Green Brick Partners, Inc. [GRBK] Filings

10-Q 1 grbk-20240630.htm 10-K grbk-20240630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from — to —

Commission file number: 001-33530


Green Brick Partners, Inc.

(Exact name of registrant as specified in its charter)

Delaware

20-5952523

(State or other jurisdiction of incorporation)

(IRS Employer Identification Number)

5501 Headquarters Drive, Suite 300W

Plano

75024

(469)

573-6755

(Address of principal executive offices, including Zip Code)

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	GRBK	The New York Stock Exchange
Depositary Shares (each representing a 1/1000th interest in a share of 5.75% Series A Cumulative Perpetual Preferred Stock, par value $0.01 per share)	GRBK PRA	The New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

The number of shares of the Registrant’s common stock outstanding as of July 25, 2024 was 44,496,772.

TABLE OF CONTENTS


PART I		FINANCIAL INFORMATION
	Item 1.	Condensed Consolidated Financial Statements (Unaudited)	1
		Condensed Consolidated Balance Sheets, June 30, 202 4 and December 31, 2023	1
		Condensed Consolidated Statements of Income for the three and six months ended June 30 , 202 4 and 2023	1
		Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three and six months ended June 30, 2024 and 2023	2
		Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2024 and 2023	4
		Notes to Condensed Consolidated Financial Statements	5
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
	Item 4.	Controls and Procedures	32
PART II		OTHER INFORMATION
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33
	Item 5.	Other Information	33
	Item 6.	Exhibits	33
		Signatures	34

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

GREEN BRICK PARTNERS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

(Unaudited)


	June 30, 2024		December 31, 2023
ASSETS
Cash and cash equivalents	$	133,294	$	179,756
Restricted cash	24,882		19,703
Receivables	14,703		10,632
Inventory	1,792,056		1,533,223
Investments in unconsolidated entities	36,557		84,654
Right-of-use assets - operating leases	7,825		7,255
Property and equipment, net	6,975		7,054
Earnest money deposits	14,529		16,619
Deferred income tax assets, net	15,306		15,306
Intangible assets, net	324		367
Goodwill	680		680
Other assets	17,271		27,583
Total assets	$	2,064,402	$	1,902,832
LIABILITIES AND EQUITY
Liabilities:
Accounts payable	$	67,978	$	54,321
Accrued expenses	126,144		96,457
Customer and builder deposits	49,316		43,148
Lease liabilities - operating leases	8,756		7,898
Borrowings on lines of credit, net	(1,921)		(2,328)
Senior unsecured notes, net	311,398		336,207
Notes payable	95		12,981
Total liabilities	561,766		548,684
Commitments and contingencies
Redeemable noncontrolling interest in equity of consolidated subsidiary	38,883		36,135
Equity:
Green Brick Partners, Inc. stockholders’ equity
Preferred stock, $0.01 par value: 5,000,000 shares authorized; 2,000 issued and outstanding as of June 30, 2024 and December 31, 2023, respectively	47,603		47,603
Common stock, $0.01 par value: 100,000,000 shares authorized; 44,897,775 issued and 44,594,451 outstanding as of June 30, 2024 and 45,005,175 issued and outstanding as of December 31, 2023, respectively	449		450
Treasury stock, at cost: 303,324 shares as of June 30, 2024 and none as of December 31, 2023	(17,192)		—
Additional paid-in capital	246,863		255,614
Retained earnings	1,161,512		997,037
Total Green Brick Partners, Inc. stockholders’ equity	1,439,235		1,300,704
Noncontrolling interests	24,518		17,309
Total equity	1,463,753		1,318,013
Total liabilities and equity	$	2,064,402	$	1,902,832

The accompanying notes are an integral part of these condensed consolidated financial statements.

TABLE OF CONTENTS

GREEN BRICK PARTNERS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Residential units revenue	$	547,138	$	454,445	$	990,422	$	904,807
Land and lots revenue	13,493		1,844		17,547		3,543
Total revenues	560,631		456,289		1,007,969		908,350
Cost of residential units	358,183		312,030		653,496		638,154
Cost of land and lots	12,782		1,324		16,550		2,655
Total cost of revenues	370,965		313,354		670,046		640,809
Total gross profit	189,666		142,935		337,923		267,541
Selling, general and administrative expenses	(57,602)		(49,229)		(108,172)		(95,174)
Equity in income of unconsolidated entities	1,186		5,699		3,778		9,920
Other income, net	5,927		4,807		21,281		9,097
Income before income taxes	139,177		104,212		254,810		191,384
Income tax expense	23,896		23,148		48,738		42,179
Net income	115,281		81,064		206,072		149,205
Less: Net income attributable to noncontrolling interests	9,923		5,794		17,413		9,755
Net income attributable to Green Brick Partners, Inc.	$	105,358	$	75,270	$	188,659	$	139,450

Net income attributable to Green Brick Partners, Inc. per common share:
Basic	$	2.34	$	1.64	$	4.18	$	3.02
Diluted	$	2.32	$	1.63	$	4.14	$	3.00
Weighted average common shares used in the calculation of net income attributable to Green Brick Partners, Inc. per common share:
Basic	44,760		45,371		44,826		45,656
Diluted	45,154		45,755		45,277		46,051

The accompanying notes are an integral part of these condensed consolidated financial statements.

