Cover Page
Cover Page - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Mar. 02, 2023 | Jun. 30, 2022 | |
Entity Listings [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-39916 | ||
Entity Registrant Name | DREAM FINDERS HOMES, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 85-2983036 | ||
Entity Address, Address Line One | 14701 Philips Highway | ||
Entity Address, Address Line Two | Suite 300 | ||
Entity Address, City or Town | Jacksonville | ||
Entity Address, State or Province | FL | ||
Entity Address, Postal Zip Code | 32256 | ||
City Area Code | 904 | ||
Local Phone Number | 644-7670 | ||
Title of 12(b) Security | Class A Common Stock, par value $0.01 per share | ||
Trading Symbol | DFH | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 205.6 | ||
Documents Incorporated by Reference | Portions of the registrant’s Proxy Statement for the 2023 Annual Meeting of Stockholders are incorporated herein by reference in Part III of this Annual Report on Form 10-K. | ||
Entity Central Index Key | 0001825088 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Class A Common Stock | |||
Entity Listings [Line Items] | |||
Entity Common Stock, Shares Outstanding | 32,768,059 | ||
Class B Common Stock | |||
Entity Listings [Line Items] | |||
Entity Common Stock, Shares Outstanding | 60,226,153 |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2022 | |
Audit Information [Abstract] | |
Auditor Name | PricewaterhouseCoopers LLP |
Auditor Location | Jacksonville, Florida |
Auditor Firm ID | 238 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Assets | ||
Cash and cash equivalents | $ 364,531 | $ 227,227 |
Restricted cash (VIE amounts of $4,372 and $4,275) | 30,599 | 54,095 |
Accounts receivable (VIE amounts of $580 and $2,684) | 43,490 | 33,482 |
Inventories: | ||
Construction in process and finished homes | 1,175,107 | 961,779 |
Company owned land and lots | 196,563 | 83,197 |
VIE owned land and lots | 6,515 | 21,686 |
Total inventories | 1,378,185 | 1,066,662 |
Lot deposits | 277,258 | 241,406 |
Other assets (VIE amounts of $1,877 and $2,185) | 49,913 | 43,962 |
Investments in unconsolidated entities | 14,008 | 15,967 |
Property and equipment, net | 7,337 | 6,789 |
Operating lease right-of-use assets | 24,084 | 19,359 |
Deferred tax asset | 4,526 | 4,232 |
Intangible assets, net of amortization | 4,999 | 9,140 |
Goodwill | 172,207 | 171,927 |
Total assets | 2,371,137 | 1,894,248 |
Liabilities | ||
Accounts payable (VIE amounts of $353 and $1,309) | 134,702 | 113,498 |
Accrued expenses (VIE amounts of $4,434 and $6,915) | 184,051 | 139,508 |
Customer deposits | 145,654 | 177,685 |
Construction lines of credit (VIE amounts of $0 and $1,979) | 966,248 | 763,292 |
Operating lease liabilities | 24,661 | 19,826 |
Contingent consideration | 115,128 | 124,056 |
Total liabilities | 1,570,444 | 1,337,865 |
Commitments and contingencies (Note 6) | ||
Mezzanine Equity | ||
Preferred mezzanine equity | 156,045 | 155,220 |
Stockholders’ Equity | ||
Additional paid-in capital | 264,757 | 257,963 |
Retained earnings | 365,994 | 118,194 |
Non-controlling interests | 12,970 | 24,081 |
Total mezzanine and stockholders’ equity | 800,693 | 556,383 |
Total liabilities, mezzanine equity and stockholders’ equity | 2,371,137 | 1,894,248 |
Class A Common Stock | ||
Stockholders’ Equity | ||
Common stock, value | 325 | 323 |
Class B Common Stock | ||
Stockholders’ Equity | ||
Common stock, value | $ 602 | $ 602 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Assets | ||
Restricted cash (VIE amounts of $4,372 and $4,275) | $ 30,599 | $ 54,095 |
Accounts receivable (VIE amounts of $580 and $2,684) | 43,490 | 33,482 |
Other assets (VIE amounts of $1,877 and $2,185) | 49,913 | 43,962 |
Liabilities | ||
Accounts payable (VIE amounts of $353 and $1,309) | 134,702 | 113,498 |
Accrued expenses (VIE amounts of $4,434 and $6,915) | 184,051 | 139,508 |
Construction lines of credit (VIE amounts of $0 and $1,979) | $ 966,248 | $ 763,292 |
Class A Common Stock | ||
Stockholders’ Equity | ||
Common stock par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock shares authorized (in shares) | 289,000,000 | 289,000,000 |
Common stock shares outstanding (in shares) | 32,533,883 | 32,295,329 |
Class B Common Stock | ||
Stockholders’ Equity | ||
Common stock par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock shares authorized (in shares) | 61,000,000 | 61,000,000 |
Common stock shares outstanding (in shares) | 60,226,153 | 60,226,153 |
Variable Interest Entity, Primary Beneficiary | ||
Assets | ||
Restricted cash (VIE amounts of $4,372 and $4,275) | $ 4,372 | $ 4,275 |
Accounts receivable (VIE amounts of $580 and $2,684) | 580 | 2,684 |
Other assets (VIE amounts of $1,877 and $2,185) | 1,877 | 2,185 |
Liabilities | ||
Accounts payable (VIE amounts of $353 and $1,309) | 353 | 1,309 |
Accrued expenses (VIE amounts of $4,434 and $6,915) | 4,434 | 6,915 |
Construction lines of credit (VIE amounts of $0 and $1,979) | $ 0 | $ 1,979 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenues: | |||
Total revenues | $ 3,342,335 | $ 1,923,910 | $ 1,133,807 |
Homebuilding cost of sales | 2,722,139 | 1,610,332 | 962,928 |
Selling, general and administrative expense | 271,040 | 154,405 | 90,359 |
Income from unconsolidated entities | (16,122) | (9,428) | (7,992) |
Contingent consideration revaluation | 11,053 | 7,533 | 1,379 |
Other (income) expense, net | (1,963) | (1,653) | 1,749 |
Interest expense | 32 | 672 | 871 |
Income before income taxes | 356,156 | 162,049 | 84,513 |
Income tax expense | (81,859) | (27,455) | 0 |
Comprehensive income | 274,297 | 134,594 | 84,513 |
Net income | 274,297 | 134,594 | 84,513 |
Comprehensive income attributable to non-controlling interests | (11,984) | (13,461) | (5,420) |
Net income attributable to non-controlling interests | (11,984) | (13,461) | (5,420) |
Comprehensive income attributable to Dream Finders Homes, Inc. | 262,313 | 121,133 | 79,093 |
Net income attributable to Dream Finders Homes, Inc. | $ 262,313 | $ 121,133 | $ 79,093 |
Earnings per share | |||
Basic (in dollars per share) | $ 2.67 | $ 1.27 | $ 0 |
Diluted (in dollars per share) | $ 2.45 | $ 1.27 | $ 0 |
Weighted-average number of shares | |||
Basic (in shares) | 92,745,781 | 92,521,482 | 0 |
Diluted (in shares) | 106,691,248 | 95,313,593 | 0 |
Homebuilding | |||
Revenues: | |||
Total revenues | $ 3,334,559 | $ 1,917,301 | $ 1,127,976 |
Other | |||
Revenues: | |||
Total revenues | $ 7,776 | $ 6,609 | $ 5,831 |
Consolidated Statements of Equi
Consolidated Statements of Equity - USD ($) $ in Thousands | Total | Redeemable Preferred Units/Stock Mezzanine | Redeemable Common Units Mezzanine | Common Units Members’ | Common Stock Common Stock - Class A | Common Stock Common Stock - Class B | Additional Paid-in Capital | Retained Earnings | Total Non- Controlling Interests |
Beginning balance (in shares) at Dec. 31, 2019 | 49,555 | 5,774 | |||||||
Beginning balance at Dec. 31, 2019 | $ 58,269 | $ 16,248 | |||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||
Redemptions (in shares) | (1,012) | ||||||||
Redemptions | $ (13,000) | ||||||||
Distributions | (2,522) | (1,202) | $ (14,252) | ||||||
Net income (loss) | $ 12,891 | $ 5,547 | $ 60,655 | ||||||
Ending balance (in shares) at Dec. 31, 2020 | 48,543 | 7,010 | |||||||
Ending balance at Dec. 31, 2020 | $ 55,638 | $ 20,593 | |||||||
Beginning balance (in shares) at Dec. 31, 2019 | 76,655 | 0 | 0 | ||||||
Beginning balance at Dec. 31, 2019 | $ 161,491 | $ 56,503 | $ 0 | $ 0 | $ 0 | $ 0 | $ 30,471 | ||
Increase (Decrease) in Partners' Capital [Roll Forward] | |||||||||
Units compensation | 947 | $ 947 | |||||||
Contributions (in shares) | 1,236 | ||||||||
Contributions | 3,883 | 3,883 | |||||||
Redemptions | (13,000) | ||||||||
Distributions | (25,811) | (7,835) | |||||||
Net income (loss) | 84,513 | 5,420 | |||||||
Ending balance (in shares) at Dec. 31, 2020 | 76,655 | 0 | 0 | ||||||
Ending balance at Dec. 31, 2020 | 212,023 | $ 103,853 | $ 0 | $ 0 | 0 | 0 | 31,939 | ||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||
Redemptions (in shares) | (26,000) | ||||||||
Redemptions | $ (25,530) | ||||||||
Distributions | (3,617) | $ (1,275) | (18,384) | ||||||
Net income (loss) | $ 563 | $ (91) | $ (996) | ||||||
Reorganization transactions (in shares) | (15,400) | (7,010) | |||||||
Reorganization transactions | $ (19,958) | $ (19,227) | |||||||
Issuance of convertible preferred stock, net (in shares) | 150,000 | ||||||||
Issuance of convertible preferred stock | 148,124 | $ 148,124 | |||||||
Ending balance (in shares) at Dec. 31, 2021 | 157,143 | 0 | |||||||
Ending balance at Dec. 31, 2021 | $ 155,220 | $ 0 | |||||||
Increase (Decrease) in Partners' Capital [Roll Forward] | |||||||||
Contributions | 2,000 | 2,000 | |||||||
Redemptions | (25,530) | ||||||||
Distributions | (46,608) | (13) | (23,319) | ||||||
Net income (loss) | 134,594 | 121,657 | 13,461 | ||||||
Reorganization transactions (in shares) | (76,655) | 21,255,329 | 60,226,153 | ||||||
Reorganization transactions | 0 | $ (84,473) | $ 213 | $ 602 | 122,843 | ||||
Issuance of common stock, net (in shares) | 11,040,000 | ||||||||
Issuance of common stock, net | 129,997 | $ 110 | 129,887 | ||||||
Issuance of convertible preferred stock | 148,124 | 148,124 | |||||||
Equity-based compensation | 5,233 | 5,233 | |||||||
Preferred stock dividends declared | (3,450) | (3,450) | |||||||
Ending balance (in shares) at Dec. 31, 2021 | 0 | 32,295,329 | 60,226,153 | ||||||
Ending balance at Dec. 31, 2021 | 556,383 | $ 0 | $ 323 | $ 602 | 257,963 | 118,194 | 24,081 | ||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||
Net income (loss) | $ 825 | ||||||||
Ending balance (in shares) at Dec. 31, 2022 | 157,143 | 0 | |||||||
Ending balance at Dec. 31, 2022 | $ 156,045 | $ 0 | |||||||
Increase (Decrease) in Partners' Capital [Roll Forward] | |||||||||
Distributions | (23,095) | (23,095) | |||||||
Net income (loss) | 274,297 | 261,488 | 11,984 | ||||||
Equity-based compensation (in shares) | 238,554 | ||||||||
Equity-based compensation | 6,796 | $ 2 | 6,794 | ||||||
Preferred stock dividends declared | (13,688) | (13,688) | |||||||
Ending balance (in shares) at Dec. 31, 2022 | 0 | 32,533,883 | 60,226,153 | ||||||
Ending balance at Dec. 31, 2022 | $ 800,693 | $ 0 | $ 325 | $ 602 | $ 264,757 | $ 365,994 | $ 12,970 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash Flows from Operating Activities | |||
Net income | $ 274,297 | $ 134,594 | $ 84,513 |
Adjustments to Reconcile Net Income to Net cash used in operating activities | |||
Depreciation and amortization | 11,252 | 6,065 | 4,010 |
Gain on sale of property and equipment | (92) | (87) | (118) |
Amortization of debt issuance costs | 3,844 | 1,960 | 2,091 |
Extinguishment of unamortized debt issuance costs | 283 | 507 | 0 |
Amortization of right-of-use operating lease assets | 5,839 | 3,786 | 3,843 |
Stock compensation expense | 6,796 | 5,233 | 947 |
Income from Paycheck Protection Program | 0 | 7,220 | 0 |
Deferred tax benefit | (294) | (946) | 0 |
Income from unconsolidated entities, net of return on investments | 1,810 | (3,918) | (2,680) |
Remeasurement of contingent consideration | 11,053 | 7,533 | 1,379 |
Payments of contingent consideration | (4,461) | 0 | 0 |
Changes in Operating Assets and Liabilities | |||
Accounts receivable | (11,850) | (16,717) | (12,227) |
Inventories | (311,523) | (80,196) | 23,513 |
Lot deposits | (35,852) | (134,238) | (37,913) |
Other assets | (6,712) | (3,706) | (10,567) |
Accounts payable and accrued expenses | 65,748 | 63,361 | 6,198 |
Customer deposits | (32,031) | 78,167 | 37,556 |
Operating lease liabilities | (5,730) | (3,510) | (3,634) |
Net cash (used in) provided by operating activities | (27,623) | 65,108 | 96,911 |
Cash Flows from Investing Activities | |||
Purchase of property and equipment | (5,545) | (2,774) | (2,924) |
Proceeds from disposal of property and equipment | 152 | 508 | 242 |
Investments in unconsolidated entities | (300) | (1,980) | (90) |
Return of investments from unconsolidated entities | 449 | 668 | 6,578 |
Business combinations, net of cash acquired | (280) | (519,465) | (16,833) |
Net cash used in investing activities | (5,524) | (523,043) | (13,027) |
Cash Flows from Financing Activities | |||
Proceeds from construction lines of credit | 11,023,077 | 1,897,540 | 742,391 |
Principal payments on construction lines of credit | (10,820,121) | (1,450,639) | (771,863) |
Payment of debt issuance costs | (5,539) | (7,657) | (1,995) |
Proceeds from common stock issuance | 0 | 143,630 | 0 |
Proceeds from issuance of convertible preferred stock | 0 | 148,500 | 0 |
Payments of preferred stock dividends | (13,688) | 0 | 0 |
Payments of equity issuance costs | 0 | (14,009) | 0 |
Distributions | 0 | (23,289) | (17,257) |
Redemptions | 0 | (25,530) | (13,000) |
Contribution from conversion of converted LLC units | 0 | 123,658 | 0 |
Conversion of LLC units | 0 | (123,658) | 0 |
Contributions from non-controlling interests | 0 | 2,000 | 3,883 |
Distributions to non-controlling interests | (23,095) | (23,319) | (7,835) |
Payments of contingent consideration | (13,679) | (1,207) | 0 |
Payments on financing leases | 0 | (136) | (154) |
Net cash provided by (used in) financing activities | 146,955 | 645,884 | (65,830) |
Net increase in cash, cash equivalents and restricted cash | 113,808 | 187,949 | 18,054 |
Cash, cash equivalents and restricted cash at beginning of period | 281,322 | 93,373 | 75,319 |
Cash, cash equivalents and restricted cash at end of period | 395,130 | 281,322 | 93,373 |
Reconciliation of cash, cash equivalents and restricted cash | |||
Cash and cash equivalents | 364,531 | 227,227 | 43,658 |
Restricted cash | 30,599 | 54,095 | 49,715 |
Total cash, cash equivalents and restricted cash shown on the Consolidated Statements of Cash Flows | 395,130 | 281,322 | 93,373 |
Noncash Investing Activities | |||
Investment capital reallocation | 0 | (3,469) | 1,171 |
Noncash Financing Activities | |||
Financed land payments to seller | 0 | 8,916 | 0 |
Equity issuance costs incurred | 0 | 1,282 | 0 |
Accrued distributions | 825 | 3,450 | 719 |
Contingent consideration | (1,841) | 94,573 | 16,310 |
Leased assets obtained in exchange for new operating lease liabilities | 10,564 | 8,149 | 2,963 |
Total noncash financing and investing activities | $ 9,548 | $ 112,901 | $ 21,163 |
Nature of Business and Signific
Nature of Business and Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Nature of Business and Significant Accounting Policies | Nature of Business and Significant Accounting Policies Nature of Business Dream Finders Homes, Inc. (the “Company” or “DFH, Inc.”) was incorporated in the State of Delaware on September 11, 2020. The Company was formed for the purpose of completing an initial public offering (“IPO”) of its common stock and related transactions in order to carry on the business of Dream Finders Holdings LLC, a Florida limited liability company (“DFH LLC”), as a publicly-traded entity. Pursuant to a corporate reorganization and completion of its IPO on January 25, 2021, the Company became a holding company for DFH LLC and its subsidiaries. In connection with the IPO and pursuant to the terms of the Agreement and Plan of Merger by and among DFH, Inc., DFH LLC and DFH Merger Sub LLC, a Delaware limited liability company and direct, wholly owned subsidiary of DFH, Inc., DFH Merger Sub LLC merged with and into DFH LLC with DFH LLC as the surviving entity (the “Merger”). As a result of the Merger, all of the outstanding non-voting common units and Series A Preferred Units of DFH LLC converted into 21,255,329 shares of Class A common stock of DFH, Inc., all of the outstanding common units of DFH LLC converted into 60,226,153 shares of Class B common stock of DFH, Inc. and all of the outstanding Series B Preferred Units and Series C Preferred Units of DFH LLC remained outstanding. We refer to this and certain other related events and transactions, as the “Corporate Reorganization”. Following the Corporate Reorganization, the Company owns all of the voting membership interest of DFH LLC. The Company successfully completed its IPO of 11,040,000 shares of Class A common stock (which included full exercise of the over-allotment option) at an IPO price of $13.00 per share. Shares of the Company’s Class A common stock began trading on the Nasdaq Global Select Market under the ticker symbol “DFH” on January 21, 2021, and the IPO closed on January 25, 2021. On January 27, 2021, the Company redeemed all of the outstanding Series C Preferred Units for $26.0 million, including accrued unpaid preferred distributions. On October 10, 2022, the Company transferred the listing of its Class A common stock from the Nasdaq Global Select Market to the New York Stock Exchange. The Company's Class A common stock continues to trade under the stock symbol "DFH". The following is a description of the significant accounting policies and practices, which conform to accounting principles generally accepted in the United States of America (“U.S. GAAP”). Principles of Consolidation The accompanying consolidated financial statements include the accounts of DFH, Inc., its wholly-owned subsidiaries and its investments that qualify for consolidation treatment (see Note 7 ). All intercompany accounts and transactions have been eliminated in consolidation. There are no other components of comprehensive income not already reflected in net and comprehensive income on our Consolidated Statements of Comprehensive Income. As a result of the Corporate Reorganization, for accounting purposes, our historical results included herein present the combined assets, liabilities and results of operations of DFH, Inc. and DFH LLC and its direct and indirect subsidiaries for the period September 11, 2020 to January 21, 2021. