Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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(Address of principal executive offices)
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(Zip code)
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Title of each class
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Trading symbol(s)
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Name of each exchange on which registered
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Large accelerated filer
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☐ |
Accelerated filer
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☐
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☒ |
Smaller reporting company
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Emerging growth company
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3
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3
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3
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4
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5
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6
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7
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20
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34
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35
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36
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36
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36
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37
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37
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38
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ITEM 1. |
DREAM FINDERS HOMES, INC CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
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March 31,
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December 31,
|
|||||||
2022 | 2021 | |||||||
Assets
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||||||||
Cash and cash equivalents
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$
|
|
$
|
|
||||
Restricted cash (VIE amounts of $
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|
|
||||||
Accounts receivable
(VIE amounts of $
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||||||||
Inventories:
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||||||||
Construction in process and finished homes
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||||||
Company owned land and lots
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||||||
VIE owned land and lots
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||||||||
Total inventories
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||||||||
Lot deposits
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||||||
Other assets (VIE amounts of $
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||||||||
Equity method investments
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|
|
||||||
Property and equipment, net
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||||||
Operating lease right-of-use assets
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||||||
Deferred tax asset
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||||||||
Intangible assets, net of amortization
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||||||
Goodwill
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||||||
Total assets
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$
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$
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|
||||
Liabilities
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||||||||
Accounts payable (VIE amounts of $
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$
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$
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|
||||
Accrued expenses (VIE amounts of $
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|
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||||||
Customer deposits
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||||||
Construction lines of credit
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||||||
Notes payable (VIE amounts of $
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||||||
Operating lease liabilities
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||||||
Contingent consideration
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|
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||||||
Total liabilities
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$
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$
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|
||||
Commitments and contingencies (Note 5)
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||||||||
Mezzanine Equity
|
||||||||
Preferred mezzanine equity
|
|
|
||||||
Stockholders’ Equity
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||||||||
Class A common stock, $
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|
||||||
Class B common stock, $
|
|
|
||||||
Additional paid-in capital
|
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|
||||||
Retained earnings
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|
||||||
Non-controlling interests
|
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||||||
Total mezzanine and stockholders’ equity
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|
|
||||||
Total liabilities, mezzanine equity, and stockholders’ equity
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$
|
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$
|
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Three Months Ended March 31,
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||||||||
2022
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2021
|
|||||||
Revenues: | ||||||||
Homebuilding
|
$ |
$ |
||||||
Other
|
||||||||
Total revenues
|
||||||||
Homebuilding cost of sales |
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|
||||||
Selling, general and administrative expense
|
|
|
||||||
Income from equity in earnings of unconsolidated entities
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(
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)
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(
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)
|
||||
Contingent consideration revaluation | ||||||||
Other (income) expense, net |
(
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)
|
||||||
Interest expense
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||||||
Income before taxes
|
|
|
||||||
Income tax expense | ( |
) | ( |
) | ||||
Net and comprehensive income
|
|
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|
|
||||
Net and comprehensive income attributable to non-controlling interests
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(
|
)
|
(
|
)
|
||||
Net and comprehensive income attributable to Dream Finders Homes, Inc.
|
$
|
|
$
|
|
||||
Earnings per share(1)
|
||||||||
Basic
|
$ | $ | ||||||
Diluted
|
$ | $ | ||||||
Weighted-average number of shares
|
||||||||
Basic
|
|
|||||||
Diluted
|
|
(1) | |
Redeemable Preferred
Units Mezzanine |
Redeemable Common
Units Mezzanine |
