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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 March 31, 2022

or
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)
Delaware20-5952523
(State or other jurisdiction of incorporation)(IRS Employer Identification Number)
2805 Dallas Pkwy,Ste 400
Plano,TX75093(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 classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.01 per share
GRBKThe 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 PRAThe 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 (or for such shorter period that the registrant was required to file such reports), 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 April 29, 2022 was 48,429,623.


TABLE OF CONTENTS
FINANCIAL INFORMATION
Item 1.
Item 2.
Item 4.
OTHER INFORMATION
Item 2.
Item 6.



PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
GREEN BRICK PARTNERS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data) (Unaudited)
March 31, 2022December 31, 2021
ASSETS
Cash and cash equivalents$66,083 $78,696 
Restricted cash14,152 14,858 
Receivables7,050 6,871 
Inventory1,327,509 1,203,743 
Investments in unconsolidated entities58,127 55,616 
Right-of-use assets - operating leases4,215 4,596 
Property and equipment, net2,617 2,812 
Earnest money deposits24,744 26,008 
Deferred income tax assets, net15,741 15,741 
Intangible assets, net516 537 
Goodwill680 680 
Other assets7,223 11,709 
Total assets$1,528,657 $1,421,867 
LIABILITIES AND EQUITY
Liabilities:
Accounts payable$56,899 $45,682 
Accrued expenses89,558 61,351 
Customer and builder deposits63,618 64,610 
Lease liabilities - operating leases4,415 4,745 
Borrowings on lines of credit, net19,421 (738)
Senior unsecured notes, net335,538 335,446 
Notes payable14,668 210 
Total liabilities584,117 511,306 
Commitments and contingencies
Redeemable noncontrolling interest in equity of consolidated subsidiary22,179 21,867 
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 March 31, 2022 and December 31 2021, respectively47,696 47,696 
Common stock, $0.01 par value: 100,000,000 shares authorized; 51,245,206 and 51,151,911 issued and 49,660,230 and 50,759,972 outstanding as of March 31, 2022 and December 31, 2021, respectively512 512 
Treasury stock, at cost, 1,584,976 and 391,939 shares as of March 31, 2022 and December 31, 2021, respectively(28,968)(3,167)
Additional paid-in capital292,155 289,641 
Retained earnings600,788 539,866 
Total Green Brick Partners, Inc. stockholders’ equity912,183 874,548 
Noncontrolling interests10,178 14,146 
Total equity922,361 888,694 
Total liabilities and equity$1,528,657 $1,421,867 
The accompanying notes are an integral part of these condensed consolidated financial statements.
1

GREEN BRICK PARTNERS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
Three Months Ended March 31,
20222021
Residential units revenue$364,661 $217,236 
Land and lots revenue28,955 17,243 
Total revenues393,616 234,479 
Cost of residential units263,430 162,072 
Cost of land and lots21,830 13,418 
Total cost of revenues285,260 175,490 
Total gross profit108,356 58,989 
Selling, general and administrative expenses(34,265)(29,488)
Equity in income of unconsolidated entities5,687 3,891 
Other income, net2,855 1,870 
Income before income taxes82,633 35,262 
Income tax expense18,437 7,501 
Net income64,196 27,761 
Less: Net income attributable to noncontrolling interests2,619 1,792 
Net income attributable to Green Brick Partners, Inc.$61,577 $25,969 
Net income attributable to Green Brick Partners, Inc. per common share:
Basic$1.20 $0.51 
Diluted$1.20 $0.51 
Weighted average common shares used in the calculation of net income attributable to Green Brick Partners, Inc. per common share:
Basic50,586 50,633 
Diluted50,924 50,993 
The accompanying notes are an integral part of these condensed consolidated financial statements.

2

GREEN BRICK PARTNERS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(In thousands, except share data)
(Unaudited)
For the three months ended March 31, 2022 and 2021:
Common StockPreferred StockTreasury StockAdditional Paid-in CapitalRetained EarningsTotal Green Brick Partners, Inc. Stockholders’ EquityNon
controlling Interests
Total Stockholders’ Equity
SharesAmountSharesAmountSharesAmount
Balance at December 31, 202151,151,911 $512 2,000 $47,696 (391,939)$(3,167)$289,641 $539,866 $874,548 $14,146 $888,694 
Issuance of common stock under 2014 Omnibus Equity Incentive Plan139,710 1 — — — — 2,751 — 2,752 — 2,752 
Withholdings from vesting of restricted stock awards(46,415)(1)— — — — (1,074)— (1,075)— (1,075)
Dividends— — — — — — — (655)(655)— (655)
Stock repurchases— — — — (1,193,037)(25,801)— — (25,801)— (25,801)
Amortization of deferred share-based compensation— — — — — — 280 — 280 — 280 
Change in fair value of redeemable noncontrolling interest— — — — — — 557 — 557 — 557 
Distributions— — — — — — — — — (5,718)(5,718)
Net income— — — — — — — 61,577 61,577 1,750 63,327 
Balance at March 31, 202251,245,206 $512 2,000 $47,696 (1,584,976)$(28,968)$292,155 $600,788 $912,183 $10,178 $922,361 

