman |
Name: | James R. Brickman |
Title: | Chief Executive Officer |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
By: | /s/ Richard A. Costello |
Name: | Richard A. Costello |
Title: | Chief Financial Officer |
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Document And Entity Information - USD ($) |
12 Months Ended | ||
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Dec. 31, 2017 |
Mar. 07, 2018 |
Jun. 30, 2017 |
|
Document And Entity Information [Abstract] | |||
Entity Registrant Name | Green Brick Partners, Inc. | ||
Entity Central Index Key | 0001373670 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2017 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Public Float | $ 261,560,754 | ||
Entity Common Stock, Shares Outstanding | 50,598,901 |
Consolidated Balance Sheets [Parenthetical] - $ / shares |
Dec. 31, 2017 |
Dec. 31, 2016 |
Jul. 01, 2015 |
---|---|---|---|
Statement of Financial Position [Abstract] | |||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 | |
Common Stock, Shares, Issued | 50,598,901 | 48,955,909 | 17,000,000 |
Common stock, shares outstanding (in shares) | 50,598,901 | 48,955,909 | |
Preferred Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 | |
Preferred Stock, Shares Authorized | 5,000,000 | 50,000,000 | |
Preferred Stock, Shares Outstanding | 0 | 0 | |
Preferred Stock, Shares Issued | 0 | 0 |
Organization and Basis of Presentation |
12 Months Ended |
---|---|
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | ORGANIZATION AND BASIS OF PRESENTATION References to the “Company”, “Green Brick”, “we”, “us” or “our” refer to the combined company, which was renamed Green Brick Partners, Inc. and its subsidiaries, resulting from the acquisition by BioFuel Energy Corp. and its then consolidated subsidiaries (“BioFuel”) of JBGL Builder Finance LLC and its consolidated subsidiaries and affiliated companies (collectively, “Builder Finance”), and JBGL Capital Companies (“Capital”), a combined group of commonly managed limited liability companies and partnerships (collectively with Builder Finance, “JBGL”) by means of a reverse recapitalization transaction on October 27, 2014. Green Brick Partners, Inc. (formerly named BioFuel Energy Corp.) was incorporated as a Delaware corporation on April 11, 2006, to invest solely in BioFuel Energy, LLC, a limited liability company organized on January 25, 2006, to build and operate ethanol production facilities in the Midwestern United States. On November 22, 2013, the Company disposed of its ethanol plants and all related assets. Following the disposition of these production facilities, we were a public shell company with no substantial operations. On June 10, 2014, the Company entered into a definitive transaction agreement with the owners of JBGL, which provided that we would acquire JBGL for $275.0 million, payable in cash and shares of our common stock (the “Transaction”). JBGL is a real estate operator involved in the purchase and development of land for residential use, construction lending and home building operations. The Transaction was completed on October 27, 2014 (the “Transaction Date”). Pursuant to the terms of the Transaction, we paid the $275.0 million purchase price with approximately $191.8 million in cash and the remainder in 11,108,500 shares of our common stock valued at approximately $7.49 per share. The cash portion of the purchase price was primarily funded from the proceeds of a $70.0 million rights offering conducted by the Company (the $70.0 million includes proceeds from purchases of shares of common stock by certain funds and accounts managed by Greenlight Capital, Inc. and its affiliates (“Greenlight”) and Third Point LLC and its affiliates (“Third Point”)) and $150.0 million of debt financing provided by Greenlight pursuant to a loan agreement, with the lenders from time to time party thereto (the “Loan Agreement”), which provided for a five year term loan facility (the “Term Loan Facility”). In 2015, the Term Loan Facility was repaid in full. At the time the Transaction was completed, BioFuel was a non-operating public shell company with nominal operations and assets consisting of cash, deferred tax assets, and nominal other nonoperating assets. As a result of the Transaction, the owners and management of JBGL gained effective operating control of the combined company. As of the Transaction Date, BioFuel did not meet the definition of a business for accounting purposes. For financial reporting purposes, the Transaction was deemed to be a capital transaction in substance and recorded as a reverse recapitalization of JBGL whereby JBGL is deemed to be the continuing, surviving entity for accounting purposes, but through reorganization, is deemed to have adopted the capital structure of BioFuel. Because the acquisition was considered a reverse recapitalization for accounting purposes, the combined historical financial statements of JBGL became our historical financial statements and from the completion of the acquisition on October 27, 2014, the financial statements have been prepared on a consolidated basis. The assets and liabilities of BioFuel were brought forward at their book value and no goodwill was recognized in connection with the Transaction. As a result of the Transaction, Green Brick changed its business direction and is now a diversified homebuilding and land development company. We are a diversified homebuilding and land development company. We acquire and develop land, provide land and construction financing to our controlled builders and participate in the profits of our controlled builders. Our core markets are in the high growth U.S. metropolitan areas of Dallas, Texas and Atlanta, Georgia. We also own a noncontrolling interest in Challenger Homes (as discussed in Note 3) in Colorado Springs, Colorado. We are engaged in all aspects of the homebuilding process, including land acquisition and development, entitlements, design, construction, marketing and sales and the creation of brand images at our residential neighborhoods and master planned communities. Equity Offering On July 1, 2015, the Company completed an underwritten public offering of 17 million shares of its common stock at a price of $10.00 per share and granted to the underwriters a 30-day option to purchase up to an aggregate of 841,500 additional shares of common stock to cover over-allotments (the “Equity Offering”). On July 23, 2015, the underwriters exercised the option and purchased 444,897 additional shares. All of the shares were sold by the Company pursuant to an effective shelf registration statement previously filed with the SEC. The Equity Offering resulted in net proceeds of approximately $170.0 million, after deducting underwriting discounts and offering expenses. On July 1, 2015, Green Brick used approximately $154.9 million of the net proceeds from the Equity Offering to repay all of the outstanding principal, interest and a prepayment premium under the Term Loan Facility. Upon repayment, the Term Loan Facility was terminated and all security interests in, and all liens held by Greenlight with respect to, the assets of Green Brick securing the amounts owed under the Term Loan Facility were terminated and released. Green Brick used the remaining net proceeds for working capital and general corporate purposes. Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) as set forth in the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) and applicable regulations of the Securities and Exchange Commission (“SEC”). Principles of Consolidation The Company evaluated its wholly-owned subsidiaries and controlled builders under ASC 810, Consolidation (“ASC 810”) and concluded that each controlled builder is a variable interest entity (“VIE”). The Company owns a 50% equity interest and has 51% of the voting interest in each controlled builder. In addition, the Company holds two of the three board seats for each controlled builder and is able to exercise control over the operations of each controlled builder. The Company accounts for its controlled builders under the variable interest model and is the primary beneficiary of each controlled builder in accordance with ASC 810. Therefore, the financial statements of the controlled builders are consolidated in the consolidated financial statements following the variable interest model (see Note 2). All intercompany balances and transactions have been eliminated in consolidation. The Company uses the equity method of accounting for its investment in an unconsolidated entity over which it exercises significant influence but does not have a controlling interest. Under the equity method, the Company’s share of the unconsolidated entity’s earnings or losses, if any, is included in the consolidated statements of income. Generally, the Company forms subsidiaries for each selling community and or homebuilding project in which it invests. |
Significant Accounting Policies |
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Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Significant Accounting Policies | SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management of the Company to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes, including the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. Cash The cash balances of the Company are held with multiple financial institutions. At times, cash balances at certain banks and financial institutions may exceed insurable amounts. The Company believes it mitigates this risk by monitoring the financial stability of institutions holding material cash balances. The Company has not experienced any losses in such accounts and believes that the risk of loss is minimal. Restricted Cash Restricted cash primarily relates to cash held in escrow to fund future development costs and refundable customer deposits held in escrow. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable primarily consist of amounts collectible from manufacturing rebates earned by our homebuilders during the normal course of business. As of December 31, 2017 and 2016, all amounts are considered fully collectible and no allowance for doubtful accounts is recorded. The allowance for doubtful accounts is estimated based on our historical losses, the existing economic conditions, and the financial stability of our customers. Receivables are written-off in the period that they are deemed uncollectible. Inventory and Cost of Sales Inventory consists of land in the process of development, undeveloped land, developed lots, completed homes, model homes, raw land scheduled for development, and land not owned under option contracts in Texas and Georgia. Inventory is valued at cost unless the carrying value is determined to be not recoverable in which case the affected inventory is written down to fair value. Cost includes any related pre-acquisition costs that are directly identifiable with a specific property so long as those pre-acquisition costs are anticipated to be recoverable at the sale of the property. Residential lots held for sale and lots held for development include the initial cost of acquiring the land as well as certain costs capitalized related to developing the land into individual residential lots including direct overhead, interest and real estate taxes. Land, development and other project costs, including direct overhead, interest and property taxes incurred during development and home construction, are capitalized. Land development and other common costs that benefit an entire community are allocated to individual lots or homes based on relative sales value. The costs of completed lots are transferred to work in process when home construction begins. Home construction costs and related carrying charges (principally interest and real estate taxes) are allocated to the cost of individual homes using the specific identification method. Inventory costs for completed homes are expensed as cost of sales as homes are sold. Changes to estimated total development costs subsequent to initial home closings in a community are generally allocated to the unsold homes in the community on a pro-rata basis. The life cycle of a community generally ranges from two to six years, commencing with the acquisition of land, continuing through the land development phase, construction, and concluding with the sale and delivery of homes. We recognize costs as incurred on our mechanics lien contracts.
Impairment of Inventory In accordance with the ASC 360, Property, Plant, and Equipment, we evaluate our inventory for indicators of impairment by individual community and development during each reporting period. For our builder operations segment, during each reporting period, community gross margins are reviewed by management. In the event that inventory in an individual community is moving at a slower than anticipated absorption pace or the average sales prices or margins within an individual community are trending downward and are anticipated to continue to trend downward over the life of the community, the Company will further investigate these communities and evaluate them for impairment. For our land development segment, we perform a quarterly review for indicators of impairment for each project which involves projecting future lot sales based on executed contracts and comparing these revenues to projected costs. In determining the allocation of costs to a particular land parcel, we rely on project budgets which are based on a variety of assumptions, including assumptions about development schedules and future costs to be incurred. It is common that actual results differ from budgeted amounts for various reasons, including delays, increases in costs that have not been committed, unforeseen issues encountered during project development that fall outside the scope of existing contracts, or items that ultimately cost more or less than the budgeted amount. We apply procedures to maintain best estimates in our budgets, including assessing and revising project budgets on a periodic basis, obtaining commitments from subcontractors and vendors for future costs to be incurred and utilizing the most recent information available to estimate costs. Each reporting period, the Company reviews our real estate assets to determine whether the estimated remaining future cash flows of the development are more or less than the asset’s carrying value. The estimated cash flows are determined by projecting the remaining sales revenue from lot sales based on the contractual lot takedowns remaining or historical/projected home sales/delivery absorptions for homebuilding operations and then comparing that to the remaining projected expenditures for development or home construction. Remaining projected expenditures are based on the most current pricing/bids received from subcontractors for current phases or homes under development. For future phases of land development, management uses its best judgment to project potential cost increases. When projecting sales revenue, management does not assume improvement in market conditions. If the estimated cash flows are more than the asset’s carrying value, no impairment adjustment is required. However, if the estimated cash flows are less than the asset’s carrying value, the asset is deemed impaired and will be written down to fair value. These impairment evaluations require us to make estimates and assumptions regarding future conditions, including the timing and amounts of development costs and sales prices of real estate assets, to determine if expected future cash flows will be sufficient to recover the asset’s carrying value. Fair value is determined based on estimated future cash flows discounted for inherent risks associated with real estate assets. These discounted cash flows are impacted by expected risk based on estimated land development activities, construction and delivery timelines, market risk of price erosion, uncertainty of development or construction cost increases, and other risks specific to the asset or market conditions where the asset is located when the assessment is made. These factors are specific to each community and may vary among communities. When estimating cash flows of a community, the Company makes various assumptions, including: (i) expected sales prices and sales incentives to be offered, including the number of homes available, pricing and incentives being offered by us or other builders in other communities, and future sales price adjustments based on market and economic trends; (ii) expected sales pace and cancellation rates based on local housing market conditions, competition and historical trends; (iii) costs expended to date and expected to be incurred including, but not limited to, land and land development costs, home construction costs, interest costs, indirect construction and overhead costs, and selling and marketing costs; (iv) alternative product offerings that may be offered that could have an impact on sales pace, sales price and/or building costs; and (v) alternative uses for the property. Many assumptions are interdependent and a change in one may require a corresponding change to other assumptions. For example, increasing or decreasing sales absorption rates has a direct impact on the estimated per unit sales price of a home, the level of time-sensitive costs (such as indirect construction, overhead and carrying costs), and selling and marketing costs (such as model home maintenance costs and advertising costs). Due to uncertainties in the estimation process, the significant volatility in demand for new housing and the long life cycle of many communities, actual results could differ significantly from such estimates. For the year ended December 31, 2017, the Company recorded impairment of approximately $0.1 million related to real estate inventory in our builder operations segment. The Company did not note any indicators of impairment for any projects, and no impairment adjustments related to real estate inventory were recorded for the years ended December 31, 2016 and 2015. Investment in Unconsolidated Entity In accordance with ASC 323, Investments - Equity Method and Joint Ventures (“ASC 323”), the Company uses the equity method of accounting for its investment in an unconsolidated entity over which it exercises significant influence but does not have a controlling interest. The equity method of accounting requires the investment to be initially recorded at cost and subsequently adjusted for the Company’s share of equity in the unconsolidated entity’s earnings or losses. The Company evaluates the carrying amount of the investment in unconsolidated entity for impairment in accordance with ASC 323. If the Company determines that a loss in the value of the investment is other than temporary, the Company writes down the investment to its estimated fair value. Any such losses are recorded to equity in income of unconsolidated entity in the Company’s consolidated statements of income. Due to uncertainties in the estimation process and the significant volatility in demand for new housing, actual results could differ significantly from such estimates. During the year ended December 31, 2017, the Company did not identify indicators of impairment for its investment in unconsolidated entity. The Company has made an election to classify distributions received from the unconsolidated entity using the nature of the distribution approach. Distributions received are classified based on the nature of the activities of the investee that generated the distribution. All such distributions for the period ended December 31, 2017 are cash inflows from operating activities. Variable Interest Entities and Noncontrolling Interests The Company accounts for VIEs in accordance with ASC 810. In accordance with ASC 810, an entity is a VIE when: (a) the equity investment at risk in the entity is not sufficient to permit the entity to finance its activities without additional subordinated financial support provided by other parties, including the equity holders; (b) the entity’s equity holders as a group either (i) lack the direct or indirect ability to make decisions about the entity, (ii) are not obligated to absorb expected losses of the entity or (iii) do not have the right to receive expected residual returns of the entity; or (c) the entity’s equity holders have voting rights that are not proportionate to their economic interests, and the activities of the entity involve or are conducted on behalf of the equity holder with disproportionately few voting rights. If an entity is deemed to be a VIE pursuant to ASC 810, the enterprise that has both (i) the power to direct the activities of the VIE that most significantly impacts the entity’s economic performance and (ii) the obligation to absorb the expected losses of the entity or right to receive benefits from the entity that could be potentially significant to the VIE is considered the primary beneficiary and must consolidate the VIE. In accordance with ASC 810, the Company performs ongoing reassessments of whether it is the primary beneficiary of a VIE. The Company owns 50% equity interests in several controlled builders deemed to be VIEs under ASC 810 for which the Company is considered the primary beneficiary. Our controlled builders are engaged in all aspects of the homebuilding process in residential neighborhoods and master planned communities in premium locations in the Dallas and Atlanta markets. We sell finished lots or option lots from third-party developers to our controlled builders for their homebuilding operations and provide them with construction financing and strategic planning. The board of managers of each of the controlled builders has the power to direct the activities that significantly impact the controlled builder’s economic performance. Pursuant to the Company’s agreements with each controlled builder, it has the ability to appoint two of the three members of the board of managers of each controlled builder’s board of managers. A majority of the board of managers constitutes a quorum to transact business. No action can be approved by the board of managers without the approval from at least one individual whom the Company has appointed at each controlled builder. The Company has the ability to control the activities of each controlled builder that most significantly impact the controlled builder’s economic performance. Such activities include, but are not limited to, involvement in the day to day capital and operating decisions, the ability to determine the budget and plan, the ability to control financing decisions, and the ability to acquire additional land or dispose of land. In addition, the Company has the right to receive the expected residual returns and obligation to absorb the expected losses of each controlled builder through the pro rata profits and losses we are allocated based on our ownership interest. Therefore, the financial statements of the controlled builders are consolidated in the Company’s consolidated financial statements following the variable interest model. The noncontrolling interests attributable to the 50% minority interests owned by our controlled builders are included as noncontrolling interests in the Company’s consolidated financial statements. Our controlled builders’ creditors have no recourse against us. The assets of two of our consolidated controlled builders can only be used to settle obligations of those controlled builders. The assets of our VIEs that can be used only to settle obligations of the VIEs as of December 31, 2017 totaled $52.2 million, of which $0.9 million was cash and $47.8 million was inventory. The assets of our VIEs that could be used only to settle obligations of the VIEs as of December 31, 2016 totaled $24.6 million, of which $0.9 million was cash and $22.1 million was inventory. Capitalization of Interest The Company capitalizes interest costs incurred to inventory during active development and other qualifying activities. Interest capitalized as cost of inventory is charged to cost of sales as related homes, land and/or lots are closed. Interest incurred on undeveloped land is directly expensed and included in interest expense in our consolidated statements of income. Interest costs incurred, capitalized and expensed were as follows (in thousands):