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. Cash and Cash Equivalents Cash and cash equivalents consist of highly liquid instruments, with original maturities of three months or less. Cash and cash equivalents includes cash proceeds from home closings in-transit from or held by third-party title company escrow accounts for the benefit of the Company, typically for less than five days. At various times throughout the year, the Company may have cash deposited with financial institutions that exceed the federally insured deposit amount. Management reviews the financial viability of these financial institutions on a periodic basis and does not anticipate nonperformance by the financial institutions. Restricted Cash Restricted cash represents funds held in accounts that are restricted for specific purposes, primarily related to escrow monies held in title companies. Revenue Recognition The Company recognizes revenue in accordance with ASC 606, which requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. We recognize revenue by following the five-step model: (i) identifying the contract(s) with the customer, (ii) identifying the separate performance obligations in the contract, (iii) determining the transaction price, (iv) allocating the transaction price to the separate performance obligations, and (v) recognizing revenue when each performance obligation is satisfied. The Company’s revenues consist primarily of home sales in the United States, which is its principal market. Home sale transactions are made pursuant to contracts under which the Company typically has a single performance obligation to deliver a completed home to the homebuyer when closing conditions are met. The Company generally determines the selling price per home based on the expected cost-plus margin. The Company has performed an assessment and its contracts do not contain significant financing terms. A large portion of the Company’s contracts with customers and the related performance obligations have an original expected duration of one year or less. For the majority of contracts, performance obligations are satisfied and revenue is recognized at the point in time when control of the asset is transferred to the customer, which is generally when title to and possession of the home and the risks and rewards of ownership are transferred to the homebuyer on the closing date. Under home sale contracts, the Company typically receives an initial cash deposit from the homebuyer at the time the sales contract is executed and receives the remaining consideration to which the Company is entitled, through an escrow agent, at closing. In certain contracts, the customer controls the underlying land upon which the home is constructed. For these specific contracts, the performance obligation is satisfied over time, as the Company’s performance creates or enhances an asset that the customer controls. The Company recognizes revenue for these contracts based on the percentage of completion of the project, determined by the number of days of construction completed compared to the total estimated number of days to construct the home. Typically, the Company has two types of percentage of completion contracts. The first type is with individual customers for which the Company acts as a general contractor on land owned by the homebuyer. The second is with institutional buyers for which the Company acts as a general contractor on land owned by the institution. Individual customers generally have construction-to-permanent loans that are taken out by the customer. During the underwriting process for our individual and institutional customers a draw schedule is agreed upon by the bank, the customer and the Company. Funds are disbursed for labor and materials that have been completed or installed. These both result in a contract asset as work is being completed prior to receiving funds. A contract liability would be recorded in cases where we have received funds in excess of costs incurred. At December 31, 2022 and 2021, the contract asset related to percentage of completion contracts was $20.7 million and $21.0 million, respectively, and is included in other assets on the Consolidated Balance Sheets. At December 31, 2022 and 2021, the contract liability related to percentage of completion contracts was $2.2 million and $3.9 million, respectively, and is included in accrued expenses on the Consolidated Balance Sheets. Revenues include forfeited deposits, which occur when home sale or land sale contracts that include a nonrefundable deposit are cancelled. Sales incentives in the form of price concessions on the selling price of a home are recorded as a reduction of revenues. The cost of sales incentives in the form of free or discounted products or services provided to homebuyers, including option upgrades, are reflected in land and development costs because such incentives are identified in home sale contracts with homebuyers as an intrinsic part of the Company’s single performance obligation to deliver and transfer title to the home for the transaction price stated in the contracts. Refer to Note 9, Segment Reporting for a more detailed disaggregation of our revenues by reportable segments. Other Income and Expense Other income includes income from the sale of non-core assets, interest income and management fees we earn from shared services with the former owner of MHI and from managing certain joint ventures. In general, we earn four to six percent of the sales price of homes built by us on behalf of the joint ventures. Other expense consists primarily of expenses related to the sale of non-core assets. For 2021, other income and expense also included the one-time forgiveness of the $7.2 million Paycheck Protection Program (“PPP”) loan and a $7.6 million litigation settlement expense. Inventories Inventories include the costs of direct land acquisition, land development, construction, capitalized interest, real estate taxes and direct overhead costs incurred related to land acquisition and development and home construction. Indirect overhead costs are charged to selling, general, and administrative expenses as incurred. Land and development costs are typically allocated to individual residential lots on a pro rata basis based on the number of lots in the development, and the costs of residential lots are transferred to construction work in progress when home construction begins. Units are expensed on a specific identification basis as homebuilding cost of sales. Homebuilding cost of sales for homes closed includes the specific construction costs of each home and all applicable land acquisition, land development and related costs allocated to each residential lot. Inventories are carried at the lower of accumulated cost or net realizable value. The Company reviews the performance and outlook of its inventories for indicators of potential impairment on a quarterly basis at the community level. In addition to considering market and economic conditions the Company assesses current sales absorption levels and recent profitability. The Company looks for instances where sales prices for a home in backlog or potential sales prices for a future sold home would be at a level at which the carrying value of the home may not be recoverable. There were $1.8 million in inventory impairment charges recorded for the year ended December 31, 2022. There were no impairment charges recorded for the years ended December 31, 2021 and 2020. Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Maintenance and repairs are charged to expense as incurred and betterments are capitalized. When items of property and equipment are sold or otherwise disposed, the asset and related accumulated depreciation accounts are eliminated and any gain or loss is included in operations. Depreciation of property and equipment is calculated using the straight-line method over the estimated useful lives of the assets as follows: Asset Class Useful Life Years Furniture and fixtures 2-7 Office equipment 4 Software 1-4 Vehicles 5 Buildings 39 Long-Lived Assets The Company evaluates the carrying value of its long-lived assets for impairment whenever events or changes in circumstances indicate an impairment may exist. Recoverability is measured by the expected undiscounted future cash flows of the assets compared to the carrying amount of the assets. If the expected undiscounted future cash flows are less than the carrying amount of the assets, the excess of the net book value over the estimated fair value is charged to current earnings. Fair value is based upon discounted cash flows of the assets at a rate deemed reasonable for the type of asset and prevailing market conditions, appraisals, and, if appropriate, current estimated net sales proceeds from pending offers. There were no triggering events or impairments recorded during the years ended December 31, 2022, 2021 or 2020. Intangible Assets, Net of Amortization The Company has intangible assets that consist of trade names that are recorded in connection with acquisitions at their fair value based on the results of valuation analyses. Trademarks acquired in business combinations are generally valued using the relief-from-royalty method, which are Level 3-type measurements. Trademarks with finite lives are amortized over no more than five-year periods. Goodwill Goodwill represents the excess of purchase price over the fair value of the assets acquired and the liabilities assumed in a business combination. See Note 2, Business Combinations, for details on recent acquisitions. The Company tests for impairment at least annually as of October 1, but the Company tests for impairment more frequently if a triggering event occurs. This test assesses qualitative factors to determine if it is more likely than not that the fair value of the reporting units is less than their carrying value. These qualitative factors include, but are not limited to, economic conditions, industry and market considerations, cost factors, overall performance of the reporting unit and other entity and reporting unit specific events. If the qualitative assessment indicates a stable fair value, no further testing is required. However, if the qualitative assessment indicates that the fair value of a reporting unit has declined past its carrying value, the Company will then calculate the fair value of the reporting unit based on discounted future cash flows. An impairment loss is recorded if this assessment concludes that the fair value of the reporting unit is less than its current carrying value. The Company completed its most recent goodwill impairment test on October 1, 2022 and determined that the fair value of all the reporting units was not less than carrying value. No impairment was recognized during the years ended December 31, 2022, 2021 or 2020. In addition, the Company has not identified any triggering events that would result in the Company performing additional impairment tests. Leases The Company determines if an arrangement is, or contains, a lease at inception. We recognize leases when the contract provides us the right to use an identified asset for a period of time in exchange for consideration. Operating leases are included in operating lease right-of-use (“ROU”) assets and operating lease liabilities in the Consolidated Balance Sheets. Finance leases are included in finance lease ROU assets and finance lease liabilities in the Consolidated Balance Sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an explicit rate, management uses the Company’s incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. An explicit rate is used when readily determinable. The ROU assets also include any lease payments made, reduced by any lease incentives. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for operating leases is recognized on a straight-line basis over the lease term. The Company elected the practical expedient to combine lease and nonlease components when accounting for the ROU assets and liabilities for all asset classes. Variable lease costs are expensed as incurred. Leases with an initial term of 12 months or less are not recorded in the Consolidated Balance Sheets. Lot Deposits Lot deposits represent amounts paid by the Company to secure the ability to acquire finished lots or land for development through an option contract. The Company enters into contracts with different land sellers to ensure it has property on which to build future homes over a two it believes it will forfeit its deposit on an individual or portfolio of lots. There were $3.0 million of impairment charges recorded in 2022, a nd no impairment charges were recorded in 2021 and 2020. Warranty Reserve The Company provides a limited warranty for its homes for a period of one year. The Company’s standard warranty requires the Company or its subcontractors to repair or replace defective construction during such warranty period at no cost to the homebuyer. At the time a home is sold, the Company records an estimate of warranty expense based on historical warranty costs. An analysis of the warranty reserve is performed quarterly to ensure the reserve’s adequacy. The warranty reserve is classified on the Consolidated Balance Sheets as an accrued expense. Business Acquisitions and Contingent Consideration Business acquisitions are evaluated and accounted for in accordance with guidance set forth in ASC 805. Once a business combination has been identified, all material assets and liabilities of the business are recognized at fair value as of the acquisition date. Any residual amount remaining of fair value over net assets is recognized as goodwill. In connection with applicable acquisitions (Note 2 ), the Company records the fair value of contingent consideration as a liability on the acquisition date as prescribed by the underlying agreement, usually resulting in additional purchase price allocations which is calculated as a percentage of future estimated pre-tax income of the acquiree. The initial measurement of contingent consideration is based on projected cash flows such as revenues, gross margin, overhead expenses and pre-tax income and is discounted to present value using the discounted cash flow method. The remaining estimated contingent consideration payments are subsequently remeasured to fair value at each reporting date based on the estimated future earnings of the acquired entities and the re-assessment of risk-adjusted discount rates that reflect current market conditions. Maximum potential exposure for contingent consideration is not estimable based on the contractual terms of the contingent consideration agreements, which allow for a percentage payout based on a potentially unlimited range of pre-tax net income. Customer Deposits Customer deposits are amounts collected from customers in conjunction with the execution of the home sale contract, and are recorded as a liability when cash is received. Customer deposits are applied against the final settlement due at the home closing. In the event of contract default or termination, the customer deposit is generally forfeited and recognized as revenue. Debt Issuance Costs Debt issuance costs are amortized to interest expense using the straight-line method over the estimated economic life of the underlying debt instrument. Portions of this amortization are evaluated for capitalization as inventories and subsequently expensed through cost of sales at the home closing. Variable Interest Entities Pursuant to ASC 810 and subtopics related to the consolidation of variable interest entities (“VIEs”), m anagement analyzes the Company’s investments first under the variable interest model to determine if they are VIEs and, if so, whether the Company is the primary beneficiary. Management determines whether the Company is the primary beneficiary of a VIE at the time it becomes involved with a VIE and reconsiders that conclusion if changes to the Company’s involvement arise. To make this determination, management considers factors such as whether the Company could direct finance, determine or limit the scope of the entity, sell or transfer property, direct development or direct other operating decisions. The primary beneficiary is defined as the entity having both of the following characteristics: 1) the power to direct the activities that most significantly impact the VIE’s performance, and 2) the obligation to absorb losses and rights to receive the returns from the VIE that would be potentially significant to the VIE. Management consolidates the entity if the Company is the primary beneficiary or if a standalone primary beneficiary does not exist and the Company and its related parties collectively meet the definition of a primary beneficiary. If the investment does not qualify as a VIE under the variable interest model, management then evaluates the entity under the voting interest model to assess if consolidation is appropriate. See Note 7, Variable Interest Entities, for a description of the Company’s interests, including which entities were determined to be VIEs. Accounting for Unconsolidated VIEs Investments for which the Company is not identified as the primary beneficiary, but the Company has significant influence are accounted for as equity method investments. Investments for which the Company does not have significant influence are accounted for at cost under the cost method. Equity and cost method investments are classified as unconsolidated entities on the Consolidated Balance Sheets. For equity method investments, the Company shares in the earnings (losses) of these unconsolidated entities generally in accordance with its respective equity interests. In some instances, the Company recognizes earnings (losses) that differ from its equity interest in the unconsolidated entity. For distributions received from equity method investments, the Company has elected to use the cumulative earnings approach for the Consolidated Statements of Cash Flows. Under the cumulative earnings approach, distributions up to the amount of cumulative equity in earnings recognized are treated as returns on investment within operating cash flows and those in excess of that amount are treated as returns of investment within investing cash flows. When applicable dividends are declared for the cost method investments, we record them as income of unconsolidated entities on the Consolidated Statements of Comprehensive Income. Non-Controlling Interests The equity interests held by others in DFH Leyden LLC, DFH Amelia LLC, DFH Clover LLC, DFH Leyden II LLC, DFH MOF Eagle Landing LLC, DCE DFH JV LLC, DFH Capitol LLC, DFC Mandarin Estates LLC, DFC East Village LLC, DFC Wilford LLC, DFC Amelia Phase III LLC, DFC Sterling Ranch LLC, DFC Grand Landings LLC and FMR IP, LLC, have been reflected as non-controlling interests in the Consolidated Balance Sheets. Income attributable to these non-controlling interests are presented in the Consolidated Statements of Comprehensive Income as net income attributable to non-controlling interests. Income Taxes We are a corporation subject to income taxes in the United States. Our proportional share of the Company’s subsidiaries’ provisions are included in our consolidated financial statements. Our deferred income tax assets and liabilities are computed for differences between the asset and liability method and financial statement amounts that will result in taxable or deductible amounts in the future. We compute deferred balances based on enacted tax laws and applicable rates for the periods in which the differences are expected to affect taxable income. A valuation allowance is recognized for deferred tax assets if it is more likely than not that some portion or all of the net deferred tax assets will not be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies and results of recent operations. If we determine we would be able to realize our deferred tax assets for which a valuation allowance had been recorded, then we would adjust the deferred tax asset valuation allowance, which would reduce our provision for income taxes. We evaluate the tax positions taken on income tax returns that remain open and positions expected to be taken on the current year tax returns to identify uncertain tax positions. Unrecognized tax benefits on uncertain tax positions are recorded on the basis of a two-step process in which (1) we determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the largest amount of tax benefit that is more than 50% likely to be realized is recognized. Interest and penalties related to unrecognized tax benefits are recorded in income tax expense. Refer to Note 8, Income Taxes. Advertising The Company expenses advertising costs as they are incurred. Advertising expense for the years ended December 31, 2022, 2021 and 2020 was $15.5 million, $7.1 million and $6.2 million, respectively. Equity-Based Compensation Certain individuals on our management team are eligible for equity-based compensation, which is awarded according to the terms of individual contracts with those managers. The Company records compensation cost for equity units awarded to employees in return for employee service. The cost is measured at the grant-date fair value of the award and recognized as compensation expense over the employee service period, which is normally the vesting period. We recognize forfeitures of equity-based awards as a reduction to compensation costs in the period in which they occur . Reclassifications Certain reclassifications have been made in the 2021 and 2020 Consolidated Financial Statements to conform to the classifications used in 2022. Recent Accounting Pronouncements In March 2020, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform, which provides practical expedients and exceptions for applying GAAP when modifying contracts and hedging relationships that use LIBOR as a reference rate. These amendments are not applicable to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022. In June 2022, we amended and restated our revolving credit facility, with no material impact as a result of the shift away from LIBOR (see Note 4). |