TABLE OF CONTENTS

GREEN BRICK PARTNERS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(In thousands, except share data)

(Unaudited)

For the three months ended June 30, 2024 and 2023:


	Common Stock			Preferred Stock			Treasury Stock			Additional Paid-in Capital		Retained Earnings		Total GRBK Stockholders’ Equity		Non controlling Interests		Total Stockholders’ Equity
	Shares	Amount		Shares	Amount		Shares	Amount
Balance at March 31, 2024	45,096,392	$	451	2,000	$	47,603	(71,241)	$	(3,758)	$	259,412	$	1,079,619	$	1,383,327	$	16,364	$	1,399,691
Issuance of common stock under 2014 Omnibus Equity Incentive Plan, net of forfeitures	500,000	5		—	—		—	—		(5)		—		—		—		—
Withholdings from share-based compensation awards	(238,961)	(2)		—	—		—	—		(9,111)		—		(9,113)		—		(9,113)
Amortization of deferred share-based compensation	—	—		—	—		—	—		779		—		779		—		779
Dividends	—	—		—	—		—	—		—		(719)		(719)		—		(719)
Stock repurchases	—	—		—	—		(691,739)	(38,832)		—		—		(38,832)		—		(38,832)
Treasury stock retirement	(459,656)	(5)		—	—		459,656	25,398		(2,647)		(22,746)		—		—		—
Change in fair value of redeemable noncontrolling interest	—	—		—	—		—	—		(1,565)		—		(1,565)		—		(1,565)
Net income	—	—		—	—		—	—		—		105,358		105,358		8,154		113,512
Balance at June 30, 2024	44,897,775	$	449	2,000	$	47,603	(303,324)	$	(17,192)	$	246,863	$	1,161,512	$	1,439,235	$	24,518	$	1,463,753


	Common Stock			Preferred Stock			Treasury Stock			Additional Paid-in Capital		Retained Earnings		Total GRBK Stockholders’ Equity		Non controlling Interests		Total Stockholders’ Equity
	Shares	Amount		Shares	Amount		Shares	Amount
Balance at March 31, 2023	46,211,430	$	462	2,000	$	47,696	467,875	$	(15,351)	$	263,545	$	817,802	$	1,114,154	$	12,448	$	1,126,602
Issuance of common stock under 2014 Omnibus Equity Incentive Plan, net of forfeitures	(29,161)	—		—	—		—	—		—		—		—		—		$	—
Amortization of deferred share-based compensation	—	—		—	—		—	—		462		—		462		—		$	462
Dividends	—	—		—	—		—	—		—		(719)		(719)		—		(719)
Stock repurchases	—	—		—	—		335,716	(12,640)		—		—		(12,640)		—		(12,640)
Treasury stock retirement	(803,591)	(8)		—	—		(803,591)	27,991		(4,592)		(23,391)		—		—		—
Change in fair value of redeemable noncontrolling interest	—	—		—	—		—	—		(2,450)		—		(2,450)		—		(2,450)
Net income	—	—		—	—		—	—		—		75,270		75,270		3,700		78,970
Balance at June 30, 2023	45,378,678	$	454	2,000	$	47,696	—	$	—	$	256,965	$	868,962	$	1,174,077	$	16,148	$	1,190,225

The accompanying notes are an integral part of these condensed consolidated financial statements.

TABLE OF CONTENTS

GREEN BRICK PARTNERS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(In thousands, except share data) (Unaudited)

For the six months ended June 30, 2024 and 2023:


	Common Stock			Preferred Stock			Treasury Stock			Additional Paid-in Capital		Retained Earnings		Total GRBK Stockholders’ Equity		Non controlling Interests		Total Stockholders’ Equity
	Shares	Amount		Shares	Amount		Shares	Amount
Balance at December 31, 2023	45,005,175	$	450	2,000	$	47,603	—	$	—	$	255,614	$	997,037	$	1,300,704	$	17,309	$	1,318,013
Issuance of common stock under 2014 Omnibus Equity Incentive Plan, net of forfeitures	636,777	6		—	—		—	—		5,843		—		5,849		—		5,849
Withholdings from share-based compensation awards	(284,521)	(2)		—	—		—	—		(11,274)		—		(11,276)		—		(11,276)
Amortization of deferred share-based compensation	—	—		—	—		—	—		1,292		—		1,292		—		1,292
Dividends	—	—		—	—		—	—		—		(1,438)		(1,438)		—		(1,438)
Stock repurchases		—		—	—		(762,980)	(42,590)		—		—		(42,590)		—		(42,590)
Treasury stock retirement	(459,656)	(5)		—	—		459,656	25,398		(2,647)		(22,746)		—				—
Change in fair value of redeemable noncontrolling interest	—	—		—	—		—	—		(1,965)		—		(1,965)		—		(1,965)
Distributions	—	—		—	—		—	—		—		—		—		(6,785)		(6,785)
Net income	—	—		—	—		—	—		—		188,659		188,659		13,994		202,653
Balance at June 30, 2024	44,897,775	$	449	2,000	$	47,603	(303,324)	$	(17,192)	$	246,863	$	1,161,512	$	1,439,235	$	24,518	$	1,463,753