Earnest Money Deposits In the ordinary course of business, the Company enters into land and lot option contracts in order to procure land for the construction of homes in the future. Pursuant to these option contracts, the Company generally provides a deposit to the seller as consideration for the right to purchase land at different times in the future, usually at predetermined prices. Such contracts enable the Company to defer acquiring portions of properties owned by third parties or unconsolidated entities until the Company has determined whether and when to exercise its option, which reduces the Company’s financial risk associated with long-term land holdings. Option deposits and pre-acquisition costs (such as environmental testing, surveys, engineering, and entitlement costs) are capitalized if the costs are directly identifiable with the land under option and acquisition of the property is probable. Such costs are reflected in earnest money deposits and are reclassified to inventory upon taking title to the land. The Company writes off deposits and pre-acquisition costs if it becomes probable that the Company will not go forward with the project or recover the capitalized costs. Such decisions take into consideration changes in local market conditions, the timing of required land takedowns, the availability and best use of necessary incremental capital, and other factors. As of December 31, 2017, the Company had land option contracts with potential purchase payments through 2021. Deposits and pre-acquisition costs written off related to option contracts we abandoned totaled $0.2 million, $0.2 million and $0.2 million for the years ended December 31, 2017, 2016 and 2015, respectively. Under ASC 810, a non-refundable deposit paid to an entity is deemed to be a variable interest that will absorb some or all of the entity’s expected losses if they occur and, as such, the Company’s land and lot option contracts are considered variable interests. The Company’s option contract deposits along with any related pre-acquisition costs represent the Company’s maximum exposure to the land seller if the Company elects not to purchase the optioned property. Therefore, whenever the Company enters into an option or purchase contract with an entity and makes a non-refundable deposit, a VIE assessment is performed. However, the Company generally has little control or power to direct the activities that most significantly impact the VIE’s economic performance due to the Company’s lack of an equity interest in them. Additionally, creditors of the VIE typically have no material recourse against the Company, and the Company does not provide financial or other support to these VIEs other than as stipulated in the option contracts. In accordance with ASC 810, the Company performs ongoing reassessments of whether the Company is the primary beneficiary of a VIE. The Company was not required to consolidate any land or lot option VIEs as of December 31, 2017 or 2016. Sales with Option to Repurchase The Company sold land and then entered into land option contracts to repurchase the land from the buyers. In accordance with ASC 360, Property, Plant, and Equipment, these transactions are considered a financing arrangement rather than a sale. As a result, the Company recorded $9.3 million as of December 31, 2016 as land not owned under option contracts with a corresponding liability reflected as obligations related to land not owned under option contracts on the consolidated balance sheets. We purchased all of the lots under the option contracts during 2017. Investment in Direct Financing Leases Through December 31, 2014, the Company entered into a series of direct finance leases for a portfolio of model homes. The Company leased these model homes to the entity from which it acquired the homes. The lessee had the option to repurchase the model homes at a predetermined price. The direct financing leases bore interest at rates from 10% to 12%. The lease payments were recorded as interest income on direct financing leases in the consolidated statements of income. All direct financing leases were sold in 2015. Property and Equipment, Net Property and equipment are stated at cost less accumulated depreciation. Repairs and maintenance are expensed as incurred. Depreciation is computed over the estimated useful lives of the assets using the straight-line method. The estimated useful lives of assets range from three to ten years. Customer and Builder Deposits The Company typically requires customers to submit a deposit for home purchases and for builders to submit a deposit in connection with their construction loan agreements. The deposits serve as a guarantee to performance under home purchase and building contracts. Cash received as customer deposits, if held in escrow, is shown as restricted cash on the consolidated balance sheets. Warranties The Company accrues an estimate of its exposure to warranty claims based on both current and historical home sales data and warranty costs incurred. The Company offers homeowners a comprehensive third-party warranty on each home. Homes are generally covered by a ten-year warranty for qualified and defined structural defects, one year for defects and products used, and two years for electrical, plumbing and HVAC parts and labor. Warranty accruals are included within accrued expenses on the consolidated balance sheets. Net Income Attributable to Green Brick Partners, Inc. per Share The Company’s restricted stock awards have the right to receive forfeitable dividends on an equal basis with common stock and therefore are not considered participating securities that must be included in the calculation of net income per share using the two-class method. Basic earnings per share is computed by dividing net income by the weighted average number of common shares outstanding during each period, adjusted for non-vested shares of restricted stock awards during each period. Diluted earnings per share is calculated using the treasury stock method and includes the effect of all dilutive securities, including stock options and restricted stock awards. The computation of basic and diluted net income attributable to Green Brick Partners, Inc. per share using the treasury stock method is as follows (in thousands, except per share amounts):
The following securities that could potentially dilute earnings per share in the future are not included in the determination of diluted net income attributable to Green Brick Partners, Inc. per common share (in thousands):
Revenue Recognition In accordance with ASC 360-20, Real Estate Sales, the Company recognizes revenue from sales of residential units, land and lots when a sale is consummated. Consummation occurs when the following criteria are met: (a) the parties are bound by the terms of the contract; (b) all net consideration has been exchanged; (c) any permanent financing for which the seller is responsible has been arranged; (d) continuing investment is adequate to demonstrate a commitment to pay for the home, land or lot; and (e) all conditions precedent to closing have been performed. Typically, these criteria are met at closing, at which time the Company recognizes revenue under the full accrual method, which allows full recognition of the gain on the sale of the home, land or lot. The Company recognizes sales incentives, such as cash discounts and incentives on options and option upgrades as a reduction of sales revenue at the time the home is closed and revenue is recognized. The Company records seller-paid financing and other closing costs within cost of sales of residential units at the time the home is closed and revenue is recognized. From time to time, the Company receives vendor rebates for certain materials that are utilized in the construction of homes. In accordance with ASC 605-50, Customer Payments and Incentives, the Company recognizes these rebates as a reduction of cost of sales of residential units at the later of (a) the home closing (when revenue is recognized), or (b) when such amounts are reasonably estimable. The Company also serves as the general contractor for certain custom homes where the customers, and not the Company, own the underlying land and improvements. The Company recognizes revenue for these mechanics lien contracts on the percentage of completion method, where progress toward completion is measured by relating the actual cost of work performed to date to the current estimated total cost of the respective contracts. During the years ended December 31, 2017, 2016 and 2015, we recognized revenue of $4.4 million, $12.5 million and $7.7 million, respectively, and incurred costs of $3.8 million, $11.1 million and $5.9 million, respectively, associated with mechanics lien contracts, which is presented net in other income, net on the consolidated statements of income. Cost Recognition Lot acquisition, materials, direct costs, interest and indirect costs related to the acquisition, development, and construction of lots and homes are capitalized. Direct and indirect costs of developing residential lots are allocated evenly to all applicable lots. Capitalized costs of residential lots are charged to earnings when the related revenue is recognized. Non-capitalizable costs in connection with developed lots and completed homes and other selling and administrative costs are charged to earnings when incurred. Advertising Expense The Company expenses advertising as incurred. Advertising costs are included in selling, general and administrative expense in the consolidated statements of income. Advertising expense for the years ended December 31, 2017, 2016 and 2015 totaled $0.8 million, $0.7 million and $0.5 million, respectively. Debt Issuance Costs Debt issuance costs of $1.2 million and $0.8 million as of December 31, 2017 and December 31, 2016, represent costs incurred related to the revolving and unsecured credit facilities, including amendments thereto, and are included as part of other assets, net on the consolidated balance sheets. These costs are amortized straight-line and included in interest expense over the term of the related debt facility. Share-Based Compensation The Company measures and accounts for share-based awards in accordance with ASC 718, Compensation - Stock Compensation. The Company expenses share-based payment awards made to employees and directors, including stock options and restricted stock awards. Share-based compensation expense associated with stock options and restricted stock awards with vesting contingent upon the achievement of service conditions is recognized on a straight-line basis, net of estimated forfeitures, over the requisite service period over which the awards are expected to vest. The Company estimates the value of stock options with vesting contingent upon the achievement of service conditions as of the date the award was granted using the Black-Scholes option pricing model. The Black-Scholes option pricing model requires the use of certain input variables, such as expected volatility, risk-free interest rate and expected award life. Income Taxes The Company accounts for income taxes using the asset and liability method, under which deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases, operating losses and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in years in which temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company regularly reviews historical and anticipated future pre-tax results of operations to determine whether we will be able to realize the benefit of deferred tax assets. A valuation allowance is required to reduce the deferred tax asset when it is more-likely-than-not that all or some portion of the deferred tax asset will not be realized due to the lack of sufficient taxable income. The Company establishes reserves for uncertain tax positions that reflect its best estimate of deductions and credits that may not be sustained on a more-likely-than-not basis. The Company recognizes interest and penalties related to uncertain tax positions in income tax provision on the consolidated statements of income. Accrued interest and penalties are included in the related tax liability account within accrued expenses on the consolidated balance sheets. As of December 31, 2017, we had deferred tax assets of $31.2 million, which was net of a valuation allowance in the amount of $1.3 million relating to Minnesota and Nebraska state net operating loss carryforwards. The deferred tax assets primarily consist of $14.1 million for federal net operating loss carryforwards and $13.4 million for basis in partnerships. For accounting purposes, a valuation allowance is required to reduce a deferred tax asset if it is determined that it is more-likely-than-not that all or some portion of the deferred tax asset will not be realized due to the lack of sufficient taxable income or other limitation on the Company’s ability to utilize the loss carryforward. Prior to the Transaction, BioFuel had recorded a valuation allowance against the full value of the deferred tax assets related to federal and state net operating losses due to a history of operating losses. The valuation allowance attributable to deferred tax assets other than the state loss carryforwards recorded by BioFuel prior to the Transaction Date was reversed through equity on the Transaction Date. The net operating loss carryforwards will begin to expire beginning with the year ending December 31, 2029. The Company’s ability to utilize its net operating loss carryforwards will depend on the amount of taxable income that the Company generates in future periods. Based on our 2017, 2016, and 2015 taxable income results and forecast projections of taxable income, Company management expects that the Company should generate sufficient taxable income to utilize substantially all of the net operating loss carryforwards before they expire. The Company will continue to evaluate the appropriateness of a valuation allowance in future periods based on the consideration of all available evidence, including the generation of taxable income, using the more-likely-than-not standard. On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act, among other things, reduces the U.S. federal corporate tax rate from 35% to 21% effective January 1, 2018 and imposes significant limitations on certain corporate deductions and credits. The Tax Act places future limitations on the usage of net operating loss carryforwards generated in the year ended December 31, 2018 and after. The Tax Act is comprehensive containing several other provisions, some of which will not materially impact the Company. The estimates of the Tax Act may be adjusted in future periods as required. Future implementation guidance from the Internal Revenue Service, clarifications of state tax law or the completion of the Company’s 2017 tax return filings could all affect the estimated financial statement impact of the Tax Act. The SEC staff issued Staff Accounting Bulletin 118 that allows for a measurement period of up to one year after the enactment date of the Tax Act to finalize the recording of the related tax impacts. The Company does not believe potential adjustments in future periods would materially impact the Company’s financial condition or results of operations. The Company remeasured its deferred tax assets due to the change in federal statutory tax rate which resulted in additional tax expense of $19.0 million. Fair Value Measurements The Company has adopted and implemented the provisions of ASC 820-10, Fair Value Measurements, with respect to fair value measurements of: (a) all elected financial assets and liabilities; and (b) any nonfinancial assets and liabilities that are recognized or disclosed in the consolidated financial statements at fair value on a recurring basis (at least annually). Under ASC 820-10, fair value is defined as an exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. These provisions establish a three-tiered fair value hierarchy that prioritizes inputs to valuation techniques used in fair value calculations. The three levels of input are defined as follows:
Entities are encouraged to maximize the use of observable inputs and minimize the use of unobservable inputs. If a financial instrument uses inputs that fall in different levels of the hierarchy, the instrument will be categorized based upon the lowest level of input that is significant to the fair value calculation. Our valuation methods may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while we believe our valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. Segment Information Prior to the fourth quarter of 2016, the Company’s operations were organized into two reportable segments: builder operations and land development. Builder operations consisted of two operating segments: Texas and Georgia. In accordance with ASC 280, Segment Reporting (“ASC 280”), in determining the most appropriate reportable segments, we considered similar economic and other characteristics, including geography, product types, production processes, average selling prices, gross profits, suppliers, land acquisition results, and underlying demand and supply. In accordance with ASC 280, an operating segment is defined as a component of an enterprise for which discrete financial information is available and is reviewed regularly by the Chief Operating Decision Maker (“CODM”), or decision-making group, to evaluate performance and make operating decisions. Prior to 2016, the Company identified its CODM as four key executives—the Chief Executive Officer, Chief Financial Officer, Chief Operating Officer and President of Texas Region (formerly, Head of Land Acquisition and Development). As a result of the departure of the Chief Operating Officer, the management structure and CODM changed during 2016. During the fourth quarter of 2016, the Company re-evaluated its reportable segments under ASC 280. Beginning in the fourth quarter of 2016, the Company identified its CODM as three key executives—the Chief Executive Officer, Chief Financial Officer and President of Texas Region. In determining the most appropriate reportable segments, the CODM considers similar economic and other characteristics, including geography, class of customers, product types and production processes. The discrete financial information that is regularly reviewed by the current CODM group is different than in the past. As such, the builder operations reportable segment has consisted of three operating segments since the fourth quarter of 2016: Texas, Georgia, and corporate and other. The operations of the Company’s controlled builders were aggregated into the Texas and Georgia operating segments based on similar (1) economic characteristics; (2) housing products; (3) class of homebuyer; (4) regulatory environments; and (5) methods used to construct and sell homes. Corporate operations is a non-operating segment that develops and implements strategic initiatives and supports the Company’s builder operations and land development segments by centralizing certain administrative functions such as finance, treasury, information technology and human resources. The majority of corporate personnel and resources are primarily dedicated to activities relating to the builder operations segment. Therefore, any unallocated corporate expenses are included in the corporate and other operating segment, within the builder operations segment which accounts for 95.9%, 96.1% and 87.3% of total revenues, for the years ended December 31, 2017, 2016 and 2015, respectively. The Company uses the equity method of accounting for its investment in an unconsolidated entity (Challenger Subsidiary, as defined in Note 3) over which it exercises significant influence but does not have a controlling interest. The Challenger Subsidiary constructs townhouses, single family homes and luxury patio homes, and is headquartered in Colorado Springs, Colorado. While the operations of the Challenger Subsidiary meet the criteria for an operating segment within the builder operations segment, such operations did not meet the quantitative thresholds, as discussed in ASC 280, to be separately reported and disclosed. As such, Challenger Subsidiary’s results are included within the corporate and other operating segment, within the builder operations segment. While the operations of Green Brick Title are not economically similar to either builder operations or land development, the results of such operations did not meet the quantitative thresholds to be separately reported and disclosed. As such, Green Brick Title’s results are included within the builder operations segment within the corporate and other operating segment. All 2015 segment information has been restated to conform with the 2016 and 2017 presentation. The changes in the reportable segments have no effect on the consolidated balance sheets, statements of income or cash flows for the periods presented. Out-of-Period Adjustment During the fourth quarter ended December 31, 2015, the Company recorded an out-of-period adjustment associated with a $1.9 million overaccrual of distributions payable recorded during the fourth quarter ended December 31, 2014. As a result, as of December 31, 2014, accrued expenses was overstated and retained earnings were understated by $1.9 million. After evaluating the quantitative and qualitative aspects of the out-of-period adjustment, management has determined that the adjustment is not material to the current year or any prior period financial statements. Change in Classification During the fourth quarter ended December 31, 2016, management determined that certain indirect project costs related to field superintendents’ salaries and benefits, and field expenses, such as field truck, phone and travel expenses, previously classified as salary expense and selling, general and administrative expense should be classified as cost of residential units to properly present cost of residential units, salary expense, and selling, general and administrative expense. We determined that the change in classification is not material to any prior period financial statements. Accordingly, we changed the classification of salary expense of $4.4 million, and selling, general and administrative expense of $0.8 million for the year ended December 31, 2015, to cost of residential units. There was no impact to net income during the prior periods as a result of the change in classification. Recent Accounting Pronouncements In May 2014, FASB issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The standard will replace most existing revenue recognition guidance in GAAP when it becomes effective. In August 2015, FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which delayed the effective date of ASU 2014-09 by one year. Subsequent to the issuance of ASU 2014-09, FASB issued several amendments in 2016 to the original standard including ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing and ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow Scope Improvements and Practical Expedients. These amendments do not change the core principle of the guidance stated in ASU 2014-09. Rather, they are intended to clarify and improve understanding of certain topics included in ASU 2014-09. The Company has evaluated how the adoption of ASU 2014-09 will impact our current revenue recognition policies by applying the five-step approach to each revenue stream (builder operations and land development). No material changes resulting from this pending adoption were identified. As a result, we expect the timing of our revenue recognition to remain substantially unchanged. The Company expects its revenue recognition disclosures to significantly expand under the new standard, specifically related to the quantitative and qualitative information about performance obligations, information about contract balances, changes in contract assets and liabilities and disaggregation of revenue. The adoption of ASU 2014-09 will not require significant changes to the Company’s internal controls and procedures over financial reporting and disclosures. However, we will make enhancements to existing internal controls and procedures to ensure compliance with the new standard. ASU 2014-09 and the related amendments are effective for the Company beginning on January 1, 2018. The Company will adopt the standard using the modified retrospective approach, under which the cumulative effect of the initial application of the new standard will be recognized as an adjustment to the opening balance of retained earnings in the first quarter of 2018. The cumulative effect of the initial application of the new standard is not expected to have a material effect on the Company’s consolidated financial statements. In November 2015, FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, as part of its simplification initiative. The standard amends the existing guidance to require that deferred income tax liabilities and assets be classified as noncurrent in a classified balance sheet, and eliminates the prior guidance which required an entity to separate deferred tax liabilities and assets into a current amount and a noncurrent amount in a classified balance sheet. The standard was effective for the Company beginning on January 1, 2017. The adoption of this standard did not have a material effect on the Company’s consolidated financial statements and related disclosures. In February 2016, FASB issued ASU 2016-02, Leases, which requires an entity that leases assets to classify the leases as either finance or operating leases and to record assets and liabilities for the rights and obligations created by long-term leases, regardless of the lease classification. The lease classification will determine whether the lease expense is recognized based on an effective interest rate method or on a straight-line basis over the term of the lease. This standard is effective for the Company beginning on January 1, 2019 and must be adopted using a modified retrospective approach. The Company does not expect that the adoption of this standard will have a material effect on its consolidated financial statements and related disclosures. In March 2016, FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, which simplifies several aspects related to the accounting for share-based payment transactions, including the accounting for income taxes, statutory tax withholding requirements and classification on the statement of cash flows. This standard was effective for the Company beginning on January 1, 2017. The adoption of this standard did not have a material effect on the Company’s consolidated financial statements and related disclosures. In August 2016, FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which reduces the existing diversity in practice in financial reporting across all industries by clarifying certain existing principles in ASC 230, Statement of Cash Flows, including providing additional guidance on how and what an entity should consider in determining the classification of certain cash receipts and cash payments. This standard is effective for the Company beginning on January 1, 2018. The Company does not expect that the adoption of this standard will have a material effect on its consolidated financial statements and related disclosures. In November 2016, FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force), which requires restricted cash to be included with cash and cash equivalents when reconciling the beginning and ending amounts on the statement of cash flows. This standard is effective for the Company beginning January 1, 2018, and is to be applied using a retrospective transition method. The Company elected to early adopt this standard during January 2017, and the standard was applied retrospectively for all periods presented. As a result of the adoption of this standard, the Company no longer presents the change in restricted cash in the operating activities section of the consolidated statement of cash flows. Prior period amounts have been reclassified to conform to the current period presentation. Such reclassifications had no impact on previously reported operating results or financial position. In January 2017, FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. The standard provides a more robust framework for determining whether transactions should be accounted for as acquisitions or dispositions of assets or businesses. This standard is effective for the Company beginning on January 1, 2018. Early adoption is permitted for transactions which occurred before the issuance date or effective date of the standard if the transactions were not reported in financial statements that have been issued or made available for issuance. The Company does not expect that the adoption of this standard will have a material effect on its consolidated financial statements and related disclosures. Once adopted, the Company will analyze any future acquisitions to determine whether the transaction qualifies as a purchase of a business or an asset. In May 2017, FASB issued ASU 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting, which amends the scope of modification accounting for share-based payment arrangements. The standard provides guidance on the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting under ASC 718, Compensation—Stock Compensation. Specifically, an entity would not apply modification accounting if the fair value, vesting conditions, and classification of the awards are the same immediately before and after the modification. This standard is effective for the Company beginning on January 1, 2018. The Company does not expect that the adoption of this standard will have a material effect on its consolidated financial statements and related disclosures. |
Investment in Unconsolidated Entity (Notes) |
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Investment in Unconsolidated Entity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Method Investments and Joint Ventures Disclosure [Text Block] | INVESTMENT IN UNCONSOLIDATED ENTITY On August 15, 2017, the Company, JBGL Ownership LLC, a Delaware limited liability company and a wholly owned subsidiary of the Company (“JBGL”), and GB Challenger, LLC, a newly formed Texas limited liability company (the “Challenger Subsidiary”) entered into a Membership Interest Purchase and Contribution Agreement (the “Challenger Agreement”) with The Challenger Group, Inc., a Wyoming corporation (“TCGI”), TCG Holdings, LLC, a Wyoming limited liability company (“TCG”), GTG Holdings, LLC, a Wyoming limited liability company (“GTG” and together with TCGI and TCG, the “Challenger Entities”) and Brian R. Bahr (“Bahr”), resulting in the Company, through its interest in JBGL, and the Challenger Entities owning a 49.9% and 50.1% ownership interest, respectively, in the Challenger Subsidiary, and the Challenger Subsidiary owning all of the membership and ownership interests in the subsidiaries of the Challenger Entities named in the Challenger Agreement (“Challenger Homebuilder Subsidiaries”). As consideration for such interests, the Company agreed to issue to the Challenger Entities, or their designees, 1,497,000 shares of its common stock, par value $0.01 per share, in a private placement, with 20,000 shares of its common stock held back pending satisfactory resolution of indemnification claims (“Holdback Shares”). The Company expects to issue the Holdback Shares during the second quarter of 2018; therefore, $0.2 million has been recorded in additional paid-in capital on the consolidated balance sheet as of December 31, 2017. The Challenger Entities, at their discretion, may offer to sell and transfer an additional 20.1% or, in certain circumstances, all of the Challenger Entities’ interest in the Challenger Subsidiary (“Additional Membership Interests”) to the Company on or after the third anniversary of the Challenger Agreement. The Company is not required to purchase the Additional Membership Interests. The Company incurred approximately $0.3 million in related acquisition costs which are included in the cost basis of investment in unconsolidated entity. The Challenger Entities operate homebuilding operations under the name Challenger Homes. Challenger Homes constructs townhouses, single family homes and luxury patio homes, and is headquartered in Colorado Springs, Colorado. The Company partnered with Challenger Homes in order to expand its business with partners who are complementary to its current builder partner group and to gain a presence in the Colorado Springs market. As a result of the investment in the Challenger Subsidiary on August 15, 2017, the Company issued 1,477,000 unregistered shares of its common stock, par value $0.01 per share (excluding 20,000 Holdback Shares). The issuance of the common stock by the Company was exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended, and the safe harbor provided by Rule 506 promulgated thereunder. The Company relied, in part, upon representations from each of the individuals that they are “accredited investors” as such term is defined in Rule 501 of Regulation D. The Company’s investment in the Challenger Subsidiary at August 15, 2017 of $15.1 million was more than its share of the estimated underlying net assets of the Challenger Subsidiary, resulting in a preliminary difference in basis of approximately $5.1 million, which was attributed to goodwill. The goodwill is reviewed for impairment as part of the investment in unconsolidated entity. The Company’s investment in the Challenger Subsidiary on August 15, 2017 was determined as follows (in thousands, except per share data):
The Challenger Entities and the Company will direct the operations of the Challenger Homebuilder Subsidiaries through the Challenger Subsidiary, with the Company as the minority stakeholder. The Company holds two of the five board of managers (the “Managers”) seats of the Challenger Subsidiary. The Challenger Subsidiary’s six officers, employees of the Challenger Entities, were designated by the Managers for the purpose of managing the day to day operations. The Company does not have a controlling financial interest in the Challenger Subsidiary as the Company has less than 50% of the voting interests in the Challenger Subsidiary. The Company’s investment in the Challenger Subsidiary is treated as an unconsolidated investment under the equity method of accounting, carried at cost, as adjusted for the Company’s share of income or losses and reduced for distributions received, and included in investment in unconsolidated entity in the Company’s consolidated balance sheets. The net carrying value of the Company’s investment in the Challenger Subsidiary was $16.9 million as of 2017. For the year ended December 31, 2017, there were no impairments related to our investment in this unconsolidated entity. The Company recognized $2.7 million in equity in income of unconsolidated entity from the date of the acquisition through December 31, 2017. A summary of the condensed financial information of the unconsolidated entity that is accounted for under the equity method is as follows (in thousands):
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Equity [Abstract] | |
Stockholders' Equity Note Disclosure [Text Block] | Common Stock Pursuant to the Company’s amended and restated certificate of incorporation (“Certificate of Incorporation”), the Company is authorized to issue up to 100,000,000 shares of common stock, par value $0.01 per share. As of December 31, 2017, there were 50,598,901 shares of common stock issued and outstanding. Preferred Stock Pursuant to the Company’s Certificate of Incorporation, the Company is authorized to issue up to 5,000,000 shares of preferred stock, par value $0.01 per share. The Board of Directors (“BODs”) has the authority, subject to any limitations imposed by law or NASDAQ rules, without further action by the stockholders, to issue such preferred stock in one or more series and to fix the voting powers (if any), the preferences and relative, participating, optional or other special rights or privileges, if any, of such series and the qualifications, limitations or restrictions thereof. These rights, preferences and privileges may include, but are not limited to, dividend rights, conversion rights, voting rights, terms of redemption, liquidation preferences, sinking fund terms and the number of shares constituting any series or the designation of that series. As of December 31, 2017, there were no shares of preferred stock issued and outstanding. Share Repurchase Program In March 2016, the Company’s BODs authorized a share repurchase program of up to 1,000,000 shares of its common stock through 2017. The share repurchase program expired in 2017. No shares were repurchased during the years ended December 31, 2017 and 2016. Section 382 Transfer Restrictions If we were to experience an ownership change, Section 382 of the Internal Revenue Code imposes an annual limitation which could impact the utilization of our net operating loss carryforwards. To reduce the likelihood of such an ownership change, our BODs implemented certain transfer restrictions, including Article V of the Company’s Certificate of Incorporation, and a Section 382 rights agreement regarding preservation of our net operating loss carryforwards. On March 27, 2014, the BODs declared a dividend of one preferred share purchase right, with respect to each outstanding share of common stock of the Company, to purchase from the Company one one-thousandth of a share of Series B Junior Participating Preferred Stock, par value $0.01 per share, of the Company at a price of $30.00 per one one-thousandth of a share of preferred stock, subject to adjustment as provided in the Section 382 rights agreement. The dividend was payable to stockholders of record at the close of business on April 7, 2014. As of December 31, 2017, the rights agreement has not been triggered. |
Property and Equipment |
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Property and Equipment | PROPERTY AND EQUIPMENT The following is a summary of property and equipment and related accumulated depreciation by major classification as of December 31, 2017 and 2016 (in thousands):
Depreciation expense for the years ended December 31, 2017, 2016 and 2015 totaled $0.3 million, $0.3 million, and $0.3 million, respectively, and is included in selling, general and administrative expense in our consolidated statements of income. |
Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | DEBT Lines of Credit Lines of credit outstanding as of December 31, 2017 and 2016 consist of the following (in thousands):
On May 3, 2016, the Company amended the Credit Facility. The amended Credit Facility is subject to a borrowing base limitation equal to the sum of 50% of the total value of land and 65% of the total value of lots owned by certain of the Company’s subsidiaries, each as determined by an independent appraiser, with the value of land being restricted from being more than 65% of the borrowing base. Beginning on August 1, 2017, a non-usage fee equal to 0.25% of the average unfunded amount of the commitment amount over a trailing 12 month period is due on or before August 1st of each year during the term of the amended Credit Facility. The maturity date was extended to May 1, 2019. The costs of $0.1 million associated with the amendment were deferred and are included in other assets, net in our consolidated balance sheets. The Company is amortizing these debt issuance costs to interest expense over the term of the Credit Facility using the straight-line method. During the year ended December 31, 2017, the Company amended the Credit Facility several times for the purpose of adding additional land holdings as collateral to the Credit Facility agreement. On October 27, 2017, the Company amended the Credit Facility to increase the commitment amount from $50.0 million to $75.0 million. This amendment temporarily waived the borrowing base through March 31, 2018, after which the borrowing base is reinstated. During the temporary borrowing base waiver, the Credit Facility is governed by a loan-to-value ratio not to exceed 70%. The commitment amount on the non-usage fee increased from $50.0 million to $75.0 million. Under the terms of the amended Credit Facility, the Company is required, among other things, to maintain minimum multiples of net worth in excess of the outstanding Credit Facility balance, minimum interest coverage and maximum leverage. The Company was in compliance with these financial covenants under the Credit Facility as of December 31, 2017.
