Green Brick Partners, Inc. - Annual Report: 2015 (Form 10-K)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

___________________

FORM 10-K

___________________



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

For the fiscal year ended December 31, 2015



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

Commission file number: 001-33530

Green Brick Partners, Inc.

(Exact name of registrant as specified in its charter)



Delaware		20-5952523
(State or other jurisdiction of incorporation)		(IRS Employer Identification Number)
2805 Dallas Pkwy, Ste 400 Plano, TX 75093		(469) 573-6755
(Address of principal executive offices, including Zip Code)		(Registrant’s telephone number, including area code)

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



Title of Each Class		Name of Each Exchange on Which Registered
Common Stock, par value $0.01 per share		The Nasdaq Stock Market LLC
Preferred Stock Purchase Rights		The Nasdaq Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No ý

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ¨ No ý

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).Yes ý No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ý

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

Large accelerated filer ¨ Accelerated filer ý Non-accelerated filer ¨ Smaller reporting company ¨

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

The aggregate market value of voting stock held by non-affiliates of the Registrant was $153,383,220 as of June 30, 2015 (based upon the closing sale price on The Nasdaq Capital Market for such date). For this purpose, all shares held by directors, executive officers and stockholders beneficially owning ten percent or more of the registrant’s common stock have been treated as held by affiliates. This determination of affiliate status is not necessarily a conclusive determination for other purposes.

The number of shares of the Registrant's common stock outstanding as of March 25, 2016 was 48,833,323.

DOCUMENTS INCORPORATED BY REFERENCE

The Registrant’s definitive Proxy Statement for its 2016 Annual Meeting of Stockholders is incorporated by reference into Part III of this Form 10-K.

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PART I
	Item 1.	Business	1
	Item 1A.	Risk Factors	15
	Item 1B.	Unresolved Staff Comments	26
	Item 2.	Properties	26
	Item 3.	Legal Proceedings	27
	Item 4.	Mine Safety Disclosures	27
PART II
	Item 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	28
	Item 6.	Selected Financial Data	30
	Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	31
	Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	51
	Item 8.	Financial Statements and Supplementary Data	52
	Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	52
	Item 9A.	Controls and Procedures	52
	Item 9B.	Other Information	55
PART III
	Item 10.	Directors, Executive Officers and Corporate Governance	56
	Item 11.	Executive Compensation	56
	Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	56
	Item 13.	Certain Relationships and Related Transactions, and Director Independence	56
	Item 14.	Principal Accounting Fees and Services	56
PART IV
	Item 15.	Exhibits and Financial Statement Schedules	57
		Signatures	92

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FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K includes statements and information that may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, which we refer to as the “Securities Act,” and Section 21E of the Securities Exchange Act of 1934, as amended, which we refer to as the “Exchange Act.” Statements that are “forward-looking statements,” include any projections of earnings, revenue or other financial items, any statements of the plans, strategies or objectives of management for future operations, any statements concerning proposed new projects or other developments, any statements regarding future economic conditions or performance, any statements of management’s beliefs, goals, strategies, intentions and objectives, any statements concerning potential acquisitions, and any statements of assumptions underlying any of the foregoing. Words such as “may,” “will,” “should,” “could,” “would,” “predicts,” “potential,” “continue,” “expects,” “anticipates,” “future,” “outlook,” “strategy,” “positioned,” “intends,” “plans,” “believes,” “projects,” “estimates” and similar expressions, as well as statements in the future tense, identify forward-looking statements.

These statements are necessarily subjective and involve known and unknown risks, uncertainties and other important factors that could cause our actual results, performance or achievements, or industry results, to differ materially from any future results, performance or achievements described in or implied by such statements. Actual results may differ materially from expected results described in our forward-looking statements, including with respect to correct measurement and identification of factors affecting our business or the extent of their likely impact, the accuracy and completeness of the publicly available information with respect to the factors upon which our business strategy is based or the success of our business. In addition, even if results are consistent with the forward-looking statements contained in this Annual Report on Form 10-K, those results may not be indicative of results or developments in subsequent periods. Furthermore, industry forecasts are likely to be inaccurate, especially over long periods of time and in industries particularly sensitive to market conditions such as homebuilding and builder finance.

Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of whether, or the times by which, our performance or results may be achieved. Forward-looking statements are based on information available at the time those statements are made and management’s belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that could cause such differences include, but are not limited to:


•	cyclicality in the homebuilding industry and adverse changes in general economic conditions;


•	fluctuations and cycles in value of, and demand for, real estate investments;


•	significant inflation or deflation;


•	the unavailability of subcontractors;


•	labor and raw material shortages and price fluctuations;


•	the failure to recruit, retain and develop highly skilled and competent employees;


•	an inability to acquire undeveloped land, partially-finished developed lots and finished lots suitable for residential homebuilding at reasonable prices;


•	an inability to develop communities successfully or within expected timeframes;


•	an inability to sell properties in response to changing economic, financial and investment conditions;


•	risks related to participating in the homebuilding business through controlled homebuilding subsidiaries;


•	risks relating to buy-sell provisions in the operating agreements governing two builder subsidiaries;


•	risks related to geographic concentration;


•	risks related to government regulation;


•	the interpretation of or changes to tax, labor and environmental laws;


•	the timing of receipt of regulatory approvals and of the opening of projects;


•	fluctuations in the market value of land, building lots and housing inventories;


•	volatility of mortgage interest rates;


•	the unavailability of mortgage financing;

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•	the number of foreclosures in our markets;


•	interest rate increases or adverse changes in federal lending programs;


•	increases in unemployment or underemployment;


•	any limitation on, or reduction or elimination of, tax benefits associated with owning a home;


•	the occurrence of severe weather or natural disasters;


•	high cancellation rates;


•	competition in the homebuilding, land development and financial services industries;


•	risks related to future growth through strategic investments, joint ventures, partnerships and/or acquisitions;


•	the inability to obtain suitable bonding for the development of housing projects;


•	difficulty in obtaining sufficient capital;


•	risks related to environmental laws and regulations;


•	the occurrence of a major health and safety incident;


•	poor relations with the residents of our communities;


•	information technology failures and data security breaches;


•	product liability claims, litigation and warranty claims;


•	the seasonality of the homebuilding industry;


•	utility and resource shortages or rate fluctuations;


•	the failure of employees or other representatives to comply with applicable regulations and guidelines;


•	future litigation, arbitration or other claims;


•	uninsured losses or losses in excess of insurance limits;


•	cost and availability of insurance and surety bonds;


•	volatility and uncertainty in the credit markets and broader financial markets;


•	availability, terms and deployment of capital including with respect to the timing and size of share repurchases, acquisitions, joint ventures and other strategic actions;


•	our debt and related service obligations;


•	required accounting changes;


•	an inability to maintain effective internal control over financial reporting; and


•	other risks and uncertainties inherent in our business, including those described in Item 1A. “Risk Factors.”

Should one or more of the risks or uncertainties described above or elsewhere in this Annual Report on Form 10-K occur, or should underlying assumptions prove incorrect, our actual results and plans could differ materially from those expressed in any forward-looking statements. Readers are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date they are made. Except as required by law, we disclaim all responsibility to publicly update any information contained in a forward-looking statement.

All forward-looking statements attributable to us or to persons acting on our behalf, including any such forward-looking statements made subsequent to the publication of this Annual Report on Form 10-K, are expressly qualified in their entirety by this cautionary statement.

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PART I

ITEM 1. BUSINESS

References

Unless the context otherwise requires, references to the “Company”, “Green Brick”, “we”, “us” or “our” refer to the consolidated company, which has been renamed Green Brick Partners, Inc. and its subsidiaries, resulting from the acquisition by BioFuel Energy Corp. and its then consolidated subsidiaries (“BioFuel”) of JBGL Builder Finance LLC and its consolidated subsidiaries and affiliated companies (collectively “Builder Finance”), and JBGL Capital Companies (“Capital”), a combined group of commonly managed limited liability companies and partnerships (collectively with Builder Finance, “JBGL”) by means of a reverse recapitalization transaction on October 27, 2014.

General

Green Brick Partners, Inc. (formerly named BioFuel Energy Corp.) was incorporated as a Delaware corporation on April 11, 2006, to invest solely in BioFuel Energy, LLC, a limited liability company organized on January 25, 2006, to build and operate ethanol production facilities in the Midwestern United States. On November 22, 2013, the Company disposed of its ethanol plants and all related assets. Following the disposition of these production facilities, we were a public shell company with no substantial operations.

On June 10, 2014, the Company entered into a definitive transaction agreement with the owners of JBGL, which provided that we would acquire JBGL for $275 million, payable in cash and shares of our common stock (the “Transaction”). JBGL is a real estate operator involved in the purchase and development of land for residential use, construction lending and home building operations. The Transaction was completed on October 27, 2014 (the “Transaction Date”). Pursuant to the terms of the Transaction, we paid the $275 million purchase price with approximately $191.8 million in cash and the remainder in 11,108,500 shares of our common stock valued at approximately $7.49 per share.

The cash portion of the purchase price was primarily funded from the proceeds of a $70.0 million rights offering conducted by the Company (the $70.0 million includes proceeds from purchases of shares of common stock by certain funds and accounts managed by Greenlight Capital, Inc. and its affiliates (“Greenlight”) and Third Point LLC and its affiliates (“Third Point”)), and $150.0 million of debt financing provided by Greenlight pursuant to a loan agreement, with the lenders from time to time party thereto (the “Loan Agreement”), which provided for a five year term loan facility (the "Term Loan Facility").

The $70.0 million rights offering included a registered offering by the Company of transferable rights to the public holders of its common stock, as of September 15, 2014 (the “Rights Offering”) to purchase additional shares of common stock. Each right permitted the holder to purchase, at a rights price ultimately equal to $5.00 per share of common stock, 2.2445 shares of common stock. 4,843,384 shares of common stock were purchased in the public Rights Offering for aggregate gross proceeds of approximately $24.2 million.

In addition to the Rights Offering, Greenlight and Third Point participated in a private rights offering to purchase additional shares of common stock pursuant to commitment letters. Pursuant to its commitment letter, Third Point agreed to participate in the private rights offering for its full basic subscription privilege in the Rights Offering and to purchase, simultaneously with the consummation of the Rights Offering to the public, all of the available shares not otherwise sold in the Rights Offering following the exercise of all other public holders’ basic subscription privileges. Pursuant to such commitment letters, Greenlight purchased 4,957,618 shares of common stock for aggregate gross proceeds of approximately $24.8 million and Third Point purchased 4,198,998 shares of common stock for aggregate gross proceeds of approximately $21.0 million.

In connection with the Transaction, we entered into a backstop agreement with Third Point. The backstop agreement set forth, among other things, the terms of Third Point's backstop commitment. Third Point did not receive compensation for its commitment to participate in the private rights offering or its backstop commitment.

At the time the Transaction was completed, BioFuel was a non-operating public shell corporation with nominal operations and assets consisting of cash, deferred tax assets, and nominal other nonoperating assets. As a result of the Transaction the owners and management of JBGL gained effective operating control of the combined company.

Accordingly, for financial reporting purposes, the Transaction was deemed to be a capital transaction in substance and recorded as a reverse recapitalization of JBGL whereby JBGL is deemed to be the continuing, surviving entity for accounting purposes, but through reorganization, has deemed to have adopted the capital structure of BioFuel. Because the acquisition was considered a reverse recapitalization for accounting purposes, the combined historical financial statements of JBGL became our historical financial statements and from the completion of the acquisition on October 27, 2014, the financial statements have

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been prepared on a consolidated basis. The assets and liabilities of BioFuel have been brought forward at their book value and no goodwill has been recognized in connection with the Transaction.

As a result of the Transaction, Green Brick changed its business direction and is now in the real estate industry.

On July 1, 2015, we completed an underwritten public offering of 17 million shares of our common stock at a price to the public of $10.00 per share and granted to the underwriters a 30-day option to purchase up to an aggregate of 841,500 additional shares of common stock to cover over-allotments (the “Equity Offering”). On July 23, 2015, the underwriters exercised the option and purchased 444,897 additional shares. All of the shares were sold by us pursuant to an effective shelf registration statement previously filed with the SEC.

The Equity Offering resulted in net proceeds to us of approximately $170.0 million, after deducting underwriting discounts and offering expenses. On July 1, 2015, we used approximately $154.9 million of the net proceeds from the Equity Offering to repay all of the outstanding principal, interest and a prepayment premium under the Term Loan Facility. Upon repayment, the Term Loan Facility was terminated and all security interests in, and all liens held by Greenlight with respect to, the assets of Green Brick securing the amounts owed under the Term Loan Facility were terminated and released. We used the remaining net proceeds for working capital and general corporate purposes.

Our Company

We are a uniquely structured company that combines residential land development and homebuilding. We acquire and develop land, provide land and construction financing to our controlled builders and participate in the profits of our controlled builders. Our core markets are in the high growth U.S. metropolitan areas of Dallas, Texas and Atlanta, Georgia. We are engaged in all aspects of the homebuilding process, including land acquisition and the development, entitlements, design, construction, marketing and sales and the creation of brand images at our residential neighborhoods and master planned communities. We believe we offer higher quality homes with more distinctive designs and floor plans than those built by our competitors at comparable prices. Our communities are located in premium locations in our core markets and we seek to enhance homebuyer satisfaction by utilizing high-quality materials, offering a broad range of customization options and building well-crafted energy-efficient homes. We seek to maximize value over the long term and operate our business to mitigate risks in the event of a downturn by controlling costs and quickly reacting to regional and local market trends.

We are a leading lot developer in the Dallas and Atlanta markets and believe that our strict operating discipline provides us with a competitive advantage in seeking to maximize returns while minimizing risk. We currently own or control over 4,700 home sites in premium locations in the Dallas and Atlanta markets. We consider premium locations to be lot supply constrained with high housing demand and where much of the surrounding land has already been developed. We are strategically positioned to either build new homes on our lots through our controlled builders or to sell finished lots to large unaffiliated homebuilders.

We sell finished lots or option lots from third-party developers to our controlled builders for their homebuilding operations and provide them with construction financing and strategic planning. Our controlled builders provide us with their local knowledge and relationships. We support our controlled builders by financing their purchases of land from us at an unlevered internal rate of return (“IRR”) of at least 20% and by providing construction financing at approximately a 13.8% interest rate. Our income is further enhanced by our 50% equity interest in the profits of our controlled builders. In addition, the land we sell to third-party homebuilders also typically generates an unlevered IRR targeted at 20% or greater.

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References to our “controlled builders” refer to our homebuilding subsidiaries in which we own at least a 50% controlling interest.



Our Controlled Builders	Year Formed	Market	Products Offered	Prices Ranges
The Providence Group of Georgia L.L.C. (“TPG”)	2011	Atlanta	Townhomes	$260,000 to $590,000
			Single family	$315,000 to $1.4 million
			Luxury homes	$770,000 to $3.0 million
CB JENI Homes DFW LLC (“CB JENI”)	2012	Dallas	Townhomes	$210,000 to $390,000
			Single family	$280,000 to $700,000
Centre Living Homes, LLC (“Centre Living”)	2012	Dallas	Townhomes	$500,000 to more than $1 million
			Contractor on luxury homes	Up to $2.5 million
Southgate Homes DFW LLC (“Southgate”)	2013	Dallas	Luxury homes	$600,000 and above

During the first quarter of 2015, we formed Green Brick Title, LLC (“Green Brick Title”), our wholly-owned title company. Green Brick Title's core business includes title insurance, and closing and settlement services for our homebuyers. Green Brick Title commenced limited operations during the year ended December 31, 2015.

The following chart sets forth the number of new homes delivered by our controlled builders, the home sales revenue, the average sales price of homes delivered and the amount of lot sales revenue generated during the years ended December 31, 2015 and 2014.



	Years Ended December 31,				Increase (Decrease)
	2015		2014		Amount			%
New homes delivered	655		587		68			11.6	%
Home sales revenue (dollars in thousands)	$	254,267	$	200,650	$	53,617		26.7	%
Average sales price of home delivered	$	388,194	$	341,823	$	46,371		13.6	%
Lot sales revenue (dollars in thousands)	$	36,878	$	45,452	$	(8,574	)	(18.9	)%

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Our Competitive Strengths

Our business is characterized by the following competitive strengths:

Optionality Provided by Our Combined Land Development and Homebuilding Structure

We are a uniquely structured company that combines residential land development and homebuilding. We are strategically positioned to either build and sell new homes on lots through our controlled builders or develop land and sell finished lots to large unaffiliated homebuilders. While our business plan increasingly has focused on building new homes on our owned and controlled lots, we proactively monitor market conditions to opportunistically sell a minority of our finished lots to large unaffiliated homebuilders if we believe that doing so will maximize our returns or lower our risk.

Experienced Management Team

Our management team is comprised of homebuilding and finance veterans that collectively have decades of experience and local knowledge of our core markets. Our founder and Chief Executive Officer, James R. Brickman has over 38 years of experience in real estate development and home building. Richard A. Costello, our Chief Financial Officer, joined the Company in 2015 and provides oversight of all financial reporting, lending relationships, audit supervision, cash management, and investor relations. Mr. Costello has over 25 years of financial and operational experience in all aspects of real estate management. Jed Dolson, Head of Land Acquisition and Development, joined JBGL as an employee in 2013 and is responsible for land entitlement and development activities, including overseeing our land development operations in Dallas. Our management team has a proven record of running profitable businesses and making prudent investment decisions. We believe that our experienced management team is well positioned to design and execute the development of complex, master planned residential communities.

Focus on Operations in Dallas and Atlanta Housing Markets with a Favorable Growth Outlook and Strong Demand Fundamentals

We currently operate in the Dallas and Atlanta markets, which we believe are among the most desirable homebuilding markets in the nation. We believe our core markets exhibit attractive residential real estate investment characteristics, such as growing economies, improving levels of employment and population growth relative to national averages, favorable migration patterns, general housing affordability, and desirable lifestyle and weather characteristics.

Among the 12 largest metropolitan areas in the country, the Dallas metropolitan area ranked third in both the rate of job growth and in the number of jobs added from October 2014 to October 2015 (Source: US Bureau of Labor Statistics, October 2015). The Atlanta metropolitan area has recorded employment gains each month, as compared to the same month in the prior year, since July 2010 (Source: US Bureau of Labor Statistics, November 2015).