	Common Stock			Preferred Stock			Treasury Stock			Additional Paid-in Capital		Retained Earnings		Total GRBK Stockholders’ Equity		Non controlling Interests		Total Stockholders’ Equity
	Shares	Amount		Shares	Amount		Shares	Amount
Balance at December 31, 2022	46,032,930	$	460	2,000	$	47,696	—	$	—	$	259,410	$	754,341	$	1,061,907	$	20,908	$	1,082,815
Issuance of common stock under 2014 Omnibus Equity Incentive Plan, net of forfeitures	209,196	3		—	—		—	—		5,230		—		5,233		—		5,233
Withholdings from vesting of restricted stock awards	(59,857)	(1)		—	—		—	—		(1,975)		—		(1,976)		—		(1,976)
Amortization of deferred share-based compensation	—	—		—	—		—	—		1,029		—		1,029		—		1,029
Dividends	—	—		—	—		—	—		—		(1,438)		(1,438)		—		(1,438)
Stock repurchases	—	—		—	—		803,591	(27,991)		—		—		(27,991)		—		(27,991)
Treasury stock retirement	(803,591)	(8)		—	—		(803,591)	27,991		(4,592)		(23,391)		—		—		—
Change in fair value of redeemable noncontrolling interest	—	—		—	—		—	—		(2,137)		—		(2,137)		—		(2,137)
Distributions	—	—		—	—		—	—		—		—		—		(11,056)		(11,056)
Net income	—	—		—	—		—	—		—		139,450		139,450		6,296		145,746
Balance at June 30, 2023	45,378,678	$	454	2,000	$	47,696	—	$	—	$	256,965	$	868,962	$	1,174,077	$	16,148	$	1,190,225

The accompanying notes are an integral part of these condensed consolidated financial statements.

TABLE OF CONTENTS

GREEN BRICK PARTNERS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


	Six Months Ended June 30,
	2024		2023
Cash flows from operating activities:
Net income	$	206,072	$	149,205
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense	2,375		1,584
Loss (gain) on disposal of property and equipment, net	71		(146)
Share-based compensation expense	7,144		5,966
Equity in income of unconsolidated entities	(3,778)		(9,920)
Allowances for option deposits and pre-acquisition costs	12		47
Gain on sale of investment in unconsolidated entity	(10,718)		—
Distributions of income from unconsolidated entities	2,121		7,324
Changes in operating assets and liabilities:
Increase in receivables	(4,071)		(1,769)
(Increase) decrease in inventory	(258,236)		18,938
Decrease in earnest money deposits	2,090		7,773
Decrease in other assets	10,589		888
Increase in accounts payable	13,657		5,660
Increase in accrued expenses	29,683		10,479
Increase in customer and builder deposits	6,168		14,139
Net cash provided by operating activities	3,179		210,168
Cash flows from investing activities:
Proceeds from sale of investment in unconsolidated entity	63,960		—
Investments in unconsolidated entities	(3,488)		(4,980)
Purchase of property and equipment, net of disposals	(2,324)		(2,852)
Net cash provided by (used in) investing activities	58,148		(7,832)
Cash flows from financing activities:
Borrowings from lines of credit	—		22,000
Repayments of lines of credit	—		(42,000)
Repayments of senior unsecured notes	(25,000)		—
Proceeds from notes payable	—		63
Repayments of notes payable	(12,884)		(95)
Payments of debt issuance costs	—		(72)
Payments of withholding tax on vesting of restricted stock awards	(11,276)		(1,975)
Repurchases of common stock	(42,590)		(27,991)
Dividends paid	(1,438)		(1,438)
Distributions to redeemable noncontrolling interest	(2,637)		(1,840)
Distributions to noncontrolling interests	(6,785)		(11,056)
Net cash used in financing activities	(102,610)		(64,404)
Net (decrease) increase in cash and cash equivalents and restricted cash	(41,283)		137,932
Cash and cash equivalents and restricted cash, beginning of period	199,459		93,270
Cash and cash equivalents and restricted cash, end of period	$	158,176	$	231,202
Supplemental disclosure of cash flow information:
Cash paid for income taxes, net of refunds	$	27,716	$	39,071

The accompanying notes are an integral part of these condensed consolidated financial statements.

TABLE OF CONTENTS

GREEN BRICK PARTNERS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed 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”), but do not include all of the information and footnotes required for complete financial statements. The condensed consolidated balance sheet as of December 31, 2023 was derived from the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. In the opinion of management, the accompanying unaudited condensed consolidated financial statements for the periods presented reflect all adjustments of a normal, recurring nature necessary to fairly state our financial position, results of operations and cash flows. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

Operating results for the three and six months ended June 30, 2024 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2024 or subsequent periods due to seasonal variations and other factors.

Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements include the accounts of Green Brick Partners, Inc., its controlled subsidiaries, (together, the “Company”, “we”, or “Green Brick”) and variable interest entities (“VIEs”) in which Green Brick Partners, Inc. or one of its controlled subsidiaries is deemed to be the primary beneficiary.

All intercompany balances and transactions have been eliminated in consolidation.

The Company uses the equity method of accounting for its investments in unconsolidated entities over which it exercises significant influence but does not have a controlling interest. Under the equity method, the Company’s share of the unconsolidated entities’ earnings or losses, if any, is included in the condensed consolidated statements of income.

Use of Estimates

The preparation of the condensed consolidated financial statements in conformity with GAAP requires management of the Company to make estimates and assumptions that affect the amounts reported in the condensed 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 condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates.