The Unsecured Revolving Credit Facility provides for interest rate options on advances at rates equal to either: (a) in the case of base rate advances, the highest of (i) Citibank’s base rate, (ii) the federal funds rate plus 0.5%, and (iii) the one-month LIBOR plus 1.0%, in each case plus 1.5%; or (b) in the case of Eurodollar rate advances, the reserve adjusted LIBOR plus 2.5%. Interest on amounts borrowed under the Unsecured Revolving Credit Facility is payable in arrears quarterly on the last day of each March, June, September and December during such periods. As of December 31, 2017, the interest rate on outstanding borrowings under the Unsecured Revolving Credit Facility was 4.0% per annum. The Company pays the lenders a commitment fee on the amount of the unused commitments on a quarterly basis at a rate per annum equal to 0.45%. Outstanding borrowings under the Unsecured Revolving Credit Facility are subject to, among other things, a borrowing base. The borrowing base limitation is equal to the sum of: 100% of unrestricted cash (in excess of $15.0 million); 85% of the book value of model homes, construction in progress homes, sold completed homes and speculative homes (subject to certain limitations on the age and number of speculative homes and model homes); 65% of the book value of finished lots and land under development; and 50% of the book value of entitled land (subject to certain limitations on the value of entitled land and land under development as a percentage of the borrowing base). On August 31, 2016, the Company entered into a First Amendment to the Credit Agreement (the “First Amendment”), with Flagstar Bank, FSB (“Flagstar Bank”), the lenders named therein, and Citibank, N.A., as administrative agent, which amended the Credit Agreement. The First Amendment added Flagstar Bank as a lender under the Credit Agreement, with an initial commitment of $20.0 million, which increased the aggregate lending commitments available under the Unsecured Revolving Credit Facility from $40.0 million to $60.0 million. The First Amendment also increased the maximum amount of the Unsecured Revolving Credit Facility to a maximum aggregate amount of $110.0 million. On December 1, 2016, the Company, entered into a Second Amendment to the Credit Agreement (the “Second Amendment”), with the lenders named therein, and Citibank, N.A., as administrative agent, which further amended the Credit Agreement. The Second Amendment, among other things, extended the termination date with respect to commitments under the Unsecured Revolving Credit Facility from December 14, 2018 to December 14, 2019. The Second Amendment became effective upon the payment of an upfront fee of 0.15% of the aggregate amount of any extended commitments on December 15, 2016. Additionally, Citibank, N.A. increased its commitment under the Unsecured Revolving Credit Facility from $25.0 million to $35.0 million, which increased the aggregate lending commitments available under the Unsecured Revolving Credit Facility from $60.0 million to $70.0 million. On March 6, 2017, Flagstar Bank increased its commitment under the Unsecured Revolving Credit Facility from $20.0 million to $35.0 million, which increased the aggregate lending commitments available under the Unsecured Revolving Credit Facility from $70.0 million to $85.0 million. The costs of $0.1 million associated with this increase in commitment were deferred and are included in other assets, net in the consolidated balance sheets. The Company is amortizing these debt issuance costs to interest expense over the term of the Unsecured Revolving Credit Facility using the straight-line method. On September 1, 2017, the Company entered into a Third Amendment to the Credit Agreement (the “Third Amendment”), with Flagstar Bank, the lenders named therein, and Citibank, N.A., as administrative agent, which amended the Credit Agreement. Pursuant to the Third Amendment, Flagstar Bank increased its commitment from $35.0 million to $70.0 million and Credit Suisse increased its commitment from $15.0 million to $25.0 million, which increased the aggregate lending commitments available under the Unsecured Revolving Credit Facility from $85.0 million to $130.0 million. The Third Amendment also increased the maximum amount of the Unsecured Revolving Credit Facility from $110.0 million to a maximum aggregate amount of $200.0 million. Further increases are available at the Company’s option, prior to the termination date, subject to certain terms and conditions. In addition, the Third Amendment appoints Flagstar in the roles as the sole lead arranger and administrative agent under the Credit Agreement. The costs of $0.4 million associated with the Third Amendment were deferred and are included in other assets, net in the consolidated balance sheets. The Company is amortizing these debt issuance costs to interest expense over the term of the Unsecured Revolving Credit Facility using the straight-line method. On December 1, 2017, the Company entered into a Fourth Amendment to the Credit Agreement (the “Fourth Amendment”), with the lenders named therein, and Flagstar Bank, as administrative agent, which amended the Credit Agreement. The Fourth Amendment extended the termination date with respect to commitments under the Unsecured Revolving Credit Facility from December 14, 2019 to December 14, 2020. The extension became effective upon the payment of an upfront fee of 0.15% of the aggregate amount of any extended commitments on December 15, 2017. On March 12, 2018, the Company, Flagstar Bank, as administrative agent, and JPMorgan Chase Bank, N.A. (“JPMorgan”) executed a new lender supplement to add JPMorgan as a lender under the Credit Agreement, with an initial commitment of $30.0 million, which increased the aggregate lending commitments available under the Unsecured Revolving Credit Facility from $130.0 million to $160.0 million. The increased borrowing capacity will be effective March 27, 2018. Under the terms of the Unsecured Revolving Credit Facility, the Company is required, among other things, to maintain compliance with various covenants, including financial covenants relating to a maximum Leverage Ratio, a minimum Interest Coverage Ratio, and a minimum Consolidated Tangible Net Worth, each as defined therein. The Company’s compliance with these financial covenants is measured by calculations and metrics that are specifically defined or described by the terms of the Unsecured Revolving Credit Facility. The Company was in compliance with these covenants as of December 31, 2017. Notes Payable Notes payable outstanding as of December 31, 2017 and 2016 consist of the following (in thousands):
The approximate annual minimum principal payments over the next five years under the debt agreements as of December 31, 2017 are (in thousands):
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Compensation | SHARE-BASED COMPENSATION 2014 Omnibus Equity Incentive Plan On October 17, 2014, the Company’s stockholders approved the Green Brick Partners, Inc. 2014 Omnibus Equity Incentive Plan (the “2014 Equity Plan”). The 2014 Equity Plan became effective upon the completion of the Transaction on October 27, 2014. The purpose of the 2014 Equity Plan is to provide a means for the Company to attract and retain key personnel and to provide a means whereby current and prospective directors, officers, employees, consultants and advisors can acquire and maintain an equity interest in the Company, or be paid incentive compensation, which may (but need not) be measured by reference to the value of the Company’s common stock, thereby strengthening their commitment to the welfare of the Company and aligning their interests with those of the Company’s stockholders. The 2014 Equity Plan will terminate automatically on the tenth anniversary of the date it became effective. No awards will be granted under the 2014 Equity Plan after that date, but awards granted prior to that date may extend beyond that date. Under the 2014 Equity Plan, awards of stock options, including both incentive stock options and nonqualified stock options, stock appreciation rights, restricted stock and restricted stock units, other share-based awards and performance compensation awards, may be granted. The maximum number of shares of the Company’s common stock that is authorized and reserved for issuance under the 2014 Equity Plan is 2,350,956 shares, subject to adjustment for certain corporate events or changes in the Company’s capital structure. In general, the Company’s employees or those reasonably expected to become the Company’s employees, consultants and directors, are eligible for awards under the 2014 Equity Plan, provided that incentive stock options may be granted only to employees. The Company has four executive officers, six non-employee directors and approximately 260 other employees (including employees of our controlled builders) who are eligible to receive awards under the 2014 Equity Plan. Written agreements between the Company and each participant evidence the terms of each award granted under the 2014 Equity Plan. If any award under the 2014 Equity Plan expires or otherwise terminates, in whole or in part, without having been exercised in full, the common stock withheld from issuance under that award will become available for future issuance under the plan. If shares issued under the 2014 Equity Plan are reacquired by the Company pursuant to the terms of any forfeiture provision, those shares will become available for future awards under the plan. Awards that can only be settled in cash will not be treated as shares of common stock granted for purposes of the 2014 Equity Plan. The maximum amount that can be paid to any single participant in any one calendar year pursuant to a cash bonus award under the 2014 Equity Plan is $2.0 million. As of December 31, 2017, 1,956,979 shares remain available for future grant of awards under the 2014 Equity Plan. Share-Based Award Activity During the year ended December 31, 2017, the Company granted restricted stock awards (“RSAs”) under the 2014 Equity Plan to Named Executive Officers (“NEOs”) and non-employee members of the BODs. The RSAs granted to the NEOs were 100% vested and non-forfeitable on the grant date. The BODs elected to defer up to 100% of their annual retainer fee, chairman fees and meeting fees in the form of common stock. The RSAs granted to the BODs will become fully vested on the earlier of (i) the first anniversary of the date of grant of the shares of restricted common stock or (ii) the date of the Company’s 2018 Annual Meeting of Stockholders. The fair value of the RSAs granted to the NEOs and non-employee members of the BODs were recorded as share-based compensation expense on the grant date and over the vesting period, respectively. The Company withheld 63,057 shares of common stock, at a total cost of $0.6 million, from NEOs to satisfy statutory minimum tax requirements in respect of the RSAs. A summary of share-based awards activity during the year ended December 31, 2017 is as follows:
Stock Options Stock options granted to date were not granted under the 2014 Equity Plan. The stock options outstanding as of December 31, 2017 generally vest and become exercisable in five substantially equal installments on each of the first five anniversaries of the grant date and expire 10 years after the date on which they were granted. Compensation expense related to these options is expensed on a straight-line basis over the five year service period. All of the stock options outstanding as of December 31, 2017 are vested or expected to vest. We utilize the Black-Scholes option pricing model for estimating the grant date fair value of stock options. There were no stock options granted during the years ended December 31, 2017, 2016 and 2015. A summary of stock option activity during the year ended December 31, 2017 is as follows:
A summary of unvested stock option activity during the year ended December 31, 2017 is as follows:
Share-Based Compensation Expense Share-based compensation expense was approximately $2.6 million, $1.3 million and $0.5 million for the years ended December 31, 2017, 2016 and 2015 respectively. As of December 31, 2017, the estimated total remaining unamortized share-based compensation expense related to unvested restricted stock awards, net of forfeitures, was $0.2 million which is expected to be recognized over a weighted-average period of 0.4 years. As of December 31, 2017, the estimated total remaining unamortized share-based compensation expense related to stock options, net of forfeitures, was $0.5 million which is expected to be recognized over a weighted-average period of 1.8 years. |
Employee Benefits |
12 Months Ended |
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Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |
Employee Benefits | EMPLOYEE BENEFITS Prior to 2015, we had a qualifying 401(k) defined contribution plan that covered employees at one of our subsidiaries, The Providence Group of Georgia L.L.C. (“TPG”). During the year ended December 31, 2015, we extended the qualifying 401(k) defined contribution plan to all employees of the Company. Each year, we may make discretionary matching contributions equal to a percentage of the employees’ contributions. The Company contributed $0.5 million of matching contributions to the 401(k) plan during the year ended December 31, 2017. The Company did not contribute any matching contributions to the 401(k) plan during the years ended December 31, 2016 and 2015. |
Related Party Transactions |
12 Months Ended |
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Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | RELATED PARTY TRANSACTIONS During 2017, 2016 and 2015, the Company had related party transactions through the normal course of business. These transactions include the following: On October 27, 2014, in connection with the Transaction, the Company entered into the Loan Agreement, a guaranty and a pledge and security agreement with certain funds and accounts managed by Greenlight, our largest shareholder. Greenlight beneficially owns approximately 47.7% of the voting power of the Company. The Loan Agreement provides for a five year term loan facility in an aggregate principal amount of $150.0 million which funded part of the Transaction. Certain subsidiaries of the Company guarantee obligations under the Term Loan Facility. The Term Loan Facility bore interest at 9.0% per annum, payable quarterly, from October 27, 2014 through the first anniversary thereof and 10.0% per annum thereafter. On July 1, 2015, we used approximately $154.9 million of the net proceeds from the Equity Offering to repay all of the outstanding principal, interest and a prepayment premium under the Term Loan Facility. In 2012, we formed Centre Living Homes, LLC (“Centre Living”), a builder that focuses on a limited number of homes and luxury townhomes each year in the Dallas, Texas market. Trevor Brickman, the son of Green Brick’s Chief Executive Officer, is the President of Centre Living. Effective as of January 1, 2015, Centre Living’s operating agreement was amended and restated to the same general terms as with our other builders, such that Green Brick’s ownership interest in Centre Living is 50% and Trevor Brickman’s ownership interest is 50% for future operations beginning January 1, 2015. Subsequent to this amendment, Green Brick has 51% voting control over the operations of Centre Living. As such, 100% of Centre Living’s operations are included within our consolidated financial statements for the years ended December 31, 2017, December 31, 2016 and December 31, 2015. The noncontrolling interest attributable to Centre Living was $0.1 million and $0.3 million as of December 31, 2017 and December 31, 2016, respectively. In June 2016, the Company sold one developed lot to Trevor Brickman for $0.4 million, of which $0.3 million was included in the cost of land and lots. In September 2016, Trevor Brickman entered into an agreement with Centre Living to construct a home on the developed lot. In accordance with the Company’s employee discount policy, the contract price resulted in a margin of approximately 13%. The home was completed in 2017 and the Company incurred $0.6 million in costs to construct the home. As of December 31, 2017 and December 31, 2016, the Company had $0 and $0.1 million, respectively, in accounts receivable due from Trevor Brickman related to the construction of the home. In September 2015, the Company purchased 11 lots from an entity affiliated with the president of TPG, one of its controlled builders. The lots are part of a 19-home community, The Parc at Cogburn in Atlanta. The total paid for the lots in 2015 was $1.8 million. Under the option agreement in place, the Company purchased $0.3 million in lots during the year ended December 31, 2016. The Company purchased $1.0 million in lots during the six months ended June 30, 2017. The Company purchased all 19 lots as of June 30, 2017. In November 2015, the Company purchased 12 lots from an entity affiliated with the president of TPG. The lots are part of a 92-unit townhome community, Glens at Sugarloaf in Atlanta. No deposits were paid by the Company in contracting for the lots. The total paid for the lots in 2015 was $1.0 million. During March 2016, the Company purchased the remaining 80 townhome lots within the community at a price of $4.8 million from the affiliated entity. During March 2016, the Company purchased undeveloped land for an eventual 83 lot community, Academy Street in Atlanta. Simultaneously, the Company entered into a partnership agreement with an entity affiliated with the president of TPG to develop the community for sale of the lots to TPG under GRBK Academy LLC. Contributions and profits are 80% for the Company and 20% for the affiliated entity. The total contributions paid in 2016 were $11.2 million, of which $9.0 million was paid by the Company. The total contributions paid during the year ended December 31, 2017 were $0.5 million, of which $0.4 million was paid by the Company. The Company has 80% ownership in GRBK Academy, LLC and has consolidated the entity’s results of operations and financial condition into its financial statements. During March 2016, the Company purchased undeveloped land for an eventual 73 unit townhome community, Suwanee Station in Atlanta. Simultaneously, the Company entered into a partnership agreement with an entity affiliated with the president of TPG to develop the community for sale of the lots to TPG under GRBK Suwanee Station LLC. Contributions and profits are 50% for the Company and 50% for the affiliated entity. Total capital contributions are estimated at $3.4 million, of which 50% will be contributed by the Company. The total contributions paid in 2016 were $1.8 million, of which $0.9 million was paid by the Company. The total contributions paid during the year ended December 31, 2017 were $0.7 million, of which $0.4 million was paid by the Company. The Company holds two of the three board seats and is able to exercise control over the operations of GRBK Suwanee Station LLC and therefore has consolidated the entity’s results of operations and financial condition into its financial statements. In June 2016, the Company purchased 14 lots from an entity affiliated with the president of TPG. The lots are part of a 40-unit townhome community, Dunwoody Towneship. No deposits were paid by the Company related to these lots. The total paid for the 14 lots in 2016 was $1.8 million. The Company purchased the remaining 26 lots during the year ended December 31, 2017 for $3.3 million. In February 2017, Richard A. Costello paid a $110,000 deposit to Centre Living for the purchase of a townhome. During the fourth quarter of 2017, Mr. Costello closed on the townhome for approximately $495,000. In accordance with the Company’s employee discount policy, the contract price resulted in a margin of approximately 13%. In February 2017, Jed Dolson paid a $110,000 deposit to Centre Living for the purchase of a townhome. During the fourth quarter of 2017, as allowed for in the Company’s employee discount policy, Mr. Dolson assigned his rights to purchase the townhome to his sister-in-law. The townhome was sold in the fourth quarter of 2017 for approximately $472,000. In accordance with the Company’s employee discount policy, the contract price resulted in a margin of approximately 13%. |
Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | INCOME TAXES Provision for Income Taxes The components of current and deferred income tax expense are as follows (in thousands):
The effective income tax rate for 2017 reflects the impact of compliance with the Tax Act, signed into law on December 22, 2017. The Company remeasured its deferred tax assets due to the change in federal statutory tax rate which resulted in additional tax expense of $19.0 million. Future implementation guidance from the Internal Revenue Service, clarifications of state tax law or the completion of the Company’s 2017 tax return filings could all affect the estimated financial statement impact of the Tax Act. The SEC has issued rules that would allow for a measurement period of up to one year after the enactment date of the Tax Act to finalize the recording of the related tax impacts. The Company does not believe potential adjustments in future periods would materially impact the Company’s financial condition or results of operations. Deferred Income Taxes The primary differences between the financial statement and tax bases of assets and liabilities are as follows (in thousands):
The Company assesses the recoverability of deferred tax assets and the need for a valuation allowance on an ongoing basis. In making this assessment, management considers all available positive and negative evidence and available income tax planning to determine whether it is more-likely-than-not that some portion or all of the deferred tax assets will be realized in future periods. This assessment requires significant judgment and estimates involving current and deferred income taxes, tax attributes relating to the interpretation of various tax laws, historical bases of tax attributes associated with certain assets and limitations surrounding the realization of deferred tax assets. The Company files a federal corporate income tax return. The operations of JBGL subsequent to the Transaction Date were included in the Company’s federal income tax filing. As of December 31, 2017, the federal net operating loss carryforward was approximately $67.0 million, which will begin to expire beginning with the year ending December 31, 2029. The U.S. federal statute of limitations remains open for our 2014 and subsequent tax years. Due to the carryover of the federal net operating losses for years 2008 and forward, income tax returns going back to the 2008 tax year are subject to adjustment. The Colorado and Minnesota statutes of limitations remain open for our 2013 and subsequent tax years. The Nebraska statute of limitations remains open for our 2014 and subsequent tax years. Additionally, JBGL’s partnerships file returns in Texas and Georgia. The Georgia statute of limitations remains open for the 2014 and subsequent tax years. Any Georgia adjustments relating to returns filed by the partnerships would be borne by the partners. The Texas statute of limitations remains open for the 2013 and subsequent tax years. The Company is not presently under examination by the Internal Revenue Service or state tax authority. Effective Tax Rate Reconciliation The provision for income before income tax provision differs from the amount that would be computed by applying the statutory federal income tax rate of 35% to income before income tax provision as a result of the following (amounts in thousands):
Net Operating Losses and Valuation Allowances As of December 31, 2017, we have federal net operating loss carryforwards of approximately $67.0 million that will expire beginning with the year ending December 31, 2029. Our ability to utilize our net operating loss carryforwards depends on the amount of taxable income we generate in future periods. Based on our historical taxable income results through December 31, 2017, as well as forecasted income, management expects that the Company will generate sufficient taxable income to utilize all of the federal net operating loss carryforwards before they expire. The Company also has approximately $20.2 million of gross state net operating loss carryforwards in Minnesota and Nebraska with varying periods of expiration which the Company believes on a more-likely-than-not basis will not be utilized. The Company has approximately $0.2 million of gross Colorado state net operating loss carryforwards which will begin to expire beginning with the year ending December 31, 2028. Management expects that the Company will generate sufficient Colorado taxable income to utilize all of the Colorado state net operating loss carryforwards before they expire. The Transaction had no effect on the state net operating loss carryforward amount, the related valuation allowance or income tax expense. The Company maintains a gross deferred income tax asset in the amount of $1.3 million for the Minnesota and Nebraska state net operating loss carryforwards and a related valuation allowance in the amount of $1.3 million. In the Company’s assessment of the need for a valuation allowance, both positive and negative information was considered, including any available income tax planning. The Company re-assessed the need for a valuation allowance as of December 31, 2017 and concluded, on a more-likely-than-not basis, that the deferred income tax asset related to the Colorado net operating loss carryforward would be realized, giving consideration to the current year and projected operating results of GB Challenger, LLC. As a result of the re-assessment, the Company released the previously recorded valuation allowance against the net deferred income tax assets at December 31, 2017, with an offset reducing deferred state income tax expense. The rollforward of valuation allowances is as follows (amounts in thousands):
Uncertain Tax Positions The Company establishes reserves for uncertain tax positions that reflect management’s best estimate of deductions and credits that may not be sustained on a more-likely-than-not basis. In accordance with ASC 740, Income Taxes, the Company recognizes the effect of income tax positions only if those positions have a more-likely-than-not chance of being sustained by the Company. Recognized income tax positions are measured at the largest amount that is considered greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. A reconciliation of the beginning and ending amount of uncertain tax positions is as follows (in thousands):
The interest and penalties expense related to uncertain tax positions reflected in the consolidated statements of income for the years ended December 31, 2017, 2016 and 2015 was $0, nil and $0 respectively. The corresponding liabilities in accrued expenses on the consolidated balance sheets were $0 and nil as of December 31, 2017 and 2016, respectively. |
Fair Value Measurements |
12 Months Ended |
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Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS Fair Value of Financial Instruments The Company’s financial instruments, none of which are held for trading purposes, include cash, restricted cash, accounts receivable, earnest money deposits, other assets, accounts payable, accrued expenses, customer and builder deposits, obligations related to land not owned under option contracts, borrowings on lines of credit, and notes payable. Per the fair value hierarchy, level 1 financial instruments include: cash, restricted cash, accounts receivable, earnest money deposits, other assets, accounts payable, accrued expenses, and customer and builder deposits due to their short-term nature. Level 2 financial instruments include: borrowings on lines of credit and notes payable. Obligations related to land not owned under option contracts are deemed to be level 3 financial instruments. The fair value for obligations related to land not owned under option contracts was based on the estimated future net cash flows discounted for inherent risk associated with the underlying inventory asset. Due to the short-term nature, the carrying amounts of notes payable and borrowings on lines of credit approximate fair value. Furthermore, borrowings on lines of credit include floating interest rate terms. The fair value of obligations related to land not owned under option contracts is primarily determined by discounting the estimated future cash flow of each community using various unobservable inputs in our impairment analysis (see Note 2). The Company estimates that, due to the short-term nature of the underlying financial instruments or the proximity of the underlying transaction to the applicable reporting date, the fair value of all financial instruments does not differ materially from the aggregate carrying values recorded in the consolidated financial statements as of December 31, 2017 and 2016. Fair Value of Nonfinancial Instruments Nonfinancial assets and liabilities include items such as inventory which is measured at cost unless the carrying value is determined to be not recoverable in which case the affected instrument is written down to fair value. The fair value of inventory is primarily determined by discounting the estimated future cash flow of each community using various unobservable inputs in our impairment analysis (see Note 2). Per the fair value hierarchy, these items are level 3 nonfinancial instruments. During the years ended December 31, 2017 and December 31, 2016, the Company recorded fair value adjustments of $0.1 million and $0, respectively, to those nonfinancial assets and liabilities measured at fair value on a nonrecurring basis. |
Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Letters of Credit During the ordinary course of business, certain regulatory agencies and municipalities require the Company to post letters of credit. Such letters of credit are issued by financial institutions and commit the issuer to pay specified amounts to the holder of the letter of credit if the holder demonstrates that the Company has failed to perform under the relevant contract. If this were to occur, the Company would be required to reimburse the issuer of the letter of credit. The expiration dates of the letters of credit coincide with the expected completion date of the related projects. If the obligations related to a project are ongoing, the letters of credit are automatically extended, without amendment, for one year. As of December 31, 2017 and December 31, 2016, letters of credit outstanding totaled $0.2 million and $0.0 million, respectively. The Company does not believe that it is likely that any material claims will be made under a letter of credit in the foreseeable future. Warranties Warranty activity, included in accrued expenses in our consolidated balance sheets, for 2017, 2016 and 2015 consists of the following (in thousands):
Commitments The Company has leases associated with office space in Georgia and Texas which are classified as operating leases. Rent expense under these leases totaled $0.8 million, $0.7 million, and $0.6 million in 2017, 2016 and 2015, respectively and is included in selling, general and administrative expense in the consolidated statements of income. The approximate annual minimum lease payments over the next five years under operating leases as of December 31, 2017 are (in thousands):
Land and Lot Option Contracts In the ordinary course of business, the Company enters into land and lot option contracts in order to procure land for the construction of homes in the future. Earnest money deposits act as security for such option contracts. As of December 31, 2017 and 2016, there were 1,724 and 954 lots under option, respectively, as well as option contracts for land intended to be developed into additional lots. The land and lot option contracts in place as of December 31, 2017 provide for potential land and lots purchase payments in each year through 2021. If each option contract in place as of December 31, 2017 was exercised, expected purchase payments would be as follows (in thousands):
Legal Matters Lawsuits, claims and proceedings may be instituted or asserted against us in the normal course of business. The Company is also subject to local, state and federal laws and regulations related to land development activities, house construction standards, sales practices, employment practices and environmental protection. As a result, the Company may be subject to periodic examinations or inquiry by agencies administering these laws and regulations. The Company records a reserve for potential legal claims and regulatory matters when they are probable of occurring and a potential loss is reasonably estimable. The Company accrues for these matters based on facts and circumstances specific to each matter and revises these estimates when necessary. In view of the inherent difficulty of predicting outcomes of legal claims and related contingencies, the Company generally cannot predict their ultimate resolution, related timing or eventual loss. If evaluations indicate loss contingencies that could be material are not probable, but are reasonably possible, the Company will disclose their nature with an estimate of the possible range of losses or a statement that such loss is not reasonably estimable. We believe that the disposition of legal claims and related contingencies will not have a material adverse effect on our results of operations and liquidity or on our financial condition. |
Segment Information |
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Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | SEGMENT INFORMATION Financial information relating to the Company’s reportable segments is as follows. Operational results of each reportable segment are not necessarily indicative of the results that would have been achieved had the reportable segment been an independent, stand-alone entity during the periods presented. Our segments follow the accounting policies used for our consolidated financial statements as described in Note 2. Evaluation of segment performance is primarily based on a combination of revenues, gross profit (loss), income (loss) before taxes and inventory.
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Quarterly Financial Data (Unaudited) |
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Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Data (Unaudited) | QUARTERLY FINANCIAL DATA (UNAUDITED) Summarized unaudited quarterly results of operations for the years ended December 31, 2017 and December 31, 2016 are as follows (in thousands, except per share amounts):
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Significant Accounting Policies (Policies) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation | The accompanying consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) as set forth in the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) and applicable regulations of the Securities and Exchange Commission (“SEC”). |
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Principles of Consolidation | The Company evaluated its wholly-owned subsidiaries and controlled builders under ASC 810, Consolidation (“ASC 810”) and concluded that each controlled builder is a variable interest entity (“VIE”). The Company owns a 50% equity interest and has 51% of the voting interest in each controlled builder. In addition, the Company holds two of the three board seats for each controlled builder and is able to exercise control over the operations of each controlled builder. The Company accounts for its controlled builders under the variable interest model and is the primary beneficiary of each controlled builder in accordance with ASC 810. Therefore, the financial statements of the controlled builders are consolidated in the consolidated financial statements following the variable interest model (see Note 2). All intercompany balances and transactions have been eliminated in consolidation. The Company uses the equity method of accounting for its investment in an unconsolidated entity over which it exercises significant influence but does not have a controlling interest. Under the equity method, the Company’s share of the unconsolidated entity’s earnings or losses, if any, is included in the consolidated statements of income. Generally, the Company forms subsidiaries for each selling community and or homebuilding project in which it invests. |
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Use of Estimates | The preparation of the consolidated financial statements in conformity with GAAP requires management of the Company to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes, including the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. |
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Cash and Cash Equivalents | The cash balances of the Company are held with multiple financial institutions. At times, cash balances at certain banks and financial institutions may exceed insurable amounts. The Company believes it mitigates this risk by monitoring the financial stability of institutions holding material cash balances. The Company has not experienced any losses in such accounts and believes that the risk of loss is minimal. |
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Restricted Cash | Restricted cash primarily relates to cash held in escrow to fund future development costs and refundable customer deposits held in escrow. |
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Accounts Receivable and Allowance for Doubtful Accounts | Accounts receivable primarily consist of amounts collectible from manufacturing rebates earned by our homebuilders during the normal course of business. As of December 31, 2017 and 2016, all amounts are considered fully collectible and no allowance for doubtful accounts is recorded. The allowance for doubtful accounts is estimated based on our historical losses, the existing economic conditions, and the financial stability of our customers. Receivables are written-off in the period that they are deemed uncollectible. |
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Inventory and Impairment of Real Estate Inventory | Inventory consists of land in the process of development, undeveloped land, developed lots, completed homes, model homes, raw land scheduled for development, and land not owned under option contracts in Texas and Georgia. Inventory is valued at cost unless the carrying value is determined to be not recoverable in which case the affected inventory is written down to fair value. Cost includes any related pre-acquisition costs that are directly identifiable with a specific property so long as those pre-acquisition costs are anticipated to be recoverable at the sale of the property. Residential lots held for sale and lots held for development include the initial cost of acquiring the land as well as certain costs capitalized related to developing the land into individual residential lots including direct overhead, interest and real estate taxes. Land, development and other project costs, including direct overhead, interest and property taxes incurred during development and home construction, are capitalized. Land development and other common costs that benefit an entire community are allocated to individual lots or homes based on relative sales value. The costs of completed lots are transferred to work in process when home construction begins. Home construction costs and related carrying charges (principally interest and real estate taxes) are allocated to the cost of individual homes using the specific identification method. Inventory costs for completed homes are expensed as cost of sales as homes are sold. Changes to estimated total development costs subsequent to initial home closings in a community are generally allocated to the unsold homes in the community on a pro-rata basis. The life cycle of a community generally ranges from two to six years, commencing with the acquisition of land, continuing through the land development phase, construction, and concluding with the sale and delivery of homes. We recognize costs as incurred on our mechanics lien contracts.