Business Combinations
Business Combinations | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Combinations | Business Combinations Century Homes On January 31, 2021, the Company completed the acquisition of Century Homes Florida, LLC (“Century Homes”) from Tavistock Development Company for a total purchase price of $35.6 million. The acquisition was accounted for as a business combination under ASC 805. We recorded an allocation of the purchase price to Century Homes’ tangible assets acquired and liabilities assumed based on their estimated fair values as of January 31, 2021. There were no identifiable intangible assets. Goodwill was recorded as the residual amount by which the purchase price exceeded the provisional fair value of the net assets acquired and is expected to be fully deductible for tax purposes. Goodwill consists primarily of expected synergies of combining operations, the acquired workforce, and growth opportunities, none of which qualify as separately identifiable intangible assets. As of January 31, 2022, the Company completed its allocation of the purchase price and no measurement period adjustments were identified. The final purchase price allocation as of January 31, 2022 was as follows (in thousands): Cash acquired $ 3,993 Other assets 754 Goodwill 1,795 Inventories 34,324 Property and equipment, net 549 Liabilities (5,831) Total purchase price $ 35,584 MHI On October 1, 2021 , the Company completed the acquisition of certain assets, rights and properties, and assumed certain liabilities of privately held Texas homebuilder McGuyer Homebuilders, Inc. and related affiliates (“MHI”), including: (i) single-family residential homebuilding; (ii) owning model homes; (iii) acquisition, ownership and licensing of intellectual property (including architectural plans); (iv) purchasing and reselling homebuilding supplies; (v) development, construction and sale of condominium units in Austin, Texas; (vi) mortgage origination through a mortgage company; and (vii) title insurance, escrow and closing services through a title company. The acquisition allowed the Company to expand its existing footprint in the Texas market. Total cash paid at closing of approximately $471.0 million included $463.0 million in purchase price based on the preliminary value of purchased net assets and a 10% deposit on a separate land bank facility. On December 3, 2021, the Company paid an additional $25.2 million in cash for customary post-closing adjustments based on the final value of the net assets acquired as of September 30, 2021. Additionally, the Company agreed to the future payment of additional consideration of up to 25% of pre-tax net income for up to five periods, the last of which ends 48 months after the closing subject to certain minimum pre-tax income thresholds and certain overhead expenses, estimated at approximately $94.6 million as of the acquisition date. The total purchase price was as follows (in thousands): Cash consideration $ 488,178 Contingent consideration based on future earnings 94,573 Total consideration $ 582,751 The Company used $20.0 million of cash on hand and proceeds from the sale of the Convertible Preferred Stock (see Note 12 ) and from unsecured debt incurred under the Credit Agreement, to fund the MHI acquisition. On October 1, 2021, the Company borrowed approximately $300.0 million under the Credit Agreement and paid off MHI’s vertical lines of credit in connection with the closing of the acquisition (See Note 4 ). The acquisition was accounted for as a business combination under Topic 805. We recorded an allocation of the purchase price to MHI tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values as of October 1, 2021 . The amounts for intangible assets were based on third-party valuations performed. Goodwill was recorded as the residual amount by which the purchase price exceeded the provisional fair value of the net assets acquired and is expected to be fully deductible for tax purposes. Goodwill consists primarily of expected synergies of combining operations, the acquired workforce, and growth opportunities, none of which qualify as separately identifiable intangible assets. As of September 30, 2022, the Company completed its purchase price allocation and no further updates to goodwill are expected as a result of the acquisition. Pursuant to Topic 805, the financial statements will not be retrospectively adjusted for any provisional amount changes that occur in subsequent periods. Rather, we will recognize any provisional adjustments during the reporting period in which the adjustments are determined. We will also be required to record, in the same period’s financial statements, the effect on earnings, if any, as a result of any change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. The final purchase price allocation as of September 30, 2022 was as follows (in thousands): Cash acquired $ 297 Inventories 473,037 Lot deposits 40,452 Other assets 14,722 Property and equipment 3,163 Equity method investments 6,192 Intangible assets 8,840 Goodwill 141,071 Operating lease right-of-use assets 1,508 Accounts payable (41,466) Accrued expenses (25,801) Customer deposits (37,756) Operating lease liabilities (1,508) Total purchase price $ 582,751 On January 31, 2022, the Company made a cash payment of $34.9 million for model homes from MHI Models, Ltd., a Texas limited partnership (the “ MHI Model Homes”). The post-close consideration payment completed the asset purchase transaction, which was considered to be economically separate from the acquisition of MHI and the related purchase price allocation above. See Note 6, Commitments and Contingencies for discussion on subsequent sale and leaseback transactions related to the MHI Model Homes. Contingent Consideration At December 31, 2022 and 2021, the Company remeasured the fair value of contingent consideration related to the 2019 acquisition of Village Park Homes, LLC (“VPH”) and adjusted the liability to $1.4 million and $7.6 million, respectively, based on revised pre-tax income forecasts and revised discount rates as of the balance sheet date and from accretion of the liability. The Company recorded contingent consideration adjustments resulting in $0.7 million of expense, $0.7 million of expense, and $1.4 million of expense for the years ended December 31, 2022, 2021 and 2020, respectively. These adjustments are included in contingent consideration revaluation on the Consolidated Statements of Comprehensive Income. At December 31, 2022 and 2021, the Company remeasured the fair value of contingent consideration related to the 2020 acquisition of H&H and adjusted the liability to $11.6 million and $19.8 million, respectively, based on revised pre-tax income forecasts and revised discount rates as of the balance sheet date and from accretion of the liability. The Company recorded contingent consideration adjustments resulting in $2.0 million of income and $4.6 million of expense for the years ended December 31, 2022 and 2021, respectively. These adjustments are included in contingent consideration revaluation on the Consolidated Statements of Comprehensive Income. At December 31, 2022 and 2021, the Company remeasured the fair value of contingent consideration related to the 2021 acquisition of MHI and adjusted the liability to $102.1 million and $96.7 million, respectively, based on revised pre-tax income forecasts and revised discount rates as of the balance sheet date and from accretion of the liability. The Company recorded contingent consideration adjustments resulting in $12.4 million of expense and $2.2 million of expense for the years ended December 31, 2022 and 2021, respectively. These adjustments are included in contingent consideration revaluation on the Consolidated Statements of Comprehensive Income. See Note 10, Fair Value Disclosures for the fair value measurement for contingent consideration. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2022 | |
Property Plant and Equipment Income Statement Disclosures [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment consisted of the following as of December 31, 2022 and 2021 (in thousands): For the Years Ended December 31, 2022 2021 Furniture and fixtures $ 18,753 $ 17,756 Buildings 401 401 Land 216 216 Vehicles 64 21 Office equipment and software 3,733 4,384 Total property and equipment 23,167 22,778 Less: Accumulated depreciation (15,830) (15,989) Property and equipment, net $ 7,337 $ 6,789 Depreciation expense was $5.0 million, $3.7 million and $3.9 million for the years ended December 31, 2022, 2021 and 2020, respectively. |
Construction Lines of Credit
Construction Lines of Credit | 12 Months Ended |
Dec. 31, 2022 | |
Line of Credit Facility [Abstract] | |
Construction Lines of Credit | Construction Lines of CreditOn January 25, 2021, the Company entered into a $450.0 million syndicated senior unsecured credit facility with Bank of America, N.A. (the “Credit Agreement”), subsequently repaid $340.0 million in outstanding debt and terminated all then-existing construction lines of credit. Through subsequent amendments to the Credit Agreement in September 2021 (the “Amendments”), additional lenders were added as well as provisions for any existing lender, at the Company’s request, to increase its revolving commitment, add new revolving loan tranches or add new term loan tranches, not to exceed—through an accordion feature— an aggregate of $1.1 billion, which would include the exercise of the accordion feature (collectively, the "Existing Credit Agreement"). On June 2, 2022, the Company entered into an agreement to amend and restate its Existing Credit Agreement (the “Amended and Restated Credit Agreement”). The Amended and Restated Credit Agreement is substantially similar to the Existing Credit Agreement except that the Amended and Restated Credit Agreement, among other things, (i) provides for an increase in the aggregate commitments under the facility from $817.5 million to $1.1 billion; (ii) allows the facility to expand to a borrowing base of up to $1.6 billion through its accordion feature; (iii) extends the maturity date from January 25, 2024 to June 2, 2025; and (iv) transitions the applicable interest rate from a Eurodollar based rate to a Secured Overnight Financing Rate (“SOFR”) based rate, as described below. Certain of our subsidiaries guaranteed the Company's obligations under the Amended and Restated Credit Agreement. Under the Amended and Restated Credit Agreement, loans bear interest at the Company’s option of (1) a “Base Rate”, which means, for any day, a fluctuating rate per annum equal to credit spreads of 1.5% to 2.6%, which are determined based on the Company’s net debt-to-capitalization ratio, plus the highest of (a) the Federal Funds Rate plus 0.5%, (b) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate,” (c) Term SOFR plus 1.0% and (d) 1.0%, or (2) a “Term SOFR/Letter of Credit Rate”, which means for any day a fluctuating rate per annum equal to credit spreads of 2.5% to 3.6%, which are determined based on the Company’s debt-to-capitalization ratio, plus the adjusted term SOFR rate (based on one, three or six-month interest periods). On June 30, 2022, the Company received an additional commitment of $50.0 million under the terms of the accordion feature. As of December 31, 2022, available liquidity under the Credit Agreement wa s $122.0 million resulting in $486.5 million in total liquidity for the Company. As of December 31, 2022 and 2021, the outstanding balance under the Amended and Restated Credit Agreement was $965.0 million and $760.0 million, respectively. Under the Amended and Restated Credit Agreement, the funds available are unsecured and availability under the borrowing base is calculated based on specified percentages of finished lots, construction in process, and finished homes inventory on the Consolidated Balance Sheets. The Company had capitalized debt issuance costs related to the line of credit and notes payable , net of amortization, of $7.3 million and $5.5 million as of December 31, 2022 and 2021, respectively, which were included in other assets on the Consolidated Balance Sheets. The Company amortized $3.8 million and $2.0 million of debt issuance costs for the years ended December 31, 2022 and 2021, respectively. The Credit Agreement contains restrictive covenants and financial covenants. The Company was in compliance with all debt covenants as of December 31, 2022 and 2021. The Company expects to remain in compliance with all debt covenants over the next twelve months. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consist of finished lots, construction in process (“CIP”) and finished homes, including capitalized interest. In addition, lot option fees related to off-balance sheet arrangements and due diligence costs related to land development are also capitalized into inventory. Finished lots are purchased with the intent of building and selling a home and are generally purchased just-in-time for construction. CIP represents the homebuilding activity associated with homes to be sold and speculative homes. CIP includes the cost of the finished lots and all of the direct costs incurred to build the homes. The cost of the homes is expensed on a specific identification basis. Interest is capitalized and included within each inventory category above. Capitalized interest activity is summarized in the table below for the years ended December 31, 2022 and 2021 (in thousands): For the year ended December 31, 2022 2021 Capitalized interest at the beginning of the period $ 33,266 $ 21,091 Interest incurred 121,964 45,355 Interest expensed (32) (672) Interest charged to homebuilding cost of sales (60,595) (32,508) Capitalized interest at the end of the period $ 94,603 $ 33,266 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Proceedings Weyerhaeuser Lawsuit The Company was involved in an appeals process of civil litigation related to defective products provided by Weyerhaeuser NR Company (“Weyerhaeuser”) (NYSE: WY), one of our lumber suppliers. Our Colorado division builds a number of floor plans that include basements using specialized fir lumber. On July 18, 2017, Weyerhaeuser issued a press release indicating a recall and potential solution for TJI Joists with Flak Jacket Protection manufactured after December 1, 2016. The press release indicated the TJI Joists used a Flak Jacket coating that included a formaldehyde-based resin that could be harmful to consumers and produced an odor in certain newly constructed homes. We had 38 homes impacted by the potentially harmful and odorous Flak Jacket coating and incurred significant costs directly related to Weyerhaeuser’s defective TJI Joists. Accordingly, we sought remediation and damages from Weyerhaeuser. The press release by Weyerhaeuser had a pronounced impact on our sales and cancellation rates in Colorado. We filed suit on December 27, 2017—Dream Finders Homes LLC and DFH Mandarin, LLC v. Weyerhaeuser NR Company, No. 17CV34801 (District Court, City and County of Denver, State of Colorado)—and included claims against Weyerhaeuser for manufacturer’s liability based on negligence, negligent misrepresentation causing financial loss in a business transaction and fraudulent concealment. Weyerhaeuser asserted a counterclaim asserting an equitable claim for unjust enrichment. After completion of a jury trial on November 18, 2019, the District Court issued a verdict in our favor on our claims, awarding Dream Finders Homes LLC $3.0 million in damages and DFH Mandarin, LLC $11.7 million in damages. On February 21, 2020, the District Court dismissed Weyerhaeuser’s counterclaim. Weyerhaeuser appealed the Colorado District Court’s jury verdict and on December 2, 2021, the Colorado Court of Appeals reversed the judgment entered against Weyerhaeuser for negligence, negligent misrepresentation and fraudulent concealment. As a result, Dream Finders Homes LLC and DFH Mandarin, LLC (collectively, “DFH”) filed a petition for writ of certiorari to the Colorado Supreme Court on January 13, 2022 to appeal the Colorado Court of Appeals ruling —Dream Finders Homes LLC and DFH Mandarin, LLC v. Weyerhaeuser NR Company, Case No. 2022SC24 (Colorado Supreme Court). On September 12, 2022, the Colorado Supreme Court issued a denial of certiorari. As a result of the denial of certiorari, the Company recorded a legal accrual of $0.9 million as of December 31, 2022 as part of Weyerhaeuser's motion for costs incurred in defense of this case. Silver Meadows Townhome Owners Association, Inc. Lawsuit On October 9, 2019, Silver Meadows Townhome Owners Association, Inc. filed a lawsuit in Boulder County Colorado District Court against DFH Mandarin, LLC (“Mandarin”) and Dream Finders Homes, LLC (collectively with Mandarin, “DFH”), both wholly-owned subsidiaries of the Company, as well as other named defendants. The lawsuit alleges certain construction and development defects. Mandarin successfully compelled arbitration. On March 2, 2022 during arbitration proceedings, the parties settled the matter for $12.0 million subject to the execution of a mutually acceptable settlement agreement, including a denial of any admission of liability on behalf of DFH. DFH’s insurance carrier agreed to pay the policy limit of $4.0 million toward the settlement. In April 2022, the parties executed a mutually acceptable settlement agreement and DFH paid the settlement amount, net of the insurance proceeds received. In April 2022, DFH also commenced the formal legal process to seek contribution toward DFH’s portion of the settlement amount from responsible subcontractors and vendors who performed work on the project. As of December 31, 2022 , DFH settled with one subcontractor for contribution toward DFH's amounts paid toward the settlement and continued its proceedings to collect additional contributions from responsible subcontractors and vendors, which is still in progress as of the date of this filing. Leases The Company has operating leases primarily associated with office space that is used by divisions outside of the Jacksonville area, model home sale-leasebacks and a corporate office building sale-leaseback in Jacksonville, Florida. This corporate office building lease has a remaining lease term of 12 years. The Company also has finance leases for corporate office furniture. Leases with an initial term of 12 months or less are not recorded on the balance sheet; the Company recognizes lease expense for these leases on a straight-line basis over the lease term. Lease and nonlease components for new and reassessed leases are combined. There are no significant operating or finance leases that have not yet commenced as of December 31, 2022. Most leases include one or more options to renew, with renewal terms that can extend the lease term. The exercise of lease renewal options is at the Company’s sole discretion. The Company only includes these renewal options in its lease terms if they are reasonably certain to be exercised. Finance lease assets are recorded within other assets and are net of accumulated amortization. On March 24, 2022, the Company sold 93 completed model homes for $55.4 million, including the MHI Model Homes. The Company simultaneously entered into 93 individual lease agreements. The Company is responsible for paying the operating expenses associated with the homes while under lease. Consistent with similar sale and leaseback agreements in previous years, the Company considered the terms of the sale and leaseback arrangement and based on applicable GAAP guidance, concluded the transaction qualifies for sale treatment and that the leases should be classified as operating leases. The following table shows the lease costs for the years ended December 31, 2022, 2021 and 2020 (in thousands): For the Years Ended December 31, Lease Cost Classification 2022 2021 2020 Operating lease cost (1) Selling, general and administrative expenses $ 11,547 $ 6,403 $ 5,932 Finance lease cost: Amortization of right of use assets Selling, general and administrative expenses 95 158 158 Interest on lease liabilities Interest expense 7 19 29 Total finance lease cost 102 177 187 Net lease cost $ 11,649 $ 6,580 $ 6,119 (1) Includes short-term leases and variable lease costs which are immaterial. The following table shows the maturities of our lease liabilities as of December 31, 2022 (in thousands): Maturity of Lease Liabilities Operating Leases (1) Finance Leases (1) Total (1) 2023 $ 7,861 $ 35 $ 7,896 2024 5,733 — 5,733 2025 3,700 — 3,700 2026 3,121 — 3,121 2027 1,666 — 1,666 Thereafter 7,386 — 7,386 Total lease payments 29,467 35 29,502 Less: Interest 4,806 1 4,807 Present value of lease liabilities $ 24,661 $ 34 $ 24,695 (1) We use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. During the year ended December 31, 2022, there have been no material changes in our lease liabilities for the next five years. As of December 31, 2022 2021 Weighted average remaining lease term Operating leases 6 years 8 years Financing leases 1 years 2 years Weighted average discount rate Operating leases 6.3% 5.6% Financing leases 7.5% 7.5% |