Common StockTreasury StockAdditional Paid-in CapitalRetained EarningsTotal Green Brick Partners, Inc. Stockholders’ EquityNon
controlling Interests
Total Stockholders’ Equity
SharesAmountSharesAmount
Balance at December 31, 202051,053,858 $511 (391,939)$(3,167)$293,242 $349,656 $640,242 $9,167 $649,409 
Issuance of common stock under 2014 Omnibus Equity Incentive Plan111,675 1 — — 2,436 — 2,437 — 2,437 
Withholdings from vesting of restricted stock awards(41,318)(1)— — (833)— (834)— (834)
Amortization of deferred share-based compensation— — — — 146 — 146 — 146 
Change in fair value of redeemable noncontrolling interest— — — — (1,829)— (1,829)— (1,829)
Net income— — — — — 25,969 25,969 1,463 27,432 
Balance at March 31, 202151,124,215 $511 (391,939)$(3,167)$293,162 $375,625 $666,131 $10,630 $676,761 

The accompanying notes are an integral part of these condensed consolidated financial statements.
3

GREEN BRICK PARTNERS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands) (Unaudited)
Three Months Ended March 31,
20222021
Cash flows from operating activities:
Net income$64,196 $27,761 
Adjustments to reconcile net income to net cash (used in) provided by operating activities:    
Depreciation and amortization expense625 841 
Loss on disposal of property and equipment, net39 10 
Share-based compensation expense2,923 2,583 
Equity in income of unconsolidated entities(5,687)(3,891)
Allowances for option deposits and pre-acquisition costs59 43 
Distributions of income from unconsolidated entities3,176 1,886 
Changes in operating assets and liabilities:  
Increase in receivables(179)(2,337)
Increase in inventory(123,429)(76,034)
Decrease (increase) in earnest money deposits1,265 (1,009)
Decrease (increase) in other assets4,476 (106)
Increase in accounts payable11,217 14,479 
Increase in accrued expenses28,317 9,819 
(Decrease) increase in customer and builder deposits(992)17,942 
Net cash used in operating activities(13,994)(8,013)
Cash flows from investing activities:
Investments in unconsolidated entities (9)
Purchase of property and equipment, net of disposals(448)(740)
Net cash used in investing activities(448)(749)
Cash flows from financing activities:  
Borrowings from lines of credit112,000 108,000 
Borrowings from senior unsecured notes 125,000 
Repayments of lines of credit(92,000)(211,000)
Proceeds from notes payable14,472  
Repayments of notes payable(14)(2,006)
Payments of debt issuance costs (86)(595)
Payments of withholding tax on vesting of restricted stock awards(1,075)(834)
Stock repurchases(25,801)— 
Dividends paid(655) 
Distributions to noncontrolling interests(5,718) 
Net cash provided by financing activities1,123 18,565 
Net (decrease) increase in cash and cash equivalents and restricted cash(13,319)9,803 
Cash and cash equivalents, beginning of period78,696 19,479 
Restricted cash, beginning of period14,858 14,156 
Cash and cash equivalents and restricted cash, beginning of period93,554 33,635 
Cash and cash equivalents, end of period66,083 28,688 
Restricted cash, end of period14,152 14,750 
Cash and cash equivalents and restricted cash, end of period$80,235 $43,438 




4

GREEN BRICK PARTNERS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands) (Unaudited)
Supplemental disclosure of cash flow information:
Cash paid for income taxes, net of refunds$25 $ 

The accompanying notes are an integral part of these condensed consolidated financial statements. 
5

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, 2021 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, 2021. 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, 2021.

Operating results for the three months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2022 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, and variable interest entities (“VIEs”) in which Green Brick Partners, Inc. or one of its controlled subsidiaries is deemed to be the primary beneficiary (together, the “Company”, “we”, or “Green Brick”).

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.

Reclassifications
Certain prior period amounts have been reclassified to conform to the current period presentation with no impact to net income in any period.

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, 2021. 

Recent Accounting Pronouncements
Changes to U.S. GAAP are established by the Financial Accounting Standards Board (“FASB”) through Accounting Standards Updates (“ASU”) to the FASB Accounting Standards Codification (“ASC”). The Company considers the applicability and impact of all ASUs and has determined that any recently adopted accounting pronouncements did not have a material impact on the Company's condensed consolidated financial statements and all recent accounting pronouncements not yet adopted are not applicable or are not expected to have a material impact on the Company's condensed consolidated financial statements.

6

2. INVENTORY

A summary of inventory is as follows (in thousands):
March 31, 2022December 31, 2021
Homes completed or under construction$601,504 $544,258 
Land and lots - developed and under development718,411 620,129 
Land held for sale7,594 39,356 
Total inventory$1,327,509 $1,203,743 

A summary of interest costs incurred, capitalized and expensed is as follows (in thousands):
Three Months Ended March 31,
20222021
Interest capitalized at beginning of period$19,950 $17,520 
Interest incurred3,734 2,851 
Interest charged to cost of revenues(2,933)(1,991)
Interest capitalized at end of period$20,751 $18,380 
Capitalized interest as a percentage of inventory1.6 %2.0 %

As of March 31, 2022, the Company reviewed the performance and outlook for all of its communities for indicators of potential impairment and performed detailed impairment analysis when necessary. As of March 31, 2022, the Company did not identify any selling communities with indicators of impairment. For the three months ended March 31, 2022 and 2021, the Company did not record an impairment adjustment to reduce the carrying value of impaired communities to fair value.