Impairment of Inventory In accordance with the ASC 360, Property, Plant, and Equipment, we evaluate our inventory for indicators of impairment by individual community and development during each reporting period. For our builder operations segment, during each reporting period, community gross margins are reviewed by management. In the event that inventory in an individual community is moving at a slower than anticipated absorption pace or the average sales prices or margins within an individual community are trending downward and are anticipated to continue to trend downward over the life of the community, the Company will further investigate these communities and evaluate them for impairment. For our land development segment, we perform a quarterly review for indicators of impairment for each project which involves projecting future lot sales based on executed contracts and comparing these revenues to projected costs. In determining the allocation of costs to a particular land parcel, we rely on project budgets which are based on a variety of assumptions, including assumptions about development schedules and future costs to be incurred. It is common that actual results differ from budgeted amounts for various reasons, including delays, increases in costs that have not been committed, unforeseen issues encountered during project development that fall outside the scope of existing contracts, or items that ultimately cost more or less than the budgeted amount. We apply procedures to maintain best estimates in our budgets, including assessing and revising project budgets on a periodic basis, obtaining commitments from subcontractors and vendors for future costs to be incurred and utilizing the most recent information available to estimate costs. Each reporting period, the Company reviews our real estate assets to determine whether the estimated remaining future cash flows of the development are more or less than the asset’s carrying value. The estimated cash flows are determined by projecting the remaining sales revenue from lot sales based on the contractual lot takedowns remaining or historical/projected home sales/delivery absorptions for homebuilding operations and then comparing that to the remaining projected expenditures for development or home construction. Remaining projected expenditures are based on the most current pricing/bids received from subcontractors for current phases or homes under development. For future phases of land development, management uses its best judgment to project potential cost increases. When projecting sales revenue, management does not assume improvement in market conditions. If the estimated cash flows are more than the asset’s carrying value, no impairment adjustment is required. However, if the estimated cash flows are less than the asset’s carrying value, the asset is deemed impaired and will be written down to fair value. These impairment evaluations require us to make estimates and assumptions regarding future conditions, including the timing and amounts of development costs and sales prices of real estate assets, to determine if expected future cash flows will be sufficient to recover the asset’s carrying value. Fair value is determined based on estimated future cash flows discounted for inherent risks associated with real estate assets. These discounted cash flows are impacted by expected risk based on estimated land development activities, construction and delivery timelines, market risk of price erosion, uncertainty of development or construction cost increases, and other risks specific to the asset or market conditions where the asset is located when the assessment is made. These factors are specific to each community and may vary among communities. When estimating cash flows of a community, the Company makes various assumptions, including: (i) expected sales prices and sales incentives to be offered, including the number of homes available, pricing and incentives being offered by us or other builders in other communities, and future sales price adjustments based on market and economic trends; (ii) expected sales pace and cancellation rates based on local housing market conditions, competition and historical trends; (iii) costs expended to date and expected to be incurred including, but not limited to, land and land development costs, home construction costs, interest costs, indirect construction and overhead costs, and selling and marketing costs; (iv) alternative product offerings that may be offered that could have an impact on sales pace, sales price and/or building costs; and (v) alternative uses for the property. Many assumptions are interdependent and a change in one may require a corresponding change to other assumptions. For example, increasing or decreasing sales absorption rates has a direct impact on the estimated per unit sales price of a home, the level of time-sensitive costs (such as indirect construction, overhead and carrying costs), and selling and marketing costs (such as model home maintenance costs and advertising costs). Due to uncertainties in the estimation process, the significant volatility in demand for new housing and the long life cycle of many communities, actual results could differ significantly from such estimates. |
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Equity Method Investments | In accordance with ASC 323, Investments - Equity Method and Joint Ventures (“ASC 323”), the Company uses the equity method of accounting for its investment in an unconsolidated entity over which it exercises significant influence but does not have a controlling interest. The equity method of accounting requires the investment to be initially recorded at cost and subsequently adjusted for the Company’s share of equity in the unconsolidated entity’s earnings or losses. The Company evaluates the carrying amount of the investment in unconsolidated entity for impairment in accordance with ASC 323. If the Company determines that a loss in the value of the investment is other than temporary, the Company writes down the investment to its estimated fair value. Any such losses are recorded to equity in income of unconsolidated entity in the Company’s consolidated statements of income. Due to uncertainties in the estimation process and the significant volatility in demand for new housing, actual results could differ significantly from such estimates. During the year ended December 31, 2017, the Company did not identify indicators of impairment for its investment in unconsolidated entity. The Company has made an election to classify distributions received from the unconsolidated entity using the nature of the distribution approach. Distributions received are classified based on the nature of the activities of the investee that generated the distribution. All such distributions for the period ended December 31, 2017 are cash inflows from operating activities. |
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Variable Interest Entities and Noncontrolling Interests | The Company accounts for VIEs in accordance with ASC 810. In accordance with ASC 810, an entity is a VIE when: (a) the equity investment at risk in the entity is not sufficient to permit the entity to finance its activities without additional subordinated financial support provided by other parties, including the equity holders; (b) the entity’s equity holders as a group either (i) lack the direct or indirect ability to make decisions about the entity, (ii) are not obligated to absorb expected losses of the entity or (iii) do not have the right to receive expected residual returns of the entity; or (c) the entity’s equity holders have voting rights that are not proportionate to their economic interests, and the activities of the entity involve or are conducted on behalf of the equity holder with disproportionately few voting rights. If an entity is deemed to be a VIE pursuant to ASC 810, the enterprise that has both (i) the power to direct the activities of the VIE that most significantly impacts the entity’s economic performance and (ii) the obligation to absorb the expected losses of the entity or right to receive benefits from the entity that could be potentially significant to the VIE is considered the primary beneficiary and must consolidate the VIE. In accordance with ASC 810, the Company performs ongoing reassessments of whether it is the primary beneficiary of a VIE. The Company owns 50% equity interests in several controlled builders deemed to be VIEs under ASC 810 for which the Company is considered the primary beneficiary. Our controlled builders are engaged in all aspects of the homebuilding process in residential neighborhoods and master planned communities in premium locations in the Dallas and Atlanta markets. We sell finished lots or option lots from third-party developers to our controlled builders for their homebuilding operations and provide them with construction financing and strategic planning. The board of managers of each of the controlled builders has the power to direct the activities that significantly impact the controlled builder’s economic performance. Pursuant to the Company’s agreements with each controlled builder, it has the ability to appoint two of the three members of the board of managers of each controlled builder’s board of managers. A majority of the board of managers constitutes a quorum to transact business. No action can be approved by the board of managers without the approval from at least one individual whom the Company has appointed at each controlled builder. The Company has the ability to control the activities of each controlled builder that most significantly impact the controlled builder’s economic performance. Such activities include, but are not limited to, involvement in the day to day capital and operating decisions, the ability to determine the budget and plan, the ability to control financing decisions, and the ability to acquire additional land or dispose of land. In addition, the Company has the right to receive the expected residual returns and obligation to absorb the expected losses of each controlled builder through the pro rata profits and losses we are allocated based on our ownership interest. Therefore, the financial statements of the controlled builders are consolidated in the Company’s consolidated financial statements following the variable interest model. The noncontrolling interests attributable to the 50% minority interests owned by our controlled builders are included as noncontrolling interests in the Company’s consolidated financial statements. |
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Capitalization of Interest | The Company capitalizes interest costs incurred to inventory during active development and other qualifying activities. Interest capitalized as cost of inventory is charged to cost of sales as related homes, land and/or lots are closed. Interest incurred on undeveloped land is directly expensed and included in interest expense in our consolidated statements of income. |
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Earnest Money Deposits | In the ordinary course of business, the Company enters into land and lot option contracts in order to procure land for the construction of homes in the future. Pursuant to these option contracts, the Company generally provides a deposit to the seller as consideration for the right to purchase land at different times in the future, usually at predetermined prices. Such contracts enable the Company to defer acquiring portions of properties owned by third parties or unconsolidated entities until the Company has determined whether and when to exercise its option, which reduces the Company’s financial risk associated with long-term land holdings. Option deposits and pre-acquisition costs (such as environmental testing, surveys, engineering, and entitlement costs) are capitalized if the costs are directly identifiable with the land under option and acquisition of the property is probable. Such costs are reflected in earnest money deposits and are reclassified to inventory upon taking title to the land. The Company writes off deposits and pre-acquisition costs if it becomes probable that the Company will not go forward with the project or recover the capitalized costs. Such decisions take into consideration changes in local market conditions, the timing of required land takedowns, the availability and best use of necessary incremental capital, and other factors. As of December 31, 2017, the Company had land option contracts with potential purchase payments through 2021. Deposits and pre-acquisition costs written off related to option contracts we abandoned totaled $0.2 million, $0.2 million and $0.2 million for the years ended December 31, 2017, 2016 and 2015, respectively. Under ASC 810, a non-refundable deposit paid to an entity is deemed to be a variable interest that will absorb some or all of the entity’s expected losses if they occur and, as such, the Company’s land and lot option contracts are considered variable interests. The Company’s option contract deposits along with any related pre-acquisition costs represent the Company’s maximum exposure to the land seller if the Company elects not to purchase the optioned property. Therefore, whenever the Company enters into an option or purchase contract with an entity and makes a non-refundable deposit, a VIE assessment is performed. However, the Company generally has little control or power to direct the activities that most significantly impact the VIE’s economic performance due to the Company’s lack of an equity interest in them. Additionally, creditors of the VIE typically have no material recourse against the Company, and the Company does not provide financial or other support to these VIEs other than as stipulated in the option contracts. In accordance with ASC 810, the Company performs ongoing reassessments of whether the Company is the primary beneficiary of a VIE. The Company was not required to consolidate any land or lot option VIEs as of December 31, 2017 or 2016. |
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Sales with Option to Repurchase | The Company sold land and then entered into land option contracts to repurchase the land from the buyers. In accordance with ASC 360, Property, Plant, and Equipment, these transactions are considered a financing arrangement rather than a sale. As a result, the Company recorded $9.3 million as of December 31, 2016 as land not owned under option contracts with a corresponding liability reflected as obligations related to land not owned under option contracts on the consolidated balance sheets. We purchased all of the lots under the option contracts during 2017. |
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Investment in Direct Financing Leases | Through December 31, 2014, the Company entered into a series of direct finance leases for a portfolio of model homes. The Company leased these model homes to the entity from which it acquired the homes. The lessee had the option to repurchase the model homes at a predetermined price. The direct financing leases bore interest at rates from 10% to 12%. The lease payments were recorded as interest income on direct financing leases in the consolidated statements of income. All direct financing leases were sold in 2015. |
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Property and Equipment, Net | Property and equipment are stated at cost less accumulated depreciation. Repairs and maintenance are expensed as incurred. Depreciation is computed over the estimated useful lives of the assets using the straight-line method. The estimated useful lives of assets range from three to ten years. |
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Customer and Builder Deposits | The Company typically requires customers to submit a deposit for home purchases and for builders to submit a deposit in connection with their construction loan agreements. The deposits serve as a guarantee to performance under home purchase and building contracts. Cash received as customer deposits, if held in escrow, is shown as restricted cash on the consolidated balance sheets. |
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Warranties | The Company accrues an estimate of its exposure to warranty claims based on both current and historical home sales data and warranty costs incurred. The Company offers homeowners a comprehensive third-party warranty on each home. Homes are generally covered by a ten-year warranty for qualified and defined structural defects, one year for defects and products used, and two years for electrical, plumbing and HVAC parts and labor. Warranty accruals are included within accrued expenses on the consolidated balance sheets. |
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Net Income Attributable to Green Brick Partners, Inc. Per Share | The Company’s restricted stock awards have the right to receive forfeitable dividends on an equal basis with common stock and therefore are not considered participating securities that must be included in the calculation of net income per share using the two-class method. Basic earnings per share is computed by dividing net income by the weighted average number of common shares outstanding during each period, adjusted for non-vested shares of restricted stock awards during each period. Diluted earnings per share is calculated using the treasury stock method and includes the effect of all dilutive securities, including stock options and restricted stock awards. |
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Revenue Recognition | In accordance with ASC 360-20, Real Estate Sales, the Company recognizes revenue from sales of residential units, land and lots when a sale is consummated. Consummation occurs when the following criteria are met: (a) the parties are bound by the terms of the contract; (b) all net consideration has been exchanged; (c) any permanent financing for which the seller is responsible has been arranged; (d) continuing investment is adequate to demonstrate a commitment to pay for the home, land or lot; and (e) all conditions precedent to closing have been performed. Typically, these criteria are met at closing, at which time the Company recognizes revenue under the full accrual method, which allows full recognition of the gain on the sale of the home, land or lot. The Company recognizes sales incentives, such as cash discounts and incentives on options and option upgrades as a reduction of sales revenue at the time the home is closed and revenue is recognized. The Company records seller-paid financing and other closing costs within cost of sales of residential units at the time the home is closed and revenue is recognized. From time to time, the Company receives vendor rebates for certain materials that are utilized in the construction of homes. In accordance with ASC 605-50, Customer Payments and Incentives, the Company recognizes these rebates as a reduction of cost of sales of residential units at the later of (a) the home closing (when revenue is recognized), or (b) when such amounts are reasonably estimable. The Company also serves as the general contractor for certain custom homes where the customers, and not the Company, own the underlying land and improvements. The Company recognizes revenue for these mechanics lien contracts on the percentage of completion method, where progress toward completion is measured by relating the actual cost of work performed to date to the current estimated total cost of the respective contracts. |
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Cost Recognition | Lot acquisition, materials, direct costs, interest and indirect costs related to the acquisition, development, and construction of lots and homes are capitalized. Direct and indirect costs of developing residential lots are allocated evenly to all applicable lots. Capitalized costs of residential lots are charged to earnings when the related revenue is recognized. Non-capitalizable costs in connection with developed lots and completed homes and other selling and administrative costs are charged to earnings when incurred. |
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Advertising Expense | The Company expenses advertising as incurred. Advertising costs are included in selling, general and administrative expense in the consolidated statements of income. |
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Debt Issuance Costs | Debt issuance costs of $1.2 million and $0.8 million as of December 31, 2017 and December 31, 2016, represent costs incurred related to the revolving and unsecured credit facilities, including amendments thereto, and are included as part of other assets, net on the consolidated balance sheets. These costs are amortized straight-line and included in interest expense over the term of the related debt facility. |
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Share-based Compensation | The Company measures and accounts for share-based awards in accordance with ASC 718, Compensation - Stock Compensation. The Company expenses share-based payment awards made to employees and directors, including stock options and restricted stock awards. Share-based compensation expense associated with stock options and restricted stock awards with vesting contingent upon the achievement of service conditions is recognized on a straight-line basis, net of estimated forfeitures, over the requisite service period over which the awards are expected to vest. The Company estimates the value of stock options with vesting contingent upon the achievement of service conditions as of the date the award was granted using the Black-Scholes option pricing model. The Black-Scholes option pricing model requires the use of certain input variables, such as expected volatility, risk-free interest rate and expected award life. |