Common Units Members’
|
Common Stock - Class A
|
Common Stock - Class B
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Additional
Paid-in
Capital
|
Retained Earnings
|
Total
Non-
Controlling
Interests
|
Total Equity
|
||||||||||||||||||||||||||||||||||||||||||||||||
Units
|
Amount
|
Units
|
Amount
|
Units
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
|||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2020
|
|
$
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$
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|
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$
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|
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$
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$
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|||||||||||||||||||||||||||||||||||||
Distributions
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-
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(
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)
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-
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(
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)
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-
|
(
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)
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-
|
|
-
|
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||||||||||||||||||||||||||
Net income (loss)
|
-
|
(
|
)
|
-
|
(
|
)
|
-
|
(
|
)
|
-
|
|
-
|
|
|
|
|
(
|
)
|
||||||||||||||||||||||||||||||||||||||
Balance at January 20, 2021, pre-IPO/Reorganization
|
|
$
|
|
|
$
|
|
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$
|
|
|
|
|
|
|
|
$
|
|
$
|
|
|||||||||||||||||||||||||||||||||||||
Reorganization transactions
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
(
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)
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(
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)
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|
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|
||||||||||||||||||||||||||||||||||||
Issuance of common stock in IPO, net
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-
|
-
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-
|
-
|
|
|
|
|
|
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|
|
|
||||||||||||||||||||||||||||||||||||||||||
Equity-based compensation
|
-
|
-
|
-
|
-
|
-
|
|
-
|
|
-
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||
Redemptions
|
(
|
)
|
(
|
)
|
|
|
|
|
|
|
|
|
|
|
|
(
|
)
|
|||||||||||||||||||||||||||||||||||||||
Distributions
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
(
|
)
|
(
|
)
|
||||||||||||||||||||||||||||||||||||||||
Net income
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2021
|
|
$
|
|
|
|
|
|
|
$
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Redeemable Preferred
Units/Stock Mezzanine |
Redeemable Common
Units Mezzanine |
Common Units
Members’
|
Common Stock -
Class A
|
Common Stock -
Class B
|
Additional
Paid-in
Capital
|
Retained
Earnings
|
Total
Non-
Controlling
Interests
|
Total Equity
|
||||||||||||||||||||||||||||||||||||||||||||||||
Units/Shares
|
Amount
|
Units |
Amount |
Units |
Amount |
Shares
|
Amount
|
Shares
|
Amount
|
|||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2021
|
|
$
|
|
|
|
|
|
|
$
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|||||||||||||||||||||||||||||||||||
Equity-based compensation
|
-
|
-
|
-
|
-
|
-
|
|
-
|
|
-
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||
Distributions
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
(
|
)
|
(
|
)
|
||||||||||||||||||||||||||||||||||||||||
Preferred dividends declared
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
(
|
)
|
|
(
|
)
|
||||||||||||||||||||||||||||||||||||||||
Net income
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2022
|
|
$
|
|
|
|
|
|
|
$
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Three Months Ended
March 31,
|
||||||||
2022
|
2021
|
|||||||
Cash Flows from Operating Activities
|
||||||||
Net income
|
$
|
|
$
|
|
||||
Adjustments to Reconcile Net Income to Net cash used in operating activities
|
||||||||
Depreciation and amortization
|
|
|
||||||
Gain on sale of property and equipment
|
(
|
)
|
(
|
)
|
||||
Amortization of debt issuance costs
|
|
|
||||||
Amortization of right-of-use operating lease
|
|
|
||||||
Stock compensation expense
|
|
|
||||||
Deferred tax expense
|
|
|
||||||
Income from equity method investments, net of distributions received
|
|
(
|
)
|
|||||
Remeasurement of contingent consideration
|
|
|
||||||
Changes in Operating Assets and Liabilities
|
||||||||
Inventories
|
(
|
)
|
(
|
)
|
||||
Lot deposits
|
(
|
)
|
(
|
)
|
||||
Other assets
|
(
|
)
|
(
|
)
|
||||
Accounts payable and accrued expenses
|
(
|
)
|
|
|||||
Customer deposits
|
|
|
||||||
Operating lease ROU assets | ( |
) | ||||||
Operating lease liabilities
|
|
(
|
)
|
|||||
Net cash used in operating activities
|
(
|
)
|
(
|
)
|
||||
Cash Flows from Investing Activities
|
||||||||
Purchase of property and equipment
|
(
|
)
|
(
|
)
|
||||
Proceeds from disposal of property and equipment
|
|
|
||||||
Returns on investment from equity method investments
|
|
|
||||||
Business combinations, net of cash acquired
|
|
(
|
)
|
|||||
Net cash used in investing activities
|
(
|
)
|
(
|
)
|
||||
Cash Flows from Financing Activities
|
||||||||
Proceeds from construction lines of credit
|
|
|
||||||
Principal payments on construction lines of credit
|
(
|
)
|
(
|
)
|
||||
Proceeds from notes payable
|
|
|
||||||
Principal payments on notes payable
|
(
|
)
|
(
|
)
|
||||
Payment of debt issuance costs
|
(
|
)
|
|
|||||
Payment of equity issuance costs
|
( |
) | ||||||
Payments on financing leases
|
|
(
|
)
|
|||||
Distributions to non-controlling interests
|
(
|
)
|
(
|
)
|
||||
Proceeds from stock issuance
|
||||||||
Distributions
|
|
(
|
)
|
|||||
Redemptions
|
|
(
|
)
|
|||||
Contribution from conversion of converted LLC units
|
|
|
||||||
Conversion of LLC units
|
|
(
|
)
|
|||||
Net cash provided by financing activities
|
|
|
||||||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
(
|
)
|
|
|||||
Cash, cash equivalents and restricted cash at beginning of period
|
|
|
||||||
Cash, cash equivalents and restricted cash at end of period
|
$ |
|
$ |
|
||||
Non-cash Financing Activities
|
||||||||
Financed land payments to seller
|
$ |
$ |
||||||
Leased assets obtained in exchange for new operating lease liabilities
|
|
|
||||||
Equity issuance costs incurred
|
||||||||
Accrued distributions
|
(
|
)
|
|
|||||
Non-cash Investing Activities |
||||||||
Investment capital reallocation
|
( |
) | ||||||
Total non-cash financing and investing activities
|
$ |
$ |
||||||
Reconciliation of Cash, cash equivalents and Restricted cash | ||||||||
Cash and cash equivalents
|
$ |
|
$ |
|
||||
Restricted cash
|
|
|
||||||
Total Cash, cash equivalents and Restricted cash shown on the Consolidated Statements of Cash Flows
|
$
|
|
$
|
|
1. |
Nature of Business and Significant Accounting Policies
|
As previously
reported |
As adjusted
|
Effect of change
|
||||||||||
Net cash used in operating activities
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
2.