We believe that increasing demand and supply constraints in our core markets create favorable conditions for our future growth.

Attractive Land Positions in Our Core Markets

We believe that we have strategically well-located land positions and lot positions within our core markets. We believe we have acquired our land and lot positions at attractive prices, providing us with significant opportunity for a healthy return on our investment. We expect the demand for housing in our core markets to continue to improve, due to rising consumer confidence, high affordability metrics, and a reduction in home inventory levels.

We seek to acquire land with convenient access to Dallas and Atlanta metropolitan areas which have diverse economic and employment bases and demographics that we believe will support long-term growth. For example, Capital currently owns, controls or is developing approximately 2,700 home sites under the brand Green Brick Communities in the Dallas market. Builder Finance owns or controls approximately 2,000 home sites in the Dallas and Atlanta markets.

We believe that our attractive inventory of home sites will enable us to capture the benefits of expected increases in home sales volumes and home prices as the U.S. housing market continues to recover and demand for new homes increases.

Land Sourcing and Evaluation Capabilities

We believe that our extensive experience and the strong reputation of our management team combined with our long-standing relationships with other market participants provide us with a competitive advantage in efficiently sourcing, purchasing and entitling land. We are actively involved in every step of the land entitlement, home design and construction process with our controlled builders. Our management team has developed significant collaborative relationships over decades

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with land sellers, developers, contractors, lenders, brokers and investors throughout the Dallas and Atlanta markets. Our deep and wide-ranging knowledge of the Dallas and Atlanta markets and our ability to quickly and efficiently identify, acquire and develop land in desirable locations and on favorable terms are key to our success.

Disciplined Investment Approach

We seek to maximize value over the long-term and operate our business to mitigate risks in the event of a downturn by controlling costs and focusing on regional and local market trends.

Our management team has gained significant operating expertise through varied economic cycles. The perspective gained from these experiences has helped shape our investment approach. We believe that our management team has learned to effectively evaluate housing trends in our markets, and to react quickly and rationally to market changes. For example, we made significant land investments during the downturn at prices that we view as attractive. Our cycle-tested management approach balances strategic planning with local day-to-day decision-making responsibilities freeing up our controlled builders to concentrate on growing our homebuilding business rather than focusing on obtaining capital to fund their operations. We believe that our strict operating discipline provides us with a competitive advantage in seeking to maximize returns while minimizing risk.

No Legacy Issues

We do not have distressed legacy assets or liabilities to manage. All of our owned land and lots, as well as those we have under option contracts, purchase contracts or non-binding letter of intent, are located in markets that we targeted during the downturn or after recovery had commenced. The absence of legacy issues has allowed us to attract and retain experienced and talented land development personnel who became available during the downturn. We believe that the absence of legacy issues enables us to achieve superior growth and profitability instead of diverting resources to manage troubled assets and relationships.

Business Strategy

We believe we are well-positioned for growth in our core Dallas and Atlanta markets through the disciplined execution of the following elements of our strategy:

Combine Land Acquisition and Development Expertise with Homebuilding Operations to Maximize Profitability

Our ability to identify, acquire and develop land in desirable locations and on favorable terms is critical to our success. We evaluate land opportunities based on how we expect such opportunities will contribute to overall corporate profitability and returns, rather than how they might drive volume on a market basis. We believe our expertise in land development and planning enables us to create desirable communities that meet or exceed our target homebuyer’s expectations, while selling homes at competitive prices. Our strategy of holding land inventory provides us with a multi-year supply of lots for future homebuilding. We focus on the development of entitled parcels in communities where we can generally sell all lots and homes within 24 to 60 months from the start of sales. This focus allows us to limit exposure to land development and market cycle risk while pursuing attractive returns on our investments. We seek to minimize our exposure to land risk through disciplined management of entitlements, the use of land options and other flexible land acquisition arrangements.

Maximize Benefits of Unique Land Development and Homebuilding Structure

Our unique land development and homebuilding structure provides the flexibility to monetize the value of our land assets either by building and selling homes through our controlled builders or developing land and selling finished lots to large unaffiliated homebuilders. When evaluating our land assets, we consider the potential contribution of each asset to our overall performance, taking into account the timeframe over which we may monetize the asset. While we currently expect the majority of our land to be utilized by our controlled homebuilders, we believe our land development and homebuilding strategy provides us with increased flexibility to seek to maximize risk-adjusted returns as market conditions warrant.

Increase Long-Term Value by Investing in Infrastructure

In our communities, we typically make enhanced investment in infrastructure, including landscaping, amenity centers and enforcing higher construction standards on our controlled and unaffiliated builders in our communities. We believe this creates greater long-term value for us and for our controlled and unaffiliated builders, homebuyers, shareholders and the communities in which we build.

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Drive Revenue by Opening New Communities from Existing Land Supplies

We have strategically invested in new land in a number of prime neighborhoods in our core markets. We currently own or control over 4,700 home sites in the Dallas and Atlanta markets. We believe that a majority of our land inventory was purchased or controlled at low price points during the downturn in the housing cycle. We expect these land purchases to provide us with the opportunity for continued revenue growth and strong gross margin performance. We continue to identify development opportunities that should allow us to profit from lot sales, construction interest and our 50% equity interest in the profits of our controlled builders.

Increase Market Position in Dallas and Atlanta

We believe that there are significant opportunities to profitably expand in our core Dallas and Atlanta markets. We continually review the allocation of our investments in these markets taking into account demographic trends and the likely impact on our operating results. We use the results of these reviews to re-allocate our investments to those areas where we believe we can maximize our profitability and return on capital. We seek to use our local relationships with land sellers, brokers and investors to pursue the purchase of additional land parcels in our core markets. While our primary growth strategy focuses on increasing our market position in our existing markets, we may, on an opportunistic basis, explore expansion into attractive new markets.

Superior Design, Broad Product Range and Enhanced Homebuying Experience

Within each of our core markets, we partner our expertise with our controlled builders to design attractive neighborhoods and homes to appeal to a wide variety of potential homebuyers. One of our core operating philosophy is to create a culture which provides a positive, memorable experience for our homebuyers through active engagement in the building process. At higher price points, we provide our homebuyers with customization options to suit their specific needs and tastes. We engineer our homes for energy-efficiency to reduce the impact on the environment and lower energy costs for our homebuyers. In consultation with nationally and locally recognized architecture firms, interior and exterior consultants and homeowner focus groups, we research and design a diversified range of products for various levels and price points. Our homebuilding projects include townhomes, single family homes and luxury custom homes. We believe we can adapt quickly to changing market conditions and optimize performance and returns while strategically reducing portfolio risk because of our diversified product strategy.

Pursue Further Growth Through the Prudent Use of Leverage

As of December 31, 2015, our debt to total capitalization ratio is less than 14%. It is our intent to prudently employ leverage to continue to invest in our land acquisition, development and homebuilding businesses. We intend to target a total capitalization ratio of approximately 35% to 40%, which we expect will provide us with significant additional growth capital.

Pursue Acquisitions of Additional Homebuilders

We intend to pursue the acquisition of additional homebuilders in our core and new markets. Our preference is to continue to acquire controlling interest in homebuilders with existing management continuing to own a significant ownership stake. We will seek to acquire and then retain management teams which have the deep local relationships with land owners and have a strong reputation for building well-crafted homes in their markets. We expect that our ability to provide capital discipline and strategic oversight will complement the local skills, relationships and reputations to our future homebuilder partners.

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Our Homebuilding Projects

Our homebuilding projects usually take approximately 24 to 60 months to complete from the start of sales, although certain projects may take longer to complete. The following table presents project information relating to each of our markets as of December 31, 2015, as well as current projects under development. Our backlog reflects the number and value of homes for which we have entered into non-contingent sales contracts with customers but not yet delivered. (While we may accept sales contracts on a contingent basis in limited circumstances, such contracts are not included in our backlog until the contingency is removed).



Projects	Year of First Delivery⁽¹⁾	Total Number of Homes in Project⁽²⁾	Cumulative Units Closed as of December 31, 2015	Backlog at December 31, 2015	Lots as of December 31, 2015	Sales Price Range (in thousands)	Home Size Range (sq. ft.)
Texas
CB JENI Brick Row Townhomes LLC	2012	152	135	15	2	$260 – $360	1,700 – 2,400
CB JENI Viridian LLC	2013	110	90	11	9	$220 – $280	1,500 – 2,000
CB JENI Grand Canal THs	2015	58	5	7	46	$300 - $380	1,700 – 2,600
CB JENI Raiford Road	2015	53	5	9	39	$260 – $350	1,700 – 2,600
CB JENI Berkshire Place LLC	2014	81	59	16	6	$240 – $300	1,400 – 2,100
CB JENI Mustang Park LLC TH	2014	177	57	17	103	$260 – $370	1,500 – 2,300
CB JENI Hometown	2016	34	—	—	34	$250 – $290	1,700 – 2,200
CB JENI Los Rios, LLC	2016	98	—	—	98	$230 – $290	1,400 – 2,100
CB JENI McKinney Ranch, LLC	2016	71	—	—	71	$230 – $290	1,500 – 2,000
CB JENI Stonegate, LLC	2016	79	—	—	79	$250 – $300	1,500 – 2,000
CB JENI Stacy Crossing, LLC	2016	145	—	—	145	$260 – $360	1,500 – 2,300
CB JENI Fairview	2017	36	—	—	36	$260 – $350	1,600 – 2,200
CB JENI Heritage Creekside	2017	105	—	—	105	$300 – $375	2,100 – 3,600
CB JENI Frisco Springs	2017	150	—	—	150	300’s +	1,800 – 2,600
CB JENI/Normandy Southgate	2017	425	—	—	425	300’s +	TBD
Normandy Lakeside, LLC	2014	76	48	10	18	$375 – $700	2,200 – 4,400
Normandy Cypress Meadows LLC	2014	140	32	12	96	$460 – $700	2,700 – 4,400
Normandy Homes Viridian LLC SF	2014	36	29	1	6	$280 – $375	2,100 – 3,200
Normandy Cottonwood Crossing	2015	47	2	10	35	$300 – $450	1,800 – 3,450
Normandy Mustang SF	2015	83	3	6	74	$400 – $700	2,200 – 4,400
Normandy Twin Creeks	2015	72	—	2	70	$360 – $500	1,800 – 3,450
Normandy Waters Branch	2017	48	—	—	48	$400 – $550	2,000 – 3,800
Southgate	2013	41	30	4	7	$640 – $1,000+	3,300 – 4,970
Southgate Canals at Grand Park	2015	41	—	2	39	$690 – $760	3,900 – 4,500
Southgate Bluffs at Austin Waters	2016	69	15	7	47	$640 – $750	3,400 – 4,400
Southgate Twin Creeks	2016	29	—	—	29	$610 – $670	3,400 – 4,000
Southgate Angel Field West	2016	62	—	5	57	$630 – $760	3,400 – 4,500
Southgate Bethany Mews	2016	4	2	—	2	$770 – $790	3,900 – 3,925
Southgate Ranch	2017	32	—	—	32	700’s +	3,700 +
Twin Creeks Future	2015	649	—	—	649	$360 – $500	1,800 – 3,450
Centre Living	2013	12	4	—	8	$490 – $950	2,300 – 3,400
Texas Total		3,215	516	134	2,565

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Projects	Year of First Delivery⁽¹⁾	Total Number of Homes in Project⁽²⁾	Cumulative Units Closed as of December 31, 2015	Backlog at December 31, 2015	Lots as of December 31, 2015	Sales Price Range (in thousands)	Home Size Range (sq. ft.)
Georgia:
The Providence Group Custom Homes LLC	2012	129	107	4	18	$408 – $950	2,600 – 5,300
The Providence Group & Associates LLC	2013	17	10	1	6	$690 – $730	3,700 – 4,400
Providence Luxury Homes	2013	9	8	1	—	$830 – $2,500+	3,400 – 11,000
TPG Custom Homes - Academy	2017	83	—	—	83	$440 – $680	1,850 – 3,500
TPG Custom Homes - Roswell	2016	92	—	—	92	$340 – $385	2,100 – 2,700
TPG Custom Homes - Townes @ Chastain	2017	162	—	—	162	$400 – $475	1,800 – 2,250
TPG Custom Homes - Dunwoody Towneship	2017	40	—	—	40	$400 – $450	2,000 – 2,550
TPG Homes, LLC - Suwanee	2017	70	—	—	70	$265 – $285	1,950 – 2,250
TPG Homes at Whitfield Parc	2013	76	73	1	2	$320 – $330	2,400
TPG Homes at Seven Norcross	2015	24	17	3	4	$314 – $465	2,000 – 3,000
TPG Homes at Traditions	2015	100	18	8	74	$400 – $690	2,300 – 4,200
TPG Homes at Rivers Edge	2015	120	32	17	71	$260 – $360	2,000 – 3,300
TPG Homes – Highpointe at Vinings	2015	84	6	8	70	$517 – $650	2,800 – 4,200
TPG Homes at Brookmere	2016	194	—	—	194	$315 – $600	2,000 – 4,300
TPG Homes at Bellmoore Park LLC	2015	618	18	12	588	$450 – $770	2,600 – 4,500
TPG Homes at The Reserve at Providence	2015	37	8	1	28	$900 – $1,400	3,700 – 5,800
TPG Homes at Central Park at Deerfield Township	2016	283	—	3	280	$430 – $575	2,350 – 3,500
TPG Homes at East Village	2015	62	8	2	52	$305 – $350	2,000 – 2,400
TPG Homes at Bluffs at Lennox	2015	29	14	2	13	$499 – $590	1,900 – 2,300
TPG Homes at Sugarloaf (Glens)	2016	92	—	—	92	$315 – $355	2,000 – 2,250
TPG Homes at Cogburn	2016	19	—	3	16	$560 – $700	3,200 – 4,300
TPG Homes at Byers Landing	2015	12	11	1	—	$340 – $385	2,100 – 2,700
Georgia Total		2,352	330	67	1,955

Total Lots		5,567	846	201	4,520


(1)	2016 or 2017 is anticipated “Year of First Delivery.”


(2)	Number of homes is subject to change due to changes in zoning, building design, construction, and similar matters, including local regulations which impose restrictive zoning and density requirements in order to limit the number of homes that can eventually be built within the boundaries of a particular locality.

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Project Sales by Market

The following table sets forth units sales revenue for our builder operations and units delivered to third party homebuilders by market for the years ended December 31, 2015, 2014 and 2013.



Builder Operations	Year Ended December 31,
Builder Operations	2015			2014			2013
Location	Home Sales		Units Delivered	Home Sales		Units Delivered	Home Sales		Units Delivered
	(dollars in thousands)
Builder Operations (Homes)
Texas Homes
CB JENI Berkshire Place LLC	$	12,752	52	$	1,603	7	$	—	—
CB JENI Brick Row Townhomes LLC	$	6,030	20	$	8,362	36	$	10,746	55
CB JENI Chase Oaks Village II LLC	$	—	—	$	—	—	$	9,651	50
CB JENI Grand Park	$	1,581	5	$	—	—	$	—	—
CB JENI Hemingway Court LLC	$	—	—	$	—	—	$	8,940	32
CB JENI Lake Vista Coppell LLC	$	—	—	$	3,771	13	$	7,089	25
CB JENI Mustang Park LLC	$	14,950	54	$	867	3	$	—	—
CB JENI Pecan Park LLC	$	4,583	20	$	9,295	43	$	722	3
CB JENI Raiford Crossing	$	1,497	5	$	—	—	$	—	—
CB JENI – Settlement at Craig Ranch LLC	$	—	—	$	—	—	$	4,155	16
CB JENI Viridian LLC	$	9,900	42	$	9,531	42	$	1,361	6
Normandy Alto Vista Irving, LLC	$	6,307	12	$	4,963	10	$	2,591	5
Normandy Cottonwood Crossing	$	676	2	$	—	—	$	—	—
Normandy Homes Cypress Meadows LLC	$	15,700	28	$	2,107	4	$	—	—
Normandy Homes Mustang Park	$	1,307	3	$	—	—	$	—	—
Normandy Homes Viridan LLC	$	7,951	27	$	553	2	$	—	—
Normandy Lake Vista Coppell	$	2,582	6	$	12,306	29	$	1,571	4
Normandy Lakeside, LLC	$	15,765	28	$	10,802	20	$	—	—
Normandy Pecan Park, LLC	$	8,968	22	$	4,266	11	$	—	—
Southgate	$	9,409	13	$	12,518	12	$	2,953	8
Centre Living	$	2,021	2	$	869	—	$	2,985	2
Texas Homes Total	$	121,979	341	$	81,813	232	$	52,764	206
Georgia Homes
TPG Homes LLC	$	27,479	74	$	5,458	16	$	11,256	34
TPG Homes at Abberley LLC	$	—	—	$	2,261	8	$	6,808	30
TPG Homes at Bellmoore LLC	$	11,070	18	$	—	—	$	—	—
TPG Homes at Crabapple LLC	$	849	2	$	7,876	21	$	10,516	28
TPG Homes at Jamestown LLC	$	9,917	34	$	27,985	93	$	17,873	57
TPG Homes at LaVista Walk LLC	$	—	—	$	4,653	15	$	11,600	38
TPG Homes at Highlands LLC	$	2,650	9	$	21,729	75	$	20,766	68
TPG Homes at Three Bridges LLC	$	15,508	53	$	17,047	63	$	8,887	37
The Providence Group Custom Homes LLC	$	44,640	72	$	18,363	35	$	16,663	33
The Providence Group & Associates LLC	$	1,871	3	$	1,477	3	$	1,950	4
Providence Luxury Homes	$	3,183	4	$	2,496	4	$	321	1
TPG Homes at Whitfield Parc	$	15,121	45	$	7,347	22	$	1,952	6
The Providence Group at Jamestown II LLC	$	—	—	$	—	—	$	2,835	12
Georgia Homes Total	$	132,288	314	$	116,692	355	$	111,427	348
Other
TPG Custom Home of Florida LLC⁽¹⁾	$	—	—	$	—	—	$	4,400	2
Lot Sales Revenue⁽²⁾	$	—	—	2,145		—	—		—
Other Total	$	—	—	$	2,145	—	$	4,400	2
Homes Total	$	254,267	655	$	200,650	587	$	168,591	556

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Highland Units⁽³⁾
Highlands Units	$	—	—	$	—	—	$	2,517	15
Highland Units Total	$	—	—	$	—	—	$	2,517	15
Total with Highland Units	$	254,267	655	$	200,650	587	$	171,108	571


(1)	The Company has occasionally built homes outside of the Dallas and Atlanta markets.