3. INVESTMENT IN UNCONSOLIDATED ENTITIES

A summary of the Company’s investments in unconsolidated entities is as follows (in thousands):
March 31, 2022December 31, 2021
GB Challenger, LLC$39,532 $37,737 
GBTM Sendera, LLC9,854 9,854 
EJB River Holdings, LLC6,868 6,130 
BHome Mortgage, LLC1,041 1,180 
Green Brick Mortgage, LLC832 715 
Total investment in unconsolidated entities $58,127 $55,616 

7

A summary of the unaudited condensed financial information of the five unconsolidated entities that are accounted for by the equity method is as follows (in thousands):
March 31, 2022December 31, 2021
Assets:
Cash$20,218 $15,903 
Accounts receivable4,609 4,787 
Bonds and notes receivable5,762 5,772 
Loans held for sale, at fair value18,277 20,734 
Inventory167,999 166,861 
Other assets12,375 7,220 
Total assets$229,240 $221,277 
Liabilities:
Accounts payable$12,547 $7,701 
Accrued expenses and other liabilities15,051 13,992 
Notes payable92,617 95,816 
Total liabilities$120,215 $117,509 
Owners’ equity:
Green Brick$55,508 $52,983 
Others53,517 50,785 
Total owners’ equity$109,025 $103,768 
Total liabilities and owners’ equity$229,240 $221,277 
Three Months Ended March 31,
20222021
Revenues$70,636 $39,721 
Costs and expenses59,197 31,951 
Net earnings of unconsolidated entities$11,439 $7,770 
Company’s share in net earnings of unconsolidated entities$5,687 $3,891 

A summary of the Company’s share in net earnings (losses) by unconsolidated entity is as follows (in thousands):
Three Months Ended March 31,
20222021
GB Challenger, LLC$4,067 $2,750 
EJB River Holdings, LLC738 (1)
BHome Mortgage, LLC554 71 
Green Brick Mortgage, LLC328 1,088 
GBTM Sendera, LLC— (17)
Total net earnings from unconsolidated entities$5,687 $3,891 

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4. DEBT

Lines of Credit
Borrowings on lines of credit outstanding, net of debt issuance costs, as of March 31, 2022 and December 31, 2021 consisted of the following (in thousands):
March 31, 2022December 31, 2021
Secured Revolving Credit Facility $ $2,000 
Unsecured Revolving Credit Facility22,000  
Debt issuance costs, net of amortization(2,579)(2,738)
Total borrowings on lines of credit, net$19,421 $(738)

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. On February 9, 2022, the Company entered into the Eighth Amendment to this credit agreement to extend its maturity from May 1, 2022 to May 1, 2025 and to reduce the minimum interest rate from 4.00% to 3.15%. All other material terms of the credit agreement, as amended, remained unchanged. The entire unpaid principal balance and any accrued but unpaid interest is due and payable on the maturity date. As of March 31, 2022, the maturity date of the Secured Revolving Credit Facility is May 1, 2025.

As of March 31, 2022, there were no letters of credit outstanding and a net available commitment amount of $35.0 million.

The Company incurred $0.1 million in fees and other debt issuance costs associated with the amendment. These costs were deferred and reduce the carrying amount of debt on our condensed consolidated balance sheet.

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”). The Unsecured Revolving Credit Facility provides for maximum aggregate lending commitments of up to $325.0 million of which the Company has secured outstanding commitments of $300.0 million. On December 10, 2021, the Company amended the Unsecured Revolving Credit Facility to increase the aggregate commitment amount from $275.0 million to $300.0 million. The termination date with respect to commitments under the Unsecured Revolving Credit Facility is December 14, 2024.

As of March 31, 2022, the interest rate on outstanding borrowings under the Unsecured Revolving Credit Facility was 2.85% per annum.

Senior Unsecured Notes
On August 8, 2019, the Company entered into a Note Purchase Agreement with Prudential Private Capital to issue $75.0 million aggregate principal amount of senior unsecured notes (the “2026 Notes”) due on August 8, 2026 at a fixed rate of 4.00% per annum in a Section 4(a)(2) private placement transaction. The Company received net proceeds of $73.3 million and incurred debt issuance costs of approximately $1.7 million that were deferred and reduced the amount of debt on our condensed balance sheet. The Company used the net proceeds from the issuance of the 2026 Notes to repay borrowings under the Company’s existing revolving credit facilities. 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. Optional prepayment is allowed with payment of a “make-whole” penalty which fluctuates depending on market interest rates. Interest is payable quarterly in arrears commencing on November 8, 2019.