Equity
Equity | 12 Months Ended |
Dec. 31, 2022 | |
Members' Equity [Abstract] | |
Equity | Equity Corporate Reorganization Prior to the Corporate Reorganization, the Company had issued non-voting common units, common units, Series A and C Preferred Units, all of which were classified in mezzanine equity. As a result of the Corporate Reorganization, all of the outstanding non-voting common units and Series A Preferred Units of DFH LLC converted into 21,255,329 shares of the Company’s Class A common stock and all of the outstanding common units of DFH LLC converted into 60,226,153 shares of the Company’s Class B common stock. On January 27, 2021, shortly after the Corporate Reorganization, the Company redeemed all of the outstanding Series C Preferred Units for $26.0 million, including accrued unpaid preferred distributions . Following the Corporate Reorganization, the Company owns all of the voting membership interest of DFH LLC. The Board of Directors of the Company (the “Board of Directors”) has the authority to issue one or more series of preferred stock, par value $0.01 per share, without stockholder approval. Series B Preferred Units of DFH LLC As of December 31, 2022 and 2021, the Company had 7,143 and 7,143, respectively, of Series B Preferred Units (“Series B Preferred Units”) issued and outstanding with a carrying value of $7.9 million and $7.1 million, respectively, which includes cumulative undeclared and unpaid distributions. In the event of a liquidation, dissolution or winding up of DFH LLC, the Series B Preferred Units have a liquidation preference of $1,000 per unit and are senior to common units. The Series B Preferred Units have an 8% annual cumulative preferred distribution on the liquidation preference that is payable if and when distributions are declared. The Series B Preferred units do not participate in discretionary distributions. As of December 31, 2022 and 2021, these units have an aggregate unpaid amount of cumulative preferred distributions of $3.7 million and $2.9 million, respectively, which is $516.56 and $401.07, respectively, per unit. The Series B Preferred Units shall automatically be deemed to be cancelled when a holder of a Series B Preferred Unit receives aggregate distributions from DFH LLC on a Series B Preferred Unit equal to the sum of (i) $1,000 per unit and (ii) the unreturned capital contributions per unit plus an 8% per annum cumulative preferred return (the “Series B Distribution Amount”). In the event of a liquidation or dissolution of DFH LLC, the holders of Series B Preferred Units shall have preference over the Company’s membership interest in DFH LLC. Further, in the event of (i) a sale of substantially all of DFH LLC’s assets or (ii) a merger or reorganization resulting in the members of DFH LLC immediately prior to such transaction no longer beneficially owning at least 50% of the voting power of DFH LLC, the holders of the Series B Preferred Units may demand redemption of their Series B preferred units at a price equal to the Series B Distribution Amount (less prior distributions on such shares). The Series B Preferred Units are not convertible into the Company’s common stock. Series A Convertible Preferred Stock of the Company On September 29, 2021, the Company filed a Certificate of Designations with the State of Delaware establishing 150,000 shares of Series A Convertible Preferred Stock with an initial liquidation preference of $1,000 per share and a par value $0.01 per share (the “Convertible Preferred Stock”) and sold 150,000 shares of Convertible Preferred Stock for an aggregate purchase price of $150.0 million. The Company used the proceeds from the sale of the Convertible Preferred Stock to fund a portion of the MHI acquisition (See Note 2 ). Pursuant to the Certificate of Designations, the Convertible Preferred Stock ranks senior to the Company’s Class A and B common stock with respect to dividends and distributions on liquidation, winding-up and dissolution. Upon a liquidation, dissolution or winding up of the Company, each share of Convertible Preferred Stock will be entitled to receive the initial liquidation preference of $1,000 per share, subject to adjustment, plus all accrued and unpaid dividends thereon. In addition, the Convertible Preferred Stock has the following terms: • Cumulative Dividends: The Convertible Preferred Stock accumulates cumulative dividends at a rate per annum equal to 9% payable quarterly in arrears. • Duration: The Convertible Preferred Stock is perpetual with call and conversion rights. The Convertible Preferred Stock is not convertible by the Purchasers in the first five years following issuance, with the exception of the acceleration of the Conversion Right (as defined below) upon breach of the protective covenants (described below). The Company can call the outstanding Convertible Preferred Stock at any time for one-hundred and two percent (102%) of its liquidation preference during the fourth year following its issuance and for one-hundred and one percent (101%) of its liquidation preference during the fifth year following its issuance, plus accrued but unpaid dividends, if any. Subsequent to the fifth anniversary of its issuance, a Purchaser can convert the Convertible Preferred Stock into Class A common stock of the Company (the “Conversion Right”). The conversion price will be based on the average of the trailing 90 days’ closing price of Class A common stock of the Company, less 20% of the average and subject to a floor conversion price of $4.00 (the “Conversion Discount”). • Protective Covenants: The protective covenants of the Convertible Preferred Stock require the Company to maintain compliance with all covenants related to (i) the Credit Agreement, as may be further amended from time to time; provided that any amendment, restatement, modification or waiver of the Credit Agreement that would adversely and materially affect the rights of the Purchasers will require the written consent of holders of a majority of the then-outstanding shares of Convertible Preferred Stock; and (ii) any agreement between the Company and any Purchaser (the covenants referred to in clauses (i) and (ii), collectively, the “Protective Covenants”). Non-compliance beyond any applicable cure period only with the Protective Covenants related to the Credit Agreement will accelerate the Conversion Right, and in the event of such acceleration that occurs before the fifth anniversary following the issuance of the Convertible Preferred Stock, the “Conversion Discount” shall be increased from 20% to 25%. • Voting Rights: Except as may be expressly required by Delaware law, the shares of Convertible Preferred Stock have no voting rights. • Redemption in a Change of Control: The Convertible Preferred Stock will be redeemed, contingent upon and concurrently with the consummation of a change of control of the Company. Shares of Convertible Preferred Stock will be redeemed in a change of control of the Company at a price, in cash, equal to the liquidation preference, subject to adjustment, plus all accumulated and unpaid dividends, plus, if the change of control occurs before the fourth anniversary of the date of issuance of the Convertible Preferred Stock, a premium equal to the dividends that would have accumulated on such share of Convertible Preferred Stock from and after the change of control redemption date and through the fourth anniversary of the issuance of the Convertible Preferred Stock. Pursuant to the terms of the Certificate of Designations, unless and until approval of the Company’s stockholders is obtained, no shares of Class A common stock will be issued or delivered upon conversion of any Convertible Preferred Stock to the extent that such issuance would (i) result in the holder beneficially owning in excess of 19.99% of the outstanding Class A common stock as of the date of the Certificate of Designations or (ii) exceed 19.99% of the outstanding shares of Class A and Class B common stock combined as of the date of the Certificate of Designations. In addition, in connection with the sale of the Convertible Preferred Stock, on September 29, 2021, the Company and the Purchasers entered into a Registration Rights Agreement (the “Registration Rights Agreement”) pursuant to which, among other things, the Company granted the Purchasers certain registration rights. Under the Registration Rights Agreement, the Company is required to register the Convertible Preferred Stock owned by the Purchasers and the shares of Class A common stoc k issuable upon conversion of such shares equal to 19.99% of the outstanding shares of Class A common stock for resale, which registration statement was filed and declared effective during March 2022. |
Equity-Based Compensation
Equity-Based Compensation | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Equity-Based Compensation | Equity-Based CompensationThe Company is authorized to grant up to an aggregate of 9.1 million of stock-based awards under the 2021 Equity Incentive Plan (the “2021 Plan”), which is administered by the Compensation Committee of the Board of Directors. The Company grants restricted stock to certain executives, directors and members of management, primarily as incentive awards. These stock grants typically vest over a period of three As of December 31, 2022 and 2021, the total unrecognized compensation expense under the 2021 Plan was $11.3 million and $16.7 million, respectively. The unrecognized compensation expense will be recognized over a weighted-average period of two years. The Company’s restricted stock awards as of December 31, 2022 and changes during the year then ended are presented below (in thousands, except share amounts): Shares Weighted Average Grant Date Fair Value Outstanding - December 31, 2021 721,598 $ 16,690 Granted 486,264 8,301 Forfeited (76,752) (1,361) Vested (238,554) (5,518) Outstanding - December 31, 2022 892,556 $ 18,112 |
Variable Interest Entities
Variable Interest Entities | 12 Months Ended |
Dec. 31, 2022 | |
Variable Interest Entities and Investments in Other Entities [Abstract] | |
Variable Interest Entities | Variable Interest Entities The Company holds investments in certain limited partnerships and similar entities that conduct land acquisition, land development and/or other homebuilding activities in various markets where our homebuilding operations are located, which are considered variable interests. The Company also has an interest in Jet Home Loans LLC (“Jet Home Loans” or “Jet LLC”), where the primary activities include underwriting, originating and selling home mortgages. The Company’s investments create a variable interest in a variable interest entity (“VIE”), depending on the contractual terms of the arrangement. Additionally, the Company, in the ordinary course of business, enters into option contracts with third parties and unconsolidated entities for the ability to acquire rights to finished lots for the construction of homes. Under these contracts, the Company typically makes a specified earnest money deposit in consideration for the right to purchase finished lots in the future, usually at a predetermined price. The VIEs are funded by initial capital contributions from the Company, as well as its other partners, and generally do not have significant debt. In some cases, an unrelated third party is the general partner or managing member and, in others, the general partner or managing member is a related party. The primary risk of loss associated with the Company’s involvement in these VIEs is limited to the Company’s initial capital contributions due to bankruptcy or insolvency of the VIE; however, management has deemed the likelihood of this as remote. The maximum exposure to loss related to the VIEs is disclosed below for both consolidated and unconsolidated VIEs, which equals the Company’s capital investment in each entity. Consolidated VIEs For VIEs that the Company does consolidate, management has the power to direct the activities that most significantly impact the VIE’s economic performance. The Company typically serves as the party with homebuilding expertise in the VIE. The Company does not guarantee the debts of the VIEs, and creditors of the VIEs have no recourse against the Company. There were no new consolidated VIEs during the years ended December 31, 2022, 2021 or 2020. The table below displays the carrying amounts of the assets and liabilities related to the consolidated VIEs (in thousands): As of December 31, Consolidated 2022 2021 Assets $ 13,344 $ 30,830 Liabilities $ 4,787 $ 10,203 Unconsolidated VIEs For VIEs that the Company does not consolidate, the Company does not hold the power to direct the activities that most significantly impact the VIE’s economic performance. The Company’s maximum exposure to loss is limited to its investment in the entities because the Company is not obligated to provide them any additional capital and does not guarantee any of the unconsolidated VIEs’ debt. The table below shows the Company’s investments in the unconsolidated VIEs (in thousands): As of December 31, Unconsolidated 2022 2021 Jet Home Loans $ 7,102 $ 6,133 Other unconsolidated VIEs 6,906 9,834 Total investment in unconsolidated VIEs $ 14,008 $ 15,967 Lot Option Contracts The Company generally does not engage in the land development business. Instead, we employ an asset-light land financing strategy, providing us optionality to purchase lots on a ‘‘just-in-time’’ basis for construction and affording us flexibility to acquire lots at a rate that matches the expected sales pace in a given community. We primarily employ two variations of our asset-light land financing strategy, finished lot option contracts and land bank option contracts, pursuant to which we secure the right to purchase finished lots at predetermined market prices from various land sellers and land bank partners, by paying deposits based on the aggregate purchase price of the finished lots. These option contracts generally allow us, at our option, to forfeit our right to purchase the lots controlled for any reason, and our sole legal obligation and economic loss as a result of such forfeitures is limited to the amount of the deposits paid pursuant to such option contracts and, in the case of land bank option contracts, our loss is limited to the related lot option fees paid to the land bank partner, any potential performance obligations, management of the land development to completion and any cost overruns relative to the project . None of the creditors of any of the land bank entities with which we enter into lot option contracts have recourse to our general credit. We generally do not have any specific performance obligations to purchase a certain number or any of the lots or guarantee any of the land bankers’ financial or other liabilities. We are not involved in the design or creation of the land bank entities from which we purchase lots under lot option contracts. The land bankers’ equity holders have the power to direct 100% of the operating activities of the land bank entity. We have no voting rights in any of the land bank entities. The sole purpose of the land bank entity’s activities is to generate positive cash flow returns for such entity’s equity holders. Further, we do not share in any of the profit or loss generated by the project’s development. The profits and losses are passed directly to the land bankers’ equity holders. The deposit placed by us pursuant to the lot option contracts is deemed to be a variable interest in the respective land bank entities. Certain of those land bank entities are deemed to be VIEs. Therefore, the land bank entities with which we enter into lot option contracts are evaluated for possible consolidation by the Company. We believe the activities that most significantly impact a land bank entity’s economic performance are the operating activities of the land bank entity. In the case of development projects, unless and until a land bank entity delivers finished lots for sale, the land bank entity’s equity investors bear the risk of land ownership and do not earn any revenues, except for lot option fees paid by the Company. The operating development activities are managed by the land bank entity’s equity investors. We possess no more than limited protective legal rights through the lot option contracts in the specific finished lots we are purchasing, and we possess no participative rights in the land bank entities. Accordingly, we do not have the power to direct the activities of a land bank entity that most significantly impact its economic performance. For the aforementioned reasons, the Company concluded that it is not the primary beneficiary of the land bank entities with which it enters into lot option contracts, and therefore the Company does not consolidate any of these VIEs. The Company’s risk of loss related to finished lot option and land bank option deposits and related fees and interest was $461.6 million as of December 31, 2022. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income TaxesThe Company is a corporation subject to U.S. federal income taxes, in addition to state and local income taxes. As the Company became subject to tax as a corporation in 2021, no provision for federal or state income taxes was made prior to 2021 and, therefore, there are no comparative balances relating to corporate income taxes for the 2020 period herein. Income tax expense for the years ended December 31, 2022 and 2021, consists of the following (in thousands): 2022 2021 Current expense: Federal $ 66,473 $ 26,336 State 15,680 5,088 Total current expense 82,153 31,424 Deferred expense: Federal 5 (3,305) State (299) (664) Total deferred (benefit) (294) (3,969) Total income tax expense $ 81,859 $ 27,455 The following table reconciles the statutory federal income tax rate to the effective income tax rate: 2022 2021 Income taxes at federal statutory rate 21.0 % 21.0 % State and local income taxes, net of federal tax 3.5 2.4 Federal tax credits (3.9) (5.9) Non-deductible executive compensation 1.3 0.8 Other 1.1 0.2 Effective rate 23.0 % 18.5 % The significant components of deferred income tax assets and liabilities as of December 31, 2022 and 2021, consist of the following (in thousands): 2022 2021 Deferred tax assets: Property and equipment, net $ 1,085 $ 238 Contingent consideration 4,145 1,805 Equity-based compensation 246 1,265 Right-of-use liabilities 5,809 — Other 1,408 1,512 Total deferred tax asset 12,693 4,820 Deferred tax liabilities: Property and equipment, net (2,423) (588) Right-of-use assets (5,674) — Other (70) — Total deferred tax liability (8,167) (588) Net deferred income tax asset $ 4,526 $ 4,232 Management believes that we will have sufficient future taxable income to make it more likely than not that the net deferred tax assets will be realized. |