(2)	Lots owned and developed to build homes sold to a third party developer.


(3)	Highland Units represent units built in connection with a notes receivable and are not included in units delivered.



Land Development	Year Ended December 31,
Land Development	2015			2014			2013
Location	Lot Sales		Units Delivered	Lot Sales		Units Delivered	Lot Sales		Units Delivered
	(dollars in thousands)
Land Development (Lots)
Bethany Mews (TX)	$	265	1	$	2,851	17	$	1,236	8
Chateau du Lac (TX)	$	1,770	6	$	1,881	7	$	865	4
Cypress Meadows (TX)	$	4,772	37	$	4,042	33	$	—	—
Hamilton Hills (TX)	$	—	—	$	1,103	7	$	5,394	33
Hardin Lake (TX)	$	1,505	20	$	5,432	75	$	—	—
Hawthorne Estates (TX)	$	644	6	$	2,806	27	$	1,868	19
Inwood Hills (TX)	$	—	—	$	957	15	$	7,999	126
Lakeside (TX)	$	6,164	61	$	9,602	88	$	1,712	18
The Landings (TX)	$	8,539	81	$	5,184	51	$	5,746	81
Mustang Park (TX)	$	7,439	76	$	11,594	129	$	7,462	58
Twin Creeks (TX)	$	5,780	48	$	—	—	$	—	—
Willowcrest (TX)	$	—	—	$	—	—	$	1,453	25
Lots Total	$	36,878	336	$	45,452	449	$	33,735	372

Company Total (Homes and Lots)	$	291,145	991	$	246,102	1,036	$	204,843	943

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Owned and Controlled Lots

The following table presents the lots we owned or controlled as of December 31, 2015 and 2014. Owned lots are those to which we hold title, while controlled lots are those that we have the contractual right to acquire title but do not currently own. With respect to controlled lots, we generally enter into lot option contracts where an earnest money deposit of up to 20% of the total purchase price of the lots is deposited with the seller. The earnest money deposit is applied to the purchase price of the lots within the lot option contract. Certain of our lot option contracts require an escalation in lot price from zero to six percent per year. The length of the lot option contract is generally based upon the number of lots being purchased and the agreed upon lot takedown schedule, which determines the number and frequency of lot purchases. Townhome lot option contracts typically require two to four lot purchases per month and single family lot option contracts typically require two to three lot purchases per month.

Lots Owned and Controlled



	December 31,
	2015	2014
Lots Owned⁽¹⁾
Texas	2,659	2,105
Georgia	991	1,211
Total	3,650	3,316
Lots Controlled⁽¹⁾
Texas	326	279
Georgia	758	561
Total	1,084	840

Total Lots Owned and Controlled⁽²⁾	4,734	4,156


(1)	The “land use” assumptions used in the above table may change over time.


(2)	Total lots excludes homes under construction.

Acquisition Process

Our ability to identify, evaluate and acquire land in desirable locations and on favorable terms is critical to our success. We evaluate land opportunities based on risk-adjusted returns and employ a rigorous due diligence process to identify risks, which we then seek to mitigate if we pursue the property.

We often purchase land parcels from large, long-term landowners who sell portions of their land to benefit from our experience in planning and executing complex land development projects. We also purchase land from large real estate developers that recognize the benefit of working with an experienced and reputable developer and homebuilder. Additionally, we acquire land from owners that want to leverage our expertise in land entitlement so that the owners may later sell all or part of their land to us after entitlement. We also acquire land from other developers that want our controlled builders to build homes in their neighborhoods.

We also identify attractive properties that are typically located in existing prime neighborhood locations. We consider the existing and future supply of developable land before working to acquire the best-valued properties. Analysis includes development costs in addition to land costs. We have found that the prime quality infill locations have limited supply competition that may result in smaller value declines in down markets.

After contracting for a property, we perform due diligence to evaluate any environmental or geotechnical issues that may exist. We often seek to secure entitlements such as zoning or plat approval during this period. After title has been reviewed and approved the property is acquired. We manage and oversee all land development with our in-house staff.

Homebuilding, Marketing and Sales Process

TPG builds town homes, single family homes, and luxury homes in the Atlanta market. TPG’s town homes range from 1,900 to 3,000 square feet, have two or more bedrooms and range in price from $260,000 to $590,000. TPG’s single family homes range from 2,300 to 5,800 square feet, have three or more bedrooms and range in price from $315,000 to $1.4 million. TPG’s luxury homes have over 4,000 square feet, four or more bedrooms and range in price from $770,000 to more than $3.0

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million. TPG has received numerous industry awards, including the best master planned community by the Greater Atlanta Home Builders Association in 2013.

In the Dallas market our controlled builders construct townhomes, single family homes and luxury homes. CB JENI builds town homes with 1,400 to 2,600 square feet, two or more bedrooms and prices ranging from $210,000 to $290,000. Normandy constructs single family homes with square footage of over 1,800 square feet, three or more bedrooms and a price between $280,000 and $700,000. Southgate builds luxury homes that have over 3,400 square feet, four or more bedrooms and prices of $600,000 and above. Southgate also acts as a contractor on homes up to $2.0 million. Centre Living builds homes and luxury townhomes, in premier centrally located neighborhoods in the Dallas market, that range from 2,100 to 3,300 square feet, two to three bedrooms and prices from $500,000 to more than $1,000,000. Centre also acts as a contractor on homes up to $2.5 million and on amenity centers for our other Dallas builders.

We offer a preferred lender referral program to provide lending options to homebuyers in need of financing. We offer homeowners a comprehensive warranty on each home. Homes are generally covered by a ten year warranty for structural concerns, one year for defects and products used, two years for electrical and plumbing and ten years for HVAC parts and labor. Our Homeowner Services Department aims to respond to any questions or concerns from homebuyers within three business days.

We sell our homes through our own sales representatives and also through independent real estate brokers. Our in-house sales force typically works from sales offices located in model homes close to or in each community. Sales representatives assist potential buyers by providing them with basic floor plans, price information, development and construction timetables, tours of model homes, and the selection of customization and upgrade options. Sales personnel are trained by us and generally have had prior experience selling new homes in the local market. Our personnel, along with subcontracted marketing and design consultants, carefully design the exterior and interior of each home to appeal to the lifestyles of targeted homebuyers. Additionally, we advertise through the use of model homes, Internet, newspapers, billboards, publications, brochures, and newsletters.

Seasonality

Historically, the homebuilding industry experiences seasonal fluctuations in quarterly operating results and capital requirements. We typically experience the highest new home order activity in spring and summer, although this activity is also highly dependent on the number of active selling communities, timing of new community openings and other market factors. Since it typically takes five to eight months to construct a new home, we deliver more homes in the second half of the year as spring and summer home orders are delivered. Because of this seasonality, home starts, construction costs and related cash outflows have historically been highest in the second and third quarters, and the majority of cash receipts from home deliveries occur during the third and fourth quarters. We expect this seasonal pattern to continue over the long-term, although it may be affected by volatility in the homebuilding industry.

Segments

We organize our operations into two reportable segments: land development and homebuilding services. Within homebuilding services, our two operating segments consist of Texas and Georgia. The reportable segments follow the same accounting policies as our consolidated financial statements. Operational results of each segment are not necessarily indicative of the results that would have occurred had the segment been an independent stand-alone entity during the periods presented. Financial information about our segments appears in Note 14, "Segment Information," of the notes to consolidated financial statements included in this Annual Report on Form 10-K.

Raw Materials

Typically, all the raw materials and most of the components used in our business are readily available in the United States. Most are standard items carried by major suppliers. However, a rapid increase in the number of homes started could cause shortages in the availability of such materials or in the price of services, thereby leading to delays in the delivery of homes under construction. We continue to monitor the supply markets to achieve the best prices available. See “Risk Factors — Labor and raw material shortages and price fluctuations could delay or increase the cost of land development and home construction, which could materially and adversely affect our business.”

Corporate Organization and Structure

We carry out our business generally through a number of project-specific, wholly-owned limited liability company subsidiaries. Our homebuilding operations business is conducted primarily through Builder Finance, and the land development operations conducts its business under the brand Green Brick Communities.

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Government Regulation and Environmental Matters

Our developments are subject to numerous local, state, federal and other statutes, ordinances, rules and regulations concerning zoning, development, building design, construction and similar matters that impose restrictive zoning and density requirements, the result of which is to limit the number of homes that can be built within the boundaries of a particular area. Projects that are not entitled may be subjected to periodic delays, changes in use, less intensive development or elimination of development in certain specific areas due to government regulations. We may also be subject to periodic delays or may be precluded entirely from developing in certain communities due to building moratoriums or “slow-growth” or “no-growth” initiatives that could be implemented in the future. Local governments also have broad discretion regarding the imposition of development and service fees for projects in their jurisdiction. Projects for which we have received land use and development entitlements or approvals may still require a variety of other governmental approvals and permits during the development process and can also be impacted adversely by unforeseen health, safety and welfare issues, which can further delay these projects or prevent their development.

We are also subject to a variety of local, state, federal and other statutes, ordinances, rules and regulations concerning the environment. The particular environmental laws that apply to any given homebuilding site vary according to multiple factors, including the site’s location, its environmental conditions and the present and former uses of the site, as well as adjoining properties. Environmental laws and conditions may result in delays, may cause us to incur substantial compliance and other costs, and can prohibit or severely restrict homebuilding and land development activity in environmentally sensitive regions or areas. In addition, in those cases where an endangered or threatened species is involved, environmental rules and regulations can result in the restriction or elimination of development in identified environmentally sensitive areas. From time to time, the United States Environmental Protection Agency and similar federal or state agencies review homebuilders’ compliance with environmental laws and may levy fines and penalties for failure to comply strictly with applicable environmental laws or impose additional requirements for future compliance as a result of past failures. Any such actions taken may increase our costs. Further, we expect that increasingly stringent requirements will be imposed on homebuilders and land developers in the future. Environmental regulations can also have an adverse impact on the availability and price of certain raw materials such as lumber.

Under various environmental laws, current or former owners of real estate, as well as certain other categories of parties, may be required to investigate and clean up hazardous or toxic substances or petroleum product releases, and may be held liable to a governmental entity or to third parties for related damages, including for bodily injury, and for investigation and clean-up costs incurred by such parties in connection with the contamination. Please see the “Risk Factors” section elsewhere in this Annual Report on Form 10-K.

Competition

Competition in the homebuilding industry is intense, and there are relatively low barriers to entry into our business. Homebuilders compete for, among other things, homebuyers, desirable land parcels, financing, raw materials and skilled labor. Increased competition could hurt our business, as it could prevent us from acquiring attractive land parcels on which to build homes or make such acquisitions more expensive, hinder our market share expansion, and lead to pricing pressures on our homes that may adversely impact our revenues and margins. If we are unable to successfully compete, our business, prospects, liquidity, financial condition and results of operations could be materially and adversely affected. Our competitors may independently develop land and construct housing units that are superior or substantially similar to our products. Furthermore, a number of our primary competitors are significantly larger, have a longer operating history and may have greater resources or lower cost of capital; accordingly, they may be able to compete more effectively in one or more of the markets in which we operate. Many of these competitors also have longstanding relationships with subcontractors and suppliers in the markets in which we operate. We also compete for sales with individual resales of existing homes and with available rental housing.

Employees

As of December 31, 2015, we had approximately 200 employees, including those of our controlled builders. Although none of our employees are covered by collective bargaining agreements, certain of the subcontractors engaged by us or our affiliates are represented by labor unions or are subject to collective bargaining arrangements. We believe that our relations with our employees and subcontractors are good.

Offices and Available Information

Our principal executive offices are located at 2805 Dallas Parkway, Ste 400, Plano, TX 75093. Our telephone number is (469) 573-6755. Our website address is www.greenbrickpartners.com. Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13 or 15

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(d) of the Exchange Act are available free of charge through our website as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC. Our website and the information contained or incorporated therein are not intended to be incorporated into this Annual Report on Form 10-K.

Executive Officers and Directors

The following table sets forth certain information regarding our executive officers and directors as of March 13, 2016:

Executive Officers



Name	Age	Position
James R. Brickman	64	Chief Executive Officer and Director
Richard A. Costello	57	Chief Financial Officer
Jed Dolson	38	Head of Land Acquisition and Development

James R. Brickman - Mr. Brickman has been our Chief Executive Officer and one of our directors since October 2014. Mr. Brickman was the founding manager and advisor of each of Capital since 2008 and Builder Finance since 2010. Mr. Brickman is responsible for all major investment decisions, capital allocation, strategic planning, and relationships with our controlled builders and lead investor. Prior to forming JBGL in 2008, Mr. Brickman was a manager of various joint ventures and limited partnerships that developed/built low and high rise office buildings, multifamily and condominium homes, single family homes, entitled land, and supervised a property management company. He previously also served as Chairman and CEO of Princeton Homes Ltd. and Princeton Realty Corporation that developed land, constructed single family custom homes, and managed apartments it built. Mr. Brickman has over 37 years’ experience in nearly all phases of real estate construction, development, and real estate finance property management. He received a B.B.A. and M.B.A. from Southern Methodist University.

Richard A. Costello - Mr. Costello has been our Chief Financial Officer since April 2015. From January 2015 until his appointment as Chief Financial Officer, Mr. Costello served as our Vice President of Finance. Mr. Costello has over 25 years of financial and operational experience in all aspects of real estate management. Since 2007, Mr. Costello has been a private investor. Previously, he worked for 16 years at GL Homes of Florida, one of the largest private developers and homebuilders in Florida. There he served as Chief Financial Officer and Chief Operating Officer as well as in other senior financial management roles. Prior to joining GL Homes, Mr. Costello worked for six years as AVP-Finance of Paragon Group, a regional commercial real estate developer, and for four years as an auditor for KPMG. Mr. Costello received a B.S. in Accounting from the University of Central Florida and his M.B.A. from Kellogg School of Northwestern University.

Jed Dolson - Mr. Dolson has been the Head of Land Acquisition and Development of the Company since October 2014. Prior to that time he was Head of Land Acquisition and Development of JBGL from September 2013. From March 2010 to September 2013, Mr. Dolson served as a managing member of Pecos One LLC, a consulting firm that provided services to JBGL. Prior to joining Capital, Mr. Dolson worked for three years at Jones & Boyd Engineering and later he served five years as Director of Development for a local private residential developer. Mr. Dolson received a B.S. degree in Civil Engineering from Texas A&M University and a M.S. in Civil Engineering from Stanford University.

Board of Directors



Name	Age	Position
Elizabeth K. Blake	64	Director
Harry Brandler	44	Director
James R. Brickman	64	Chief Executive Officer and Director
David Einhorn	47	Chairman of the Board
John R. Farris	43	Director
Kathleen Olsen	44	Director
Richard Press	77	Director

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ITEM 1A. RISK FACTORS

Set forth below are the risks that we believe are material to our investors. Any of these risks could significantly and adversely affect our business, prospects, financial condition and results of operations. You should carefully consider the risks described below, together with the other information included in this Annual Report on Form 10-K, including the information contained under the caption “Forward-Looking Statements.

Risks Related to Ownership of Our Common Stock

The price of our common stock may continue to be volatile.

The trading price of our common stock is highly volatile and could be subject to future fluctuations in response to a number of factors beyond our control. In recent years the stock market has experienced significant price and volume fluctuations. These fluctuations may be unrelated to the operating performance of particular companies. These broad market fluctuations may cause declines in the market price of our common stock. The price of our common stock could fluctuate based upon factors that have little or nothing to do with our company or its performance, and those fluctuations could materially reduce our common stock price. Our share repurchase program does not obligate us to acquire any specific number of shares. If we fail to meet expectations related to future growth, profitability, share repurchases or other market expectations, our stock price may decline significantly, which could have a material adverse impact on investor confidence and our stock price.

Certain large stockholders own a significant percentage of our shares and exert significant influence over us. Their interests may not coincide with yours and they may make decisions with which you may disagree.

Greenlight, Third Point, and James R. Brickman, together with certain members of Mr. Brickman’s family, beneficially own approximately 49.4%, 16.8% and 5.4%, respectively, of the voting power of the Company. These large stockholders, acting together, could determine substantially all matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions, such as a sale or other change of control transaction. In addition, this concentration of ownership may delay or prevent a change in control of our company and make some transactions more difficult or impossible without the support of these stockholders. The interests of these stockholders may not always coincide with our interests as a company or the interests of other stockholders. Accordingly, these stockholders could cause us to enter into transactions or agreements that you would not approve or make decisions with which you may disagree.

We do not intend to pay dividends on our common stock for the foreseeable future.

We have not paid any dividends since our inception and do not anticipate paying any cash dividends on our common stock in the foreseeable future. Any payment of future dividends will be at the discretion of our board of directors and will depend upon, among other things, our earnings, financial condition, capital requirements, levels of indebtedness, statutory and contractual restrictions applying to the payment of dividends or contained in our financing instruments and other considerations that the board of directors deems relevant. Investors must rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize a return on their investment. Investors seeking cash dividends should not purchase our common stock.

Certain large stockholders’ shares may be sold into the market in the future, which could cause the market price of our common stock to decrease significantly.

We believe that all or a significant portion of our common stock beneficially owned by Greenlight, Third Point and Mr. Brickman are “restricted securities” within the meaning of the federal securities laws because they were acquired from us on a private, non-registered basis. We have entered into registration rights agreements with each of these parties, however, that give these parties the right to require us to register the resale of their shares under certain circumstances. If these holders sell substantial amounts of these shares, the price of our common stock could decline. In addition, the sale of these shares could impair our ability to raise capital through the sale of additional equity securities.

Though we may repurchase shares pursuant to our common stock share repurchase program, we are not obligated to do so and if we do, we may purchase only a limited number of shares of common stock.