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Income Taxes | The Company accounts for income taxes using the asset and liability method, under which deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases, operating losses and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in years in which temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company regularly reviews historical and anticipated future pre-tax results of operations to determine whether we will be able to realize the benefit of deferred tax assets. A valuation allowance is required to reduce the deferred tax asset when it is more-likely-than-not that all or some portion of the deferred tax asset will not be realized due to the lack of sufficient taxable income. The Company establishes reserves for uncertain tax positions that reflect its best estimate of deductions and credits that may not be sustained on a more-likely-than-not basis. The Company recognizes interest and penalties related to uncertain tax positions in income tax provision on the consolidated statements of income. Accrued interest and penalties are included in the related tax liability account within accrued expenses on the consolidated balance sheets. As of December 31, 2017, we had deferred tax assets of $31.2 million, which was net of a valuation allowance in the amount of $1.3 million relating to Minnesota and Nebraska state net operating loss carryforwards. The deferred tax assets primarily consist of $14.1 million for federal net operating loss carryforwards and $13.4 million for basis in partnerships. For accounting purposes, a valuation allowance is required to reduce a deferred tax asset if it is determined that it is more-likely-than-not that all or some portion of the deferred tax asset will not be realized due to the lack of sufficient taxable income or other limitation on the Company’s ability to utilize the loss carryforward. Prior to the Transaction, BioFuel had recorded a valuation allowance against the full value of the deferred tax assets related to federal and state net operating losses due to a history of operating losses. The valuation allowance attributable to deferred tax assets other than the state loss carryforwards recorded by BioFuel prior to the Transaction Date was reversed through equity on the Transaction Date. The net operating loss carryforwards will begin to expire beginning with the year ending December 31, 2029. The Company’s ability to utilize its net operating loss carryforwards will depend on the amount of taxable income that the Company generates in future periods. Based on our 2017, 2016, and 2015 taxable income results and forecast projections of taxable income, Company management expects that the Company should generate sufficient taxable income to utilize substantially all of the net operating loss carryforwards before they expire. The Company will continue to evaluate the appropriateness of a valuation allowance in future periods based on the consideration of all available evidence, including the generation of taxable income, using the more-likely-than-not standard. On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act, among other things, reduces the U.S. federal corporate tax rate from 35% to 21% effective January 1, 2018 and imposes significant limitations on certain corporate deductions and credits. The Tax Act places future limitations on the usage of net operating loss carryforwards generated in the year ended December 31, 2018 and after. The Tax Act is comprehensive containing several other provisions, some of which will not materially impact the Company. The estimates of the Tax Act may be adjusted in future periods as required. Future implementation guidance from the Internal Revenue Service, clarifications of state tax law or the completion of the Company’s 2017 tax return filings could all affect the estimated financial statement impact of the Tax Act. The SEC staff issued Staff Accounting Bulletin 118 that allows for a measurement period of up to one year after the enactment date of the Tax Act to finalize the recording of the related tax impacts. The Company does not believe potential adjustments in future periods would materially impact the Company’s financial condition or results of operations. The Company remeasured its deferred tax assets due to the change in federal statutory tax rate which resulted in additional tax expense of $19.0 million. |
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Fair Value Measurements | The Company has adopted and implemented the provisions of ASC 820-10, Fair Value Measurements, with respect to fair value measurements of: (a) all elected financial assets and liabilities; and (b) any nonfinancial assets and liabilities that are recognized or disclosed in the consolidated financial statements at fair value on a recurring basis (at least annually). Under ASC 820-10, fair value is defined as an exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. These provisions establish a three-tiered fair value hierarchy that prioritizes inputs to valuation techniques used in fair value calculations. The three levels of input are defined as follows:
Entities are encouraged to maximize the use of observable inputs and minimize the use of unobservable inputs. If a financial instrument uses inputs that fall in different levels of the hierarchy, the instrument will be categorized based upon the lowest level of input that is significant to the fair value calculation. Our valuation methods may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while we believe our valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. |
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Segment Information | two reportable segments: builder operations and land development. Builder operations consisted of two operating segments: Texas and Georgia. In accordance with ASC 280, Segment Reporting (“ASC 280”), in determining the most appropriate reportable segments, we considered similar economic and other characteristics, including geography, product types, production processes, average selling prices, gross profits, suppliers, land acquisition results, and underlying demand and supply. In accordance with ASC 280, an operating segment is defined as a component of an enterprise for which discrete financial information is available and is reviewed regularly by the Chief Operating Decision Maker (“CODM”), or decision-making group, to evaluate performance and make operating decisions. Prior to 2016, the Company identified its CODM as four key executives—the Chief Executive Officer, Chief Financial Officer, Chief Operating Officer and President of Texas Region (formerly, Head of Land Acquisition and Development). As a result of the departure of the Chief Operating Officer, the management structure and CODM changed during 2016. During the fourth quarter of 2016, the Company re-evaluated its reportable segments under ASC 280. Beginning in the fourth quarter of 2016, the Company identified its CODM as three key executives—the Chief Executive Officer, Chief Financial Officer and President of Texas Region. In determining the most appropriate reportable segments, the CODM considers similar economic and other characteristics, including geography, class of customers, product types and production processes. The discrete financial information that is regularly reviewed by the current CODM group is different than in the past. As such, the builder operations reportable segment has consisted of three operating segments since the fourth quarter of 2016: Texas, Georgia, and corporate and other. The operations of the Company’s controlled builders were aggregated into the Texas and Georgia operating segments based on similar (1) economic characteristics; (2) housing products; (3) class of homebuyer; (4) regulatory environments; and (5) methods used to construct and sell homes. Corporate operations is a non-operating segment that develops and implements strategic initiatives and supports the Company’s builder operations and land development segments by centralizing certain administrative functions such as finance, treasury, information technology and human resources. The majority of corporate personnel and resources are primarily dedicated to activities relating to the builder operations segment. Therefore, any unallocated corporate expenses are included in the corporate and other operating segment, within the builder operations segment which accounts for 95.9%, 96.1% and 87.3% of total revenues, for the years ended December 31, 2017, 2016 and 2015, respectively. The Company uses the equity method of accounting for its investment in an unconsolidated entity (Challenger Subsidiary, as defined in Note 3) over which it exercises significant influence but does not have a controlling interest. The Challenger Subsidiary constructs townhouses, single family homes and luxury patio homes, and is headquartered in Colorado Springs, Colorado. While the operations of the Challenger Subsidiary meet the criteria for an operating segment within the builder operations segment, such operations did not meet the quantitative thresholds, as discussed in ASC 280, to be separately reported and disclosed. As such, Challenger Subsidiary’s results are included within the corporate and other operating segment, within the builder operations segment. While the operations of Green Brick Title are not economically similar to either builder operations or land development, the results of such operations did not meet the quantitative thresholds to be separately reported and disclosed. As such, Green Brick Title’s results are included within the builder operations segment within the corporate and other operating segment. |
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Out-of-Period Adjustment | During the fourth quarter ended December 31, 2015, the Company recorded an out-of-period adjustment associated with a $1.9 million overaccrual of distributions payable recorded during the fourth quarter ended December 31, 2014. As a result, as of December 31, 2014, accrued expenses was overstated and retained earnings were understated by $1.9 million. After evaluating the quantitative and qualitative aspects of the out-of-period adjustment, management has determined that the adjustment is not material to the current year or any prior period financial statements. |
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Change in Classification | determined that certain indirect project costs related to field superintendents’ salaries and benefits, and field expenses, such as field truck, phone and travel expenses, previously classified as salary expense and selling, general and administrative expense should be classified as cost of residential units to properly present cost of residential units, salary expense, and selling, general and administrative expense. We determined that the change in classification is not material to any prior period financial statements. |
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Recent Accounting Pronouncements | In May 2014, FASB issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The standard will replace most existing revenue recognition guidance in GAAP when it becomes effective. In August 2015, FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which delayed the effective date of ASU 2014-09 by one year. Subsequent to the issuance of ASU 2014-09, FASB issued several amendments in 2016 to the original standard including ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing and ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow Scope Improvements and Practical Expedients. These amendments do not change the core principle of the guidance stated in ASU 2014-09. Rather, they are intended to clarify and improve understanding of certain topics included in ASU 2014-09. The Company has evaluated how the adoption of ASU 2014-09 will impact our current revenue recognition policies by applying the five-step approach to each revenue stream (builder operations and land development). No material changes resulting from this pending adoption were identified. As a result, we expect the timing of our revenue recognition to remain substantially unchanged. The Company expects its revenue recognition disclosures to significantly expand under the new standard, specifically related to the quantitative and qualitative information about performance obligations, information about contract balances, changes in contract assets and liabilities and disaggregation of revenue. The adoption of ASU 2014-09 will not require significant changes to the Company’s internal controls and procedures over financial reporting and disclosures. However, we will make enhancements to existing internal controls and procedures to ensure compliance with the new standard. ASU 2014-09 and the related amendments are effective for the Company beginning on January 1, 2018. The Company will adopt the standard using the modified retrospective approach, under which the cumulative effect of the initial application of the new standard will be recognized as an adjustment to the opening balance of retained earnings in the first quarter of 2018. The cumulative effect of the initial application of the new standard is not expected to have a material effect on the Company’s consolidated financial statements. In November 2015, FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, as part of its simplification initiative. The standard amends the existing guidance to require that deferred income tax liabilities and assets be classified as noncurrent in a classified balance sheet, and eliminates the prior guidance which required an entity to separate deferred tax liabilities and assets into a current amount and a noncurrent amount in a classified balance sheet. The standard was effective for the Company beginning on January 1, 2017. The adoption of this standard did not have a material effect on the Company’s consolidated financial statements and related disclosures. In February 2016, FASB issued ASU 2016-02, Leases, which requires an entity that leases assets to classify the leases as either finance or operating leases and to record assets and liabilities for the rights and obligations created by long-term leases, regardless of the lease classification. The lease classification will determine whether the lease expense is recognized based on an effective interest rate method or on a straight-line basis over the term of the lease. This standard is effective for the Company beginning on January 1, 2019 and must be adopted using a modified retrospective approach. The Company does not expect that the adoption of this standard will have a material effect on its consolidated financial statements and related disclosures. In March 2016, FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, which simplifies several aspects related to the accounting for share-based payment transactions, including the accounting for income taxes, statutory tax withholding requirements and classification on the statement of cash flows. This standard was effective for the Company beginning on January 1, 2017. The adoption of this standard did not have a material effect on the Company’s consolidated financial statements and related disclosures. In August 2016, FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which reduces the existing diversity in practice in financial reporting across all industries by clarifying certain existing principles in ASC 230, Statement of Cash Flows, including providing additional guidance on how and what an entity should consider in determining the classification of certain cash receipts and cash payments. This standard is effective for the Company beginning on January 1, 2018. The Company does not expect that the adoption of this standard will have a material effect on its consolidated financial statements and related disclosures. In November 2016, FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force), which requires restricted cash to be included with cash and cash equivalents when reconciling the beginning and ending amounts on the statement of cash flows. This standard is effective for the Company beginning January 1, 2018, and is to be applied using a retrospective transition method. The Company elected to early adopt this standard during January 2017, and the standard was applied retrospectively for all periods presented. As a result of the adoption of this standard, the Company no longer presents the change in restricted cash in the operating activities section of the consolidated statement of cash flows. Prior period amounts have been reclassified to conform to the current period presentation. Such reclassifications had no impact on previously reported operating results or financial position. In January 2017, FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. The standard provides a more robust framework for determining whether transactions should be accounted for as acquisitions or dispositions of assets or businesses. This standard is effective for the Company beginning on January 1, 2018. Early adoption is permitted for transactions which occurred before the issuance date or effective date of the standard if the transactions were not reported in financial statements that have been issued or made available for issuance. The Company does not expect that the adoption of this standard will have a material effect on its consolidated financial statements and related disclosures. Once adopted, the Company will analyze any future acquisitions to determine whether the transaction qualifies as a purchase of a business or an asset. In May 2017, FASB issued ASU 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting, which amends the scope of modification accounting for share-based payment arrangements. The standard provides guidance on the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting under ASC 718, Compensation—Stock Compensation. Specifically, an entity would not apply modification accounting if the fair value, vesting conditions, and classification of the awards are the same immediately before and after the modification. This standard is effective for the Company beginning on January 1, 2018. The Company does not expect that the adoption of this standard will have a material effect on its consolidated financial statements and related disclosures. |
Significant Accounting Policies (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Real Estate Inventory |
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Schedule of Real Estate Inventory Capitalized Interest Costs | Interest costs incurred, capitalized and expensed were as follows (in thousands):
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Schedule of Basic and Diluted Net Income | The computation of basic and diluted net income attributable to Green Brick Partners, Inc. per share using the treasury stock method is as follows (in thousands, except per share amounts):
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Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following securities that could potentially dilute earnings per share in the future are not included in the determination of diluted net income attributable to Green Brick Partners, Inc. per common share (in thousands):
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Investment in Unconsolidated Entity (Tables) |
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Schedule of Equity Method Investments [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Method Investments [Table Text Block] | A summary of the condensed financial information of the unconsolidated entity that is accounted for under the equity method is as follows (in thousands):
The Company’s investment in the Challenger Subsidiary on August 15, 2017 was determined as follows (in thousands, except per share data):
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Property, Plant and Equipment (Tables) |
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Summary of Property and Equipment | The following is a summary of property and equipment and related accumulated depreciation by major classification as of December 31, 2017 and 2016 (in thousands):
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Debt (Tables) |
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Schedule of Lines of Credit Outstanding | Lines of credit outstanding as of December 31, 2017 and 2016 consist of the following (in thousands):
On May 3, 2016, the Company amended the Credit Facility. The amended Credit Facility is subject to a borrowing base limitation equal to the sum of 50% of the total value of land and 65% of the total value of lots owned by certain of the Company’s subsidiaries, each as determined by an independent appraiser, with the value of land being restricted from being more than 65% of the borrowing base. Beginning on August 1, 2017, a non-usage fee equal to 0.25% of the average unfunded amount of the commitment amount over a trailing 12 month period is due on or before August 1st of each year during the term of the amended Credit Facility. The maturity date was extended to May 1, 2019. The costs of $0.1 million associated with the amendment were deferred and are included in other assets, net in our consolidated balance sheets. The Company is amortizing these debt issuance costs to interest expense over the term of the Credit Facility using the straight-line method. During the year ended December 31, 2017, the Company amended the Credit Facility several times for the purpose of adding additional land holdings as collateral to the Credit Facility agreement. On October 27, 2017, the Company amended the Credit Facility to increase the commitment amount from $50.0 million to $75.0 million. This amendment temporarily waived the borrowing base through March 31, 2018, after which the borrowing base is reinstated. During the temporary borrowing base waiver, the Credit Facility is governed by a loan-to-value ratio not to exceed 70%. The commitment amount on the non-usage fee increased from $50.0 million to $75.0 million. Under the terms of the amended Credit Facility, the Company is required, among other things, to maintain minimum multiples of net worth in excess of the outstanding Credit Facility balance, minimum interest coverage and maximum leverage. The Company was in compliance with these financial covenants under the Credit Facility as of December 31, 2017.