For a complete set of the Company’s significant accounting policies, refer to Note 1 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

Recent Accounting Pronouncements

Changes to U.S. GAAP are established by the FASB in the form of Accounting Standard Updates (“ASUs”) to the FASB ASC. We consider the applicability and impact of all ASUs and any not listed below were assessed and determined to be not applicable or are not expected to have a material impact on our consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09 (“ASU 2023-09”) Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 requires public companies to annually disclose specific categories in the income tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income or loss by the applicable statutory income tax rate). ASU 2023-09 will be effective for the annual reporting periods in fiscal years beginning after December 15, 2024. The Company is currently evaluating ASU 2023-09 and does not expect it to have a material effect on the Company’s consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07, “Improvements to Reportable Segment Disclosures” (“ASU 2023-07”). ASU 2023-07 requires disclosure of (i) significant segment expenses that are regularly provided to the chief

TABLE OF CONTENTS

operating decision maker (“CODM”) and included within the segment measure of profit or loss, (ii) an amount and description of its composition for other segment items to reconcile to segment profit or loss, and (iii) the title and position of the entity’s CODM. ASU 2023-07 will be applied retrospectively and is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company is currently reviewing the impact that the adoption of ASU 2023-07 may have on its Consolidated Financial Statements and disclosures.

2. INVENTORY

A summary of inventory is as follows (in thousands):


	June 30, 2024		December 31, 2023
Homes completed or under construction	$	646,153	$	559,488
Land and lots - developed and under development	1,123,602		921,241
Land held for future development(1)	14,946		48,991
Land held for sale	7,355		3,503
Total inventory	$	1,792,056	$	1,533,223

(1)Land held for future development consists of raw land parcels where development activities have been postponed due to market conditions or other factors. All applicable carrying costs, including property taxes, are expensed as incurred.

As of June 30, 2024, the Company reviewed the performance and outlook for all of its communities and land inventory for indicators of potential impairment and performed detailed impairment analysis when such indicators were identified. As of June 30, 2024, one selling community had an indicator of impairment. The Company estimated the remaining undiscounted cash flows for this community and determined its carrying value of $20.9 million does not exceed the community’s fair value. For the three and six months ended June 30, 2024 and 2023, the Company did not record an impairment adjustment to reduce the carrying value of communities or land inventory to fair value.

A summary of interest costs incurred, capitalized and expensed is as follows (in thousands):


	Three Months Ended June 30,						Six Months Ended June 30,
	2024			2023			2024		2023
Interest capitalized at beginning of period	$	24,893		$	22,847		$	24,126	$	22,752
Interest incurred	3,472			3,624			6,923		7,367
Interest charged to cost of revenues	(3,131)			(3,872)			(5,815)		(7,520)
Interest capitalized at end of period	$	25,234		$	22,599		$	25,234	$	22,599

Capitalized interest as a percentage of inventory	1.4		%	1.6		%

3. INVESTMENT IN UNCONSOLIDATED ENTITIES

A summary of the Company’s investments in unconsolidated entities is as follows (in thousands):


	June 30, 2024		December 31, 2023
GB Challenger, LLC(1)	$	—	$	52,666
GBTM Sendera, LLC	20,804		19,866
EJB River Holdings, LLC	12,156		10,867
Rainwater Crossing Single-Family, LLC	2,550		—
BHome Mortgage, LLC	1,047		1,255
Total investment in unconsolidated entities	$	36,557	$	84,654

(1)Effective February 1, 2024, the Company sold its ownership interest in GB Challenger, LLC for approximately $64.0 million in cash.

TABLE OF CONTENTS

Sale of GB Challenger Ownership Interest

Effective February 1, 2024, the Company sold its ownership interest in GB Challenger, LLC (“Challenger”) to the entity that already held the controlling interest in Challenger for approximately $64.0 million in cash. A gain on this sale of $10.7 million is included in other income, net in the condensed consolidated statements of income.

Rainwater Crossing Single-Family, LLC Joint Venture

On February 15, 2024, a wholly owned subsidiary of the Company established a joint venture (“JV”), Rainwater Crossing Single-Family, LLC (“Rainwater Crossing”), with Rainwater Single Family S-CORP to develop a tract of land in Celina, Texas. Both parties hold a 50% ownership interest in Rainwater Crossing. The Company evaluated the JV agreements and determined that it has a variable interest in this entity, but the Company is not its primary beneficiary. Specifically, the Company determined that it does not direct the activities that most significantly impact the entity’s economic performance as key decisions are subject to the approval of a management committee where both members are equally represented. Therefore, the Company’s investment in Rainwater Crossing is treated as an unconsolidated investment under the equity method of accounting and is included in investments in unconsolidated entities in the Company’s condensed consolidated balance sheets.

As of June 30, 2024, the Company’s maximum exposure to loss as a result from its involvement with Rainwater Crossing was approximately $22.4 million, representing its $2.6 million investment and the Company’s remaining commitment to contribute to the joint venture $15.0 million in quarterly payments through March 31, 2029 and $4.8 million upon the joint venture’s initial land contribution. The Company will also fund the development costs related to this project.