On August 26, 2020, the Company entered into a Note Purchase Agreement with The Prudential Insurance Company of America and Prudential Universal Reinsurance Company to issue $37.5 million aggregate principal amount of senior unsecured notes (the “2027 Notes”) due on August 26, 2027 at a fixed rate of 3.35% per annum in a Section 4(a)(2) private placement transaction. The Company received net proceeds of $37.4 million and incurred debt issuance costs of approximately $0.1 million that were deferred and reduced the amount of debt on our condensed consolidated balance sheet. The Company used the net proceeds from the issuance of the 2027 Notes to repay borrowings under the Company’s existing revolving credit facilities and for general corporate purposes. Optional prepayment is allowed with payment of a “make-whole” penalty which fluctuates depending on market interest rates. Interest is payable quarterly in arrears commencing on November 26, 2020.

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On February 25, 2021, the Company entered into a Note Purchase Agreement with several purchasers to issue $125.0 million aggregate principal amount of senior unsecured notes (the “2028 Notes”) due on May 25, 2028 at a fixed rate of 3.25% per annum in a Section 4(a)(2) private placement transaction. The Company received net proceeds of $124.4 million and incurred debt issuance costs of approximately $0.6 million that were deferred and reduced the amount of debt on our condensed consolidated balance sheet. The Company used the net proceeds from the issuance of the 2028 Notes to repay borrowings under the Company’s existing revolving credit facilities and for general corporate purposes. Principal on the 2028 Notes is due in increments of $25.0 million on February 25, 2024; $25.0 million on February 25, 2025; $25.0 million on February 25, 2026; $25.0 million on February 25, 2027 and $25.0 million on February 25, 2028. Optional prepayment is allowed with payment of a “make-whole” penalty which fluctuates depending on market interest rates. Interest is payable quarterly in arrears commencing on May 25, 2021.

On December 28, 2021, the Company entered into a Note Purchase Agreement with several purchasers to issue $100.0 million aggregate principal amount of senior unsecured notes (the “2029 Notes”) due on December 28, 2029 at a fixed rate of 3.25% per annum in a Section 4(a)(2) private placement transaction. The Company received net proceeds of $99.6 million and incurred debt issuance costs of approximately $0.4 million that were deferred and reduced the amount of debt on our condensed consolidated balance sheet. The Company used the net proceeds from the issuance of the 2029 Notes to repay borrowings under the Company’s existing revolving credit facilities and for general corporate purposes. Principal on the 2029 Notes of $30.0 million is due on December 28, 2028. The remaining principal amount of $70.0 million is due on December 29, 2029. Optional prepayment is allowed with payment of a “make-whole” penalty which fluctuates depending on market interest rates. Interest is payable quarterly in arrears commencing on March 28, 2022.

Notes payable
On February 7, 2022, a subsidiary of the Company entered into a Promissory Note agreement with another homebuilder for $28.8 million in connection with the acquisition of a tract of land in Bastrop County, Texas. The Company agreed to pay $14.4 million per the governing Joint Ownership and Development Agreement. The Promissory Note matures on February 7, 2024 and it carries an annual fixed rate of 0.6%.

5. REDEEMABLE NONCONTROLLING INTEREST

Redeemable Noncontrolling Interest in Equity of Consolidated Subsidiaries
The Company has a noncontrolling interest attributable to the 20% minority interest in GRBK GHO Homes, LLC (“GRBK GHO”) owned by our Florida-based partner that is included as redeemable noncontrolling interest in equity of consolidated subsidiary in the Company’s condensed consolidated financial statements.
The following tables show the changes in redeemable noncontrolling interest in equity of consolidated subsidiary during the three months ended March 31, 2022 and 2021 (in thousands):
Three Months Ended March 31,
20222021
Redeemable noncontrolling interest, beginning of period$21,867 $13,543 
Net income attributable to redeemable noncontrolling interest partner869 329 
Change in fair value of redeemable noncontrolling interest(557)1,829 
Redeemable noncontrolling interest, end of period$22,179 $15,701 

6. STOCKHOLDERS’ EQUITY

2021 Share Repurchase Program
On March 1, 2021, the Company’s Board of Directors (the “Board”) authorized a new $50.0 million stock repurchase program (the “Repurchase Plan”). The Repurchase Plan authorizes the Company to purchase from time to time on or prior to December 31, 2022, up to $50.0 million of our outstanding common stock through open market repurchases in compliance with Rule 10b-18 under the Exchange Act and/or in privately negotiated transactions at management’s discretion based on market
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and business conditions, applicable legal requirements and other factors. Shares repurchased can be retired. The Repurchase Plan may be modified or terminated by our Board at any time in its sole discretion.

During the period ended March 31, 2022, the Company completed discrete open market repurchases under the Repurchase Plan of 1,193,037 shares for approximately $25.8 million. As of March 31, 2022, the remaining dollar value of shares that may yet be purchased under the Repurchase Plan was $24.2 million.