In March 2016, our Board of Directors authorized a share repurchase program for up to 1,000,000 shares of our common stock. Although the Board of Directors has authorized a share repurchase program, the share repurchase program does not obligate us to acquire any specific number of shares. The timing, prices, and sizes of repurchases will depend upon prevailing market prices, general economic and market conditions and other considerations. Other considerations include our current and future priorities for the use of cash for other purposes such as investments in land, joint ventures and acquisitions. We intend to purchase through open market transactions or in privately negotiated transactions, in accordance with applicable securities laws

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and regulatory limitations, and any market purchases will be made during applicable trading window periods or pursuant to any applicable Rule 10b5-1 trading plans. Although we have announced a share repurchase program, we are not obligated to acquire any shares of our common stock, and holders of our common stock should not rely on the share repurchase program to increase their liquidity. We may reduce or eliminate our share repurchase program in the future. The reduction or elimination of our share repurchase program, particularly if we do not repurchase the full number of shares authorized under the program, could adversely affect the market price of our common stock.

Risk Related to Our Tax Asset and Organizational Structure

Our ability to use net operating loss carryforwards to offset future taxable income for U.S. federal income tax purposes may be limited.

As of December 31, 2015, we reported federal net operating loss carryforwards of approximately $158.9 million, which will begin to expire, if not used, beginning with the year ending December 31, 2029.

For accounting purposes, a valuation allowance is required to reduce our potential deferred tax assets if it is determined that it is more-likely-than-not that all or some portion of such assets will not be realized due to the lack of sufficient taxable income. Based on the availability of historical financial results, projections of pre-tax book income and the assessment of available positive and negative information, management believes, on a more-likely-than-not basis, that the deferred tax assets will be realized in full. Accordingly, no valuation allowance has been recorded at December 31, 2015 with respect to the federal net operating loss ("NOL").

Our ability to utilize our tax attributes, such as NOL carryforwards and tax credits (“Tax Attributes”), will be subject to significant limitation for federal income tax purposes if we undergo an “ownership change” as defined in Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”). For this purpose, an ownership change generally occurs, as of any “testing date” (as defined under Section 382 of the Code), if our “5-percent shareholders” have collectively increased their ownership in our common stock by more than 50 percentage points over their lowest percentage ownership at any time during the relevant testing period, which generally begins the later of either January 1, 2008 or three years preceding the relevant testing date. In general, our 5-percent shareholders would include any (i) individual who owns 5% or more (directly, indirectly or constructively) of our common stock and (ii) “public groups” who own our common stock (even in certain cases if they own less than 5% of our common stock) or stock in higher tier entities who own 5% or more (directly, indirectly or constructively) of our common stock. A “public group” generally consists of a group of persons each of whom owns (directly, indirectly or constructively) less than 5% of our common stock. An ownership change may therefore occur following substantial changes in the direct or indirect ownership of our outstanding stock by one or more 5-percent shareholders over this period.

If we were to experience an ownership change, Section 382 of the Code imposes an annual limitation on the amount of our post-change taxable income that may be offset by our pre-change Tax Attributes. The limitation imposed by Section 382 of the Code for any post-change year is generally determined by multiplying the value of our common stock immediately before the ownership change by the applicable long-term tax-exempt rate. Any unused annual limitation may, subject to certain limits, be carried over to later years.

To reduce the likelihood of an ownership change, our board of directors has implemented the Section 382 rights agreement, and our Amended and Restated Certificate of Incorporation ("Charter") contains customary transfer and ownership limitations regarding preservation of our NOLs.

Our ability to utilize our Tax Attributes to reduce taxable income in future years may be limited for various reasons, including if our projected future taxable income is insufficient to recognize the full benefit of such Tax Attributes prior to their expiration and/or if the IRS successfully asserts that a transaction or transactions were concluded with the principal purpose of securing future tax benefits. There can be no assurance that we will have sufficient taxable income or that the IRS will not successfully challenge the use of our Tax Attributes to enable us to utilize the Tax Attributes in full before they expire.

Provisions in our charter documents may delay or prevent our acquisition by a third party or may reduce the value of your investment.

Some provisions in our Charter and bylaws may be deemed to have an anti-takeover effect and may delay, defer or prevent a tender offer or takeover attempt that a stockholder may deem to be in his or her best interest. For example, our board of directors may determine the rights, preferences, privileges and restrictions of unissued series of preferred stock without any vote or action by our stockholders. In addition, stockholders must provide advance notice to nominate directors or to propose business to be considered at a meeting of stockholders and may not take action by written consent. Additionally, both our 382 rights plan and our Charter contain transfer restrictions intended to prevent future acquisitions of our common stock that would

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limit our ability to use the NOLs. The existence of these provisions could also limit the price that investors may be willing to pay in the future for shares of our common stock.

Risks Related to our Business and Industry

The homebuilding industry is cyclical. A severe downturn in the industry, such as the one experienced in 2006 through 2011, could adversely affect our business, results of operations and stockholder’s equity.

The residential homebuilding industry is cyclical and is highly sensitive to changes in general economic conditions such as levels of employment, consumer confidence and income, availability of financing for acquisitions, construction and permanent mortgages, interest rate levels, inflation and demand for housing. Since early 2006, the U.S. housing market has been negatively impacted by declining consumer confidence, restrictive mortgage standards and large supplies of foreclosures, resales and new homes, among other factors. When combined with a prolonged economic downturn, high unemployment levels, increases in the rate of inflation and uncertainty in the U.S. economy, these conditions have contributed to decreased demand for housing, declining sales prices and increasing pricing pressure. While national data indicate that the overall demand for new homes improved during 2013, 2014, and 2015, in the event that the current recovery stalls or reverses and these economic and business trends continue or decline further, we could experience declines in the market value of our inventory and demand for our lots, homes and construction loans, which could have a material adverse effect on our business, prospects, liquidity, financial condition and results of operations.

Our operating performance is subject to risks associated with the real estate industry.

Real estate investments are subject to various risks and fluctuations and cycles in value and demand, many of which are beyond our control. Certain events may decrease cash available for operations, as well as the value of our real estate assets. These events include, but are not limited to:


•	adverse changes in international, national or local economic and demographic conditions;


•	adverse changes in financial conditions of buyers and sellers of properties, particularly residential homes and land suitable for development of residential homes;


•	competition from other real estate investors with significant capital, including other real estate operating companies and developers and institutional investment funds;


•	fluctuations in interest rates, which could adversely affect the ability of homebuyers to obtain financing on favorable terms or at all;


•	unanticipated increases in expenses, including, without limitation, insurance costs, development costs, real estate assessments and other taxes and costs of compliance with laws, regulations and governmental policies; and


•	changes in enforcement of laws, regulations and governmental policies, including, without limitation, health, safety, environmental, zoning and tax laws.

In addition, periods of economic slowdown or recession, rising interest rates or declining demand for real estate, or the public perception that any of these events may occur, could result in a general decline in the purchase of homes or an increased incidence of home order cancellations. If we cannot successfully implement our business strategy, our business, prospects, liquidity, financial condition and results of operations will be adversely affected.

Further, acts of war, any outbreak or escalation of hostilities between the United States and any foreign power or acts of terrorism may cause disruption to the U.S. economy, or the local economies of the markets in which we operate, cause shortages of building materials, increase costs associated with obtaining building materials, result in building code changes that could increase costs of construction, affect job growth and consumer confidence or cause economic changes that we cannot anticipate, all of which could reduce demand for our lots, homes and construction loans and adversely impact our business, prospects, liquidity, financial condition and results of operations.

Our business and financial results could be adversely affected by significant inflation or deflation.

Inflation can adversely affect our homebuilding operations by increasing costs of land, financing, materials, labor and construction. While we attempt to pass on cost increases to homebuyers through increased prices, in a weak housing market, we may not be able to offset cost increases with higher selling prices. In addition, significant inflation is often accompanied by higher interest rates, which have a negative impact on housing demand. In a highly inflationary environment, depending on industry and other economic conditions, we may be precluded from raising home prices enough to keep up with the rate of inflation, which could reduce our profit margins. Moreover, with inflation, the costs of capital increase and the purchasing

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power of our cash resources could decline. Current or future efforts by the government to stimulate the economy may increase the risk of significant inflation and its adverse impact on our business or financial results.

Alternatively, a significant period of deflation could cause a decrease in overall spending and borrowing levels. This could lead to a further deterioration in economic conditions, including an increase in the rate of unemployment. Deflation could also cause the value of our inventories to decline or reduce the value of existing homes below the related mortgage loan balance, which could potentially increase the supply of existing homes and have a negative impact on our results of operations.

We are dependent on the continued availability and satisfactory performance of subcontractors which, if unavailable, could have a material adverse effect on our business.

We and our homebuilding subsidiaries conduct our land development and construction operations only as a general contractor. Virtually all land development and construction work is performed by unaffiliated third-party subcontractors. As a consequence, the timing and quality of the development of our land and the construction of our homes depends on the availability and skill of our subcontractors. There may not be sufficient availability of and satisfactory performance by these unaffiliated third-party subcontractors in the markets in which we operate. In addition, inadequate subcontractor resources could have a material adverse effect on our business.

We have recently experienced labor shortages and increased labor costs in both the Dallas and Atlanta markets. These labor shortages have resulted in higher wages for subcontractors, construction workers frequently moving between jobs for higher pay, increased prices and delays in projects.

Labor and raw material shortages and price fluctuations could delay or increase the cost of land development and home construction, which could materially and adversely affect our business.

The residential construction industry experiences labor and raw material shortages from time to time, including shortages in qualified tradespeople and supplies of insulation, drywall, cement, steel and lumber. These labor and raw material shortages can be more severe during periods of strong demand for housing if either of the regions in which we operate experiences a natural disaster that has a significant impact on existing residential and commercial structures. The cost of labor and raw materials may also be adversely affected during periods of shortage or high inflation. During the recent economic downturn, a large number of qualified tradespeople went out of business or otherwise exited the market in the Dallas and Atlanta regions. This reduction in available tradespeople exacerbated labor shortages as demand for new housing increased in these markets. Shortages and price increases could cause delays in, and increase our costs of, land development and home construction, which in turn could have a material adverse effect on our business, prospects, liquidity, financial condition and results of operations.

Failure to recruit, retain and develop highly skilled, competent employees may have a material adverse effect on our business and results of operations.

Key employees, including management team members at both the corporate and homebuilder subsidiary levels, are fundamental to our ability to obtain, generate and manage opportunities. If any of the management team members were to cease employment with us, our results of operations could suffer. Our ability to retain our management team or to attract suitable replacements should any members of its management team leave is dependent on the competitive nature of the employment market. The loss of services from key management team members or a limitation in their availability could materially and adversely impact our business, prospects, liquidity, financial condition and results of operations. Further, such a loss could be negatively perceived in the capital markets. In addition, we do not maintain key person insurance in respect of any member of our senior management team.

In addition, key employees working in the land development, homebuilding and construction industries are highly sought after. Experienced employees in the homebuilding, land acquisition and construction industries are fundamental to our ability to generate, obtain and manage opportunities. In particular, local knowledge and relationships are critical to our ability to source attractive land acquisition opportunities. Failure to attract and retain such personnel or to ensure that their experience and knowledge is not lost when they leave the business through retirement, redundancy or otherwise may adversely affect the standards of our service and may have an adverse impact on our business, financial conditions and results of operations.

Our long-term success depends on our ability to acquire undeveloped land, partially-finished developed lots and finished lots suitable for residential homebuilding at reasonable prices, in accordance with our land investment criteria.

The homebuilding industry is highly competitive for suitable land and the risk inherent in purchasing and developing land increases as consumer demand for housing increases. The availability of finished and partially-finished developed lots and undeveloped land for purchase that meet our investment criteria depends on a number of factors outside our control, including land availability in general, competition with other homebuilders and land buyers, inflation in land prices, zoning, allowable

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housing density, the ability to obtain building permits and other regulatory requirements. Should suitable land or lots become more difficult to locate or obtain, the number of lots we may be able to develop and sell could decrease, the number of homes we may be able to build and sell could be reduced and the cost of land could increase, perhaps substantially, which could adversely impact our results of operations.

As competition for suitable land increases, the cost of acquiring both finished and undeveloped lots and the cost of developing owned land could rise and the availability of suitable land at acceptable prices may decline, which could adversely impact our financial results. The availability of suitable land assets could also affect the success of our land acquisition strategy, which may impact our ability to increase the number of actively selling communities, to grow our revenues and margins and to achieve or maintain profitability.

If we are unable to develop communities successfully or within expected timeframes, our results of operations could be adversely affected.

Before a community generates any revenue, time and material expenditures are required to acquire and prepare land, entitle and finish lots, obtain development approvals, pay taxes and construct significant portions of project infrastructure, amenities, model homes and sales facilities. It can take several years from the time that we acquire control of a property to the time that we make our first home sale on the site. Delays in the development of communities expose us to the risk of changes in market conditions for homes. A decline in our ability to develop and market our communities successfully and to generate positive cash flow from these operations in a timely manner could have a material adverse effect on our business and results of operations and on our ability to service our debt and to meet our working capital requirements.

Because real estate investments are relatively illiquid, our ability to promptly sell one or more properties for reasonable prices in response to changing economic, financial and investment conditions may be limited and we may be forced to hold non-income producing properties for extended periods of time.

Real estate investments are relatively difficult to sell quickly. As a result, our ability to promptly sell one or more properties in response to changing economic, financial and investment conditions is limited and we may be forced to hold non-income producing assets for an extended period of time. We cannot predict whether we will be able to sell any property for the price or on the terms that we set or whether any price or other terms offered by a prospective purchaser would be acceptable to us. We also cannot predict the length of time needed to find a willing purchaser and to close the sale of a property.

We depend on the success of our controlled homebuilding subsidiaries.

We participate in the homebuilding business through subsidiaries in which we own a 50% controlling interest, which we refer to as our “controlled builders.” We have entered into arrangements with these controlled builders in order to take advantage of the local knowledge and relationships of the controlled builders, acquire attractive land positions and brand images, manage our risk profile and leverage our capital base. The viability of our participation in the homebuilding business depends on our ability to maintain good relationships with our controlled builders. Our controlled builders are focused on maximizing the value of their operations and working with a partner that can help them be successful. The effectiveness of our management, the value of our expertise and the rapport we maintain with our controlled builders are important factors for new builders considering doing business with us and may affect our ability to attract homebuyers, subcontractors, employees or others upon whom our business, financial condition and results of operations ultimately depend. Further, our relationships with our controlled builders generate additional business opportunities that support our growth. If we are unable to maintain good relationships with our controlled builders, we may be unable to fully take advantage of existing agreements or expand our relationships with these controlled builders. Additionally, our opportunities for developing new relationships with additional builders may be adversely impacted.

We sell lots to our controlled builders for their homebuilding operations and provide them loans to finance home construction. If our controlled builders fail to successfully execute their business strategies for any reason, they may be unable to purchase lots from us, repay outstanding construction finance loans made by us or borrow from us in the future, any of which could negatively impact our business, financial condition and results of operations.

If we are required to either repurchase or sell a substantial portion of the equity interest in our controlled homebuilding subsidiaries, our capital resources and financial condition could be adversely affected.

The operating agreements governing two of our controlled homebuilding subsidiaries contain buy-sell provisions that may be triggered in certain circumstances. In the event that a buy-sell event occurs, our builder will have the right to initiate a buy-sell process, which may happen at an inconvenient time for us. In the event the buy-sell provisions are exercised at a time when we lack sufficient capital to purchase the remaining equity interest, we may elect to sell our equity interest in the entity. If we

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are forced to sell our equity interest, we will no longer benefit from the future operations of the applicable entity. If a buy-sell provision is exercised and we elect to purchase the interest in an entity that we do not already own, we may be obligated to expend significant capital in order to complete such acquisition, which may result in our being unable to pursue other investments or opportunities. If either of these events occurs, our revenue and net income could decline or we may not have sufficient capital necessary to implement our growth strategy.

Our geographic concentration could materially and adversely affect us if the homebuilding industry in our current markets should decline.

Our business strategy is focused on the development of land, the issuance of construction finance loans and the design, construction and sale of single-family detached and attached homes in the Dallas and Atlanta markets, as well as the eventual entry into other attractive geographic markets. In Dallas, we principally operate in the counties of Dallas, Collin and Denton. In Atlanta, we principally operate in the counties of Fulton, Gwinnett, Cobb, Forsyth and Dekalb. To the extent housing demand and population growth slow in our core markets, our favorable growth outlook may not be realized. Furthermore, we may be unable to compete effectively with the resale home market in our core markets. Because our operations are concentrated in these areas, a prolonged economic downturn in one or more of these areas could have a material adverse effect on our business, prospects, liquidity, financial condition and results of operations, and a disproportionately greater impact on us than other homebuilders with more diversified operations. Further, slower rates of population growth or population declines in the Dallas or Atlanta markets, especially as compared to the high population growth rates in prior years, could affect the demand for housing, causing home prices in these markets to fall and adversely affect our business, financial condition and results of operations.

Our developments are subject to extensive government regulation, which could cause us to incur significant liabilities or restrict our business activities.

If the market value of our land and homes drops significantly, our profits would decrease.

The market value of land, building lots and housing inventories can fluctuate significantly as a result of changing market conditions, and the measures we employ to manage inventory risk may not be adequate to insulate our operations from a severe drop in inventory values. We acquire land for replacement of land inventory and expansion within our current markets, and may in the future acquire land for expansion into new markets. If housing demand decreases below what we anticipated when we acquired our inventory, we may not be able to generate profits consistent with those we have generated in the past and we may not be able to recover our costs when we sell lots and homes. When market conditions are such that land values are not appreciating, option arrangements previously entered into may become less desirable, at which time we may elect to forego deposits and pre-acquisition costs and terminate such arrangements. In the face of adverse market conditions, we may have substantial inventory carrying costs, may have to write down our inventory to its fair value in accordance with generally accepted accounting principles and/or may have to sell land or homes at a loss. Any material write-downs of assets, or sales at a loss, could have a material adverse effect on our business, prospects, liquidity, financial condition and results of operations.

The terms and availability of mortgage financing can affect consumer demand for homes and the ability of homebuyers to complete the purchase of a home. Because most of our homebuyers, and the homebuyers of those entities to whom we sell lots, finance the purchase of their homes, unfavorable terms in, or the unavailability of, mortgage financing could materially and adversely affect us.