Segment Reporting
Segment Reporting | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting The Company primarily operates in the homebuilding business and is organized and reported by division. There are six reportable segments: (i) Jacksonville, (ii) Colorado, (iii) Orlando, (iv) The Carolinas, (v) Texas and (vi) Jet LLC, the Company’s mortgage operations. The Company includes the Century Homes operations within the Orlando segment and the MHI operations comprise the Texas segment, and excludes legacy Austin, Texas operations. The remaining operating segments are combined into the “Other” category, along with the corporate component, which is not considered an operating segment. As of December 31, 2022, DC Metro, which was previously its own reportable segment comprising our homebuilding operations in the Washington D.C. metropolitan area, has been included in Other. It no longer meets the quantitative thresholds prescribed by ASC 280 Segment Reporting warranting separate disclosure, individually or in the aggregate with the Other segment. The current and comparative disclosures below reflect this change in segment reporting as of and for the years ended December 31, 2022 and 2021. The following tables summarize revenues and net and comprehensive income by segment for the years ended December 31, 2022, 2021 and 2020 as well as total assets and goodwill by segment as of December 31, 2022 and 2021 (in thousands): For the Years Ended December 31, Revenues: 2022 2021 2020 Jacksonville $ 679,321 $ 452,891 $ 430,811 Colorado 169,378 114,260 122,275 Orlando 304,767 244,143 124,769 The Carolinas 482,646 370,477 89,324 Texas 1,325,274 361,138 — Jet Home Loans 26,399 28,056 28,629 Other (1) 380,949 381,001 366,628 Total segment revenues 3,368,734 1,951,966 1,162,436 Reconciling items from equity method investments (26,399) (28,056) (28,629) Consolidated revenues $ 3,342,335 $ 1,923,910 $ 1,133,807 For the Years Ended December 31, Net and comprehensive income: 2022 2021 2020 Jacksonville $ 86,872 $ 55,578 $ 41,380 Colorado 17,740 3,971 14,052 Orlando 32,070 15,937 10,680 The Carolinas 25,965 14,623 6,034 Texas 112,855 21,797 — Jet Home Loans 3,655 10,630 15,921 Other (1) 1,004 18,679 4,376 Total segment net and comprehensive income 280,161 141,215 92,443 Reconciling items from equity method investments (5,864) (6,621) (7,930) Consolidated net and comprehensive income $ 274,297 $ 134,594 $ 84,513 Assets: Goodwill: As of December 31, 2022 2021 2022 2021 Jacksonville $ 300,491 $ 207,502 $ — $ — Colorado 187,813 116,121 — — Orlando 276,720 131,882 1,795 1,795 The Carolinas 311,469 247,250 16,853 16,853 Texas 793,219 743,306 141,071 141,070 Jet Home Loans 96,108 77,074 — — Other (1) 494,150 441,910 12,488 12,209 Total segments 2,459,970 1,965,045 172,207 171,927 Reconciling items from equity method investments (88,833) (70,797) — — Consolidated $ 2,371,137 $ 1,894,248 $ 172,207 $ 171,927 (1) Other includes the Company’s title operations, homebuilding operations in non-reportable segments, operations of the corporate component and corporate assets such as cash and cash equivalents, cash held in trust, prepaid insurance, operating and financing leases, as well as property and equipment. |
Fair Value Disclosures
Fair Value Disclosures | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures | Fair Value Disclosures Fair value represents the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair values are determined using a fair value hierarchy based on the inputs used to measure fair value. Level 1 inputs are unadjusted quoted prices in active markets for identical assets and liabilities. Level 2 inputs are inputs other than quoted market prices that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable and significant to the fair value. The following table presents a summary of the change in fair value measurement of contingent consideration, which is based on Level 3 inputs and is the only asset or liability measured at fair value on a recurring basis (in thousands): Beginning balance, December 31, 2021 $ 124,056 Fair value adjustments related to prior year acquisitions 11,053 Contingent consideration payments (19,981) Ending balance, December 31, 2022 $ 115,128 Fair value measurements may also be utilized on a nonrecurring basis, such as for the impairment of long-lived assets and inventory. The fair value of financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, notes payable and customer deposits, approximate their carrying amounts due to the short-term nature of these instruments. The fair value of the construction lines of credit approximate their carrying amounts since they are subject to short-term fixed interest rates that reflect current market rates. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions The Company enters into or participates in related party transactions. The majority of these transactions are entered into to secure finished lots for the construction of new homes. Consolidated VIEs The Company has arrangements to acquire land, develop finished lots and build homes. Certain stockholders, directors and members of management of the Company, have invested in these VIEs and some are limited partners in these VIEs. DFH Investors LLC is the managing member of certain of these VIEs. The VIEs are consolidated for accounting purposes (see Note 7) . DF Residential I, LP DF Residential I, LP (Fund I) is a real estate investment vehicle, organized to acquire and develop finished lots. Dream Finders Homes LLC, has entered into six joint ventures and ten land bank projects with Fund I since its formation in January 2017. DF Capital Management, LLC (“DF Capital”) is the investment manager of Fund I. The Company owns a 49% membership interest in DF Capital. DF Capital is controlled by unaffiliated parties. Certain directors and executive officers have made investments in Fund I as limited partners. In addition, certain members of management have made investments in Fund I. The general partner of Fund I is DF Management GP, LLC (“DF Management”). Dream Finders Homes LLC is one of four members of DF Management with a 25.8% membership interest. The total committed capital in Fund I, which was fully committed in 2019, is $36.7 million. Collectively, the Company’s directors, executive officers and members of management invested $8.7 million or 23.8% of the total committed capital in Fund I. Additionally, Dream Finders Homes LLC and DFH Investors LLC, collectively invested $1.4 million or 3.8% of the total committed capital of Fund I. DF Residential II, LP DF Residential II, LP (“Fund II”) initiated its first close on March 11, 2021. DF Management GP II, LLC, a Florida limited liability company, serves as the general partner of Fund II (the “General Partner”). Fund II raised total capital commitments of $322.1 million and was fully committed as of January 2022. DF Capital is the investment manager of Fund II. The Company indirectly owns 72.0% of the membership interests in the General Partner and receives 72.0% of the economic interests. The General Partner is controlled by unaffiliated parties. The Company’s investment commitment in Fund II is $3.0 million or 0.9% of the total committed capital of Fund II. On March 11, 2021, the Company entered into land bank financing arrangements and a Memorandum of Right of First Offer with Fund II, under which Fund II has an exclusive right of first offer on any land bank financing projects that meet its investment criteria and are undertaken by the Company during Fund II’s investment period. Certain directors, executive officers and members of management have made investment commitments as limited partners in Fund II in an aggregate amount of $133.9 million or 41.6% of the total committed capital of Fund II as of December 31, 2022, inclusive of a $100.0 million commitment from Rockpoint Group, LLC discussed below. As of December 31, 2021, these investment commitments were $33.9 million or 10.5% of the total committed capital of Fund II. Land Bank Transactions with DF Capital DF Capital raised additional commitments from limited partners through deals other than Fund I and Fund II, which provided land bank financing for specific projects. One of the Company’s officers invested $0.2 million in one of these funds managed by DF Capital as a limited partner in 2019. The Company continues to purchase lots controlled by these funds. As of December 31, 2022 and 2021, the Company had $58.6 million in outstanding lot deposits primarily related to Fund II and other land bank transaction deals, and $3.7 million in outstanding lot deposits primarily related to other land bank transaction deals, respectively, in relation to DF Capital projects. Transactions with Rockpoint Group, LLC and affiliates From time to time, the Company enters into land bank option contracts with Rockpoint Group, LLC (“Rockpoint”) or its affiliates in connection with the Company’s acquisition and development of land. Rockpoint or its affiliate provides the funding for the land acquisition and the Company secures the right to purchase finished lots at market prices by paying deposits based on the aggregate purchase price of the finished lots and any related fees, similar to land bank option contracts with non-related, third-party land bankers. William H. Walton III is the founding principal of Rockpoint and a member of the Company’s Board of Directors. On February 15, 2022, DFH entered into a Memorandum of Right of First Offer with Rockpoint, under which Rockpoint has an exclusive right of first offer on certain land bank financing projects that meet certain criteria and are undertaken by the Company during Fund II’s investment period. On the same date, Rockpoint provided funding relating to its $100.0 million commitment to Fund II. Jet LLC Jet LLC performs mortgage origination activities for the Company including underwriting and originating home mortgages for Company customers and non-Company customers. The Company owns 49.9% of Jet LLC, but is not the primary beneficiary. Jet LLC is accounted for under the equity method and is a related party of the Company (see Note 9 ). |
Earnings per Share
Earnings per Share | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings per Share The following weighted-average shares and share equivalents were used to calculate basic and diluted earnings per share (“EPS”) for the years ended December 31, 2022, and 2021 (in thousands, except share amounts): For the Years Ended December 31, 2022 2021 Numerator Net and comprehensive income attributable to Dream Finders Homes, Inc. $ 262,313 $ 121,133 Less: Preferred dividends (1) (14,513) (4,845) Add: Loss prior to reorganization attributable to DFH LLC members (2) — 1,244 Net and comprehensive income available to common stockholders $ 247,800 $ 117,532 Denominator Weighted-average number of common shares outstanding - basic 92,745,781 92,521,482 Add: Common stock equivalent shares 13,945,467 2,792,111 Weighted-average number of shares outstanding - diluted 106,691,248 95,313,593 (1) For the diluted earnings per share calculation, $13.7 million and $3.5 million in preferred dividends associated with convertible preferred stock that are assumed to be converted have been added back to the numerator for the year ended December 31, 2022 an d 2021, respectively. The remaining amounts of preferred dividends that are not added back to the numerator are associated with paid-in-kind dividends for preferred mezzanine equity which is not convertible into the Company’s common stock. (2) The Company calculated EPS for the year ended December 31, 2021 prospectively for the period subsequent to the Company’s IPO and Corporate Reorganization, based on net income attributable to common stockholders for the period January 21, 2021 through December 31, 2021 over the weighted average shares outstanding for the same period. Therefore, the net income per share for DFH, Inc. is not shown for the fiscal year ended December 31, 2020. Basic earnings per share is calculated by dividing net income available to common stockholders for the period by the weighted-average number of shares of Class A common stock and Class B common stock outstanding for the period, which participate equally in their ratable ownership of the Company. Diluted shares were calculated by using the treasury stock method for restricted stock grants and the if‐converted method for the convertible preferred stock. Diluted earnings per share gives effect to shares of potentially dilutive restricted stock grants outstanding during the period and the convertible preferred stock and the associated preferred dividends. Since the conversion price of the Company’s Convertible Preferred Stock is based on the average trailing 90 days’ closing price of Class A common stock, changes in the price of the Class A common stock may significantly affect, as it did in 2022, the number of additional assumed common shares outstanding under the if-converted method for diluted earnings per share, even when the number of Convertible Preferred Stock shares outstanding is unchanged. There were no anti-dilutive shares for the years ended December 31, 2022 and 2021. |
Nature of Business and Signif_2
Nature of Business and Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Nature of Business | Nature of Business Dream Finders Homes, Inc. (the “Company” or “DFH, Inc.”) was incorporated in the State of Delaware on September 11, 2020. The Company was formed for the purpose of completing an initial public offering (“IPO”) of its common stock and related transactions in order to carry on the business of Dream Finders Holdings LLC, a Florida limited liability company (“DFH LLC”), as a publicly-traded entity. Pursuant to a corporate reorganization and completion of its IPO on January 25, 2021, the Company became a holding company for DFH LLC and its subsidiaries. In connection with the IPO and pursuant to the terms of the Agreement and Plan of Merger by and among DFH, Inc., DFH LLC and DFH Merger Sub LLC, a Delaware limited liability company and direct, wholly owned subsidiary of DFH, Inc., DFH Merger Sub LLC merged with and into DFH LLC with DFH LLC as the surviving entity (the “Merger”). As a result of the Merger, all of the outstanding non-voting common units and Series A Preferred Units of DFH LLC converted into 21,255,329 shares of Class A common stock of DFH, Inc., all of the outstanding common units of DFH LLC converted into 60,226,153 shares of Class B common stock of DFH, Inc. and all of the outstanding Series B Preferred Units and Series C Preferred Units of DFH LLC remained outstanding. We refer to this and certain other related events and transactions, as the “Corporate Reorganization”. Following the Corporate Reorganization, the Company owns all of the voting membership interest of DFH LLC. The Company successfully completed its IPO of 11,040,000 shares of Class A common stock (which included full exercise of the over-allotment option) at an IPO price of $13.00 per share. Shares of the Company’s Class A common stock began trading on the Nasdaq Global Select Market under the ticker symbol “DFH” on January 21, 2021, and the IPO closed on January 25, 2021. On January 27, 2021, the Company redeemed all of the outstanding Series C Preferred Units for $26.0 million, including accrued unpaid preferred distributions. On October 10, 2022, the Company transferred the listing of its Class A common stock from the Nasdaq Global Select Market to the New York Stock Exchange. The Company's Class A common stock continues to trade under the stock symbol "DFH". The following is a description of the significant accounting policies and practices, which conform to accounting principles generally accepted in the United States of America (“U.S. GAAP”). |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of DFH, Inc., its wholly-owned subsidiaries and its investments that qualify for consolidation treatment (see Note 7 ). All intercompany accounts and transactions have been eliminated in consolidation. There are no other components of comprehensive income not already reflected in net and comprehensive income on our Consolidated Statements of Comprehensive Income. As a result of the Corporate Reorganization, for accounting purposes, our historical results included herein present the combined assets, liabilities and results of operations of DFH, Inc. and DFH LLC and its direct and indirect subsidiaries for the period September 11, 2020 to January 21, 2021. |
Use of Estimates | Use of EstimatesThe preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of highly liquid instruments, with original maturities of three months or less. |
Restricted Cash | Restricted CashRestricted cash represents funds held in accounts that are restricted for specific purposes, primarily related to escrow monies held in title companies. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue in accordance with ASC 606, which requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. We recognize revenue by following the five-step model: (i) identifying the contract(s) with the customer, (ii) identifying the separate performance obligations in the contract, (iii) determining the transaction price, (iv) allocating the transaction price to the separate performance obligations, and (v) recognizing revenue when each performance obligation is satisfied. The Company’s revenues consist primarily of home sales in the United States, which is its principal market. Home sale transactions are made pursuant to contracts under which the Company typically has a single performance obligation to deliver a completed home to the homebuyer when closing conditions are met. The Company generally determines the selling price per home based on the expected cost-plus margin. The Company has performed an assessment and its contracts do not contain significant financing terms. A large portion of the Company’s contracts with customers and the related performance obligations have an original expected duration of one year or less. For the majority of contracts, performance obligations are satisfied and revenue is recognized at the point in time when control of the asset is transferred to the customer, which is generally when title to and possession of the home and the risks and rewards of ownership are transferred to the homebuyer on the closing date. Under home sale contracts, the Company typically receives an initial cash deposit from the homebuyer at the time the sales contract is executed and receives the remaining consideration to which the Company is entitled, through an escrow agent, at closing. In certain contracts, the customer controls the underlying land upon which the home is constructed. For these specific contracts, the performance obligation is satisfied over time, as the Company’s performance creates or enhances an asset that the customer controls. The Company recognizes revenue for these contracts based on the percentage of completion of the project, determined by the number of days of construction completed compared to the total estimated number of days to construct the home. Typically, the Company has two types of percentage of completion contracts. The first type is with individual customers for which the Company acts as a general contractor on land owned by the homebuyer. The second is with institutional buyers for which the Company acts as a general contractor on land owned by the institution. Individual customers generally have construction-to-permanent loans that are taken out by the customer. During the underwriting process for our individual and institutional customers a draw schedule is agreed upon by the bank, the customer and the Company. Funds are disbursed for labor and materials that have been completed or installed. These both result in a contract asset as work is being completed prior to receiving funds. A contract liability would be recorded in cases where we have received funds in excess of costs incurred. At December 31, 2022 and 2021, the contract asset related to percentage of completion contracts was $20.7 million and $21.0 million, respectively, and is included in other assets on the Consolidated Balance Sheets. At December 31, 2022 and 2021, the contract liability related to percentage of completion contracts was $2.2 million and $3.9 million, respectively, and is included in accrued expenses on the Consolidated Balance Sheets. Revenues include forfeited deposits, which occur when home sale or land sale contracts that include a nonrefundable deposit are cancelled. Sales incentives in the form of price concessions on the selling price of a home are recorded as a reduction of revenues. The cost of sales incentives in the form of free or discounted products or services provided to homebuyers, including option upgrades, are reflected in land and development costs because such incentives are identified in home sale contracts with homebuyers as an intrinsic part of the Company’s single performance obligation to deliver and transfer title to the home for the transaction price stated in the contracts. Refer to Note 9, Segment Reporting for a more detailed disaggregation of our revenues by reportable segments. |