2022 Share Repurchase Program
On April 27,2022, the Board approved a new stock repurchase program 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 Exchange Act and/or in privately negotiated transactions at management’s discretion based on market and business conditions, applicable legal requirements and other factors. Shares repurchased will be retired. The new plan has no time deadline and will continue until otherwise modified or terminated by the Company’s board at any time in its sole discretion.

Preferred Stock
The table below presents a summary of the perpetual preferred stock outstanding at March 31, 2022 and December 31, 2021.
Series DescriptionInitial date of issuanceTotal Shares Outstanding Liquidation Preference per Share (in dollars)Carrying Value (in thousands)Per Annum Dividend RateRedemption Period
Series A(1)
5.75% Cumulative PerpetualDecember 20212,000 $25 $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
According to the terms of the preferred stock offering, the Company will pay cumulative cash dividends on the Series A Preferred Stock, when and as declared by the Board, on a quarterly basis in arrears. On April 27, 2022, the Board declared a quarterly cash dividend of $0.0359 per depositary share on the Company’s preferred stock. The dividend is payable on June 15, 2022 to shareholders of record as of June 1, 2022.

Preferred share dividends paid totaled $0.7 million and $0.0 million for the three months ended March 31, 2022 and 2021, respectively.

7. SHARE-BASED COMPENSATION

Share-Based Award Activity
During the three months ended March 31, 2022, the Company granted stock awards (“SAs”) under its 2014 Omnibus Equity Incentive Plan to executive officers (“EOs”). The SAs granted to the EOs were 100% vested and non-forfeitable on the grant date. The fair value of the SAs granted to EOs was recorded as share-based compensation expense on the grant date. The Company withheld 46,415 shares of common stock from EOs, at a total cost of $1.1 million, to satisfy statutory minimum tax requirements upon grant of the SAs.

2021 Employee Stock Awards
On March 1, 2021, the Company’s Board of Directors approved an incentive program for eligible employees to participate in the Company’s new Employee Performance Based Restricted Stock Awards Plan (the “PBRS Award Plan”). This plan is being offered pursuant to the Company’s 2014 Omnibus Equity Incentive Plan. The Company incurred de minimis share-based
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compensation expense and compensation expense related to these awards during the three months ended March 31, 2022 and 2021, respectively.

2022 Employee Stock Awards
On March 1, 2022, the Company’s Board of Directors approved the issuance of restricted stock awards for eligible employees in accordance with the PBRS Award Plan. The Company incurred de minimis compensation expense related to these awards during the three months ended March 31, 2022.

A summary of share-based awards activity during the three months ended March 31, 2022 is as follows:
Number of SharesWeighted Average Grant Date Fair Value per Share
 (in thousands)
Nonvested, December 31, 202128 $23.21 
Granted140 $22.08 
Vested(126)$21.94 
Forfeited $ 
Nonvested, March 31, 202242 $23.23 

Stock Options
A summary of stock options activity during the three months ended March 31, 2022 is as follows:
Number of SharesWeighted Average Exercise Price per ShareWeighted Average Remaining Contractual TermAggregate Intrinsic Value
 (in thousands)(in years)(in thousands)
Options outstanding, December 31, 2021500 $7.49 
Granted 
Exercised  
Forfeited  
Options outstanding, March 31, 2022500 $7.49 2.58$6,135 
Options exercisable, March 31, 2022500 $7.49 2.58$6,135 

Share-Based Compensation Expense
Share-based compensation expense was $2.9 million and $2.6 million for the three months ended March 31, 2022 and 2021, respectively. Recognized tax benefit related to share-based compensation expense was $0.7 million and $0.6 million for the three months ended March 31, 2022 and 2021, respectively.

As of March 31, 2022, the estimated total remaining unamortized share-based compensation expense related to unvested Restricted Stock Awards (“RSAs”), net of forfeitures, was $0.4 million, which is expected to be recognized over a weighted-average period of 1.5 years.

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8. 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 months ended March 31, 2022 and 2021 (in thousands):

Three Months Ended March 31, 2022Three Months Ended March 31, 2021
Residential units revenueLand and lots revenueResidential units revenueLand and lots revenue
Primary Geographical Market
Central$261,698 $28,861 $157,378 $8,417 
Southeast102,963 94 59,858 8,826 
Total revenues$364,661 $28,955 $217,236 $17,243 
Type of Customer
Homebuyers$364,661 $ $217,236 $ 
Homebuilders and Multi-family Developers 28,955  17,243 
Total revenues$364,661 $28,955 $217,236 $17,243 
Product Type
Residential units$364,661 $ $217,236 $ 
Land and lots 28,955  17,243 
Total revenues$364,661 $28,955 $217,236 $17,243 
Timing of Revenue Recognition
Transferred at a point in time$363,063 $28,955 $216,134 $17,243 
Transferred over time1,598  1,102  
Total revenues$364,661 $28,955 $217,236 $17,243 

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):
March 31, 2022December 31, 2021
Customer and builder deposits$63,618 $64,610 

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 performance, impacted slightly by terminations of contracts.