Our business depends on the ability of our homebuyers, as well as the ability of those who buy homes from the homebuilding entities to which we sell lots (our “homebuilding customers”), to obtain financing for the purchase of their homes. Many of these homebuyers must sell their existing homes in order to buy a home from us or our homebuilding customers. Since 2009, the U.S. residential mortgage market as a whole has experienced significant instability due to, among

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other things, defaults on subprime and other loans, resulting in the declining market value of such loans. In light of these developments, lenders, investors, regulators and other third parties questioned the adequacy of lending standards and other credit requirements for several loan programs made available to borrowers in recent years. This has led to tightened credit requirements and an increase in indemnity claims for mortgages. Deterioration in credit quality among subprime and other nonconforming loans has caused most lenders to eliminate subprime mortgages and most other loan products that do not conform to Federal National Mortgage Association (“Fannie Mae”), Federal Home Loan Mortgage Corporation (“Freddie Mac”), Federal Housing Administration (the “FHA”) or Veterans Administration (the “VA”) standards. Fewer loan products and tighter loan qualifications, in turn, make it more difficult for a borrower to finance the purchase of a new home or the purchase of an existing home from a potential “move-up” buyer who wishes to purchase a home from us or our homebuilding customers. If potential buyers of our or our homebuilding customers’ homes, or the buyers of those potential buyers’ existing homes, cannot obtain suitable financing, our business, prospects, liquidity, financial condition and results of operations could be materially and adversely affected.

Interest rate increases or changes in federal lending programs or other regulations could lower demand for our lots, homes and construction finance loans, which could materially and adversely affect our business and results of operations.

Rising interest rates, decreased availability of mortgage financing or of certain mortgage programs, higher down payment requirements or increased monthly mortgage costs may lead to reduced demand for our homes, lots and construction loans. Increased interest rates can also hinder our ability to realize our backlog because certain of our home purchase contracts provide homebuyers with a financing contingency. Financing contingencies allow homebuyers to cancel their home purchase contracts in the event that they cannot arrange for adequate financing. As a result, rising interest rates can decrease our home sales and mortgage originations. Any of these factors could have a material adverse effect on our business, prospects, liquidity, financial condition and results of operations.

In addition, as a result of the turbulence in the credit markets and mortgage finance industry, the federal government has taken on a significant role in supporting mortgage lending through its conservatorship of Fannie Mae and Freddie Mac, both of which purchase home mortgages and mortgage-backed securities originated by mortgage lenders, and its insurance of mortgages originated by lenders through the FHA and the VA. The availability and affordability of mortgage loans, including consumer interest rates for such loans, could be adversely affected by a curtailment or cessation of the federal government’s mortgage-related programs or policies. The FHA may continue to impose stricter loan qualification standards, raise minimum down payment requirements, impose higher mortgage insurance premiums and other costs and/or limit the number of mortgages it insures. Due to growing federal budget deficits, the U.S. Treasury may not be able to continue supporting the mortgage-related activities of Fannie Mae, Freddie Mac, the FHA and the VA at present levels, or it may revise significantly the federal government’s participation in and support of the residential mortgage market. Further, in 2013 the Obama administration proposed the wind-down of Fannie Mae and Freddie Mac, a proposal supported by Julian Castro, the current Secretary of Housing and Urban Development. Because the availability of Fannie Mae, Freddie Mac, FHA- and VA-backed mortgage financing is an important factor in marketing and selling many of our homes, any limitations, restrictions or changes in the availability of such government-backed financing could reduce our home sales, which could have a material adverse effect on our business, prospects, liquidity, financial condition and results of operations.

Furthermore, in July 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into law. This legislation provides for a number of new requirements relating to residential mortgages and mortgage lending practices, many of which are to be developed further by implementing rules. These include, among others, minimum standards for mortgages and lender practices in making mortgages, limitations on certain fees and incentive arrangements, retention of credit risk and remedies for borrowers in foreclosure proceedings. The effect of these provisions on lending institutions will depend on the rules that are ultimately enacted. These requirements, however, as and when implemented, are expected to reduce the availability of loans to borrowers and/or increase the costs to borrowers to obtain such loans. Any such reduction could result in a decline of our home sales, lot sales and construction finance loan portfolio which could materially and adversely affect our business and results of operations.

Any increase in unemployment or underemployment may lead to an increase in the number of loan delinquencies and property repossessions, which would have an adverse impact on us.

The unemployment rate in the United States was 5.0% as of December 2015, according to the U.S. Bureau of Labor Statistics (“BLS”). In addition, the labor force participation rate reported by the BLS has been declining, from 66.2% in January 2008 to 62.6% in December 2015, potentially reflecting an increased number of “discouraged workers” who have left the labor force. People who are not employed, are underemployed, who have left the labor force or are concerned about the loss of their jobs are less likely to purchase new homes, may be forced to try to sell the homes they own and may face difficulties in making required mortgage payments. Therefore, any increase in unemployment or underemployment may lead to an increase in

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the number of loan delinquencies and property repossessions and have an adverse impact on us both by reducing demand for our homes, lots and construction loans and by increasing the supply of homes for sale.

Any limitation on, or reduction or elimination of, tax benefits associated with owning a home would have an adverse effect on the demand for our homes, lots and construction loans, which could be material to our business.

Changes in federal income tax laws may affect demand for new homes. Current tax laws generally permit significant expenses associated with owning a home, primarily mortgage interest expense and real estate taxes, to be deducted for the purpose of calculating an individual’s federal and, in many cases, state taxable income. Various proposals have been publicly discussed to limit mortgage interest deductions and to limit the exclusion of gain from the sale of a principal residence. If such proposals were enacted without offsetting provisions, the after-tax cost of owning a new home would increase for many of our potential homebuyers and the potential homebuyers of our homebuilding customers. Enactment of any such proposal may have an adverse effect on the homebuilding industry in general, as the loss or reduction of homeowner tax deductions could decrease the demand for new homes.

The occurrence of severe weather or natural disasters could increase our operating expenses and reduce our revenues and cash flows.

The climates and geology of the states in which we operate, Georgia and Texas, present increased risks of severe weather and natural disasters. The occurrence of severe weather conditions or natural disasters can delay new home deliveries and lot development, reduce the availability of materials and/or negatively impact the demand for new homes in affected areas. For example, the winter of 2014 - 2015 brought severe weather conditions in the states in which we operate, including extreme rain in Atlanta and Dallas and abnormally low temperatures and icy conditions in the Dallas region, which hindered land development and delayed home construction.

Further, to the extent that hurricanes, severe storms, earthquakes, tornadoes, droughts, floods, wildfires or other natural disasters or similar events occur, our homes under construction or our building lots could be damaged or destroyed, which may result in losses exceeding our insurance coverage. Any of these events could increase our operating expenses, impair our cash flows and reduce our revenues.

High cancellation rates may negatively impact our business.

Our backlog reflects the number and value of homes for which we have entered into non-contingent sales contracts with homebuyers but not yet delivered. (While we may accept sales contracts on a contingent basis in limited circumstances, such contracts are not included in our backlog until the contingency is removed.) Although these sales contracts typically require a cash deposit and do not allow for the sale to be contingent on the sale of the homebuyer's existing home, a homebuyers may in certain circumstances cancel the contract and receive a complete or partial refund of the deposit as a result of local laws or contract provisions. If home prices decline, the national or local homebuilding environment or general economy weakens, our neighboring competitors reduce their sales prices (or increase their sales incentives), interest rates increase or the availability of mortgage financing tightens, homebuyers may have an incentive to cancel their contracts with us, even where they might be entitled to no refund or only a partial refund. Significant cancellations could have a material adverse effect on our business as a result of lost sales revenue and the accumulation of unsold housing inventory.

We may not be able to compete effectively against competitors in the homebuilding, land development and financial services industries.

Competition in the land development and homebuilding industries is intense, and there are relatively low barriers to entry. Land developers and homebuilders compete for, among other things, homebuyers, desirable land parcels, financing, raw materials and skilled labor. Increased competition could hurt our business, as it could prevent us from acquiring attractive land parcels for development and resale or homebuilding (or make such acquisitions more expensive), hinder our market share expansion and lead to pricing pressures that adversely impact its margins and revenues. If we are unable to compete successfully, our business, prospects, liquidity, financial condition and results of operations could be materially and adversely affected. Our competitors may independently develop land and construct housing units that are superior or substantially similar to our products. Furthermore, a number of our primary competitors are significantly larger, have a longer operating history and may have greater resources or lower cost of capital than us. Accordingly, they may be able to compete more effectively in one or more of the markets in which we operate. Many of these competitors also have longstanding relationships with subcontractors and suppliers in the markets in which we operate. Our homebuilding business also competes for sales with individual resales of existing homes and with available rental housing.

Our construction financing business competes with other lenders, including national, regional and local banks and other financial institutions, some of which have greater access to capital or different lending criteria and may be able to offer more attractive financing to potential homebuyers.

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Our future growth may include additional strategic investments, joint ventures, partnerships and/or acquisitions of companies that may not be as successful as we anticipate and could disrupt our ongoing businesses and adversely affect our operations.

Our investments in our homebuilding subsidiaries have contributed to our historical growth and similar investments may be a component of our growth strategy in the future. We may make additional strategic investments, enter into new joint venture or partnership arrangements or acquire businesses, some of which may be significant. These endeavors may involve significant risks and uncertainties, including distraction of management from current operations, significant start-up costs, insufficient revenues to offset expenses associated with these new investments and inadequate return of capital on these investments, any of which may adversely affect our financial condition and results of operations. Our failure to successfully identify and manage future investments, joint ventures, partnerships or acquisitions could harm our results of operations.

We may be unable to obtain suitable bonding for the development of our housing projects.

We are often required to provide bonds to governmental authorities and others to ensure the completion of our projects. As a result of market conditions, surety providers have been reluctant to issue new bonds and some providers are requesting credit enhancements (such as cash deposits or letters of credit) in order to maintain existing bonds or to issue new bonds. If we are unable to obtain required bonds for our future projects, or if we are required to provide credit enhancements with respect to our current or future bonds, our business, prospects, liquidity, financial condition and results of operations could be materially and adversely affected.

Difficulty in obtaining sufficient capital could result in an inability to acquire land for our developments or increased costs and delays in the completion of development projects.

The homebuilding industry is capital-intensive and requires significant up-front expenditures to acquire land parcels and begin development. Land acquisition, development and construction activities may be adversely affected by any shortage or increased cost of financing or the unwillingness of third parties to engage in partnerships, joint ventures or other alternative arrangements.

We currently have access to a senior secured revolving credit facility with aggregate lending commitments of up to $50 million and a senior unsecured revolving credit facility with aggregate lending commitments of up to $40 million. As of December 31, 2015, we have $32.5 million of available borrowing capacity under the senior secured revolving credit facility and $10 million of available borrowing capacity under the senior unsecured revolving credit facility. Subject to certain terms and conditions, we may, prior to the termination of the senior unsecured revolving credit facility, increase the amount of such revolving credit facility up to a maximum aggregate amount of $75.0 million. We cannot assure you that we will be able to increase the unsecured revolving credit facility or extend its maturity or arrange another facility on acceptable terms or at all.

Furthermore, in the future, we may seek additional capital in the form of equity or debt financing from a variety of potential sources, including additional bank financings and/or securities offerings. The availability of borrowed funds, especially for land acquisition and construction financing, may be greatly reduced nationally, and the lending community may require increased amounts of equity to be invested in a project by borrowers in connection with both new loans and the extension of existing loans. The credit and capital markets have recently experienced significant volatility. If we are required to seek additional financing to fund our operations, continued volatility in these markets may restrict our flexibility to access such financing. If we are not successful in obtaining sufficient capital to fund our planned capital and other expenditures, we may be unable to acquire land for our housing developments and/or to develop the housing. Any difficulty in obtaining sufficient capital for planned development expenditures could also cause project delays and any such delay could result in cost increases. Any one or more of the foregoing events could have a material adverse effect on our business, prospects, liquidity, financial condition and results of operations.

We are subject to environmental laws and regulations, which may increase our costs, limit the areas in which we can build homes and develop land and delay completion of our projects.

We are subject to a variety of local, state, federal and other statutes, ordinances, rules and regulations concerning the environment. The particular environmental laws that apply to any given homebuilding or development site vary according to multiple factors, including the site’s location, its environmental conditions and the present and former uses of the site, as well as adjoining properties. Environmental laws and conditions may result in delays, may cause us to incur substantial compliance and other costs and can prohibit or severely restrict homebuilding and land development activity in environmentally sensitive regions or areas. In addition, in those cases where an endangered or threatened species is involved, environmental rules and regulations can result in the restriction or elimination of development in identified environmentally sensitive areas. From time to time, the United States Environmental Protection Agency and similar federal or state agencies review homebuilders’

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compliance with environmental laws and may levy fines and penalties for failure to comply strictly with applicable environmental laws or impose additional requirements for future compliance as a result of past failures. Any such actions taken with respect to us may increase our costs. Further, we expect that increasingly stringent requirements will be imposed on homebuilders and land developers in the future. Environmental regulations can also have an adverse impact on the availability and price of certain raw materials such as lumber.

A major health and safety incident relating to our business could be costly in terms of potential liabilities and reputational damage.

Building sites are inherently dangerous, and operating in the land development and homebuilding industries poses certain inherent health and safety risks. Due to health and safety regulatory requirements and the number of projects we work on, health and safety performance is critical to the success of all areas of our business. Any failure in health and safety performance may result in penalties for non-compliance with relevant regulatory requirements, and a failure that results in a major or significant health and safety incident is likely to be costly in terms of potential liabilities incurred as a result. Such a failure could generate significant negative publicity and have a corresponding impact on our reputation, our relationships with relevant regulatory agencies or governmental authorities and our ability to attract employees, subcontractors and homebuyers, which in turn could have a material adverse effect on our business, financial condition and results of operations.

Poor relations with the residents of our communities, or with local real estate agents, could negatively impact our home sales, which could cause our revenues or results of operations to decline.

Residents of communities we develop rely on us to resolve issues or disputes that may arise in connection with the operation or development of their communities. Efforts made by us to resolve these issues or disputes could be deemed unsatisfactory by the affected residents and subsequent actions by these residents could adversely affect sales or our reputation. In addition, we could be required to make material expenditures related to the settlement of such issues or disputes or to modify its community development plans, which could adversely affect our results of operations.

Most of our potential homebuyers engage local real estate agents that are unaffiliated with us in connection with their search for a new home. If we do not maintain good relations with, and a good reputation among, these real estate agents, the agents may not encourage potential homebuyers to consider, or may actively discourage homebuyers from considering, our communities, which could adversely affect its results of operations.

Information technology failures and data security breaches could harm our business.

We use information technology and other computer resources to carry out important operational and marketing activities, as well as to maintain our business records, including information provided by our homebuyers. Many of these resources are provided to us and/or maintained on our behalf by third-party service providers pursuant to agreements that specify certain security and service level standards. Our ability to conduct our business may be impaired if these resources are compromised, degraded, damaged or fail, whether due to a virus or other harmful circumstance, intentional penetration or disruption of our information technology resources by a third party, natural disaster, hardware or software corruption or failure or error (including a failure of security controls incorporated into or applied to such hardware or software), telecommunications system failure, service provider error or failure, intentional or unintentional personnel actions (including the failure to follow our security protocols) or lost connectivity to networked resources. A significant and extended disruption in the functioning of these resources could damage our reputation and cause us to lose homebuyers, sales and revenue.

Product liability claims and litigation and warranty claims that arise in the ordinary course of business may be costly, which could adversely affect our business.

As a homebuilder, we are subject to construction defect and home warranty claims arising in the ordinary course of business. These claims are common in the homebuilding industry and can be costly. In addition, the costs of insuring against construction defect and product liability claims are high, and the amount of coverage offered by insurance companies is currently limited. This coverage may be further restricted and become more costly. If the limits or coverages of our current and former insurance programs prove inadequate, or we are not able to obtain adequate, or reasonably priced, insurance against these types of claims in the future, or the amounts currently provided for future warranty or insurance claims are inadequate, we may experience losses that could negatively impact our financial results.

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Our business is seasonal in nature, so our quarterly results of operations may fluctuate.

Historically, the homebuilding industry experiences seasonal fluctuations in quarterly results of operations and capital requirements. We typically experience the highest new home order activity in spring and summer, although this activity is also highly dependent on the number of active selling communities, timing of new community openings and other market factors. Since it typically takes five to eight months to construct a new home, we deliver more homes in the second half of the year as spring and summer home orders convert to home deliveries. Because of this seasonality, homes starts, construction costs and related cash outflows have historically been highest in the second and third quarters, and the majority of cash receipts from home deliveries occurs during the second half of the year. We expect this seasonal pattern to continue over the long-term, although we may also be affected by volatility in the homebuilding industry.

Additionally, weather-related problems may occur in the late winter and early spring, delaying starts or closings or increasing costs and reducing profitability. In addition, delays in opening new communities or new sections of existing communities could have an adverse impact on home sales and revenues. Expenses are not incurred and recognized evenly throughout the year. Because of these factors, our quarterly results of operations may be uneven and may be marked by lower revenues and earnings in some quarters than in others.

Utility and resource shortages or rate fluctuations could have an adverse effect on our operations.

The markets in which we operate may in the future be subject to utility and resource shortages, including significant changes to the availability of electricity and water. Shortages of natural resources in our markets, particularly of water, may make it more difficult for us to obtain regulatory approval of new developments. We have also experienced material fluctuations in utility and resource costs across our markets, and we may incur additional costs and may not be able to complete construction on a timely basis if such fluctuations arise. Our lumber inventory is particularly sensitive to these shortages. Furthermore, these shortages and rate fluctuations may adversely affect the regional economies in which we operate, which may reduce demand for our homes, lots and construction loans and negatively affect our business and results of operations.

Our business and financial results could be adversely affected by the failure of persons who act on our behalf to comply with applicable regulations and guidelines.