A summary of the unaudited condensed financial information of the unconsolidated entities as of June 30, 2024 and December 31, 2023 that are accounted for by the equity method is as follows (in thousands):


	June 30, 2024		December 31, 2023
Assets:
Cash	$	6,099	$	23,549
Accounts receivable	561		4,207
Bonds and notes receivable	19,363		2,838
Loans held for sale, at fair value	7,328		7,452
Inventory	66,787		182,550
Other assets	570		6,425
Total assets	$	100,708	$	227,021
Liabilities:
Accounts payable	$	3,653	$	7,151
Accrued expenses and other liabilities	2,594		10,265
Notes payable	27,573		49,701
Total liabilities	33,820		67,117
Owners’ equity:
Green Brick	34,681		80,968
Others	32,207		78,936
Total owners’ equity	66,888		159,904
Total liabilities and owners’ equity	$	100,708	$	227,021


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Revenues	$	8,078	$	74,747	$	37,817	$	133,070
Costs and expenses	5,680		63,420		30,187		113,146
Net earnings of unconsolidated entities	$	2,398	$	11,327	$	7,630	$	19,924
Company’s share in net earnings of unconsolidated entities	$	1,186	$	5,699	$	3,778	$	9,920

TABLE OF CONTENTS

A summary of the Company’s share in net earnings by unconsolidated entity is as follows (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
GB Challenger, LLC(1)	$	—	$	4,487	$	929	$	7,512
EJB River Holdings, LLC	520		571		1,290		1,074
BHome Mortgage, LLC	666		641		1,559		1,334
Total net earnings from unconsolidated entities	$	1,186	$	5,699	$	3,778	$	9,920

(1)Effective February 1, 2024, the Company sold its ownership interest in GB Challenger, LLC for approximately $64.0 million in cash.

4. ACCRUED EXPENSES

A summary of the Company’s accrued expenses is as follows (in thousands):


	June 30, 2024		December 31, 2023
Real estate development reserve to complete(1)	$	30,698	$	26,063
Warranty reserve	27,139		23,474
Federal income tax payable(2)	17,994		—
Accrued property tax payable	10,460		5,003
Accrued compensation	14,637		14,960
Other accrued expenses	25,216		26,957
Total accrued expenses	$	126,144	$	96,457

(1)The Company’s real estate development reserve to complete consists of estimated future costs to complete the development of its communities.

(2)On May 28, 2024, the Internal Revenue Service (IRS) announced tax relief for individuals and businesses in certain Texas counties that were affected by severe weather on April 26, 2024. For the affected taxpayers, the IRS extended the due date to November 1, 2024 for any estimated income tax payments due on or after April 26, 2024.

Warranties

Warranty accruals are included within accrued expenses on the condensed consolidated balance sheets. Warranty activity during the three and six months ended June 30, 2024 and 2023 consisted of the following (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Warranty accrual, beginning of period	$	25,116	$	19,532	$	23,474	$	17,945
Warranties issued	3,373		2,876		6,126		4,921
Changes in liability for existing warranties	53		(82)		251		551
Payments made	(1,403)		(1,502)		(2,712)		(2,593)
Warranty accrual, end of period	$	27,139	$	20,824	$	27,139	$	20,824

TABLE OF CONTENTS

5. DEBT

Lines of Credit

Borrowings on lines of credit outstanding, net of debt issuance costs, as of June 30, 2024 and December 31, 2023 consisted of the following (in thousands):


	June 30, 2024		December 31, 2023
Secured Revolving Credit Facility	$	—	$	—
Unsecured Revolving Credit Facility	—		—
Debt issuance costs, net of amortization	(1,921)		(2,328)
Total borrowings on lines of credit, net	$	(1,921)	$	(2,328)

Secured Revolving Credit Facility

The Company is party to a revolving credit facility (the “Secured Revolving Credit Facility”) with Inwood National Bank, which provides for an aggregate commitment amount of $35.0 million. The Secured Revolving Credit Facility matures on May 1, 2025 and it carries a minimum interest rate of 3.15%. The entire unpaid principal balance and any accrued but unpaid interest is due and payable on the maturity date.

As of June 30, 2024 there were no letters of credit outstanding under our Secured Revolving Credit Facility and the net available commitment amount was $35.0 million.

Unsecured Revolving Credit Facility

The Company is party to a credit agreement, providing for a senior, unsecured revolving credit facility (the “Unsecured Revolving Credit Facility”). On December 8, 2023, the Company entered into the Eleventh Amendment to this credit agreement which was amended to revise certain financial covenants in order to appropriately reflect the Company’s size and growth. The Eleventh Amendment also extends the maturity of $300.0 million of the commitments under the credit facility through December 14, 2026, with the remaining $25.0 million commitment expiring December 14, 2025.

The Unsecured Revolving Credit Facility is guaranteed on an unsecured senior basis by the Company’s significant subsidiaries and certain other subsidiaries.

Senior Unsecured Notes

Senior unsecured notes, net of debt issuance costs, as of June 30, 2024 and December 31, 2023 consisted of the following (in thousands):


	June 30, 2024		December 31, 2023
4.00% senior unsecured notes due in 2026 (“2026 Notes”)	$	75,000	$	75,000
3.35% senior unsecured notes due in 2027 (“2027 Notes”)	37,500		37,500
3.25% senior unsecured notes due in 2028 (“2028 Notes”)	100,000		125,000
3.25% senior unsecured notes due in 2029 (“2029 Notes”)	100,000		100,000
Debt issuance costs, net of amortization	(1,102)		(1,293)
Total senior unsecured notes, net	$	311,398	$	336,207

The Senior Unsecured Notes are guaranteed on an unsecured senior basis by the Company’s significant subsidiaries and certain other subsidiaries. Optional prepayment of each of the Senior Unsecured Notes is allowed with a payment of a “make-whole” penalty which fluctuates depending on market interest rates. Interest is payable quarterly in arrears.