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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 months ended March 31, 2022 and 2021 are as follows (in thousands):
Three Months Ended March 31,
20222021
Type of Customer
Homebuyers$20,795 $6,616 
Homebuilders and Multi-Family Developers100 1,109 
Total deposits recognized as revenue$20,895 $7,725 

Performance Obligations
There was no revenue recognized during the three months ended March 31, 2022 and 2021 from performance obligations satisfied in prior periods.

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 $24.1 million. The Company will recognize the remaining revenue when the lots are taken down, or upon closing for the sale of a land parcel, which is expected to occur as follows (in thousands):
Total
Remainder of 2022$17,949 
20236,163 
2024 
Total$24,112 

The timing of lot takedowns is contingent upon a number of factors, including customer 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.

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9. 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.
Three Months Ended March 31,
(in thousands)20222021
Revenues: (1)
Builder operations
Central$261,698 $158,386 
Southeast103,057 68,684 
Total builder operations364,755 227,070 
Land development28,861 7,409 
Total revenues$393,616 $234,479 
Gross profit:
Builder operations
Central$84,064 $43,889 
Southeast25,776 19,049 
Total builder operations109,840 62,938 
Land development7,414 1,780 
Corporate, other and unallocated (2)
(8,898)(5,729)
Total gross profit$108,356 $58,989 
Income before income taxes:
Builder operations
Central$59,485 $24,858 
Southeast15,494 10,163 
Total builder operations74,979 35,021 
Land development7,585 1,844 
Corporate, other and unallocated (3)
69 (1,603)
Income before income taxes$82,633 $35,262 
March 31, 2022December 31, 2021
Inventory:
Builder operations
Central$489,094 $460,796 
Southeast283,475 258,759 
Total builder operations772,569 719,555 
Land development517,892 449,654 
Corporate, other and unallocated (4)
37,048 34,534 
Total inventory$1,327,509 $1,203,743 
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
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lot closings, which for the three months ended March 31, 2022 were $0.1 million, compared to $9.8 million for the three months ended March 31, 2021.
(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, C Brick 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 work in process and land under development.

10. INCOME TAXES

The Company’s income tax expense for the three months ended March 31, 2022 was $18.4 million, compared to $7.5 million in the three months ended March 31, 2021. The effective tax rate was 22.3% for the three months ended March 31, 2022, compared to 21.3% in the comparable prior year period. The change in the effective tax rate for the three months ended March 31, 2022 relates primarily to the increase in book income offset by a decrease in the tax credit benefit from the enactment of the Taxpayer Certainty and Disaster Tax Relief Act of 2019 (“the 2019 Act”). The 2019 Act retroactively reinstated the federal energy efficient homes tax credit that expired on December 31, 2017 to homes closed from January 1, 2018 to December 31, 2020. In December 2020, Congress approved the Taxpayer Certainty and Disaster Tax Relief Act of 2020, which extended the federal energy efficient homes tax credit through December 31, 2021. As of March 31, 2022, the credit for energy efficient new homes had not been extended past December 31, 2021.

11. EARNINGS PER SHARE

The Company’s RSAs 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 common share is computed by dividing net income allocated to common shareholders by the weighted average number of common shares outstanding during each period, adjusted for non-vested shares of restricted stock awards during each period. Net income applicable to common shareholders is net income adjusted for preferred stock dividends including dividends declared and cumulative dividends related to the current dividend period that have not been declared as of period end. 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 is as follows (in thousands, except per share amounts):
Three Months Ended March 31,
20222021
Net income attributable to Green Brick Partners, Inc.$61,577 $25,969 
Preferred stock dividends paid(599) 
Cumulative preferred stock dividends(120) 
Net income applicable to common shareholders60,858 25,969 
Weighted-average number of common shares outstanding - basic50,586 50,633 
Basic net income attributable to Green Brick Partners, Inc. per common share$1.20 $0.51 
Weighted-average number of common shares outstanding - basic50,586 50,633 
Dilutive effect of stock options and restricted stock awards338 360 
Weighted-average number of common shares outstanding - diluted50,924 50,993 
Diluted net income attributable to Green Brick Partners, Inc. per common share$1.20 $0.51 

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The following shares which 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):
Three Months Ended March 31,
20222021
Antidilutive options to purchase common stock and restricted stock awards29  

12. FAIR VALUE MEASUREMENTS

Fair Value of Financial Instruments
The Company’s financial instruments, none of which are held for trading purposes, include cash and cash equivalents, restricted cash, receivables, earnest money deposits, other assets, accounts payable, accrued expenses, customer and builder deposits, borrowings on lines of credit, senior unsecured notes, and contingent consideration liability.

Per the fair value hierarchy, level 1 financial instruments include: cash and cash equivalents, restricted cash, receivables, earnest money deposits, other assets, accounts payable, accrued expenses, and customer and builder deposits due to their short-term nature. 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 level 1 financial instruments does not differ materially from the aggregate carrying values recorded in the condensed consolidated financial statements as of March 31, 2022 and December 31, 2021.