Although we expect all of our employees, officers and directors to comply at all times with all applicable laws, rules and regulations, there may be instances in which subcontractors or others through whom we do business engage in practices that do not comply with applicable regulations or guidelines. Should we learn of practices relating to homes we build, lots we develop or financing we provide that do not comply with applicable regulations or guidelines, we would move actively to stop the non-complying practices as soon as possible and would take disciplinary action with regard to employees who were aware of the practices and did not take steps to address them, including in some instances terminating their employment. However, regardless of the steps we take after we learns of practices that do not comply with applicable regulations or guidelines, we can in some instances be subject to fines or other governmental penalties, and our reputation can be injured, due to the practices having taken place.

We may become subject to litigation, which could materially and adversely affect us.

In the future, we may become subject to litigation, including claims relating to our operations and otherwise in the ordinary course of business. Some of these claims may result in significant defense costs and potentially significant judgments against us, some of which are not, or cannot be, insured against. We generally intend to vigorously defend ourselves. However, we cannot be certain of the ultimate outcomes of any claims that may arise in the future. Resolution of these types of matters may result in us having to pay significant fines, judgments, or settlements, which, if uninsured, or if the fines, judgments and settlements exceed insured levels, could adversely impact our earnings and cash flows, thereby materially and adversely affecting us. Certain litigation or the resolution of certain litigation may affect the availability or cost of some of our insurance coverage, which could materially and adversely impact us, expose us to increased risks that would be uninsured, and materially and adversely impact our ability to attract directors and officers.

We may suffer uninsured losses or suffer material losses in excess of insurance limits.

We could suffer physical damage to property and liabilities resulting in losses that may not be fully recoverable by insurance. In addition, certain types of risks, such as personal injury claims, may be, or may become in the future, either uninsurable or not economically insurable, or may not be currently or in the future covered by our insurance policies or otherwise be subject to significant deductibles or limits. Should an uninsured loss or a loss in excess of insured limits occur or be subject to deductibles, we could sustain financial loss or lose capital invested in the affected property as well as anticipated future income from that property. In addition, we could be liable to repair damage or meet liabilities caused by risks that are

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uninsured or subject to deductibles. We may be liable for any debt or other financial obligations related to affected property. Material losses or liabilities in excess of insurance proceeds may occur in the future.

The requirements of being a public company may strain our resources and distract our management, which could make it difficult to manage our business.

Prior to the completion of the Transaction, JBGL had operated as a privately-held company since it began operations in 2008. Since the consummation of the Transaction, we have been required to comply with various regulatory and reporting requirements, including those required by the Securities and Exchange Commission (the “SEC”). Complying with these reporting and other regulatory requirements has been and will continue to be time-consuming and will result in increased costs and could have a negative effect on our business, financial condition and results of operations.

As a public company, we are subject to the reporting requirements of the Exchange Act and the requirements of the Sarbanes-Oxley Act of 2002 (as amended, the “Sarbanes-Oxley Act”). These requirements may place a strain on our system and resources. The Exchange Act requires that we file annual, quarterly and current reports with respect to our business and financial condition. The Sarbanes-Oxley Act requires that we maintain effective disclosure controls and procedures and internal controls over financial reporting. To maintain and improve the effectiveness of our disclosure controls and procedures, we will need to commit significant resources, hire additional staff and provide additional management oversight. Since the consummation of the Transaction, we have been implementing additional procedures and processes for the purpose of addressing the standards and requirements applicable to public companies. Sustaining our growth also may require us to commit additional management, operational and financial resources to identify new professionals to join us and to maintain appropriate operation and financial systems to adequately support expansion. These activities may divert management’s attention from other business concerns, which could have a material adverse effect on our business, financial condition and results of operations.

We have identified material weaknesses in our internal control over financial reporting. Failure to establish and maintain effective internal control over financial reporting could have an adverse effect on our business and results of operations.

Maintaining effective internal control over financial reporting is necessary for us to produce timely and reliable financial reports and is important in helping to prevent financial fraud. As a result of management’s assessment of our internal control over financial reporting as of December 31, 2015, management concluded that there were material weaknesses in our internal control over financial reporting. A material weakness is defined as a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of annual or interim financial statements will not be prevented or detected on a timely basis. See Item 9A. Controls and Procedures for a description of the identified material weaknesses and our remediation plans.

While we have been actively engaged in developing remediation plans and will continue to devote significant time and attention to remedy the identified material weaknesses in our internal control over financial reporting, additional time and effort will be required to complete the implementation. There can be no assurance that we will be able to remediate these material weaknesses or that additional material weaknesses or significant deficiencies in our internal control over financial reporting will not be identified in the future. Any failure to complete our remediation in a timely manner, to remediate material weaknesses or significant deficiencies noted by our management or our independent registered public accounting firm or to implement required new or improved controls or difficulties encountered in their implementation could cause us to fail to meet our reporting obligations, result in material misstatements in our financial statements, result in harm to our business and could cause investors to lose confidence in our reported financial information. The foregoing may result in a material adverse effect on our business, prospects, liquidity, financial condition and results of operations and a decline in the trading price of our common stock. Failure to comply with Section 404 of the Sarbanes-Oxley Act and the related rules of the SEC could potentially subject us to sanctions or investigations by the SEC, the Financial Industry Regulatory Authority or other regulatory authorities.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

We lease our principal executive office in Plano, TX. Our homebuilding division offices are located in leased space in the markets where we conduct business. We believe that such properties are suitable and adequate to meet the needs of our businesses. Our properties are described in Item 1. “Business” under the headings “Our Homebuilding Projects ” and “Owned and Controlled Lots”, which information is incorporated herein by reference.

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ITEM 3. LEGAL PROCEEDINGS

We are not involved in any material litigation nor, to our knowledge, is any material litigation threatened against the Company.

ITEM 4. MINE SAFETY DISCLOSURES

Not Applicable.

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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

Our common stock trades on The Nasdaq Capital Market maintained by The Nasdaq Stock Market LLC under the symbol “GRBK” (formerly “BIOF”). The following table sets forth the high and low closing prices for our common stock as reported on The Nasdaq Capital Market for the quarterly periods indicated. These prices do not include retail markups, markdowns or commissions. The pre-Transaction prices were adjusted for the $70.0 million Rights Offering, as described in Item 1. Business.



Year ended December 31, 2015	High		Low
First Quarter	$	8.34	$	7.05
Second Quarter	$	10.95	$	8.20
Third Quarter	$	14.55	$	10.65
Fourth Quarter	$	12.13	$	6.64
Year ended December 31, 2014
First Quarter	$	4.76	$	1.12
Second Quarter	$	5.74	$	3.37
Third Quarter	$	8.23	$	4.07
Fourth Quarter	$	8.77	$	5.17

The prices depicted in the table above represent our past performance as a shell company with no substantial operations from November 22, 2013 to October 26, 2014, and as a real estate company since October 27, 2014.

Holders of Record

On March 25, 2016, there were approximately 28 stockholders of record of our common stock. We believe the number of beneficial owners of our common stock is substantially greater than the number of record holders because a large portion of our outstanding common stock is held of record in broker “street names” for the benefit of individual investors. As of March 25, 2016, there were 48,833,323 common shares outstanding.

Dividends

We have not paid any dividends since our inception and do not anticipate declaring or paying any cash dividends on our common stock in the foreseeable future. We currently anticipate that we will retain all of our available cash for general corporate purposes. Payment of future dividends, if any, will be at the discretion of our board of directors and will depend on many factors, including general economic and business conditions, our strategic plans, our financial results and condition, legal requirements and other factors as our board of directors deems relevant.

Issuer Purchases of Equity Securities

In March 2016, our Board of Directors approved a share repurchase program of up to 1,000,000 shares of our common stock in open market or privately negotiated transactions.

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Performance Graph

The following graph compares our five-year cumulative total return, assuming $100 is invested on December 31, 2010, on our common stock with the cumulative total returns of the Russell 2000 Index, and the Nasdaq Composite Index for the periods ended December 31. The pre-Transaction prices of our common stock were adjusted for the $70.0 million Rights Offering, as described in Item 1. Business.



	2010	2011	2012	2013	2014	2015
Green Brick Partners	$100	$39.08	$10.56	$4.93	$36.09	$31.69
Russell 2000 Index	$100	$94.55	$108.38	$148.49	$153.73	$144.95
Nasdaq Composite Index	$100	$98.2	$113.82	$157.44	$178.53	$188.75

The above graph is based on our common stock and index prices calculated as of the last trading day before January 1 of the year-end periods presented. The closing price of our common stock on the Nasdaq Capital Market was $7.20 per share on December 31, 2015 and $8.20 per share on December 31, 2014. Total return assumes $100 invested at market close on December 31, 2010 in our common stock, the Russell 2000 Index, and the Nasdaq Composite Index. The performance of our common stock depicted in the graph above represents our past performance as an ethanol producer from December 31, 2010 to November 21, 2013, as a shell company with no substantial operations from November 22, 2013 to October 26, 2014, and as a real estate company since October 27, 2014. As a result, the performance of our common stock depicted in the graph above is not indicative of future performance or the historical performance of our current real estate business.

The information in the graph and table above is not “soliciting material,” is not deemed “filed” with the Securities and Exchange Commission and is not to be incorporated by reference in any of our filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Annual Report on Form 10-K, except to the extent that we specifically incorporate such information by reference.

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ITEM 6. SELECTED FINANCIAL DATA

The following table sets forth selected historical financial information regarding our business and should be read in conjunction with Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and the related notes included elsewhere in this Annual Report on Form 10-K.

As described in Note 3 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K, BioFuel Energy Corp. acquired JBGL Builder Finance LLC and its consolidated subsidiaries and affiliated companies (collectively “Builder Finance”), and JBGL Capital Companies (“Capital”), a combined group of commonly managed limited liability companies and partnerships (collectively with Builder Finance, “JBGL”), on October 27, 2014. Because the acquisition was considered a reverse recapitalization for accounting purposes, the combined historical financial statements of JBGL became our historical financial statements and from the completion of the acquisition on October 27, 2014, the financial statements have been prepared on a consolidated basis. Share and per share amounts have been retroactively restated to the earliest periods presented to reflect the transaction.



	As of December 31,
	2015		2014		2013		2012		2011
	(in thousands)
Assets
Cash and cash equivalents	$	19,909	$	21,267	$	16,683	$	7,164	$	8,127
Inventory	344,132		275,141		228,777		132,571		34,416
Notes receivable, net	—		—		7,556		15,272		29,801
Deferred tax assets, net	80,663		89,197		—		—		—
Other	29,172		14,720		15,392		13,804		975
Total assets	$	473,876	$	400,325	$	268,408	$	168,811	$	73,319
Liabilities and stockholders’ equity
Borrowings on lines of credit	$	47,500	$	14,061	$	17,208	$	6,544	$	2,950
Notes payable	10,158		12,151		26,595		21,442		3,718
Term loan facility	—		150,000		—		—		—
Other	44,363		42,516		25,786		19,137		4,572
Total liabilities	102,021		218,728		69,589		47,123		11,240
Total stockholders’ equity	371,855		181,597		198,819		121,688		62,079
Total liabilities and stockholders’ equity	$	473,876	$	400,325	$	268,408	$	168,811	$	73,319



	For the Years Ended December 31,
	2015			2014			2013			2012			2011
	(in thousands, except per share data)
Sale of residential units	$	254,267		$	200,650		$	168,591		$	50,105		$	9,086
Sale of land and lots	36,878			45,452			33,735			22,927			6,184
Total revenues	291,145			246,102			202,326			73,032			15,270
Cost of residential units	196,529			149,809			122,781			39,642			7,922
Cost of land and lots	27,125			34,082			21,513			15,256			3,983
Total cost of sales	223,654			183,891			144,294			54,898			11,905
Total gross profit	67,491			62,211			58,032			18,134			3,365
Salaries and management fees expense - related party	(20,685		)	(16,134		)	(11,267		)	(4,371		)	(1,886		)
Selling, general and administrative expense	(13,665		)	(10,099		)	(6,623		)	(3,312		)	(1,184		)
Operating profit	33,141			35,978			40,142			10,451			295
Interest expense	(281		)	(1,393		)	(315		)	(351		)	(28		)
Interest and fees income	—			265			2,503			6,217			2,586
Other income, net	1,856			1,359			2,313			4,626			1,601
Income before taxes	34,716			36,209			44,643			20,943			4,454
Income tax provision (benefit)	9,171			(24,853		)	327			231			34
Net income	25,545			61,062			44,316			20,712			4,420
Less: net income attributable to non-controlling interests	10,220			11,036			12,309			3,518			56
Net income attributable to controlling interests	$	15,325		$	50,026		$	32,007		$	17,194		$	4,364

Net income attributable to Green Brick Partners, Inc. per common share:
Basic	$0.38			$3.40			$2.88			$1.55			$0.39
Diluted	$0.38			$3.40			$2.88			$1.55			$0.39

Weighted average common shares used in the calculation of net income attributable to Green Brick Partners, Inc. per common share:
Basic	40,068			14,712			11,109			11,109			11,109
Diluted	40,099			14,712			11,109			11,109			11,109

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion in conjunction with our financial statements and the accompanying notes included in this Annual Report on Form 10-K. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from the results discussed in or implied by any of the forward-looking statements as a result of various factors, including those listed elsewhere in this Annual Report on Form 10-K. See “Risk Factors” and “Forward-Looking Statements” above.

Reverse Recapitalization

On June 10, 2014, we entered into a definitive transaction agreement with the owners of JBGL Builder Finance LLC and its consolidated subsidiaries and affiliated companies (collectively “Builder Finance”), and JBGL Capital Companies (“Capital”), a combined group of commonly managed limited liability companies and partnerships (collectively with Builder Finance, “JBGL”), which provided that we would acquire JBGL for $275 million, payable in cash and shares of our common stock (the “Transaction”). JBGL is a real estate operator involved in the purchase and development of land for residential use, construction lending and home building operations. The Transaction was completed on October 27, 2014 (“Transaction Date”). Pursuant to the terms of the Transaction, we paid the $275 million purchase price with approximately $191.8 million in cash and the remainder in 11,108,500 shares of our common stock valued at approximately $7.49 per share.

The cash portion of the purchase price was primarily funded from the proceeds of a $70.0 million rights offering conducted by the Company (the $70.0 million includes proceeds from purchases of shares of common stock by certain funds and accounts managed by Greenlight Capital, Inc. and its affiliates (“Greenlight”) and Third Point LLC and its affiliates (“Third Point”)) and $150.0 million of debt financing provided by Greenlight pursuant to a loan agreement, with the lenders from time to time party thereto (the “Loan Agreement”), which provided for a five year term loan facility (the "Term Loan Facility"). In 2015, the Term Loan Facility was repaid in full.

At the time the Transaction was completed, BioFuel Energy Corp. (“BioFuel”) was a non-operating public shell corporation with nominal operations and assets consisting of cash, deferred tax assets, and nominal other nonoperating assets. As a result of the Transaction the owners and management of JBGL gained effective operating control of the combined company.

Accordingly, for financial reporting purposes, the Transaction was deemed to be a capital transaction in substance and recorded as a reverse recapitalization of JBGL whereby JBGL is deemed to be the continuing, surviving entity for accounting purposes, but through reorganization, has deemed to have adopted the capital structure of BioFuel. Because the acquisition was considered a reverse recapitalization for accounting purposes, the combined historical financial statements of JBGL became our historical financial statements and, from the completion of the acquisition on October 27, 2014, the financial statements have been prepared on a consolidated basis. The assets and liabilities of BioFuel have been brought forward at their book value and no goodwill has been recognized in connection with the Transaction.

As a result of the Transaction, Green Brick changed its business direction and is now in the real estate industry. The financial statements set forth in this Annual Report on Form 10-K for all periods prior to the reverse recapitalization are the historical financial statements of JBGL, and have been retroactively restated to give effect to the Transaction.

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Equity Offering

On July 1, 2015, we completed an underwritten public offering of 17,000,000 shares of our common stock at a price to the public of $10.00 per share and granted to the underwriters a 30-day option to purchase up to an aggregate of 841,500 additional shares of common stock to cover over-allotments (the “Equity Offering”). On July 23, 2015, the underwriters exercised the option and purchased 444,897 additional shares. All of the shares were sold by us pursuant to an effective shelf registration statement previously filed with the SEC.

The Equity Offering resulted in net proceeds to us of approximately $170.0 million, after deducting underwriting discounts and offering expenses. On July 1, 2015, we used approximately $154.9 million of the net proceeds from the Equity Offering to repay all of the outstanding principal, interest and a prepayment premium under the Term Loan Facility. Upon repayment, the Term Loan Facility was terminated, and all security interests in, and all liens held by Greenlight with respect to, the assets of Green Brick securing the amounts owed under the Term Loan Facility were terminated and released. We used the remaining net proceeds for working capital and general corporate purposes.

Overview of the Business

We sell finished lots or option lots from third-party developers to our controlled builders for their homebuilding operations and provide them with construction financing and strategic planning. Our controlled builders provide us with their local knowledge and relationships. We support our controlled builders by financing their purchases of land from us at an unlevered IRR of at least 20% and by providing construction financing at approximately a 13.8% interest rate. Our income is further enhanced by our 50% equity interest in the profits of our controlled builders. In addition, the land we sell to third-party homebuilders also typically generates an unlevered IRR of 20% or greater.

References to our “controlled builders” refer to our homebuilding subsidiaries in which we own at least a 50% controlling interest.



Our Controlled Builders	Year Formed	Market	Products Offered	Prices Ranges
The Providence Group of Georgia L.L.C. (“TPG”)	2011	Atlanta	Townhomes	$260,000 to $590,000
			Single family	$315,000 to $1.4 million
			Luxury homes	$770,000 to $3.0 million
CB JENI Homes DFW LLC (“CB JENI”)	2012	Dallas	Townhomes	$210,000 to $390,000
			Single family	$280,000 to $700,000
Centre Living Homes, LLC (“Centre Living”)	2012	Dallas	Townhomes	$500,000 to more than $1 million
			Contractor on luxury homes	Up to $2.5 million
Southgate Homes DFW LLC (“Southgate”)	2013	Dallas	Luxury homes	$600,000 and above

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Definitions

In the following discussion, “backlog” refers to homes under sales contracts that have not yet closed at the end of the relevant period, “cancellation rate” refers to sales contracts canceled divided by sales contracts executed during the relevant period, “net new home orders” refers to new home sales contracts reduced by the number of sales contracts canceled during the relevant period, and “overall absorption rate” refers to the rate at which net new home orders are contracted per selling community during the relevant period. Sales contracts relating to homes in backlog may be canceled by the prospective purchaser for a number of reasons, such as the prospective purchaser’s inability to obtain suitable mortgage financing. Upon a cancellation, the escrow deposit may be returned to the prospective purchaser (other than with respect to certain design-related deposits, which we retain). Accordingly, backlog may not be indicative of our future revenue.