The Unsecured Revolving Credit Facility provides for interest rate options on advances at rates equal to either: (a) in the case of base rate advances, the highest of (i) Citibank’s base rate, (ii) the federal funds rate plus 0.5%, and (iii) the one-month LIBOR plus 1.0%, in each case plus 1.5%; or (b) in the case of Eurodollar rate advances, the reserve adjusted LIBOR plus 2.5%. Interest on amounts borrowed under the Unsecured Revolving Credit Facility is payable in arrears quarterly on the last day of each March, June, September and December during such periods. As of December 31, 2017, the interest rate on outstanding borrowings under the Unsecured Revolving Credit Facility was 4.0% per annum. The Company pays the lenders a commitment fee on the amount of the unused commitments on a quarterly basis at a rate per annum equal to 0.45%. Outstanding borrowings under the Unsecured Revolving Credit Facility are subject to, among other things, a borrowing base. The borrowing base limitation is equal to the sum of: 100% of unrestricted cash (in excess of $15.0 million); 85% of the book value of model homes, construction in progress homes, sold completed homes and speculative homes (subject to certain limitations on the age and number of speculative homes and model homes); 65% of the book value of finished lots and land under development; and 50% of the book value of entitled land (subject to certain limitations on the value of entitled land and land under development as a percentage of the borrowing base). On August 31, 2016, the Company entered into a First Amendment to the Credit Agreement (the “First Amendment”), with Flagstar Bank, FSB (“Flagstar Bank”), the lenders named therein, and Citibank, N.A., as administrative agent, which amended the Credit Agreement. The First Amendment added Flagstar Bank as a lender under the Credit Agreement, with an initial commitment of $20.0 million, which increased the aggregate lending commitments available under the Unsecured Revolving Credit Facility from $40.0 million to $60.0 million. The First Amendment also increased the maximum amount of the Unsecured Revolving Credit Facility to a maximum aggregate amount of $110.0 million. On December 1, 2016, the Company, entered into a Second Amendment to the Credit Agreement (the “Second Amendment”), with the lenders named therein, and Citibank, N.A., as administrative agent, which further amended the Credit Agreement. The Second Amendment, among other things, extended the termination date with respect to commitments under the Unsecured Revolving Credit Facility from December 14, 2018 to December 14, 2019. The Second Amendment became effective upon the payment of an upfront fee of 0.15% of the aggregate amount of any extended commitments on December 15, 2016. Additionally, Citibank, N.A. increased its commitment under the Unsecured Revolving Credit Facility from $25.0 million to $35.0 million, which increased the aggregate lending commitments available under the Unsecured Revolving Credit Facility from $60.0 million to $70.0 million. On March 6, 2017, Flagstar Bank increased its commitment under the Unsecured Revolving Credit Facility from $20.0 million to $35.0 million, which increased the aggregate lending commitments available under the Unsecured Revolving Credit Facility from $70.0 million to $85.0 million. The costs of $0.1 million associated with this increase in commitment were deferred and are included in other assets, net in the consolidated balance sheets. The Company is amortizing these debt issuance costs to interest expense over the term of the Unsecured Revolving Credit Facility using the straight-line method. On September 1, 2017, the Company entered into a Third Amendment to the Credit Agreement (the “Third Amendment”), with Flagstar Bank, the lenders named therein, and Citibank, N.A., as administrative agent, which amended the Credit Agreement. Pursuant to the Third Amendment, Flagstar Bank increased its commitment from $35.0 million to $70.0 million and Credit Suisse increased its commitment from $15.0 million to $25.0 million, which increased the aggregate lending commitments available under the Unsecured Revolving Credit Facility from $85.0 million to $130.0 million. The Third Amendment also increased the maximum amount of the Unsecured Revolving Credit Facility from $110.0 million to a maximum aggregate amount of $200.0 million. Further increases are available at the Company’s option, prior to the termination date, subject to certain terms and conditions. In addition, the Third Amendment appoints Flagstar in the roles as the sole lead arranger and administrative agent under the Credit Agreement. The costs of $0.4 million associated with the Third Amendment were deferred and are included in other assets, net in the consolidated balance sheets. The Company is amortizing these debt issuance costs to interest expense over the term of the Unsecured Revolving Credit Facility using the straight-line method. On December 1, 2017, the Company entered into a Fourth Amendment to the Credit Agreement (the “Fourth Amendment”), with the lenders named therein, and Flagstar Bank, as administrative agent, which amended the Credit Agreement. The Fourth Amendment extended the termination date with respect to commitments under the Unsecured Revolving Credit Facility from December 14, 2019 to December 14, 2020. The extension became effective upon the payment of an upfront fee of 0.15% of the aggregate amount of any extended commitments on December 15, 2017. |
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Schedule of Minimum Principal Payments | The approximate annual minimum principal payments over the next five years under the debt agreements as of December 31, 2017 are (in thousands):
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Schedule of Long-term Debt | Notes payable outstanding as of December 31, 2017 and 2016 consist of the following (in thousands):
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Share-Based Compensation (Tables) |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share-based Compensation, Activity | A summary of share-based awards activity during the year ended December 31, 2017 is as follows:
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Summary of Stock Option Activity | A summary of stock option activity during the year ended December 31, 2017 is as follows:
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Summary of Unvested Stock Options Activity | A summary of unvested stock option activity during the year ended December 31, 2017 is as follows:
|
Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Income Tax Expense (Benefit) | The components of current and deferred income tax expense are as follows (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Deferred Tax Assets and Liabilities | The primary differences between the financial statement and tax bases of assets and liabilities are as follows (in thousands):
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Schedule of Effective Tax Rate Reconciliation | The provision for income before income tax provision differs from the amount that would be computed by applying the statutory federal income tax rate of 35% to income before income tax provision as a result of the following (amounts in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Rollforward of Valuation Allowances | The rollforward of valuation allowances is as follows (amounts in thousands):
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Reconciliation of Uncertain Tax Positions | A reconciliation of the beginning and ending amount of uncertain tax positions is as follows (in thousands):
|
Commitments and Contingencies (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Warranty Activity | Warranty activity, included in accrued expenses in our consolidated balance sheets, for 2017, 2016 and 2015 consists of the following (in thousands):
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Schedule of Annual Minimum Operating Lease Payments | The approximate annual minimum lease payments over the next five years under operating leases as of December 31, 2017 are (in thousands):
|
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Schedule of Expected Land and Lot Purchase Payments Under Option Agreements [Table Text Block] | If each option contract in place as of December 31, 2017 was exercised, expected purchase payments would be as follows (in thousands):
|
Segment Information (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information |
|
Quarterly Financial Data (Unaudited) (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summarized Unaudited Quarterly Results of Operations | Summarized unaudited quarterly results of operations for the years ended December 31, 2017 and December 31, 2016 are as follows (in thousands, except per share amounts):
|
Significant Accounting Policies (Schedule of Real Estate Inventory) (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Inventory Disclosure [Abstract] | ||
Capital Leases, Net Investment in Direct Financing Leases, Interest Rate Maximum | 12.00% | |
Completed home inventory and residential lots held for sale | $ 106,043 | $ 127,679 |
Work in process and land under development | 389,612 | 269,255 |
Undeveloped land | 0 | 4,070 |
Land not owned under option contracts | 0 | 9,293 |
Inventory, Real Estate | $ 495,655 | $ 410,297 |
Significant Accounting Policies (Schedule of Real Estate Inventory Capitalized Interest Costs (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Real Estate Inventory, Capitalized Interest Costs [Roll Forward] | |||
Interest capitalized at beginning of year | $ 9,417 | $ 9,085 | $ 3,713 |
Interest incurred | 4,456 | 3,218 | 9,625 |
Interest charged to cost of sales | (3,399) | (2,886) | (3,972) |
Interest charged to interest expense | 0 | 0 | (281) |
Interest capitalized at end of year | $ 10,474 | $ 9,417 | $ 9,085 |
Significant Accounting Policies (Schedule of Basic and Diluted Net Income) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Net income attributable to Green Brick Partners, Inc. per share | |||||||||||
Net income attributable to Green Brick Partners, Inc. | $ (8,196) | $ 9,280 | $ 7,689 | $ 6,197 | $ 7,676 | $ 6,243 | $ 6,743 | $ 3,094 | $ 14,970 | $ 23,756 | $ 15,325 |
Weighted-average number of shares outstanding - basic (in shares) | 49,597 | 48,879 | 40,068 | ||||||||
Basic net income attributable to Green Brick Partners, Inc. per share (in dollars per share) | $ (0.16) | $ 0.19 | $ 0.16 | $ 0.13 | $ 0.16 | $ 0.13 | $ 0.14 | $ 0.06 | $ 0.30 | $ 0.49 | $ 0.38 |
Diluted net income attributable to Green Brick Partners, Inc. per share | |||||||||||
Weighted-average number of shares outstanding - diluted (in shares) | 49,683 | 48,886 | 40,099 | ||||||||
Weighted Average Number Diluted Shares Outstanding Adjustment | 86 | 7 | 30 | ||||||||
Diluted net income attributable to Green Brick Partners, Inc. per share (in dollars per share) | $ (0.16) | $ 0.19 | $ 0.16 | $ 0.13 | $ 0.16 | $ 0.13 | $ 0.14 | $ 0.06 | $ 0.30 | $ 0.49 | $ 0.38 |
Significant Accounting Policies (Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share) (Details) - shares shares in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Accounting Policies [Abstract] | |||
Antidilutive options to purchase common stock | 0 | 144 | 62 |
Property and Equipment (Summary of Property and Equipment) (Details) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 2,053 | $ 1,815 |
Less: accumulated depreciation | (1,249) | (923) |
Total property and equipment, net | 804 | 892 |
Office furniture and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 399 | 333 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 271 | 166 |
Computers and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 903 | 836 |
Field trailers | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 10 | 10 |
Design center | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 470 | $ 470 |
Property and Equipment (Narrative) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Property, Plant and Equipment [Abstract] | |||
Depreciation and amortization expense | $ 0.3 | $ 0.3 | $ 0.3 |
Debt (Schedule of Long-term Debt - Term Loan Facility) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Debt Instrument [Line Items] | |||
Repayments of Secured Debt | $ 0 | $ 0 | $ 150,000 |
Notes payable | $ 9,926 | $ 10,948 | |
Officer [Member] | Restricted Stock [Member] | |||
Debt Instrument [Line Items] | |||
Shares Paid for Tax Withholding for Share Based Compensation | 63,057 |
Debt (Schedule of Long-term Debt - Notes Payable) (Details) - USD ($) $ in Thousands |
1 Months Ended | 12 Months Ended | |||||
---|---|---|---|---|---|---|---|
Sep. 30, 2016 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
Nov. 30, 2016 |
Aug. 19, 2016 |
Dec. 13, 2013 |
|
Debt Instrument [Line Items] | |||||||
Notes payable | $ 9,926 | $ 10,948 | |||||
Repayments of Notes Payable | 1,022 | 1,870 | $ 5,199 | ||||
Notes Payable | Briar Ridge Investments, LTD | |||||||
Debt Instrument [Line Items] | |||||||
Notes payable | 9,000 | 9,000 | |||||
Subsidiary of JBGL | Notes Payable | Briar Ridge Investments, LTD | |||||||
Debt Instrument [Line Items] | |||||||
Stated interest rate | 6.00% | ||||||
Interest Payable | 0 | ||||||
Debt instrument, face amount | $ 9,000 | ||||||
Subsidiary of JBGL | Notes Payable | Wretched Land, LP [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Notes payable | 0 | 713 | |||||
Stated interest rate | 2.00% | ||||||
Debt instrument, face amount | $ 1,400 | ||||||
Repayments of Notes Payable | $ 700 | ||||||
Subsidiary of JBGL | Notes Payable | Graham Mortgage Corporation [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Notes payable | $ 926 | $ 1,235 | $ 1,200 | ||||
Stated interest rate | 3.00% |
Debt (Schedule of Minimum Principal Payments) (Details) $ in Thousands |
Dec. 31, 2017
USD ($)
|
---|---|
Debt Instrument [Line Items] | |
2018 | $ 9,926 |
2019 | 32,000 |
2020 | 75,000 |
Total | 116,926 |
Line of Credit | |
Debt Instrument [Line Items] | |
2018 | 0 |
2019 | 32,000 |
2020 | 75,000 |
Total | 107,000 |
Notes Payable | |
Debt Instrument [Line Items] | |
2018 | 9,926 |
2019 | 0 |
2020 | 0 |
Total | $ 9,926 |
Share-Based Compensation (Summary of Unvested Stock Options Activity) (Details) - $ / shares shares in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2017 |
Dec. 31, 2015 |
|
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares [Roll Forward] | ||
Unvested, beginning balance (in shares) | 300 | |
Granted (in shares) | 0 | |
Vested (in shares) | (100) | |
Forfeited (in shares) | 0 | |
Unvested, ending balance (in shares) | 200 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | ||
Unvested, beginning balance (in dollars per share) | $ 2.88 | |
Granted (in dollars per share) | $ 0.00 | |
Vested (in dollars per share) | 2.88 | |
Forfeited (in dollars per share) | 0.00 | |
Unvested, ending balance (in dollars per share) | $ 2.88 |
Share-Based Compensation (Schedule of Stock Options, Valuation Assumptions) (Details) |
12 Months Ended |
---|---|
Dec. 31, 2015
$ / shares
| |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Weighted Average Per Share Grant Date Fair Value | $ 0.00 |
Employee Benefits (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Retirement Benefits [Abstract] | |||
Company match contribution to 401(k) plan | $ 500 | $ 0 | $ 0 |
Income Taxes (Schedule of Components of Income Tax Expense (Benefit)) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Current expense: | |||
Federal | $ 999 | $ 158 | $ 0 |
State | 1,733 | 2,076 | 819 |
Total current expense | 2,732 | 2,234 | 819 |
Deferred expense: | |||
Federal | 36,569 | 13,146 | 8,412 |
State | (270) | 1 | (60) |
Total deferred expense | 36,299 | 13,147 | 8,352 |
Total income tax provision | $ 39,031 | $ 15,381 | $ 9,171 |
Income Taxes (Narrative) (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Operating Loss Carryforwards [Line Items] | |||
Income tax expense (benefit) related to the Tax Act | $ 19,017,000 | ||
Uncertain income tax positions | 0 | $ 249,000 | $ 0 |
Basis in partnerships | 13,377,000 | 22,922,000 | |
Deferred tax assets | 32,611,000 | 68,902,000 | |
Interest and penalties expense | 0 | 0 | $ 0 |
Accrued expenses | 0 | $ 0 | |
Federal | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carryforward | $ 67,000,000 | ||
Operating loss carryforward, expiration date | Dec. 31, 2029 | ||
Minnesota and Nebraska | State | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carryforward | $ 20,200,000 | ||
Deferred tax assets | 1,300,000 | ||
Valuation allowance | 1,300,000 | ||
Colorado | State | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carryforward | $ 200,000 | ||
Operating loss carryforward, expiration date | Dec. 31, 2028 |
Income Taxes (Schedule of Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|---|
Deferred tax assets: | |||
Accrued bonuses | $ 591 | $ 1,120 | |
Accrued payroll | 75 | 101 | |
Stock-based compensation | 268 | 291 | |
Federal net operating loss carryover | 14,078 | 40,800 | |
State net operating loss carryover | 1,353 | 1,147 | |
Basis in partnerships | 13,377 | 22,922 | |
Warranty accrual | 483 | 444 | |
Inventory (Section 263A) | 944 | 945 | |
Accrued job costs | 178 | 503 | |
Reserve to complete | 91 | 345 | |
Alternative minimum tax credit carryover | 1,145 | 158 | |
Other | 28 | 126 | |
Deferred tax assets, gross | 32,611 | 68,902 | |
Valuation allowance | (1,346) | (1,147) | $ (1,161) |
Deferred tax assets, net | 31,265 | 67,755 | |
Deferred tax liabilities: | |||
Prepaid insurance | (17) | (43) | |
Other | (37) | (114) | |
Deferred tax liabilities | $ (54) | $ (157) |
Income Taxes (Schedule of Effective Tax Rate Reconciliation) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Income Tax Disclosure [Abstract] | |||
Tax on pre-tax book income (before reduction for noncontrolling interests) | $ 22,483 | $ 17,693 | $ 12,151 |
Tax effect of noncontrolled earnings post Transaction | (3,630) | (3,996) | (3,577) |
State tax expense, net | 1,213 | 1,153 | 533 |
Income tax expense (benefit) related to the Tax Act | 19,017 | ||
Change in federal statutory tax rate | 0 | 0 | |
Other | (52) | 531 | 64 |
Total income tax provision | $ 39,031 | $ 15,381 | $ 9,171 |
Effective income tax rate reconciliation, percent | 60.80% | 30.40% | 26.40% |
Income Taxes (Rollforward of Valuation Allowances) (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Valuation allowance at beginning of the year | $ 1,147 | $ 1,161 |
Release of Colorado net operating loss valuation allowance | (8) | 0 |
Change in federal benefit tax rate - deferred | 240 | 0 |
Expiration of state net operating losses | (33) | (14) |
Valuation allowance at end of the year | $ 1,346 | $ 1,147 |
Income Taxes (Uncertain Tax Positions) (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Balance at beginning of period | $ 249 | $ 0 |
Change related to Georgia state income taxes | (249) | (249) |
Balance at end of period | $ 0 | $ 249 |
Fair Value Measurements (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Fair Value Disclosures [Abstract] | ||
Fair value adjustment to assets | $ 100,000.0 | $ 0 |
Fair value adjustment to liabilities | $ 0 | $ 0 |
Commitments and Contingencies (Narrative) (Details) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017
USD ($)
lot
|
Dec. 31, 2016
USD ($)
lot
|
Dec. 31, 2015
USD ($)
|
|
Operating Leased Assets [Line Items] | |||
Letters of credit outstanding | $ 0.2 | $ 0.0 | |
Lots under purchase options | lot | 1,724 | 954 | |
Selling, General and Administrative Expenses | |||
Operating Leased Assets [Line Items] | |||
Rent expense | $ 0.8 | $ 0.7 | $ 0.6 |
Commitments and Contingencies (Schedule of Warranty Activity) (Details) - Accrued Expenses - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Movement in Standard Product Warranty Accrual [Roll Forward] | |||
Beginning balance | $ 1,210 | $ 474 | $ 460 |
Additions | 1,936 | 1,399 | 667 |
Charges | (1,063) | (663) | (653) |
Ending balance | $ 2,083 | $ 1,210 | $ 474 |
Commitments and Contingencies (Schedule of Annual Minimum Operating Lease Payments) (Details) $ in Thousands |
Dec. 31, 2017
USD ($)
|
---|---|
Commitments and Contingencies Disclosure [Abstract] | |
2018 | $ 877 |
2019 | 895 |
2020 | 934 |
2021 | 763 |
2022 and thereafter | 1,025 |
Total | $ 4,494 |
Commitments and Contingencies Commitments and Contingencies (Land and Lot Option Contracts) (Details) $ in Thousands |
Dec. 31, 2017
USD ($)
|
---|---|
Commitments and Contingencies Disclosure [Abstract] | |
2018 | $ 137,548 |
2019 | 47,588 |
2020 | 16,092 |
2021 | 5,765 |
Total expected purchase payments | $ 206,993 |
Subsequent Events Narrative (Details) - USD ($) $ in Thousands |
Mar. 12, 2018 |
Dec. 31, 2017 |
Sep. 01, 2017 |
Mar. 06, 2017 |
Dec. 31, 2016 |
Dec. 01, 2016 |
Aug. 31, 2016 |
---|---|---|---|---|---|---|---|
Subsequent Event [Line Items] | |||||||
Borrowings on lines of credit | $ 107,000 | $ 75,000 | |||||
Flagstar Bank and JP Morgan Chase Bank | Unsecured Debt | Unsecured Revolving Credit Facility | Subsequent Event | |||||||
Subsequent Event [Line Items] | |||||||
Borrowings on lines of credit | $ 30,000 | ||||||
Citibank, N.A., Credit Suisse AG, Cayman Islands Branch, and Flagstar Bank | Unsecured Debt | Unsecured Revolving Credit Facility | |||||||
Subsequent Event [Line Items] | |||||||
Borrowings on lines of credit | $ 130,000 | $ 85,000 | $ 70,000 | $ 60,000 |
Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenues | $ 136,380 | $ 113,706 | $ 104,951 | $ 99,337 | $ 119,764 | $ 91,670 | $ 98,936 | $ 69,958 | $ 454,374 | $ 380,328 | $ 291,145 |
Gross profit | 28,831 | 25,410 | 22,926 | 21,286 | 29,201 | 20,644 | 22,116 | 14,414 | 98,453 | 86,375 | 62,252 |
Net income (loss) attributable to Green Brick Partners, Inc.(1) | $ (8,196) | $ 9,280 | $ 7,689 | $ 6,197 | $ 7,676 | $ 6,243 | $ 6,743 | $ 3,094 | $ 14,970 | $ 23,756 | $ 15,325 |
Net income (loss) attributable to Green Brick Partners, Inc. per common share:(2) | |||||||||||
Basic (in dollars per share) | $ (0.16) | $ 0.19 | $ 0.16 | $ 0.13 | $ 0.16 | $ 0.13 | $ 0.14 | $ 0.06 | $ 0.30 | $ 0.49 | $ 0.38 |
Diluted (in dollars per share) | $ (0.16) | $ 0.19 | $ 0.16 | $ 0.13 | $ 0.16 | $ 0.13 | $ 0.14 | $ 0.06 | $ 0.30 | $ 0.49 | $ 0.38 |
Income tax expense (benefit) related to the Tax Act | $ 19,017 |
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