2026 Notes

Principal on the 2026 Notes is required to be paid in increments of $12.5 million on August 8, 2024 and $12.5 million on August 8, 2025. The final principal payment of $50.0 million is due on August 8, 2026.

TABLE OF CONTENTS

2027 Notes

The aggregate principal amount of the 2027 Notes is due on August 26, 2027.

2028 Notes

Principal on the 2028 Notes is due in increments of $25.0 million annually on February 25 in each of 2025, 2026, 2027, and 2028.

2029 Notes

Principal on the 2029 Notes of $30.0 million is due on December 28, 2028 and the remaining principal amount of $70.0 million is due on December 28, 2029.

Our debt instruments require us to maintain specific financial covenants, each of which we were in compliance with as of June 30, 2024.

6. REDEEMABLE NONCONTROLLING INTEREST

The Company has a noncontrolling interest attributable to the 20% minority interest in GRBK GHO Homes, LLC (“GRBK GHO”) owned by its Florida-based partner that is included as redeemable noncontrolling interest in equity of consolidated subsidiary in the Company’s condensed consolidated financial statements.

On March 23, 2023, the Company and the minority partner amended the operating agreement of GRBK GHO to change the start of the put and purchase options from April 2024 to April 2027. Refer to Note 2 in the Notes to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 for details on the put/call structure of this agreement.

The following tables show the changes in redeemable noncontrolling interest in equity of consolidated subsidiary during the three and six months ended June 30, 2024 and 2023 (in thousands):


	Three Months Ended June 30,
	2024		2023
Redeemable noncontrolling interest, beginning of period	$	38,186	$	30,291
Net income attributable to redeemable noncontrolling interest partner	1,769		2,094
Distributions of income to redeemable noncontrolling interest partner	(2,637)		(1,840)
Change in fair value of redeemable noncontrolling interest	1,565		2,450
Redeemable noncontrolling interest, end of period	$	38,883	$	32,995


	Six Months Ended June 30,
	2024		2023
Redeemable noncontrolling interest, beginning of period	$	36,135	$	29,239
Net income attributable to redeemable noncontrolling interest partner	3,420		3,459
Distributions of income to redeemable noncontrolling interest partner	(2,637)		(1,840)
Change in fair value of redeemable noncontrolling interest	1,965		2,137
Redeemable noncontrolling interest, end of period	$	38,883	$	32,995

TABLE OF CONTENTS

7. STOCKHOLDERS’ EQUITY

2022 Share Repurchase Program

During the six month period ended June 30, 2024, the Company completed discrete open market repurchases under the 2022 Repurchase Plan of 65,481 shares for approximately $3.4 million, excluding excise tax. The Company completed the repurchases under the 2022 Repurchase Plan on March 15, 2024. The repurchased shares were subsequently retired.

2023 Share Repurchase Program

On April 27, 2023, the Board approved a new stock repurchase program (the “2023 Repurchase Plan”) that authorizes the Company to purchase, from time to time, up to an additional $100.0 million of our outstanding common stock through open market repurchases in compliance with Rule 10b-18 under the Securities Exchange Act of 1924, as amended (the “Exchange Act”) and/or in privately negotiated transactions based on market and business conditions, applicable legal requirements and other factors. Shares repurchased will be retired. The 2023 Repurchase Plan has no time deadline and will continue until otherwise modified, completed, or terminated by the Board at any time in its sole discretion.

During the three and six months ended June 30, 2024, the Company repurchased 691,739 and 697,499 shares, respectively, for approximately $38.4 million and $38.7 million, excluding excise tax. As of June 30, 2024, the remaining dollar value of shares that may be repurchased under the 2023 Repurchase Plan was $61.3 million, excluding excise tax. As of June 30, 2024, 459,656 of the repurchased shares were retired.

Preferred Stock

The table below presents a summary of the perpetual preferred stock outstanding at June 30, 2024 and December 31, 2023.

Series

Description

Initial date of issuance

Total Shares Outstanding(1)

Liquidation Preference per Share (in dollars)

Carrying Value (in thousands)

Per Annum Dividend Rate

Redemption Period

Series A(1)

5.75% Cumulative Perpetual

December 2021

2,000

50,000

5.75

n/a

(1) Ownership is held in the form of Depositary Shares, each representing a 1/1,000th interest in a share of preferred stock, paying a quarterly cash dividend, if and when declared.

Dividends

Dividends paid on our Series A preferred stock were $0.7 million and $1.4 million for each of the three and six months ended June 30, 2024 and 2023.

On July 22, 2024, the Board declared a quarterly cash dividend of $0.359 per depositary share on the Company’s preferred stock. The dividend is payable on September 15, 2024 to stockholders of record as of September 1, 2024.

8. SHARE-BASED COMPENSATION

The 2014 Omnibus Equity Incentive Plan and the 2024 Omnibus Incentive Plan, are administered by the Board and allow for the grant of stock awards (“SAs”), restricted stock awards (“RSAs”), performance restricted stock units (“PRSUs”), restricted stock units (RSUs), stock options and other stock based awards.

2024 Omnibus Incentive Plan

On June 11, 2024, the 2024 Omnibus Incentive Plan was approved by the stockholders of the Company. As of June 11, 2024, no further awards may be made under the Green Brick Partners, Inc. 2014 Omnibus Equity Incentive Plan.