Overview and Outlook

The following are our key operating metrics for the year ended December 31, 2015 as compared to the year ended December 31, 2014: home deliveries increased by 11.6%, home sales revenue increased by 26.7%, average selling prices increased by 13.6%, backlog units decreased by 3.8%, backlog units value increased by 12.2%, average sales price of homes in backlog increased by 16.7%, while net new home orders increased by 7.7%. The increase in the average sales price of homes in backlog is the result of changes in product mix of homes contracted for sale during the period and local market appreciation. During the year ended December 31, 2015, homes in the Dallas and Atlanta markets appreciated by 9.4% and 5.7%, respectively (Source: S&P/Case-Shiller 20-City Composite Home Price Index, November 2015). During the year ended December 31, 2015, the housing market continued to show signs of improvement, which we believe is driven by rising consumer confidence, lower interest rates, high affordability metrics, and a reduction in home inventory levels.

The following are our key operating metrics for the year ended December 31, 2014 as compared to the same period in 2013: home deliveries increased by 5.6%, home sales revenue increased by 19.0%, average selling prices increased by 12.7%, backlog units increased by 14.8%, backlog units value increased by 34.0%, and average sales price of homes in backlog increased by 16.7%, while net new home orders decreased by 6.7%. The increase in the average sales price of homes in backlog was the result of changes in product mix related to higher priced single family homes over lower priced townhomes contracted for sale during the period and local market appreciation.

Our two primary markets, Dallas and Atlanta, have shown significant housing market recovery. We believe the housing market recovery is sustainable, and that we operate in two of the most desirable housing markets in the nation. Among the 12 largest metropolitan areas in the country, the Dallas metropolitan area ranked third in both the rate of job growth and in the number of jobs added from October 2014 to October 2015 (Source: US Bureau of Labor Statistics, October 2015). The Atlanta metropolitan area has recorded employment gains each month, as compared to the same month in the prior year, since July 2010 (Source: US Bureau of Labor Statistics, November 2015). We believe that increasing demand and supply constraints in our target markets create favorable conditions for our future growth.

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) as set forth in the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) and applicable regulations of the SEC. Our operating results for the year ended December 31, 2015 are not necessarily indicative of the results that may be expected for any future periods.

The consolidated financial statements and notes thereto include the accounts of the Company and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

Results of Operations

Land Development

During the year ended December 31, 2015, our land development segment revenue decreased $8.6 million, or 18.9%, from $45.5 million for the year ended December 31, 2014 to $36.9 million for the year ended December 31, 2015.

The decrease was comprised of $11.4 million due to a 25.2% decrease in finished inventory lots delivered from 449 for the year ended December 31, 2014 to 336 for the year ended December 31, 2015, partially offset by an increase of $2.9 million

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related to an increase in the average sales price per lot of $109,756 per lot for the year ended December 31, 2015 from $101,229 per lot for the year ended December 31, 2014.

During the year ended December 31, 2014, our land development segment revenue increased $11.7 million, or 34.7%, to $45.5 million from $33.7 million for the year ended December 31, 2013. The increase was comprised of $6.9 million due to a 20.7% increase in finished inventory lots delivered to 449 for the year ended December 31, 2014, from 372 for the year ended December 31, 2013, and an increase of $4.8 million related to an increase in the average sales price per lot of $101,229 per lot for the year ended December 31, 2014 from $90,591 per lot for the year ended December 31, 2013.

Builder Operations

During the year ended December 31, 2015, our builder operations segment delivered 655 homes, with an average sales price of $388,194, compared to 587 homes with an average sales price of $341,823, during the same period in 2014. During the year ended December 31, 2015, our builder operations segment generated approximately $254.3 million in revenue compared to $200.7 million during the same period in 2014. For the year ended December 31, 2015, net new home orders totaled 647, a 7.7% increase from the same period in 2014. At December 31, 2015, our builder operations segment had a backlog of 201 sold but unclosed homes, a 3.8% decrease from the same period in 2014, with a total value of approximately $88.1 million, an increase of $9.6 million, or 12.2%, from December 31, 2014. The increase in total value of backlog units reflects an increase in the average sales price of homes in backlog.

During the year ended December 31, 2014, our builder operations segment delivered 587 homes, with an average sales price of $341,823, compared to 556 homes with an average sales price of $303,221, during the same period in 2013. During the year ended December 31, 2014, our builder operations segment generated approximately $200.7 million in revenue compared to $168.6 million during the same period in 2013. For the year ended December 31, 2014, net new home orders totaled 601, a 6.7% decrease from the same period in 2013. At December 31, 2014, builder operations segment had a backlog of 209 sold but unclosed homes, a 14.8% increase from the same period in 2013, with a total value of approximately $78.6 million, an increase of $19.9 million, or 34.0%, from December 31, 2013. The increase in value of backlog units reflects an increase in the number of homes in backlog and an increase in the average sales price of homes in backlog.

The increase in the average sales price of homes in backlog is the result of changes in product mix related to higher priced single family homes over lower priced townhomes closed during the period and local market appreciation. The average sales price of homes may increase or decrease depending on the mix of typical homes delivered and sold during such period and local market conditions. These changes in the average sales price of homes are part of our natural business cycle.

Revenues

We primarily generate revenue through (a) the sale of lots from our land development segment to public builders, large private builders and our controlled builders, (b) making first lien construction loans to our controlled builders, and (c) the closing and delivery of homes through our builder operations segment. We recognize revenue on homes and lots when completed and title to, and possession of, the property have been transferred to the purchaser.

All customer deposits are treated as liabilities. We also serve as the general contractor for certain custom homes where the customers, and not our company, own the underlying land and improvements. We recognize revenue for these contracts either on a percentage of completion method or cost plus method.

Expenses

Lot acquisition, materials, other direct costs, interest and other indirect costs related to the acquisition, development, and construction of lots and homes are capitalized until the homes are complete, after which they are expensed. Direct and indirect costs of developing residential lots are allocated based on the relative sales price of the lots. Capitalized costs of residential lots are charged to earnings when the related revenue is recognized. Costs incurred in connection with developed lots and completed homes are charged to earnings when incurred.

Salary Expense and Management Fees Expense - Related Party

Salary expense and management fees expense represent salaries, benefits, related party management fees and share-based compensation, and are recorded in the period incurred.

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Selling, General and Administrative Expense

Selling, general and administrative expenses represent property taxes, advertising and marketing, rent and lease expenses, and other administrative items, and are recorded in the period incurred.

Interest Expense

Interest expense consists primarily of interest costs incurred on our debt that is not capitalized and amortization of related debt issuance costs. We capitalize interest costs incurred to inventory during active development and other qualifying activities.

Interest and Fees Income

Interest and fees income consists primarily of interest earned and loan origination fees from outstanding third-party notes receivable.

Other Income, Net

Other income, consists of net revenue from contracts where we are the general contractor and where our customers own the land, interest on direct financing leases income, profit participation on notes receivable, costs incurred for business acquisitions, depreciation, amortization, income from rental property and forfeited deposits.

Income Tax Provision (Benefit)

Prior to the Transaction, JBGL consisted of entities that filed individual partnership tax returns for federal income tax purposes. Several of the underlying entities were wholly-owned limited liability companies (“LLC’s”), and thus disregarded for federal income tax purposes, while several other entities had non-controlled interests, causing these LLC entities to be treated as regarded entities that filed partnership tax returns for federal income tax purposes. The Transaction resulted in the ownership of JBGL by Green Brick, a corporate entity. Effectively, during the fourth quarter of calendar year 2014, JBGL and its wholly-owned LLC interests became disregarded for federal income tax purposes, taxable as a branch of the corporate entity. As such, the Transaction resulted in a change in tax status of the partnerships. The income tax effect of the change in tax status was recorded as an income tax benefit during the fourth quarter of the year ended December 31, 2014.

We account for income taxes using the asset and liability method, under which deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases, operating losses and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in years in which temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. We regularly review historical and anticipated future pre-tax results of operations to determine whether we will be able to realize the benefit of deferred tax assets. A valuation allowance is required to reduce the deferred tax asset when it is more-likely-than-not that all or some portion of the deferred tax asset will not be realized due to the lack of sufficient taxable income.

We establish reserves for uncertain tax positions that reflect our best estimate of deductions and credits that may not be sustained on a more-likely-than-not basis. In accordance with ASC 740, Income Taxes, the Company recognizes the effect of income tax positions only if those positions have a more-likely-than-not chance of being sustained by the Company. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs.

As of December 31, 2015, in consideration of all available positive and negative evidence, including tax planning, management concluded that it was more-likely-than-not that all of our net deferred tax assets will be realized in accordance with U.S. GAAP, except for state income tax net operating loss carryforwards, for which a valuation allowance in the amount of $1.2 million has been recorded. Except for the valuation allowance pertaining to the state net operating losses, the valuation allowance previously recorded by BioFuel was reversed into additional paid-in-capital as of October 27, 2014. The valuation allowance reversal of approximating $63.9 million was recorded as part of the reverse recapitalization and had no effect on income tax expense.

Immediately prior to the Transaction, JBGL consisted of entities that filed individual partnership tax returns for federal income tax purposes. Several of the underlying entities were wholly-owned Limited Liability Corporations (“LLC’s”), and thus disregarded for federal income tax purposes, while several other entities had non-controlled interests, causing these LLC entities to be treated as regarded entities that filed partnership tax returns for federal income tax purposes. The Transaction resulted in the ownership of JBGL by Green Brick, a corporate entity. Effectively, JBGL and its wholly-owned LLC interests

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became disregarded for federal purposes, taxable as a branch of the corporate entity. As such, the Transaction resulted in a change in tax status of the partnerships.

Consolidated Financial Data

The consolidated historical financial data presented below reflect our land development and builder operations segments, and are not necessarily indicative of the results to be expected for any future period.

As described in Note 3 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K, BioFuel acquired JBGL on October 27, 2014. The accounting treatment of the Transaction is reflected as a “reverse recapitalization,” whereby JBGL is the surviving accounting entity for financial reporting purposes. Therefore, our historical results for periods prior to the Transaction are the same as JBGL's historical results.



	For the Years Ended December 31,
	2015			2014			2013
	(in thousands, except per share data)
Sale of residential units	$	254,267		$	200,650		$	168,591
Sale of land and lots	36,878			45,452			33,735
Total revenues	291,145			246,102			202,326
Cost of residential units	196,529			149,809			122,781
Cost of land and lots	27,125			34,082			21,513
Total cost of sales	223,654			183,891			144,294
Total gross profit	67,491			62,211			58,032
Salary expense and management fees expense - related party	(20,685		)	(16,134		)	(11,267		)
Selling, general and administrative expense	(13,665		)	(10,099		)	(6,623		)
Operating profit	33,141			35,978			40,142
Interest expense	(281		)	(1,393		)	(315		)
Interest and fees income	—			265			2,503
Other income, net	1,856			1,359			2,313
Income before taxes	34,716			36,209			44,643
Income tax provision (benefit)	9,171			(24,853		)	327
Net income	25,545			61,062			44,316
Less: net income attributable to noncontrolling interests	10,220			11,036			12,309
Net income attributable to Green Brick Partners, Inc.	$	15,325		$	50,026		$	32,007

Net income attributable to Green Brick Partners, Inc. per common share:
Basic	$0.38			$3.40			$2.88
Diluted	$0.38			$3.40			$2.88

Weighted average common shares used in the calculation of net income attributable to Green Brick Partners, Inc. per common share:
Basic	40,068			14,712			11,109
Diluted	40,099			14,712			11,109

Reclassifications

Depreciation of model home furnishings for the years ended December 31, 2014 and December 31, 2013 has been reclassified from depreciation and amortization expense, which is included in other income, net in the consolidated financial data above, to cost of residential units to conform to the current year presentation.

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Year Ended December 31, 2015 Compared to the Year Ended December 31, 2014

Net New Home Orders and Backlog

The table below represents new home orders and backlog related to our builder operations segment.



	Years Ended December 31,						Increase (Decrease)
New Home Orders & Backlog	2015			2014			Change			%
Net new home orders	647			601			46			7.7%
Number of cancellations	108			106			2			1.9%
Cancellation rate	14.3		%	15.0		%	(0.7		)%	(4.7)%
Average selling communities	41			30			11			36.7%
Selling communities at end of period	43			33			10			30.3%
Backlog ($ in thousands)	$	88,136		$	78,552		$	9,584		12.2%
Backlog (units)	201			209			(8		)	(3.8)%
Average sales price of backlog	$	438,488		$	375,847		$	62,641		16.7%

Net new home orders for the year ended December 31, 2015 increased by 46 homes, or 7.7%, to 647 for the year ended December 31, 2015 from 601 for the year ended December 31, 2014. Overall absorption rate for the year ended December 31, 2015 was an average of 15.7 per selling community (1.3 monthly), compared to an average of 20.0 per selling community (1.7 monthly) for the year ended December 31, 2014. Our monthly absorption rate decreased in part due to the timing of the opening of new communities and the closing out of existing communities.

Our cancellation rate was approximately 14.3% for the year ended December 31, 2015, compared to 15.0% for the year ended December 31, 2014. Management believes a cancellation rate in the range of 15% to 20% is representative of an industry average cancellation rate. Nevertheless, on average, our cancellation rate is on the lower end of the industry average, which we believe is due to our target buyer demographics, which generally does not include first time homebuyers.

Backlog units decreased by 8 homes, or 3.8%, from 209 as of December 31, 2014 to 201 as of December 31, 2015. The dollar value of backlog units increased $9.6 million, or 12.2%, to $88.1 million as of December 31, 2015 from $78.6 million as of December 31, 2014. The increase in value of backlog units reflects an increase in the average sales price of homes in backlog. Our average sales price of homes in backlog increased $62,641, or 16.7%, to $438,488 for the year ended December 31, 2015, compared to $375,847 for the year ended December 31, 2014. The increase in the average sales price of homes in backlog is the result of changes in product mix related to higher priced single family homes over lower priced townhomes contracted for sale during the period and local market appreciation. The average sales price of homes may fluctuate depending on the mix of typical homes delivered and sold during a period. The change in the average sales price of homes is part of our natural business cycle.

New Homes Delivered and Home Sales Revenue

The table below represents home sales revenue and new homes delivered related to our builder operations segment.



	Years Ended December 31,				Increase (Decrease)
New Homes Delivered and Home Sales Revenue	2015		2014		Change		%
New homes delivered	655		587		68		11.6%
Home sales revenue ($ in thousands)	$	254,267	$	200,650	$	53,617	26.7%
Average sales price of home delivered	$	388,194	$	341,823	$	46,371	13.6%

New home deliveries (excluding existing completed homes sold, but not yet closed) for the year ended December 31, 2015 for our builder operations segment was 655, compared to new home deliveries of 587 for the year ended December 31, 2014, resulting in an increase of 68 homes, or 11.6%. The increase in new home deliveries was primarily attributable to a 36.7% increase in new communities to 41 from 30.

Home sales revenue increased $53.6 million, or 26.7%, to $254.3 million for the year ended December 31, 2015, from $200.7 million for the year ended December 31, 2014. The increase in revenue was comprised of (a) $27.2 million resulting from an increase in average sales price of $46,371 per home to $388,194 for the year ended December 31, 2015, from $341,823 for the year ended December 31, 2014, and (b) $26.4 million due to a 11.6% increase in homes delivered to 655 for the year

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ended December 31, 2015, from 587 for the year ended December 31, 2014. The increase in the average sales price of homes was the result of changes to the mix of homes delivered resulting in an increase in the number of single family homes delivered at higher price points compared to townhomes and local market appreciation.

Homebuilding

The table below represents cost of home sales and gross margin related to our builder operations segment.



	Years Ended December 31,
Homebuilding ($ in thousands)	2015		%		2014		%
Home sales revenue	$	254,267	100.0	%	$	200,650	100.0	%
Cost of home sales	$	196,529	77.3	%	$	149,809	74.7	%
Homebuilding gross margin	$	57,738	22.7	%	$	50,841	25.3	%

Cost of home sales for the year ended December 31, 2015 for builder operations was $196.5 million, compared to cost of home sales of $149.8 million for the year ended December 31, 2014, resulting in an increase of $46.7 million, or 31.2%, primarily due to the 11.6% increase in the number of homes delivered. Homebuilding gross margin percentage for the year ended December 31, 2015 for builder operations was 22.7%, compared to a gross margin percentage of 25.3% for the year ended December 31, 2014. The increase in homebuilding gross margin is largely due to the opening of new communities during the year ended December 31, 2015. The decrease in gross margin percentage is due to the unusually large number of home closings in several high margin communities during the year ended December 31, 2014, and to a substantial number of home closings in existing communities being closed out and the amortization of capitalized interest during the year ended December 31, 2015.

Salary Expense and Management Fees Expense - Related Party

The table below represents salary expense and management fees, related to our land development and builder operations segments.



($ in thousands)	Years Ended December 31,				As Percentage of Relevant Revenue
($ in thousands)	2015		2014		2015		2014
Land development	$	809	$	1,479	2.2	%	3.3	%
Builder operations	$	19,876	$	14,655	7.8	%	7.3	%

Land Development

Salary expense and management fees expense for the year ended December 31, 2015 for land development was $0.8 million compared to $1.5 million for the year ended December 31, 2014, a decrease of 45.3%. The decrease is primarily the result of a decrease in employee headcount of 3.

Builder Operations

Salary expense and management fees expense for the year ended December 31, 2015 for builder operations was $19.9 million, compared to $14.7 million for the year ended December 31, 2014, an increase of 35.6%. The increase was primarily the result of an increase in salaries driven by JBGL going from a privately-held company to a public company, the associated costs of benefits to support the growth in our builder operations segment, and an increase in employee headcount of 54.

Selling, General and Administrative Expense

The table below represents selling, general and administrative expenses related to our land development and builder operations segments.