Level 2 financial instruments include borrowings on lines of credit and senior unsecured notes. Due to the short-term nature and floating interest rate terms, the carrying amounts of borrowings on lines of credit are deemed to approximate fair value. The estimated fair value of the senior unsecured notes as of March 31, 2022 was $329.1 million. The carrying value of senior unsecured notes as of March 31, 2022 was $337.5 million.

There were no transfers between the levels of the fair value hierarchy for any of our financial instruments during the three months ended March 31, 2022.

13. RELATED PARTY TRANSACTIONS

During the three months ended March 31, 2022 and 2021, the Company had the following related party transactions in the normal course of business.

Corporate Officers
Trevor Brickman, the son of Green Brick’s Chief Executive Officer, is the President of CLH20, LLC (“Centre Living”). Green Brick’s ownership interest in Centre Living is 90% and Trevor Brickman’s ownership interest is 10%. Green Brick has 90% voting control over the operations of Centre Living. As such, 100% of Centre Living’s operations are included within our condensed consolidated financial statements.

GRBK GHO
GRBK GHO leases office space from entities affiliated with the president of GRBK GHO. During the three months ended March 31, 2022 and 2021, GRBK GHO incurred de minimis rent expense under such lease agreements. As of March 31, 2022 and December 31, 2021, there were no amounts due to the affiliated entities related to such lease agreements.
    
GRBK GHO receives title closing services on the purchase of land and third-party lots from an entity affiliated with the president of GRBK GHO. During the three months ended March 31, 2022 and 2021, GRBK GHO incurred de minimis fees related to such title closing services. As of March 31, 2022, and December 31, 2021, no amounts were due to the title company affiliate.

14. COMMITMENTS AND CONTINGENCIES

Letters of Credit and Performance Bonds
During the ordinary course of business, certain regulatory agencies and municipalities require the Company to post letters of credit or performance bonds related to development projects. As of March 31, 2022 and December 31, 2021, letters of credit
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and performance bonds outstanding were $1.5 million and $1.7 million, respectively. The Company does not believe that it is likely that any material claims will be made under a letter of credit or performance bond in the foreseeable future.

Warranties
Warranty accruals are included within accrued expenses on the condensed consolidated balance sheets. Warranty activity during the three months ended March 31, 2022 and 2021 consisted of the following (in thousands):
Three Months Ended March 31,
20222021
Warranty accrual, beginning of period$9,378 $6,407 
Warranties issued1,814 1,100 
Changes in liability for existing warranties295 39 
Settlements(874)(685)
Warranty accrual, end of period$10,613 $6,861 

Operating Leases
The Company has leases associated with office and design center space in Georgia, Texas, and Florida that, at the commencement date, have a lease term of more than 12 months and are classified as operating leases. The exercise of any extension options available in such operating lease contracts is not reasonably certain.
Operating lease cost of $0.4 million for the three months ended March 31, 2022, and $0.3 million in the prior year period, is included in selling, general and administrative expenses in the condensed consolidated statements of income. Cash paid for amounts included in the measurement of operating lease liabilities was $0.4 million and $0.3 million, for the three months ended March 31, 2022 and 2021.
As of March 31, 2022, the weighted-average remaining lease term and the weighted-average discount rate used in calculating our lease liabilities were 4.7 years and 4.1%, respectively.
The future annual undiscounted cash flows in relation to the operating leases and a reconciliation of such undiscounted cash flows to the operating lease liabilities recognized in the condensed consolidated balance sheet as of March 31, 2022 are presented below (in thousands):
Remainder of 2022$1,158 
20231,306 
2024507 
2025517 
2026504 
Thereafter864 
Total future lease payments$4,856 
Less: Interest441 
Present value of lease liabilities$4,415 
The Company elected the short-term lease recognition exemption for all leases that, at the commencement date, have a lease term of 12 months or less and do not include an option to purchase the underlying asset that the Company is reasonably certain to exercise. For such leases, the Company does not recognize right-of-use assets or lease liabilities and instead recognizes lease payments in the condensed consolidated income statements on a straight-line basis. Short-term lease cost of $0.2 million and $0.2 million for the three months ended March 31, 2022 and 2021, respectively, is included in selling, general and administrative expenses in the condensed consolidated statements of income.

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, title company regulations, 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.

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The Company records an accrual for 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.