TABLE OF CONTENTS

Share-Based Award Activity

During the six months ended June 30, 2024, the Company granted SAs to executive officers, RSAs to non-employee members of the Board, and PRSUs to employees. The SAs granted to the executive officers were 100% vested and non-forfeitable on the grant date. Non-vested stock awards are usually granted with a one-year vesting for non-employee directors, two-year cliff vesting for employee RSAs, and three-year cliff vesting for PRSUs. The fair value of all share awards were recorded as share-based compensation expense on the grant date and over the vesting period, respectively. Stock options were also exercised by an executive officer during the three months ended June 30, 2024. The Company withheld 284,521 shares of common stock from executive officers and employees at a total cost of $11.3 million, to satisfy statutory minimum tax requirements upon grant of the SAs, vesting of RSAs, and exercise of stock options.

A summary of share-based awards activity during the six months ended June 30, 2024 is as follows:


	Number of Shares (in thousands)	Weighted Average Grant Date Fair Value per Share

Unvested, December 31, 2023	92	$	33.56
Granted	172	$	51.75
Vested	(149)	$	46.69
Forfeited	(1)	$	36.44
Unvested, June 30, 2024	114	$	43.77

Stock Options

A summary of stock options activity during the six months ended June 30, 2024 is as follows:


	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, 2023	500	$	7.49	0.82	$	22,225
Granted	—	—		—	—
Exercised	(500)	7.49		—	23,160
Forfeited	—	—		—	—
Options outstanding, June 30, 2024	—	$	—	—	$	—
Options exercisable, June 30, 2024	—	$	—	—	$	—

Share-Based Compensation Expense

Share-based compensation expense was $0.8 million and $0.5 million for the three months ended June 30, 2024 and 2023, respectively. For the six months ended June 30, 2024 and 2023, share-based compensation expense was $7.1 million and $6.0 million, respectively.

As of June 30, 2024, the estimated total remaining unamortized share-based compensation expense related to unvested RSAs and PRSUs, net of forfeitures, was $3.2 million which is expected to be recognized over a weighted-average period of 1.9 years.

TABLE OF CONTENTS

9. REVENUE RECOGNITION

Disaggregation of Revenue

The following reflects the disaggregation of revenue by primary geographic market, type of customer, product type, and timing of revenue recognition for the three and six months ended June 30, 2024 and 2023 (in thousands):


	Three Months Ended June 30, 2024				Three Months Ended June 30, 2023
	Residential units revenue		Land and lots revenue		Residential units revenue		Land and lots revenue
Primary Geographical Market
Central	$	389,168	$	13,493	$	322,154	$	1,844
Southeast	157,970		—		132,291		—
Total revenues	$	547,138	$	13,493	$	454,445	$	1,844

Type of Customer
Homebuyers	$	547,138	$	—	$	454,445	$	—
Homebuilders and Multi-family Developers	—		13,493		—		1,844
Total revenues	$	547,138	$	13,493	$	454,445	$	1,844

Product Type
Residential units	$	547,138	$	—	$	454,445	$	—
Land and lots	—		13,493		—		1,844
Total revenues	$	547,138	$	13,493	$	454,445	$	1,844

Timing of Revenue Recognition
Transferred at a point in time	$	546,948	$	13,493	$	454,136	$	1,844
Transferred over time(1)	190		—		309		—
Total revenues	$	547,138	$	13,493	$	454,445	$	1,844

(1) Revenue recognized over time represents revenue from mechanic’s lien contracts.

TABLE OF CONTENTS


	Six Months Ended June 30, 2024				Six Months Ended June 30, 2023
	Residential units revenue		Land and lots revenue		Residential units revenue		Land and lots revenue
Primary Geographical Market
Central	$	704,405	$	17,547	$	666,618	$	3,543
Southeast	286,017		—		238,189		—
Total revenues	$	990,422	$	17,547	$	904,807	$	3,543

Type of Customer
Homebuyers	$	990,422	$	—	$	904,807	$	—
Homebuilders and Multi-family Developers	—		17,547		—		3,543
Total revenues	$	990,422	$	17,547	$	904,807	$	3,543

Product Type
Residential units	$	990,422	$	—	$	904,807	$	—
Land and lots	—		17,547		—		3,543
Total revenues	$	990,422	$	17,547	$	904,807	$	3,543

Timing of Revenue Recognition
Transferred at a point in time	$	990,042	$	17,547	$	903,566	$	3,543
Transferred over time(1)	380		—		1,241		—
Total revenues	$	990,422	$	17,547	$	904,807	$	3,543

(1) Revenue recognized over time represents revenue from mechanic’s lien contracts.

Contract Balances

Opening and closing contract balances included in customer and builder deposits on the condensed consolidated balance sheets are as follows (in thousands):


	June 30, 2024		December 31, 2023
Customer and builder deposits	$	49,316	$	43,148

The difference between the opening and closing balances of customer and builder deposits results from the timing difference between the customers’ payments of deposits and the Company’s delivery of the home, impacted slightly by terminations of contracts.

The amount of deposits on residential units and land and lots held as of the beginning of the period and recognized as revenue during the three and six months ended June 30, 2024 and 2023 are as follows (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Homebuyer deposits recognized as revenue	$	21,064	$	15,595	$	30,640	$	21,329

Transaction Price Allocated to the Remaining Performance Obligations

The aggregate amount of transaction price allocated to the remaining performance obligations on our land sale and lot option contracts is $6.4 million. The Company will recognize the remaining revenue when the lots are taken down, or upon closing for the sale of a land parcel. The Company expects to recognize revenue of $5.8 million in the remainder of 2024 and $0.6 million in 2025.