|
Business Acquisitions
|
Cash acquired
|
$
|
|
||
Other assets
|
|
|||
Goodwill
|
|
|||
Inventories
|
|
|||
Property and equipment, net
|
|
|||
Liabilities
|
(
|
)
|
||
Total purchase price
|
$
|
|
Cash consideration
|
$
|
|
||
Contingent consideration based on future earnings
|
|
|||
Total consideration
|
$
|
|
Cash acquired
|
$
|
|
||
Inventories
|
|
|||
Lot deposits
|
|
|||
Other assets
|
|
|||
Property and equipment, net
|
|
|||
Equity method investments
|
|
|||
Intangible assets, net of amortization
|
|
|||
Goodwill
|
|
|||
Operating lease right-of-use assets
|
|
|||
Accounts payable
|
(
|
)
|
||
Accrued expenses
|
(
|
)
|
||
Customer deposits
|
(
|
)
|
||
Operating lease liabilities
|
(
|
)
|
||
Total purchase price
|
$
|
|
3. |
Construction Lines of Credit
|
4.
|
Inventories
|
For the Three Months Ended
March 31,
|
||||||||
2022
|
2021
|
|||||||
Capitalized interest at the beginning of the period
|
$
|
|
$ | |||||
Interest incurred
|
|
|
||||||
Interest expensed
|
(
|
)
|
(
|
)
|
||||
Interest charged to homebuilding cost of sales
|
(
|
)
|
(
|
)
|
||||
Capitalized interest at the end of the period
|
$
|
|
$
|
|
5. |
Commitments and Contingencies
|
6. |
Equity
|
7. |
Variable Interest Entities
|
As of |
As of |
|||||||
March 31, | December 31, | |||||||
Consolidated
|
2022
|
2021
|
||||||
Assets
|
$
|
|
$
|
|
||||
Liabilities
|
$
|
|
$
|
|
As of | As of |
|||||||
March 31, | December 31, | |||||||
Unconsolidated
|
2022
|
2021
|
||||||
Jet Home Loans
|
$ |
|
$ |
|
||||
Other unconsolidated VIEs |
||||||||
Total investment in unconsolidated VIEs
|
$
|
|
$
|
|
8. |
Income Taxes
|
9. |
Segment Reporting
|
For the Three Months Ended
March 31,
|
||||||||
Revenues:
|
2022
|
2021
|
||||||
Jacksonville
|
$ |
|
$ |
|
||||
Colorado
|
|
|
||||||
Orlando
|
|
|
||||||
DC Metro
|
|
|
||||||
The Carolinas |
||||||||
Texas |
||||||||
Jet Home Loans
|
|
|
||||||
Other (1)
|
|
|
||||||
Total segment revenues
|
|
|
|
|
||||
Reconciling items from equity method investments
|
(
|
)
|
(
|
)
|
||||
Consolidated revenues
|
$
|
|
$
|
|
|
For the Three Months Ended
March 31,
|
|||||||
Net and comprehensive income:
|
2022
|
2021
|
||||||
Jacksonville
|
$ |
|
$ |
|
||||
Colorado
|
|
|
||||||
Orlando
|
|
|
||||||
DC Metro
|
|
|
||||||
The Carolinas | ||||||||
Texas | ||||||||
Jet Home Loans
|
|
|
||||||
Other (1)
|
|
(
|
)
|
|||||
Total segment net and comprehensive income
|
|
|
|
|
||||
Reconciling items from equity method investments
|
(
|
)
|
(
|
)
|
||||
Consolidated net and comprehensive income
|
$
|
|
$
|
|
Assets:
|
Goodwill:
|
|||||||||||||||
As of
March 31, |
As of
December 31, |
As of
March 31, |
As of
December 31, |
|||||||||||||
2022
|
2021
|
2022
|
2021
|
|||||||||||||
Jacksonville
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Colorado
|
|
|
|
|
||||||||||||
Orlando
|
|
|
|
|
||||||||||||
DC Metro
|
|
|
|
|
||||||||||||
The Carolinas
|
|
|
|
|
||||||||||||
Texas
|
|
|
|
|
||||||||||||
Jet Home Loans
|
|
|
|
|
||||||||||||
Other (1)
|
|
|
|
|
||||||||||||
Total segments
|
|
|
|
|
||||||||||||
Reconciling items from equity method investments
|
(
|
)
|
( |