Other Income and Expense | Other Income and Expense Other income includes income from the sale of non-core assets, interest income and management fees we earn from shared services with the former owner of MHI and from managing certain joint ventures. In general, we earn four to six percent of the sales price of homes built by us on behalf of the joint ventures. Other expense consists primarily of expenses related to the sale of non-core assets. For 2021, other income and expense also included the one-time forgiveness of the $7.2 million Paycheck Protection Program (“PPP”) loan and a $7.6 million litigation settlement expense. |
Inventories | Inventories Inventories include the costs of direct land acquisition, land development, construction, capitalized interest, real estate taxes and direct overhead costs incurred related to land acquisition and development and home construction. Indirect overhead costs are charged to selling, general, and administrative expenses as incurred. Land and development costs are typically allocated to individual residential lots on a pro rata basis based on the number of lots in the development, and the costs of residential lots are transferred to construction work in progress when home construction begins. Units are expensed on a specific identification basis as homebuilding cost of sales. Homebuilding cost of sales for homes closed includes the specific construction costs of each home and all applicable land acquisition, land development and related costs allocated to each residential lot. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Maintenance and repairs are charged to expense as incurred and betterments are capitalized. When items of property and equipment are sold or otherwise disposed, the asset and related accumulated depreciation accounts are eliminated and any gain or loss is included in operations. Depreciation of property and equipment is calculated using the straight-line method over the estimated useful lives of the assets as follows: Asset Class Useful Life Years Furniture and fixtures 2-7 Office equipment 4 Software 1-4 Vehicles 5 Buildings 39 |
Long-Lived Assets | Long-Lived Assets The Company evaluates the carrying value of its long-lived assets for impairment whenever events or changes in circumstances indicate an impairment may exist. Recoverability is measured by the expected undiscounted future cash flows of the assets compared to the carrying amount of the assets. If the expected undiscounted future cash flows are less than the carrying amount of the assets, the excess of the net book value over the estimated fair value is charged to current earnings. Fair value is based upon discounted cash flows of the assets at a rate deemed reasonable for the type of asset and prevailing market conditions, appraisals, and, if appropriate, current estimated net sales proceeds from pending offers. There were no triggering events or impairments recorded during the years ended December 31, 2022, 2021 or 2020. |
Intangible Assets, Net of Amortization | Intangible Assets, Net of Amortization The Company has intangible assets that consist of trade names that are recorded in connection with acquisitions at their fair value based on the results of valuation analyses. Trademarks acquired in business combinations are generally valued using the relief-from-royalty method, which are Level 3-type measurements. Trademarks with finite lives are amortized over no more than five-year periods. |
Goodwill | Goodwill Goodwill represents the excess of purchase price over the fair value of the assets acquired and the liabilities assumed in a business combination. See Note 2, Business Combinations, for details on recent acquisitions. The Company tests for impairment at least annually as of October 1, but the Company tests for impairment more frequently if a triggering event occurs. This test assesses qualitative factors to determine if it is more likely than not that the fair value of the reporting units is less than their carrying value. These qualitative factors include, but are not limited to, economic conditions, industry and market considerations, cost factors, overall performance of the reporting unit and other entity and reporting unit specific events. If the qualitative assessment indicates a stable fair value, no further testing is required. However, if the qualitative assessment indicates that the fair value of a reporting unit has declined past its carrying value, the Company will then calculate the fair value of the reporting unit based on discounted future cash flows. An impairment loss is recorded if this assessment concludes that the fair value of the reporting unit is less than its current carrying value. The Company completed its most recent goodwill impairment test on October 1, 2022 and determined that the fair value of all the reporting units was not less than carrying value. No impairment was recognized during the years ended December 31, 2022, 2021 or 2020. In addition, the Company has not identified any triggering events that would result in the Company performing additional impairment tests. |
Leases | Leases The Company determines if an arrangement is, or contains, a lease at inception. We recognize leases when the contract provides us the right to use an identified asset for a period of time in exchange for consideration. Operating leases are included in operating lease right-of-use (“ROU”) assets and operating lease liabilities in the Consolidated Balance Sheets. Finance leases are included in finance lease ROU assets and finance lease liabilities in the Consolidated Balance Sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an explicit rate, management uses the Company’s incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. An explicit rate is used when readily determinable. The ROU assets also include any lease payments made, reduced by any lease incentives. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for operating leases is recognized on a straight-line basis over the lease term. The Company elected the practical expedient to combine lease and nonlease components when accounting for the ROU assets and liabilities for all asset classes. Variable lease costs are expensed as incurred. Leases with an initial term of 12 months or less are not recorded in the Consolidated Balance Sheets. |
Lot Deposits | Lot Deposits Lot deposits represent amounts paid by the Company to secure the ability to acquire finished lots or land for development through an option contract. The Company enters into contracts with different land sellers to ensure it has property on which to build future homes over a two it believes it will forfeit its deposit on an individual or portfolio of lots. There were $3.0 million of impairment charges recorded in 2022, a nd no impairment charges were recorded in 2021 and 2020. |
Warranty Reserve | Warranty Reserve The Company provides a limited warranty for its homes for a period of one year. The Company’s standard warranty requires the Company or its subcontractors to repair or replace defective construction during such warranty period at no cost to the homebuyer. |
Business Acquisitions and Contingent Consideration | Business Acquisitions and Contingent Consideration Business acquisitions are evaluated and accounted for in accordance with guidance set forth in ASC 805. Once a business combination has been identified, all material assets and liabilities of the business are recognized at fair value as of the acquisition date. Any residual amount remaining of fair value over net assets is recognized as goodwill. In connection with applicable acquisitions (Note 2 ), the Company records the fair value of contingent consideration as a liability on the acquisition date as prescribed by the underlying agreement, usually resulting in additional purchase price allocations which is calculated as a percentage of future estimated pre-tax income of the acquiree. The initial measurement of contingent consideration is based on projected cash flows such as revenues, gross margin, overhead expenses and pre-tax income and is discounted to present value using the discounted cash flow method. The remaining estimated contingent consideration payments are subsequently remeasured to fair value at each reporting date based on the estimated future earnings of the acquired entities and the re-assessment of risk-adjusted discount rates that reflect current market conditions. Maximum potential exposure for contingent consideration is not estimable based on the contractual terms of the contingent consideration agreements, which allow for a percentage payout based on a potentially unlimited range of pre-tax net income. |
Customer Deposits | Customer Deposits Customer deposits are amounts collected from customers in conjunction with the execution of the home sale contract, and are recorded as a liability when cash is received. Customer deposits are applied against the final settlement due at the home closing. In the event of contract default or termination, the customer deposit is generally forfeited and recognized as revenue. |
Debt Issuance Costs | Debt Issuance Costs Debt issuance costs are amortized to interest expense using the straight-line method over the estimated economic life of the underlying debt instrument. Portions of this amortization are evaluated for capitalization as inventories and subsequently expensed through cost of sales at the home closing. |
Variable Interest Entities | Variable Interest Entities Pursuant to ASC 810 and subtopics related to the consolidation of variable interest entities (“VIEs”), m anagement analyzes the Company’s investments first under the variable interest model to determine if they are VIEs and, if so, whether the Company is the primary beneficiary. Management determines whether the Company is the primary beneficiary of a VIE at the time it becomes involved with a VIE and reconsiders that conclusion if changes to the Company’s involvement arise. To make this determination, management considers factors such as whether the Company could direct finance, determine or limit the scope of the entity, sell or transfer property, direct development or direct other operating decisions. The primary beneficiary is defined as the entity having both of the following characteristics: 1) the power to direct the activities that most significantly impact the VIE’s performance, and 2) the obligation to absorb losses and rights to receive the returns from the VIE that would be potentially significant to the VIE. Management consolidates the entity if the Company is the primary beneficiary or if a standalone primary beneficiary does not exist and the Company and its related parties collectively meet the definition of a primary beneficiary. If the investment does not qualify as a VIE under the variable interest model, management then evaluates the entity under the voting interest model to assess if consolidation is appropriate. See Note 7, Variable Interest Entities, for a description of the Company’s interests, including which entities were determined to be VIEs. Accounting for Unconsolidated VIEs Investments for which the Company is not identified as the primary beneficiary, but the Company has significant influence are accounted for as equity method investments. Investments for which the Company does not have significant influence are accounted for at cost under the cost method. Equity and cost method investments are classified as unconsolidated entities on the Consolidated Balance Sheets. For equity method investments, the Company shares in the earnings (losses) of these unconsolidated entities generally in accordance with its respective equity interests. In some instances, the Company recognizes earnings (losses) that differ from its equity interest in the unconsolidated entity. For distributions received from equity method investments, the Company has elected to use the cumulative earnings approach for the Consolidated Statements of Cash Flows. Under the cumulative earnings approach, distributions up to the amount of cumulative equity in earnings recognized are treated as returns on investment within operating cash flows and those in excess of that amount are treated as returns of investment within investing cash flows. |
Non-Controlling Interests | Non-Controlling Interests The equity interests held by others in DFH Leyden LLC, DFH Amelia LLC, DFH Clover LLC, DFH Leyden II LLC, DFH MOF Eagle Landing LLC, DCE DFH JV LLC, DFH Capitol LLC, DFC Mandarin Estates LLC, DFC East Village LLC, DFC Wilford LLC, DFC Amelia Phase III LLC, DFC Sterling Ranch LLC, DFC Grand Landings LLC and FMR IP, LLC, have been reflected as non-controlling interests in the Consolidated Balance Sheets. Income attributable to these non-controlling interests are presented in the Consolidated Statements of Comprehensive Income as net income attributable to non-controlling interests. |
Income Taxes | Income TaxesWe are a corporation subject to income taxes in the United States. Our proportional share of the Company’s subsidiaries’ provisions are included in our consolidated financial statements. Our deferred income tax assets and liabilities are computed for differences between the asset and liability method and financial statement amounts that will result in taxable or deductible amounts in the future. We compute deferred balances based on enacted tax laws and applicable rates for the periods in which the differences are expected to affect taxable income. A valuation allowance is recognized for deferred tax assets if it is more likely than not that some portion or all of the net deferred tax assets will not be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies and results of recent operations. If we determine we would be able to realize our deferred tax assets for which a valuation allowance had been recorded, then we would adjust the deferred tax asset valuation allowance, which would reduce our provision for income taxes. We evaluate the tax positions taken on income tax returns that remain open and positions expected to be taken on the current year tax returns to identify uncertain tax positions. Unrecognized tax benefits on uncertain tax positions are recorded on the basis of a two-step process in which (1) we determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the largest amount of tax benefit that is more than 50% likely to be realized is recognized. Interest and penalties related to unrecognized tax benefits are recorded in income tax expense. |
Advertising | AdvertisingThe Company expenses advertising costs as they are incurred. |
Equity-Based Compensation | Equity-Based Compensation Certain individuals on our management team are eligible for equity-based compensation, which is awarded according to the terms of individual contracts with those managers. The Company records compensation cost for equity units awarded to employees in return for employee service. The cost is measured at the grant-date fair value of the award and recognized as compensation expense over the employee service period, which is normally the vesting period. We recognize forfeitures of equity-based awards as a reduction to compensation costs in the period in which they occur . |
Reclassifications | Reclassifications Certain reclassifications have been made in the 2021 and 2020 Consolidated Financial Statements to conform to the classifications used in 2022. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In March 2020, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform, which provides practical expedients and exceptions for applying GAAP when modifying contracts and hedging relationships that use LIBOR as a reference rate. These amendments are not applicable to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022. In June 2022, we amended and restated our revolving credit facility, with no material impact as a result of the shift away from LIBOR (see Note 4). |
Nature of Business and Signif_3
Nature of Business and Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Estimated Useful Lives of Assets | Depreciation of property and equipment is calculated using the straight-line method over the estimated useful lives of the assets as follows: Asset Class Useful Life Years Furniture and fixtures 2-7 Office equipment 4 Software 1-4 Vehicles 5 Buildings 39 |
Business Combinations (Tables)
Business Combinations (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Century Homes Florida Acquisition | |
Business Acquisition [Line Items] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The final purchase price allocation as of January 31, 2022 was as follows (in thousands): Cash acquired $ 3,993 Other assets 754 Goodwill 1,795 Inventories 34,324 Property and equipment, net 549 Liabilities (5,831) Total purchase price $ 35,584 |
MHI Acquisition | |
Business Acquisition [Line Items] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The total purchase price was as follows (in thousands): Cash consideration $ 488,178 Contingent consideration based on future earnings 94,573 Total consideration $ 582,751 The final purchase price allocation as of September 30, 2022 was as follows (in thousands): Cash acquired $ 297 Inventories 473,037 Lot deposits 40,452 Other assets 14,722 Property and equipment 3,163 Equity method investments 6,192 Intangible assets 8,840 Goodwill 141,071 Operating lease right-of-use assets 1,508 Accounts payable (41,466) Accrued expenses (25,801) Customer deposits (37,756) Operating lease liabilities (1,508) Total purchase price $ 582,751 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property Plant and Equipment Income Statement Disclosures [Abstract] | |