TABLE OF CONTENTS

The timing of lot takedowns is contingent upon a number of factors, including customer and business needs, the number of lots being purchased, receipt of acceptance of the plat by the municipality, weather-related delays, and agreed-upon lot takedown schedules.

Our contracts with homebuyers have a duration of less than one year. As such, the Company uses the practical expedient as allowed under ASC 606, Revenue from Contracts with Customers, and therefore has not disclosed the transaction price allocated to remaining performance obligations as of the end of the reporting period.

10. SEGMENT INFORMATION

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. Financial information related to the Company’s reportable segments is as follows (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Revenues: (1)
Builder operations
Central	$	389,168	$	322,154	$	704,515	$	666,618
Southeast	157,970		132,291		286,017		238,189
Total builder operations	547,138		454,445		990,532		904,807
Land development	13,493		1,844		17,437		3,543
Total revenues	$	560,631	$	456,289	$	1,007,969	$	908,350

Gross profit:
Builder operations
Central	$	142,534	$	107,878	$	252,200	$	210,283
Southeast	57,431		45,868		105,522		79,197
Total builder operations	199,965		153,746		357,722		289,480
Land development	775		858		1,080		1,546
Corporate, other and unallocated (2)	(11,074)		(11,669)		(20,879)		(23,485)
Total gross profit	$	189,666	$	142,935	$	337,923	$	267,541

Income before income taxes:
Builder operations
Central	$	104,803	$	74,800	$	180,324	$	142,817
Southeast	41,417		32,494		76,211		54,765
Total builder operations	146,220		107,294		256,535		197,582
Land development	1,542		1,140		2,015		1,915
Corporate, other and unallocated (3)	(8,585)		(4,222)		(3,740)		(8,113)
Income before income taxes	$	139,177	$	104,212	$	254,810	$	191,384

TABLE OF CONTENTS


	June 30, 2024		December 31, 2023
Inventory:
Builder operations
Central	$	677,930	$	645,987
Southeast	333,065		314,087
Total builder operations	1,010,995		960,074
Land development	733,274		529,711
Corporate, other and unallocated (4)	47,787		43,438
Total inventory	$	1,792,056	$	1,533,223

Goodwill:
Builder operations - Southeast	$	680	$	680

(1)The sum of Builder operations Central and Southeast segments’ revenues does not equal residential units revenue included in the condensed consolidated statements of income in periods when our builders have revenues from land or lot closings. Land and lot closings revenue were $13.5 million and $17.5 million for the three and six months ended June 30, 2024 and $1.8 million and $3.5 million for the three and six months ended June 30, 2023, respectively.

(2)Corporate, other and unallocated gross loss is comprised of capitalized overhead and capitalized interest adjustments that are not allocated to builder operations and land development segments.

(3)Corporate, other and unallocated income (loss) before income taxes includes results from Green Brick Title, LLC, Ventana Insurance, LLC, and investments in unconsolidated subsidiaries, in addition to capitalized cost adjustments that are not allocated to operating segments.

(4)Corporate, other and unallocated inventory consists of capitalized overhead and interest related to homes under construction and land under development.

11. INCOME TAXES

Green Brick Partners, Inc. [GRBK] Filings
Green Brick Partners, Inc. [GRBK-PA] Filings
10-Q	[2024-07-31]
10-Q	[2024-05-01]
10-K	[2024-02-29]
10-Q	[2023-10-31]
10-Q	[2023-08-02]
10-Q	[2023-05-03]
10-K	[2023-02-27]
10-Q	[2022-11-02]
10-Q	[2022-08-03]
10-Q	[2022-05-03]
10-K	[2022-03-01]
10-Q	[2021-11-02]
10-Q	[2021-08-03]
10-Q	[2021-05-04]
10-K	[2021-03-08]
10-Q	[2020-10-29]
10-Q	[2020-08-04]
10-Q	[2020-05-11]
10-K	[2020-03-06]
10-Q	[2019-11-08]
10-Q	[2019-08-08]
10-Q	[2019-05-06]
10-K	[2019-03-08]
10-Q	[2018-11-05]
10-Q	[2018-08-06]
10-Q	[2018-05-07]
10-K	[2018-03-12]
10-Q	[2017-11-06]
10-Q	[2017-08-07]
10-Q	[2017-05-08]
10-K	[2017-03-13]
10-Q	[2016-11-07]
10-Q	[2016-08-08]
10-Q	[2016-05-09]
10-K	[2016-03-30]
10-Q	[2015-11-12]
10-Q	[2015-08-12]
10-Q	[2015-05-13]
10-K	[2015-03-31]
10-Q	[2014-10-22]
10-Q	[2014-07-29]
S-1	[2014-07-16]
10-Q	[2014-05-08]
10-K	[2014-03-26]
10-Q	[2013-11-12]
10-Q	[2013-08-13]
10-Q	[2013-05-14]
10-K	[2013-04-01]
10-Q	[2012-11-14]
10-Q	[2012-08-10]
10-Q	[2012-05-11]
10-K	[2012-03-16]

Green Brick Partners, Inc. [GRBK] Filings

Green Brick Partners, Inc. [GRBK-PA] Filings