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FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements concern expectations, beliefs, projections, plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts and typically include the words “anticipate,” “believe,” “consider,” “estimate,” “expect,” “feel,” “forecast,” “intend,” “objective,” “plan,” “predict,” “projection,” “seek,” “strategy,” “target,” “will” or other words of similar meaning. Forward-looking statements in this Quarterly Report include statements concerning (1) our balance sheet strategies, operational strength and margin performance; (2) our operational goals and strategies and their anticipated benefits; (3) our expectations that we will continue to experience increases in cost and decreased availability of skilled labor as well as increases, shortages and significant extensions to our lead time for the delivery of key materials and inputs and the financial impact of such factors on our future financial and operational results; (4) expectations regarding our industry and our business; (5) our land and lot acquisition strategy and its impact on our results; (6) the sufficiency of our capital resources to support our business strategy and to service our debt; (7) the impact of new accounting standards and changes in accounting estimates; (8) expectations about the impact of sales metering and increases in spec homes will have on future financial results; (9) expectations about backlog and cancellation rates on future financial results; (10) our strategy to utilize leverage to invest in our business; (11) seasonal factors and the impact of seasonality in future quarters; (12) our expectations regarding future cash needs and access to additional growth capital; and (13) beliefs regarding the impact of legal claims and related contingencies. These forward-looking statements reflect our current views about future events and involve estimates and assumptions which may be affected by risks and uncertainties in our business, as well as other external factors, which could cause future results to materially differ from those expressed or implied in any forward-looking statement. These risks include, but are not limited to: (1) changes in macroeconomic conditions, including increasing interest rates and inflation that could adversely impact demand for new homes or the ability of potential buyers to qualify; (2) general economic conditions, seasonality, cyclicality and competition in the homebuilding industry; (3) shortages, delays or increased costs of raw materials and increased demand for materials, or increases in other operating costs, including costs related to labor, real estate taxes and insurance, which in each case exceed our ability to increase prices; (4) a shortage of labor; (5) an inability to acquire land in our current and new markets at anticipated prices or difficulty in obtaining land-use entitlements; (6) our inability to successfully execute our strategies, including an inability to grow our operations or expand our Trophy brand; (7) a failure to recruit, retain or develop highly skilled and competent employees; (8) government regulation risks; (9) a lack of availability or volatility of mortgage financing or a rise in interest rates; (10) severe weather events or natural disasters; (11) difficulty in obtaining sufficient capital to fund our growth; (12) our ability to meet our debt service obligations; (13) a decline in the value of our inventories and resulting write-downs of the carrying value of our real estate assets; (14) changes in accounting standards that adversely affect our reported earnings or financial condition.

Please see “Risk Factors” located in Part I, Item 1A in our Annual Report on Form 10-K for the year ended December 31, 2021 for a further discussion of these and other risks and uncertainties which could affect our future results. We undertake no obligation to revise any forward-looking statements to reflect events or circumstances after the date of those statements or to reflect the occurrence of anticipated or unanticipated events, except to the extent we are legally required to disclose certain matters in SEC filings or otherwise.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of our financial condition and results of operations should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the Securities and Exchange Commission (“SEC”) on March 1, 2022. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q.

Overview and Outlook
Our key financial and operating metrics are home deliveries, home closings revenue, average sales price of homes delivered, and net new home orders, which refers to sales contracts executed reduced by the number of sales contracts canceled during the relevant period. Our results for each key financial and operating metric, as compared to the same period in 2021, are provided below:
Three Months Ended March 31, 2022
Home deliveries
Increased by 27.5%
Home closings revenue
Increased by 68.0%
Average sales price of homes delivered
Increased by 31.7%
Net new home orders
Decreased by 44.5%

During the first quarter of 2022, the direct impact of the COVID-19 pandemic and the related actions taken by local and federal governmental agencies in the U.S. has declined. However, we have continued to experience the significantly higher demand for new homes that arose from the pandemic. Throughout the pandemic, we have continued to build, close and sell homes in our markets. The overwhelming expansion of our revenues year over year is primarily attributable to the strong performance of our Trophy brand division, the impact of macroeconomic factors, and an influx of millennial first-time home buyers. Unfortunately, the significant increase in new home demand has, in turn, led to increased demand for labor and the raw materials, products and appliances for new homes. Due to the increased demand, we have and expect to continue to experience increases in cost and decreased availability of skilled labor as well as increases, shortages, and significant extensions to our lead time for the delivery of key materials and inputs.

Three Months Ended March 31, 2022 Compared to the Three Months Ended March 31, 2021

Residential Units Revenue and New Homes Delivered
The table below represents residential units revenue and new homes delivered for the three months ended March 31, 2022 and 2021 (dollars in thousands):
Three Months Ended March 31,
20222021Change%
Home closings revenue$363,063 $216,134 $146,929 68.0%
Mechanic’s lien contracts revenue1,598 1,102 496 45.0%
Residential units revenue$364,661 $217,236 $147,425 67.9%
New homes delivered658 516 142 27.5%
Average sales price of homes delivered$551.8 $418.9 $132.9 31.7%

The $147.4 million increase in residential units revenue was driven by the 31.7% increase in the average sales price of homes delivered and the 27.5% increase in new homes delivered. The increase in new homes delivered was due to a large backlog of homes entering the quarter and an increased number of units under construction entering the quarter. The 31.7% increase in the average sales price of homes delivered for the three months ended March 31, 2022 was attributable to overall price increases driven by high demand and low supply of inventory.

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New Home Orders and Backlog
The table below represents new home orders and backlog related to our builder operations segments, excluding mechanic’s lien contracts (dollars in thousands):
Three Months Ended March 31,
20222021Change%
Net new home orders601 1,082 (481)(44.5)%
Cancellation rate8.0 %6.0 %2.0 %33.3 %
Absorption rate per average active selling community per quarter8.0 11.3 (3.3)(29.2)%
Average active selling communities75 96 (21)(21.9)%