Property and Equipment | Property and equipment consisted of the following as of December 31, 2022 and 2021 (in thousands): For the Years Ended December 31, 2022 2021 Furniture and fixtures $ 18,753 $ 17,756 Buildings 401 401 Land 216 216 Vehicles 64 21 Office equipment and software 3,733 4,384 Total property and equipment 23,167 22,778 Less: Accumulated depreciation (15,830) (15,989) Property and equipment, net $ 7,337 $ 6,789 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Capitalized Inventory | Interest is capitalized and included within each inventory category above. Capitalized interest activity is summarized in the table below for the years ended December 31, 2022 and 2021 (in thousands): For the year ended December 31, 2022 2021 Capitalized interest at the beginning of the period $ 33,266 $ 21,091 Interest incurred 121,964 45,355 Interest expensed (32) (672) Interest charged to homebuilding cost of sales (60,595) (32,508) Capitalized interest at the end of the period $ 94,603 $ 33,266 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Lease Cost | The following table shows the lease costs for the years ended December 31, 2022, 2021 and 2020 (in thousands): For the Years Ended December 31, Lease Cost Classification 2022 2021 2020 Operating lease cost (1) Selling, general and administrative expenses $ 11,547 $ 6,403 $ 5,932 Finance lease cost: Amortization of right of use assets Selling, general and administrative expenses 95 158 158 Interest on lease liabilities Interest expense 7 19 29 Total finance lease cost 102 177 187 Net lease cost $ 11,649 $ 6,580 $ 6,119 (1) Includes short-term leases and variable lease costs which are immaterial. |
Maturities of Lease Liabilities | The following table shows the maturities of our lease liabilities as of December 31, 2022 (in thousands): Maturity of Lease Liabilities Operating Leases (1) Finance Leases (1) Total (1) 2023 $ 7,861 $ 35 $ 7,896 2024 5,733 — 5,733 2025 3,700 — 3,700 2026 3,121 — 3,121 2027 1,666 — 1,666 Thereafter 7,386 — 7,386 Total lease payments 29,467 35 29,502 Less: Interest 4,806 1 4,807 Present value of lease liabilities $ 24,661 $ 34 $ 24,695 (1) We use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. |
Weighted-Average Lease Term and Discount Rate | During the year ended December 31, 2022, there have been no material changes in our lease liabilities for the next five years. As of December 31, 2022 2021 Weighted average remaining lease term Operating leases 6 years 8 years Financing leases 1 years 2 years Weighted average discount rate Operating leases 6.3% 5.6% Financing leases 7.5% 7.5% |
Equity-Based Compensation (Tabl
Equity-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Restricted Stock Awards | The Company’s restricted stock awards as of December 31, 2022 and changes during the year then ended are presented below (in thousands, except share amounts): Shares Weighted Average Grant Date Fair Value Outstanding - December 31, 2021 721,598 $ 16,690 Granted 486,264 8,301 Forfeited (76,752) (1,361) Vested (238,554) (5,518) Outstanding - December 31, 2022 892,556 $ 18,112 |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Variable Interest Entities and Investments in Other Entities [Abstract] | |
Schedule of Variable Interest Entities | The table below displays the carrying amounts of the assets and liabilities related to the consolidated VIEs (in thousands): As of December 31, Consolidated 2022 2021 Assets $ 13,344 $ 30,830 Liabilities $ 4,787 $ 10,203 |
Investment in Unconsolidated VIEs | The table below shows the Company’s investments in the unconsolidated VIEs (in thousands): As of December 31, Unconsolidated 2022 2021 Jet Home Loans $ 7,102 $ 6,133 Other unconsolidated VIEs 6,906 9,834 Total investment in unconsolidated VIEs $ 14,008 $ 15,967 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | Income tax expense for the years ended December 31, 2022 and 2021, consists of the following (in thousands): 2022 2021 Current expense: Federal $ 66,473 $ 26,336 State 15,680 5,088 Total current expense 82,153 31,424 Deferred expense: Federal 5 (3,305) State (299) (664) Total deferred (benefit) (294) (3,969) Total income tax expense $ 81,859 $ 27,455 |
Schedule of Effective Income Tax Rate Reconciliation | The following table reconciles the statutory federal income tax rate to the effective income tax rate: 2022 2021 Income taxes at federal statutory rate 21.0 % 21.0 % State and local income taxes, net of federal tax 3.5 2.4 Federal tax credits (3.9) (5.9) Non-deductible executive compensation 1.3 0.8 Other 1.1 0.2 Effective rate 23.0 % 18.5 % |
Schedule of Deferred Tax Assets and Liabilities | The significant components of deferred income tax assets and liabilities as of December 31, 2022 and 2021, consist of the following (in thousands): 2022 2021 Deferred tax assets: Property and equipment, net $ 1,085 $ 238 Contingent consideration 4,145 1,805 Equity-based compensation 246 1,265 Right-of-use liabilities 5,809 — Other 1,408 1,512 Total deferred tax asset 12,693 4,820 Deferred tax liabilities: Property and equipment, net (2,423) (588) Right-of-use assets (5,674) — Other (70) — Total deferred tax liability (8,167) (588) Net deferred income tax asset $ 4,526 $ 4,232 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following tables summarize revenues and net and comprehensive income by segment for the years ended December 31, 2022, 2021 and 2020 as well as total assets and goodwill by segment as of December 31, 2022 and 2021 (in thousands): For the Years Ended December 31, Revenues: 2022 2021 2020 Jacksonville $ 679,321 $ 452,891 $ 430,811 Colorado 169,378 114,260 122,275 Orlando 304,767 244,143 124,769 The Carolinas 482,646 370,477 89,324 Texas 1,325,274 361,138 — Jet Home Loans 26,399 28,056 28,629 Other (1) 380,949 381,001 366,628 Total segment revenues 3,368,734 1,951,966 1,162,436 Reconciling items from equity method investments (26,399) (28,056) (28,629) Consolidated revenues $ 3,342,335 $ 1,923,910 $ 1,133,807 For the Years Ended December 31, Net and comprehensive income: 2022 2021 2020 Jacksonville $ 86,872 $ 55,578 $ 41,380 Colorado 17,740 3,971 14,052 Orlando 32,070 15,937 10,680 The Carolinas 25,965 14,623 6,034 Texas 112,855 21,797 — Jet Home Loans 3,655 10,630 15,921 Other (1) 1,004 18,679 4,376 Total segment net and comprehensive income 280,161 141,215 92,443 Reconciling items from equity method investments (5,864) (6,621) (7,930) Consolidated net and comprehensive income $ 274,297 $ 134,594 $ 84,513 Assets: Goodwill: As of December 31, 2022 2021 2022 2021 Jacksonville $ 300,491 $ 207,502 $ — $ — Colorado 187,813 116,121 — — Orlando 276,720 131,882 1,795 1,795 The Carolinas 311,469 247,250 16,853 16,853 Texas 793,219 743,306 141,071 141,070 Jet Home Loans 96,108 77,074 — — Other (1) 494,150 441,910 12,488 12,209 Total segments 2,459,970 1,965,045 172,207 171,927 Reconciling items from equity method investments (88,833) (70,797) — — Consolidated $ 2,371,137 $ 1,894,248 $ 172,207 $ 171,927 (1) Other includes the Company’s title operations, homebuilding operations in non-reportable segments, operations of the corporate component and corporate assets such as cash and cash equivalents, cash held in trust, prepaid insurance, operating and financing leases, as well as property and equipment. |
Fair Value Disclosures (Tables)
Fair Value Disclosures (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation | The following table presents a summary of the change in fair value measurement of contingent consideration, which is based on Level 3 inputs and is the only asset or liability measured at fair value on a recurring basis (in thousands): Beginning balance, December 31, 2021 $ 124,056 Fair value adjustments related to prior year acquisitions 11,053 Contingent consideration payments (19,981) Ending balance, December 31, 2022 $ 115,128 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following weighted-average shares and share equivalents were used to calculate basic and diluted earnings per share (“EPS”) for the years ended December 31, 2022, and 2021 (in thousands, except share amounts): For the Years Ended December 31, 2022 2021 Numerator Net and comprehensive income attributable to Dream Finders Homes, Inc. $ 262,313 $ 121,133 Less: Preferred dividends (1) (14,513) (4,845) Add: Loss prior to reorganization attributable to DFH LLC members (2) — 1,244 Net and comprehensive income available to common stockholders $ 247,800 $ 117,532 Denominator Weighted-average number of common shares outstanding - basic 92,745,781 92,521,482 Add: Common stock equivalent shares 13,945,467 2,792,111 Weighted-average number of shares outstanding - diluted 106,691,248 95,313,593 (1) For the diluted earnings per share calculation, $13.7 million and $3.5 million in preferred dividends associated with convertible preferred stock that are assumed to be converted have been added back to the numerator for the year ended December 31, 2022 an d 2021, respectively. The remaining amounts of preferred dividends that are not added back to the numerator are associated with paid-in-kind dividends for preferred mezzanine equity which is not convertible into the Company’s common stock. |
Nature of Business and Signif_4
Nature of Business and Significant Accounting Policies, Nature of Business (Details) - USD ($) $ / shares in Units, $ in Millions | Jan. 25, 2021 | Jan. 27, 2021 |
Class B Common Stock | ||
Nature of Business [Abstract] | ||
Units converted to common stock (in shares) | 60,226,153 | |
Redeemable Convertible Series C Preferred Units = | ||
Nature of Business [Abstract] | ||
Redemption of preferred stock | $ 26 | |
IPO | Class A Common Stock | ||
Nature of Business [Abstract] | ||
Units converted to common stock (in shares) | 21,255,329 | |
Stock issued in offering (in shares) | 11,040,000 | |
Share price (in dollars per share) | $ 13 | |
IPO | Class B Common Stock | ||
Nature of Business [Abstract] | ||
Units converted to common stock (in shares) | 60,226,153 |
Nature of Business and Signif_5
Nature of Business and Significant Accounting Policies, Revenue Recognition (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Revenue Recognition | ||
Contract assets | $ 20.7 | $ 21 |
Contract liability | $ 2.2 | $ 3.9 |
Nature of Business and Signif_6
Nature of Business and Significant Accounting Policies, Other Income and Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | |||
Income from Paycheck Protection Program | $ 0 | $ 7,220 | $ 0 |
Litigation settlement, expense | $ 7,600 | ||
Minimum | |||
Disaggregation of Revenue [Line Items] | |||
Interest income and management fees earned as percentage of sales price | 4% | ||
Maximum | |||
Disaggregation of Revenue [Line Items] | |||
Interest income and management fees earned as percentage of sales price | 6% |
Nature of Business and Signif_7
Nature of Business and Significant Accounting Policies, Inventories (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Inventories [Abstract] | |||
Production related impairments or charges | $ 1.8 | $ 0 | $ 0 |
Nature of Business and Signif_8
Nature of Business and Significant Accounting Policies, Estimated Useful Lives of Assets (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Furniture and fixtures | Minimum | |
Property and Equipment [Abstract] | |
Estimated useful lives of assets | 2 years |
Furniture and fixtures | Maximum | |
Property and Equipment [Abstract] | |
Estimated useful lives of assets | 7 years |
Office equipment | |
Property and Equipment [Abstract] | |
Estimated useful lives of assets | 4 years |
Software | Minimum | |
Property and Equipment [Abstract] | |
Estimated useful lives of assets | 1 year |
Software | Maximum | |
Property and Equipment [Abstract] | |
Estimated useful lives of assets | 4 years |
Vehicles | |
Property and Equipment [Abstract] | |
Estimated useful lives of assets | 5 years |
Buildings | |
Property and Equipment [Abstract] | |
Estimated useful lives of assets | 39 years |
Nature of Business and Signif_9
Nature of Business and Significant Accounting Policies, Long-Lived Assets (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Long-Lived Assets [Abstract] | |||
Impairments recognized | $ 0 | $ 0 | $ 0 |
Nature of Business and Signi_10
Nature of Business and Significant Accounting Policies, Intangibles Asset Net of Amortization (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Trademarks | |
Intangibles Asset Net of Amortization [Abstract] | |
Finite-lived intangible asset, useful life | 5 years |
Nature of Business and Signi_11
Nature of Business and Significant Accounting Policies, Goodwill (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill, Impaired [Abstract] | |||
Goodwill, impairment loss | $ 0 | $ 0 | $ 0 |
Nature of Business and Signi_12
Nature of Business and Significant Accounting Policies, Lot Deposits (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Lot Deposits [Abstract] | |||
Deposit forfeitures or impairments | $ 3,000,000 | $ 0 | $ 0 |
Minimum | |||
Lot Deposits [Abstract] | |||
Future homes building timeline | 2 years | ||
Maximum | |||
Lot Deposits [Abstract] | |||
Future homes building timeline | 4 years |
Nature of Business and Signi_13
Nature of Business and Significant Accounting Policies, Warranty Reserve (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Standard Product Warranty Disclosure [Abstract] | |
Warranty period on homes | 1 year |
Nature of Business and Signi_14
Nature of Business and Significant Accounting Policies, Advertising (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Marketing and Advertising Expense [Abstract] | |||
Advertising expense | $ 15.5 | $ 7.1 | $ 6.2 |
Business Combinations - Narrati
Business Combinations - Narrative (Details) | 12 Months Ended | |||||||
Jan. 31, 2022 USD ($) | Dec. 03, 2021 USD ($) Period | Oct. 01, 2021 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Sep. 30, 2022 USD ($) | Jan. 31, 2021 USD ($) | |
Business Acquisition [Line Items] | ||||||||
Contingent consideration | $ 115,128,000 | $ 124,056,000 | ||||||
Century Homes Florida Acquisition | ||||||||
Business Acquisition [Line Items] | ||||||||
Purchase price | $ 35,584,000 | $ 35,600,000 | ||||||
Identifiable intangible assets | $ 0 | |||||||
MHI Acquisition | ||||||||
Business Acquisition [Line Items] | ||||||||
Purchase price | 582,751,000 | $ 582,751,000 | ||||||
Cash paid for business acquisition | $ 471,000,000 | |||||||
Purchase price | $ 463,000,000 | |||||||
Percentage of deposit on separate land bank facility | 10% | |||||||
Consideration paid | $ 25,200,000 | |||||||
Minimum pre-tax income thresholds and overhead expenses | $ 94,600,000 | |||||||
Business acquisition, cash on hand | 20,000,000 | |||||||
Contingent consideration | 102,100,000 | 96,700,000 | ||||||
MHI Acquisition | Other Expense | ||||||||
Business Acquisition [Line Items] | ||||||||
Contingent consideration adjustments, expense (income) | 12,400,000 | 2,200,000 | ||||||
MHI Acquisition | Model Home | ||||||||
Business Acquisition [Line Items] | ||||||||
Cash paid for business acquisition | $ 34,900,000 | |||||||
MHI Acquisition | Revolving Credit Facility | ||||||||
Business Acquisition [Line Items] | ||||||||
Lines of credit | $ 300,000,000 | |||||||
MHI Acquisition | Maximum | ||||||||
Business Acquisition [Line Items] | ||||||||
Additional consideration on pre-tax net income, percentage | 25% | |||||||
Periods of pre-tax net income | Period | 5 | |||||||
Period for closing pre-tax income thresholds and certain overhead expenses | 48 months | |||||||
VPH | ||||||||
Business Acquisition [Line Items] | ||||||||
Contingent consideration | 1,400,000 | 7,600,000 | ||||||
VPH | Other Expense | ||||||||
Business Acquisition [Line Items] | ||||||||
Contingent consideration adjustments, expense (income) | 700,000 | 700,000 | $ 1,400,000 | |||||
H&H | ||||||||
Business Acquisition [Line Items] | ||||||||
Contingent consideration | 11,600,000 | 19,800,000 | ||||||
H&H | Other Expense | ||||||||
Business Acquisition [Line Items] | ||||||||
Contingent consideration adjustments, expense (income) | $ (2,000,000) | $ 4,600,000 |
Business Combinations - Purchas
Business Combinations - Purchase Price Allocation (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||
Oct. 01, 2021 | Dec. 31, 2022 | Sep. 30, 2022 | Jan. 31, 2022 | Dec. 31, 2021 | Jan. 31, 2021 | |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | ||||||
Goodwill | $ 172,207 | $ 171,927 | ||||
Century Homes Florida Acquisition | ||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | ||||||
Cash acquired | $ 3,993 | |||||
Inventories | 34,324 | |||||
Other assets | 754 | |||||
Goodwill | 1,795 | |||||
Property and equipment, net | 549 | |||||
Liabilities | (5,831) | |||||
Purchase price | $ 35,584 | $ 35,600 | ||||
MHI Acquisition | ||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | ||||||
Cash acquired | $ 297 | |||||
Inventories | 473,037 | |||||
Other assets | 14,722 | |||||
Goodwill | 141,071 | |||||
Property and equipment, net | 3,163 | |||||
Cash consideration | $ 488,178 | |||||
Contingent consideration based on future earnings | 94,573 | |||||
Lot deposits | 40,452 | |||||
Equity method investments | 6,192 | |||||
Intangible assets | 8,840 | |||||
Operating lease right-of-use assets | 1,508 | |||||
Accounts payable | (41,466) | |||||
Accrued expenses | (25,801) | |||||
Customer deposits | (37,756) | |||||
Operating lease liabilities | (1,508) | |||||
Purchase price | $ 582,751 | $ 582,751 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Property and Equipment [Abstract] | |||
Property and equipment, gross | $ 23,167 | $ 22,778 | |
Less: Accumulated depreciation | (15,830) | (15,989) | |
Property and equipment, net | 7,337 | 6,789 | |
Depreciation expense | 5,000 | 3,700 | $ 3,900 |
Furniture and fixtures | |||
Property and Equipment [Abstract] | |||
Property and equipment, gross | 18,753 | 17,756 | |
Buildings | |||
Property and Equipment [Abstract] | |||
Property and equipment, gross | 401 | 401 | |
Land | |||
Property and Equipment [Abstract] | |||
Property and equipment, gross | 216 | 216 | |
Vehicles | |||
Property and Equipment [Abstract] | |||
Property and equipment, gross | 64 | 21 | |
Office equipment and software | |||
Property and Equipment [Abstract] | |||
Property and equipment, gross | $ 3,733 | $ 4,384 |
Construction Lines of Credit (D
Construction Lines of Credit (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||||
Jan. 25, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Jun. 30, 2022 | Jun. 02, 2022 | Jun. 01, 2022 | Sep. 30, 2021 | |
Line of Credit Facility [Line Items] | ||||||||
Line of credit facility, commitment fee amount | $ 486,500 | |||||||
Construction loan, outstanding balance | 965,000 | $ 760,000 | ||||||
Amortization of debt issuance costs | 3,844 | 1,960 | $ 2,091 | |||||
Line of Credit and Notes Payable | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Debt issuance costs, net of amortization | $ 7,300 | $ 5,500 | ||||||
Line of Credit | Variable Rate, Highest Option, Three | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Variable rate | 1% | |||||||
Line of Credit | Fed Funds Effective Rate Overnight Index Swap Rate | Variable Rate, Highest Option, One | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Variable rate | 0.50% | |||||||
Line of Credit | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Variable Rate, Highest Option, Two | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Variable rate | 1% | |||||||
Line of Credit | Minimum | Base Rate | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Variable rate | 1.50% | |||||||
Line of Credit | Minimum | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Variable Rate, Highest Option, Four | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Variable rate | 2.50% | |||||||
Line of Credit | Maximum | Base Rate | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Variable rate | 2.60% | |||||||
Line of Credit | Maximum | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Variable Rate, Highest Option, Four | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Variable rate | 3.60% | |||||||
Bank of America, N.A. and Other Lenders | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Line of credit maximum borrowing base | $ 1,100,000 | $ 817,500 | $ 1,100,000 | |||||
Increase limit | $ 1,600,000 | |||||||
Bank of America, N.A. and Other Lenders | Unsecured Syndicated Credit Facility | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Line of credit maximum borrowing base | $ 50,000 | |||||||
Line of credit facility, commitment fee amount | $ 122,000 | |||||||
Bank of America, N.A. and Other Lenders | Unsecured Syndicated Credit Facility | IPO | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Line of credit current borrowing base | $ 450,000 | |||||||
Repayment of debt | $ 340,000 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Real Estate Inventory, Capitalized Interest Costs [Roll Forward] | ||
Capitalized interest at the beginning of the period | $ 33,266 | $ 21,091 |
Interest incurred | 121,964 | 45,355 |
Interest expensed | (32) | (672) |
Interest charged to homebuilding cost of sales | (60,595) | (32,508) |
Capitalized interest at the end of the period | $ 94,603 | $ 33,266 |
Commitments and Contingencies,
Commitments and Contingencies, Summary (Details) $ in Millions | 12 Months Ended | |||
Mar. 02, 2022 USD ($) | Nov. 18, 2019 USD ($) | Dec. 31, 2022 USD ($) Home | Mar. 24, 2022 USD ($) Lease Home | |
Loss Contingencies [Line Items] | ||||
Number of homes impacted by harmful and odorous flak jacket coating | Home | 38 | |||
Settlement amount during arbitration proceedings | $ 12 | |||
Amount awarded to other party | $ 4 | |||
Office Building Member | ||||
Loss Contingencies [Line Items] | ||||
Remaining lease term | 12 years | |||
Weyerhaeuser Lawsuit | ||||
Loss Contingencies [Line Items] | ||||
Estimated litigation liability | $ 0.9 | |||
Model Home | MHI Acquisition | ||||
Loss Contingencies [Line Items] | ||||
Number of completed homes sold | Home | 93 | |||
Sale leaseback transaction | $ 55.4 | |||
Number of individual lease agreements | Lease | 93 | |||
Parent Company | ||||
Loss Contingencies [Line Items] | ||||
Damages awarded value | $ 3 | |||
Subsidiaries | ||||
Loss Contingencies [Line Items] | ||||
Damages awarded value | $ 11.7 |
Commitments and Contingencies_2
Commitments and Contingencies, Lease Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Finance lease cost: | |||
Total finance lease cost | $ 102 | $ 177 | $ 187 |
Net lease cost | 11,649 | 6,580 | 6,119 |
Selling, general and administrative expenses | |||
Lease, Cost [Abstract] | |||
Operating lease cost | 11,547 | 6,403 | 5,932 |
Finance lease cost: | |||
Amortization of right of use assets | 95 | 158 | 158 |
Interest expense | |||
Finance lease cost: | |||
Interest on lease liabilities | $ 7 | $ 19 | $ 29 |
Commitments and Contingencies_3
Commitments and Contingencies, Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Operating Leases | ||
2023 | $ 7,861 | |
2024 | 5,733 | |
2025 | 3,700 | |
2026 | 3,121 | |
2027 | 1,666 | |
Thereafter | 7,386 | |
Total lease payments | 29,467 | |
Less: Interest | 4,806 | |
Present value of lease liabilities | $ 24,661 | $ 19,826 |
Finance Leases | ||
Finance Lease, Liability, Statement of Financial Position [Extensible Enumeration] | Liabilities | |
2023 | $ 35 | |
2024 | 0 | |
2025 | 0 | |
2026 | 0 | |
2027 | 0 | |
Thereafter | 0 | |
Total lease payments | 35 | |
Less: Interest | 1 | |
Present value of lease liabilities | 34 | |
Total | ||
2023 | 7,896 | |
2024 | 5,733 | |
2025 | 3,700 | |
2026 | 3,121 | |
2027 | 1,666 | |
Thereafter | 7,386 | |
Total lease payments | 29,502 | |
Less: Interest | 4,807 | |
Present value of lease liabilities | $ 24,695 |
Commitments and Contingencies_4
Commitments and Contingencies, Weighted Average Lease Term and Discount Rate (Details) | Dec. 31, 2022 | Dec. 31, 2021 |
Weighted average remaining lease term | ||
Operating leases | 6 years | 8 years |
Financing leases | 1 year | 2 years |
Weighted average discount rate | ||
Operating leases | 6.30% | 5.60% |
Financing leases | 7.50% | 7.50% |
Equity (Details)
Equity (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | |||||
Sep. 29, 2021 USD ($) $ / shares shares | Jan. 25, 2021 shares | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | Dec. 31, 2020 USD ($) | Jan. 27, 2021 USD ($) Vote $ / shares | |
Class of Stock [Line Items] | ||||||
Proceeds from issuance of convertible preferred stock | $ | $ 0 | $ 148,500 | $ 0 | |||
Series A Convertible Preferred Stock | ||||||
Class of Stock [Line Items] | ||||||
Temporary equity, shares issued (in shares) | shares | 150,000 | |||||
Liquidation preference (dollars per share) | $ 1,000 | |||||
Temporary Equity (dollars per share) | $ 0.01 | |||||
Proceeds from issuance of convertible preferred stock | $ | $ 150,000 | |||||
Cumulative dividend rate | 9% | |||||
Percentage of liquidation preference in year four to call outstanding stock | 102% | |||||
Percentage of liquidation preference in year five to call outstanding stock | 101% | |||||
Period of waiting for conversion after issuance | 5 years | |||||
Trailing period | 90 days | |||||
Percentage of average closing price | 20% | |||||
Conversion price (dollars per share) | $ 4 | |||||
Percentage of conversion discount after increase | 25% | |||||
Ownership percentage | 19.99% | |||||
Redeemable Convertible Series C Preferred Units = | ||||||
Class of Stock [Line Items] | ||||||
Redemption of preferred stock | $ | $ 26,000 | |||||
Class A Common Stock | ||||||
Class of Stock [Line Items] | ||||||
Common stock par value (in dollars per share) | $ 0.01 | $ 0.01 | ||||
Class A Common Stock | IPO | ||||||
Class of Stock [Line Items] | ||||||
Units converted to common stock (in shares) | shares | 21,255,329 | |||||
Common stock par value (in dollars per share) | $ 0.01 | |||||
Class B Common Stock | ||||||
Class of Stock [Line Items] | ||||||
Units converted to common stock (in shares) | shares | 60,226,153 | |||||
Common stock par value (in dollars per share) | $ 0.01 | $ 0.01 | ||||
Class B Common Stock | IPO | ||||||
Class of Stock [Line Items] | ||||||
Units converted to common stock (in shares) | shares | 60,226,153 | |||||
Common stock par value (in dollars per share) | $ 0.01 | |||||
Series B Preferred Stock | ||||||
Class of Stock [Line Items] | ||||||
Voting rights per each unit | Vote | 1 | |||||
Number of preferred shares owned (in shares) | shares | 7,143 | 7,143 | ||||
Temporary equity, shares issued (in shares) | shares | 7,143 | 7,143 | ||||
Temporary equity units issued and outstanding, carrying value | $ | $ 7,900 | $ 7,100 | ||||
Liquidation preference (dollars per share) | $ 1,000 | |||||
Liquidation preference, annual cumulative preference distribution percentage | 8% | |||||
Accretion of dividends | $ | $ 3,700 | $ 2,900 | ||||
Cumulative preferred distributions, per unit (in dollars per share) | $ 516.56 | $ 401.07 | ||||
Temporary equity, voting percentage | 50% |
Equity-Based Compensation - Nar
Equity-Based Compensation - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock compensation expense | $ 6,796 | $ 5,233 | $ 947 |
Equity Incentive Plan Two Thousand and Twenty One | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock repurchase program, authorized amount | 9,100 | ||
Stock compensation expense | 6,800 | 5,200 | |
Nonvested award not yet recognized | $ 11,300 | $ 16,700 | |
Period for recognition | 2 years | ||
Equity Incentive Plan Two Thousand and Twenty One | Restricted Stock | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 3 years | ||
Equity Incentive Plan Two Thousand and Twenty One | Restricted Stock | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 5 years | ||
Equity Incentive Plan Two Thousand and Twenty One | Restricted Stock | Share-based Payment Arrangement, Tranche One | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting ratably increments at end of each year | 33% | ||
Equity Incentive Plan Two Thousand and Twenty One | Restricted Stock | Share-based Payment Arrangement, Tranche One | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting ratably increments at end of each year | 55% |
Equity-Based Compensation - Sch
Equity-Based Compensation - Schedule of Restricted Stock Awards (Details) - Restricted Stock $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) shares | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Outstanding at beginning of period (in shares) | shares | 721,598 |
Granted (in shares) | shares | 486,264 |
Forfeited (in shares) | shares | (76,752) |
Vested (in shares) | shares | (238,554) |
Outstanding at end of period (in shares) | shares | 892,556 |
Weighted Average Grant Date Fair Value | |
Outstanding at beginning of period | $ | $ 16,690 |
Granted | $ | 8,301 |
Forfeited | $ | (1,361) |
Vested | $ | (5,518) |
Outstanding at end of period | $ | $ 18,112 |
Variable Interest Entities - Na
Variable Interest Entities - Narrative (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 USD ($) Vote Entity | Dec. 31, 2021 Entity | Dec. 31, 2020 Entity | |
Variable Interest Entity [Line Items] | |||
Land bankers equity holders power to direct , Percentage of operating activities of land bank entity | 100% | ||
Number of voting rights of land bank entities | Vote | 0 | ||
Total risk of loss related to finished lot option and land bank option contracts | $ | $ 461.6 | ||
Variable Interest Entity, Primary Beneficiary | |||
Variable Interest Entity [Line Items] | |||
Number of entities | Entity | 0 | 0 | 0 |
Variable Interest Entities - Ca
Variable Interest Entities - Carrying Amounts (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Variable Interest Entity [Line Items] | ||
Assets | $ 2,371,137 | $ 1,894,248 |
Liabilities | 1,570,444 | 1,337,865 |
Variable Interest Entity, Primary Beneficiary | ||
Variable Interest Entity [Line Items] | ||
Assets | 13,344 | 30,830 |
Liabilities | $ 4,787 | $ 10,203 |
Variable Interest Entities - In
Variable Interest Entities - Investment In The Unconsolidated VIEs (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Variable Interest Entity [Line Items] | ||
Investment in unconsolidated VIE's | $ 14,008 | $ 15,967 |
Jet Home Loans | ||
Variable Interest Entity [Line Items] | ||
Investment in unconsolidated VIE's | 7,102 | 6,133 |
Other unconsolidated VIEs | ||
Variable Interest Entity [Line Items] | ||
Investment in unconsolidated VIE's | $ 6,906 | $ 9,834 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Current expense: | |||
Federal | $ 66,473 | $ 26,336 | |
State | 15,680 | 5,088 | |
Total current expense | 82,153 | 31,424 | |
Deferred expense: | |||
Federal | 5 | (3,305) | |
State | (299) | (664) | |
Total deferred (benefit) | (294) | (3,969) | |
Total income tax expense | $ 81,859 | $ 27,455 | $ 0 |
Effective Income Tax Rate Reconciliation, Percent [Abstract] | |||
Income taxes at federal statutory rate | 21% | 21% | |
State and local income taxes, net of federal tax | 3.50% | 2.40% | |
Federal tax credits | (3.90%) | (5.90%) | |
Non-deductible executive compensation | 1.30% | 0.80% | |
Other | 1.10% | 0.20% | |
Effective rate | 23% | 18.50% | |
Deferred tax assets: | |||
Property and equipment, net | $ 1,085 | $ 238 | |
Contingent consideration | 4,145 | 1,805 | |
Equity-based compensation | 246 | 1,265 | |
Right-of-use liabilities | 5,809 | 0 | |
Other | 1,408 | 1,512 | |
Total deferred tax asset | 12,693 | 4,820 | |
Deferred tax liabilities: | |||
Property and equipment, net | (2,423) | (588) | |
Right-of-use assets | (5,674) | 0 | |
Other | (70) | 0 | |
Total deferred tax liability | (8,167) | (588) | |
Net deferred income tax asset | $ 4,526 | $ 4,232 |
Segment Reporting (Details)
Segment Reporting (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 USD ($) Segment | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Segment Reporting [Abstract] | |||
Number of Reportable Segments | Segment | 6 | ||
Revenues: | |||
Total revenues | $ 3,342,335 | $ 1,923,910 | $ 1,133,807 |
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest [Abstract] | |||
Net income (loss) | 274,297 | 134,594 | 84,513 |
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest [Abstract] | |||
Comprehensive income | 274,297 | 134,594 | 84,513 |
Assets [Abstract] | |||
Assets | 2,371,137 | 1,894,248 | |
Goodwill, Impaired, Accumulated Impairment Loss [Abstract] | |||
Goodwill | 172,207 | 171,927 | |
Operating Segments | |||
Revenues: | |||
Total revenues | 3,368,734 | 1,951,966 | 1,162,436 |
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest [Abstract] | |||
Net income (loss) | 280,161 | 141,215 | 92,443 |
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest [Abstract] | |||
Comprehensive income | 280,161 | 141,215 | 92,443 |
Assets [Abstract] | |||
Assets | 2,459,970 | 1,965,045 | |
Goodwill, Impaired, Accumulated Impairment Loss [Abstract] | |||
Goodwill | 172,207 | 171,927 | |
Operating Segments | Jacksonville | |||
Revenues: | |||
Total revenues | 679,321 | 452,891 | 430,811 |
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest [Abstract] | |||
Net income (loss) | 86,872 | 55,578 | 41,380 |
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest [Abstract] | |||
Comprehensive income | 86,872 | 55,578 | 41,380 |
Assets [Abstract] | |||
Assets | 300,491 | 207,502 | |
Goodwill, Impaired, Accumulated Impairment Loss [Abstract] | |||
Goodwill | 0 | 0 | |
Operating Segments | Colorado | |||
Revenues: | |||
Total revenues | 169,378 | 114,260 | 122,275 |
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest [Abstract] | |||
Net income (loss) | 17,740 | 3,971 | 14,052 |
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest [Abstract] | |||
Comprehensive income | 17,740 | 3,971 | 14,052 |
Assets [Abstract] | |||
Assets | 187,813 | 116,121 | |
Goodwill, Impaired, Accumulated Impairment Loss [Abstract] | |||
Goodwill | 0 | 0 | |
Operating Segments | Orlando | |||
Revenues: | |||
Total revenues | 304,767 | 244,143 | 124,769 |
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest [Abstract] | |||
Net income (loss) | 32,070 | 15,937 | 10,680 |
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest [Abstract] | |||
Comprehensive income | 32,070 | 15,937 | 10,680 |
Assets [Abstract] | |||
Assets | 276,720 | 131,882 | |
Goodwill, Impaired, Accumulated Impairment Loss [Abstract] | |||
Goodwill | 1,795 | 1,795 | |
Operating Segments | The Carolinas | |||
Revenues: | |||
Total revenues | 482,646 | 370,477 | 89,324 |
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest [Abstract] | |||
Net income (loss) | 25,965 | 14,623 | 6,034 |
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest [Abstract] | |||
Comprehensive income | 25,965 | 14,623 | 6,034 |
Assets [Abstract] | |||
Assets | 311,469 | 247,250 | |
Goodwill, Impaired, Accumulated Impairment Loss [Abstract] | |||
Goodwill | 16,853 | 16,853 | |
Operating Segments | Texas | |||
Revenues: | |||
Total revenues | 1,325,274 | 361,138 | 0 |
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest [Abstract] | |||
Net income (loss) | 112,855 | 21,797 | 0 |
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest [Abstract] | |||
Comprehensive income | 112,855 | 21,797 | 0 |
Assets [Abstract] | |||
Assets | 793,219 | 743,306 | |
Goodwill, Impaired, Accumulated Impairment Loss [Abstract] | |||
Goodwill | 141,071 | 141,070 | |
Operating Segments | Jet Home Loans | |||
Revenues: | |||
Total revenues | 26,399 | 28,056 | 28,629 |
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest [Abstract] | |||
Net income (loss) | 3,655 | 10,630 | 15,921 |
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest [Abstract] | |||
Comprehensive income | 3,655 | 10,630 | 15,921 |
Assets [Abstract] | |||
Assets | 96,108 | 77,074 | |
Goodwill, Impaired, Accumulated Impairment Loss [Abstract] | |||
Goodwill | 0 | 0 | |
Operating Segments | Other | |||
Revenues: | |||
Total revenues | 380,949 | 381,001 | 366,628 |
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest [Abstract] | |||
Net income (loss) | 1,004 | 18,679 | 4,376 |
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest [Abstract] | |||
Comprehensive income | 1,004 | 18,679 | 4,376 |
Assets [Abstract] | |||
Assets | 494,150 | 441,910 | |
Goodwill, Impaired, Accumulated Impairment Loss [Abstract] | |||
Goodwill | 12,488 | 12,209 | |
Reconciling items from equity method investments | |||
Revenues: | |||
Total revenues | (26,399) | (28,056) | (28,629) |
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest [Abstract] | |||
Net income (loss) | (5,864) | (6,621) | (7,930) |
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest [Abstract] | |||
Comprehensive income | (5,864) | (6,621) | $ (7,930) |
Assets [Abstract] | |||
Assets | (88,833) | (70,797) | |
Goodwill, Impaired, Accumulated Impairment Loss [Abstract] | |||
Goodwill | $ 0 | $ 0 |
Fair Value Disclosures (Details
Fair Value Disclosures (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | |
Fair Value Recurring Basis Unobservable Input Reconciliation Liability Gain Loss Statement Of Income Extensible List Not Disclosed Flag | Fair value adjustments related to prior year acquisitions |
Fair Value, Inputs, Level 3 | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | |
Beginning balance, December 31, 2021 | $ 124,056 |
Fair value adjustments related to prior year acquisitions | 11,053 |
Contingent consideration payments | (19,981) |
Ending balance, December 31, 2022 | $ 115,128 |
Related Party Transactions (Det
Related Party Transactions (Details) $ in Millions | 12 Months Ended | ||||
Feb. 15, 2022 USD ($) | Dec. 31, 2022 USD ($) Project JointVenture | Feb. 28, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2019 USD ($) | |
Fund I | |||||
Consolidated Joint Ventures [Abstract] | |||||
Number of joint ventures entered | JointVenture | 6 | ||||
Number of land bank projects | Project | 10 | ||||
Investment company, committed capital | $ 36.7 | ||||
DF Capital | |||||
Consolidated Joint Ventures [Abstract] | |||||
Percentage of ownership interest | 49% | ||||
Payments to acquire projects | $ 0.2 | ||||
Dream Finders Homes LLC and DFH Investors LLC | |||||
Consolidated Joint Ventures [Abstract] | |||||
Investment company, committed capital | $ 1.4 | ||||
Committed capital ratio | 3.80% | ||||
DF Management GP II, LLC | |||||
Consolidated Joint Ventures [Abstract] | |||||
Percentage of ownership interest | 25.80% | ||||
Investment company, committed capital | $ 322.1 | ||||
Fund II | |||||
Consolidated Joint Ventures [Abstract] | |||||
Percentage of ownership interest | 72% | ||||
Investment company, committed capital | $ 3 | ||||
Committed capital ratio | 0.90% | ||||
Jet Home Loans | |||||
Consolidated Joint Ventures [Abstract] | |||||
Percentage of ownership interest | 49.90% | ||||
Directors Executive Officers and Management | Fund I | |||||
Consolidated Joint Ventures [Abstract] | |||||
Investment company, committed capital | $ 8.7 | ||||
Committed capital ratio | 23.80% | ||||
Directors Executive Officers and Management | Fund II | |||||
Consolidated Joint Ventures [Abstract] | |||||
Investment company, committed capital | $ 133.9 | $ 33.9 | |||
Committed capital ratio | 41.60% | 10.50% | |||
Directors Executive Officers and Management | Rockpoint Group LLC | |||||
Consolidated Joint Ventures [Abstract] | |||||
Investment company, committed capital | $ 100 | $ 100 | |||
DF Capital | |||||
Consolidated Joint Ventures [Abstract] | |||||
Outstanding lot deposits | $ 58.6 | $ 3.7 |
Earnings per Share (Details)
Earnings per Share (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Numerator | |||
Net and comprehensive income attributable to Dream Finders Homes, Inc. | $ 262,313 | $ 121,133 | $ 79,093 |
Less: Preferred dividends | (14,513) | (4,845) | |
Add: Loss prior to reorganization attributable to DFH LLC members | 0 | 1,244 | |
Net and comprehensive income available to common stockholders | $ 247,800 | $ 117,532 | |
Denominator | |||
Weighted-average number of common shares outstanding - basic (in shares) | 92,745,781 | 92,521,482 | 0 |
Add: Common stock equivalent shares | 13,945,467 | 2,792,111 | |
Weighted-average number of shares outstanding - diluted (in shares) | 106,691,248 | 95,313,593 | 0 |
Value of preferred dividends | $ 13,700 | $ 3,500 | |
Antidilutive shares | 0 | 0 |