($ in thousands)	Years Ended December 31,				As Percentage of Relevant Revenue
($ in thousands)	2015		2014		2015		2014
Land development	$	1,470	$	2,410	4.0	%	5.3	%
Builder operations	$	12,195	$	7,689	4.8	%	3.8	%

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Land Development

Selling, general and administrative expense for the year ended December 31, 2015 for land development was $1.5 million, compared to $2.4 million for the year ended December 31, 2014, a decrease of 39.0%. The decrease was primarily attributable to costs incurred in connection with the Transaction during the year ended December 31, 2014.

Builder Operations

Selling, general and administrative expense for the year ended December 31, 2015 for builder operations was $12.2 million, compared to $7.7 million for the year ended December 31, 2014, an increase of 58.6%. The increase was primarily attributable to increases in expenditures to support builder operations in anticipation of future growth in our business, and additional costs of JBGL going from a privately-held company to a public company. Builder operations expenditures include community costs, such as, non-capitalized property taxes, rent expenses, professional fees, and advertising and marketing expenses. The average selling community count is 41 for the year ended December 31, 2015 compared to 30 for the year ended December 31, 2014.

Interest Expense

Interest expense decreased $1.1 million, or 79.8%, to $0.3 million for the year ended December 31, 2015, compared to $1.4 million for the year ended December 31, 2014. The decrease was due primarily to an increase in the amount of capitalized interest during the year ended December 31, 2015.

Interest and Fees Income

Interest and fees income decreased $0.3 million, or 100.0%, to $0.0 million for the year ended December 31, 2015, compared to $0.3 million for the year ended December 31, 2014. The decrease was due to no notes receivable outstanding during the year ended December 31, 2015.

Other Income, Net

Other income, net, increased $0.5 million, or 36.6%, to $1.9 million for the year ended December 31, 2015, from $1.4 million for the year ended December 31, 2014. The increase was due to a $1.8 million increase in various other income and a decrease in various other expense, partially offset by a $0.8 million decrease in interest on direct financing leases income and a $0.6 million increase in depreciation and amortization expense.

Income Tax Provision (Benefit)

Income tax provision decreased $34.0 million, or 136.9%, for the year ended December 31, 2015, from a benefit of $24.9 million for the year ended December 31, 2014. The decrease in income tax benefit is due to primarily to the recognition of a $26.6 million income tax benefit relating to the change in tax status of the JBGL entities during the year ended December 31, 2014, from pass through entities to taxable entities, relating primarily to the tax attributes that arose from the Transaction.

As of December 31, 2015, we have federal net operating loss carryforwards of approximately $158.9 million, which will begin to expire beginning with the year ending December 31, 2029. Our ability to utilize our net operating loss carryforwards depends on the amount of taxable income we generate in future periods. Based on our historical taxable income results through December 31, 2015, as well as forecasted income, management expects that the Company will generate sufficient taxable income to utilize all of the federal net operating loss carryforwards before they expire. The Company also has approximately $21.6 million of gross state net operating loss carryforwards having varying periods of expiration which the Company believes on a more-likely-than-not basis, will not be utilized. The state loss carryforwards and related $1.2 million tax-effected valuation allowance were previously recorded by BioFuel. The Transaction had no effect on the state loss carryforward amount, the related valuation allowance or income tax expense. The Company maintains a deferred income tax asset in the amount of $1.2 million for the state loss carryforwards and a related valuation allowance in the amount of $1.2 million. In the Company’s assessment of the need for a valuation allowance, both positive and negative information was considered, including any available income tax planning.

As of December 31, 2015, we had deferred tax assets of $80.8 million, which was net of a valuation allowance in the amount of $1.2 million relating to state loss carryforwards. The deferred tax assets are primarily related to $55.6 million for federal net operating loss carryforwards and $24.8 million for basis in partnerships. We evaluate the appropriateness of a valuation allowance in future periods based on the consideration of all available evidence, including the generation of taxable income, using the more-likely-than-not standard. A valuation allowance is required to reduce our deferred tax assets if it is determined that it is more-likely-than-not that all or some portion of such assets will not be realized due to the lack of sufficient taxable income. As of December 31, 2015, management concluded that it was more-likely-than-not that the net deferred tax

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assets, except for the state loss carryforwards noted above, will be realized in accordance with U.S. GAAP principles. Accordingly, $63.9 million of the $65.0 million valuation allowance was reversed as of the Transaction Date.

Year Ended December 31, 2014 Compared to the Year Ended December 31, 2013

Net New Home Orders and Backlog

The table below represents new home orders and backlog related to our builder operations segment.



	Years Ended December 31,						Increase (Decrease)
New Home Orders & Backlog	2014			2013			Change			%
Net new home orders	601			644			(43		)	(6.7)%
Number of cancellations	106			95			11			11.6%
Cancellation rate	15.0		%	14.8		%	0.2		%	1.4%
Average selling communities	30			29			1			3.4%
Selling communities at end of period	33			25			8			32.0%
Backlog ($ in thousands)	$	78,552		$	58,634		$	19,918		34.0%
Backlog (units)	209			182			27			14.8%
Average sales price of backlog	$	375,847		$	322,165		$	53,682		16.7%

Net new home orders for the year ended December 31, 2014 decreased by 43 homes, or 6.7% from 644 for the year ended December 31, 2013 to 601 for the year ended December 31, 2014. Our overall absorption rate for the year ended December 31, 2014 was an average of 20.0 per selling community (1.7 monthly), compared to an average of 22.2 per selling community (1.9 monthly) for the year ended December 31, 2013. Our monthly absorption rate and number of net new home orders decreased in part due to the timing of the opening of new communities and the closing out of existing communities.

Our cancellation rate was approximately 15.0% for the year ended December 31, 2014, compared to 14.8% for the year ended December 31, 2013. Management believes a cancellation rate in the range of 15% to 20% is representative of an industry average cancellation rate.

Backlog units increased by 27 homes, or 14.8%, to 209 as of December 31, 2014, from 182 as of December 31, 2013. The dollar value of backlog units increased $19.9 million, or 34.0%, to $78.6 million as of December 31, 2014 from $58.6 million as of December 31, 2013. The increase in value of backlog units reflects an increase in the number of homes in backlog and an increase in the average sales price of homes in backlog. Our average sales price of homes in backlog increased $53,682, or 16.7%, to $375,847 for the year ended December 31, 2014, compared to $322,165 for the year ended December 31, 2013. The increase in the average sales price of homes in backlog is the result of changes in product mix related to higher priced single family homes over lower priced townhomes contracted for sale during the period and local market appreciation. The average sales price of homes may fluctuate depending on the mix of typical homes delivered and sold during a period. The change in the average sales price of homes is part of our natural business cycle.

New Homes Delivered and Home Sales Revenue

The table below represents home sales revenue and new homes delivered related to our builder operations segment.



	Years Ended December 31,				Increase (Decrease)
New Homes Delivered and Home Sales Revenue	2014		2013		Change		%
New homes delivered	587		556		31		5.6%
Home sales revenue ($ in thousands)	$	200,650	$	168,591	$	32,059	19.0%
Average sales price of home delivered	$	341,823	$	303,221	$	38,602	12.7%

New home deliveries (excluding existing completed homes purchased, but not yet closed) for the year ended December 31, 2014 for our builder operations segment was 587, compared to new home deliveries of 556 for the year ended December 31, 2013, resulting in an increase of 31 homes, or 5.6%. The increase in new home deliveries was primarily attributable to the timing of when communities were open for sale.

Home sales revenue increased $32.1 million, or 19.0%, to $200.7 million for the year ended December 31, 2014, from $168.6 million for the year ended December 31, 2013. The increase in revenue was comprised of (a) $22.7 million related to an

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increase in average sales price of $38,602 per home to $341,823 for the year ended December 31, 2014, from $303,221 for the year ended December 31, 2013, and (b) $9.4 million due to a 5.6% increase in homes delivered to 587 for the year ended December 31, 2014, from 556 for the year ended December 31, 2013. The increase in the average sales price was the result of changes to the mix of homes resulting in an increase of single family to townhomes delivered during those periods, and local market appreciation.

Homebuilding

The table below represents cost of home sales and gross margin related our builder operations segment.



	Years Ended December 31,
Homebuilding ($ in thousands)	2014		%		2013		%
Home sales revenue	$	200,650	100.0	%	$	168,591	100.0	%
Cost of home sales	$	149,809	74.7	%	$	122,781	72.8	%
Homebuilding gross margin	$	50,841	25.3	%	$	45,810	27.2	%

Cost of home sales for the year ended December 31, 2014 for builder operations was $149.8 million, compared to cost of home sales of $122.8 million on for the year ended December 31, 2013, resulting in an increase of $27.0 million, or 22.0%, primarily due to the 5.6% increase in the number of homes delivered.

Homebuilding gross margin percentage for the year ended December 31, 2014 for builder operations was 25.3%, compared to a gross margin percentage of 27.2% for the year ended December 31, 2013. The decrease in homebuilding gross margin is largely due to a higher cost basis on homes sold during the year ended December 31, 2014.

Salary Expense and Management Fees Expense - Related Party

The table below represents salary expense and management fees, related to our land development and builder operations segments.



($ in thousands)	Years Ended December 31,				As Percentage of Relevant Revenue
($ in thousands)	2014		2013		2014		2013
Land development	$	1,479	$	1,279	3.3	%	3.8	%
Builder operations	$	14,655	$	9,988	7.3	%	5.9	%

Land Development

Salary expense and management fees expense for the year ended December 31, 2014 for land development remained relatively flat at $1.5 million, as there was no change in the employee headcount from December 31, 2013 to December 31, 2014.

Builder Operations

Salary expense and management fees expense for the year ended December 31, 2014 for builder operations was $14.7 million, compared to $10.0 million for the year ended December 31, 2013, an increase of 46.7%. The increase was primarily the result of an increase in employee headcount of 20 and associated costs of benefits to support the growth in our builder operations segment.

Selling, General and Administrative Expense

The table below represents selling, general and administrative expenses related to our land development and builder operations segments.



($ in thousands)	Years Ended December 31,				As Percentage of Relevant Revenue
($ in thousands)	2014		2013		2014		2013
Land development	$	2,410	$	808	5.3	%	2.4	%
Builder operations	$	7,689	$	5,815	3.8	%	3.4	%

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Land Development

Selling, general and administrative expense for the year ended December 31, 2014 for land development was $2.4 million, compared to $0.8 million for the year ended December 31, 2013, an increase of 198.3%. The increase was primarily attributable to costs incurred in connection with the Transaction and growth in our land development business which resulted in additional expenditures. These additional expenditures include home owners association dues, subdivision maintenance, property taxes and rent expense.

Builder Operations

Selling, general and administrative expense for the year ended December 31, 2014 for builder operations was $7.7 million, compared to $5.8 million for the year ended December 31, 2013, an increase of 32.2%. The increase was primarily attributable to increases in expenditures to support builder operations in anticipation of future growth in our business, and costs incurred in connection with the Transaction. Builder operations expenditures include community costs, such as, non-capitalized property taxes, rent expenses, and advertising and marketing expenses. Selling, general and administrative expense as a percentage of revenue increased 11.8% due to front end expenses incurred on new communities currently under development, scheduled to open in 2015, that did not produce any revenues during 2014.

Interest Expense

Interest expense increased $1.1 million, or 342.2%, to $1.4 million for the year ended December 31, 2014, from $0.3 million for the year ended December 31, 2013. The increase was due primarily to higher average balances on our line of credit throughout the year ended December 31, 2014. On October 13, 2013, we increased the size of our revolving credit facility from $8.0 million to $25.0 million.

Interest and Fees Income

Interest and fees income decreased $2.2 million, or 89.4%, to $0.3 million for the year ended December 31, 2014, from $2.5 million for the year ended December 31, 2013. The decrease was due to the decrease in notes receivable outstanding from $7.6 million as of December 31, 2013 to $0.0 million as of December 31, 2014.

Other Income, Net

Other income, net, decreased $0.9 million, or 41.2%, to $1.4 million for the year ended December 31, 2014, from $2.3 million for the year ended December 31, 2013. The decrease in other income, net was primarily due to a decrease in profit participation on real estate projects of approximately $0.6 million driven by lower notes receivable, an increase in depreciation expense of approximately $0.2 million due to an increase in property and equipment, and a decrease in various other income (expense).

Income Tax Provision (Benefit)

Income tax benefit increased $25.2 million, or 7,700.3% for the year ended December 31, 2014, from an expense of $0.3 million for the year ended December 31, 2013. The increase in income tax benefit is due to primarily to the recognition of a $26.6 million income tax benefit relating to the change in tax status of the JBGL entities, from pass through entities to taxable entities, relating primarily to the tax attributes that arose from the Transaction.

As of December 31, 2014, we had federal net operating loss carryforwards of approximately $178.8 million, which will begin to expire beginning with the year ending December 31, 2029. Our ability to utilize our net operating loss carryforwards depends on the amount of taxable income we generate in future periods. Based on our historical taxable income results through December 31, 2014, as well as forecasted income, management expects that we will generate sufficient taxable income to utilize all of the federal net operating loss carryforwards before they expire. We also have approximately $21.6 million of gross state net operating loss carryforwards having varying periods of expiration which we believe on a more-likely-than-not basis, will not be utilized. The state loss carryforwards and related $1.2 million tax-effected valuation allowance were previously recorded by BioFuel. The Transaction had no effect on the state loss carryforward amount, the related valuation allowance or income tax expense. We maintain a deferred income tax asset in the amount of $1.2 million for the state loss carryforwards and a related valuation allowance in the amount of $1.2 million. In the Company’s assessment of the need for a valuation allowance, both positive and negative information was considered, including any available income tax planning.

As of December 31, 2014, we had deferred tax assets of $89.2 million, which was net of a valuation allowance in the amount of $1.2 million relating to state loss carryforwards. The deferred tax assets are primarily related to $62.6 million for federal net operating loss carryforwards and $26.1 million for basis in partnerships. We evaluate the appropriateness of a valuation allowance in future periods based on the consideration of all available evidence, including the generation of taxable

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income, using the more-likely-than-not standard. A valuation allowance is required to reduce our deferred tax assets if it is determined that it is more-likely-than-not that all or some portion of such assets will not be realized due to the lack of sufficient taxable income. As of December 31, 2014, management concluded that it was more-likely-than-not that the net deferred tax assets, except for the state loss carryforwards noted above, will be realized in accordance with U.S. GAAP principles. Accordingly, $63.9 million of the $65.0 million valuation allowance was reversed as of the Transaction Date.

Lots Owned and Controlled

The table below represents lots owned and controlled (including land option agreements) as of December 31, 2015, 2014 and 2013. Owned lots are those to which the Company holds title, while controlled lots are those that we have the contractual right to acquire title but does not currently own it.



	December 31,
	2015	2014	2013
Lots Owned⁽¹⁾
Texas	2,659	2,105	2,364
Georgia	991	1,211	1,384
Total	3,650	3,316	3,748
Lots Controlled⁽¹⁾⁽²⁾
Texas	326	279	292
Georgia	758	561	555
Total	1,084	840	847

Total Lots Owned and Controlled⁽¹⁾	4,734	4,156	4,595


(1)	The land use assumptions used in the above table may change over time.


(2)	Lots controlled excludes homes under construction.

Liquidity and Capital Resources Overview

As of December 31, 2015 and 2014, we had $19.9 million and $21.3 million of cash and cash equivalents, respectively. Management believes that we have a prudent cash management strategy, including with respect to cash outlays for land and inventory acquisition and development. We intend to generate cash from the sale of inventory, and intend to redeploy the net cash generated from the sale of inventory to acquire and develop lots that represent opportunities to generate desired margins. We may also use cash to make share repurchases or additional investments in acquisitions, joint ventures, or other strategic activities.

Our principal uses of capital for the year ended December 31, 2015 were operating expenses, land purchases, land development, home construction and the payment of routine liabilities. We used funds generated by operations and available borrowings to meet our short-term working capital requirements. We remain focused on generating positive margins in our builder operations segment and acquiring desirable land positions in order to maintain a strong balance sheet and remain poised for growth.

Cash flows for each of our communities depend on their stage in the development cycle, and can differ substantially from reported earnings. Early stages of development or expansion require significant cash outlays for land acquisitions, entitlements and other approvals, and construction of model homes, roads, utilities, general landscaping and other amenities. Because these costs are a component of our inventory and are not recognized in our statement of income until a home closes, we incur significant cash outlays prior to recognition of earnings. In the later stages of community development, cash inflows may significantly exceed earnings reported for financial statement purposes, as the cash outflow associated with home and land construction was previously incurred. We are actively acquiring and developing lots in our primary markets in order to maintain and grow our lot supply.

On July 1, 2015, we completed the Equity Offering of 17,000,000 shares of our common stock at a price to the public of $10.00 per share. On July 23, 2015, the underwriters purchased 444,897 additional shares pursuant to their 30-day option to purchase up to an aggregate of 841,500 additional shares of common stock to cover over-allotments. The Equity Offering resulted in net proceeds of approximately $170.0 million, after deducting underwriting discounts and offering expenses, which we used to repay the Term Loan Facility and for working capital and general corporate purposes. On July 30, 2015, we replaced our $25.0 million revolving credit facility with a new revolving credit facility with Inwood National Bank (“Inwood”), which

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provides for up to $50.0 million and is secured by land owned in John’s Creek, Georgia, Allen, TX, and Carrollton, TX. The maturity date for the new revolving credit facility is July 30, 2017. See Note 5 and Note 7 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for further discussion.

As a result of the Equity Offering, the repayment of the Term Loan Facility and the $50.0 million replacement line of credit with Inwood, our debt to total capitalization ratio was less than 14% as of December 31, 2015. It is our intent to prudently employ leverage to continue to invest in our land acquisition, development and homebuilding businesses. We intend to target a debt to total capitalization ratio of approximately 35% to 40%, which we expect will provide us with significant additional growth capital.

Term Loan Facility

On July 1, 2015 we used approximately $154.9 million of the net proceeds from the Equity Offering to repay all of the outstanding principal, interest and a prepayment premium under the Term Loan Facility. Upon repayment, the Term Loan Facility was terminated. The Term Loan Facility was secured by a first priority lien on substantially all of our assets and substantially all of the assets, subject to certain exceptions, of each of our subsidiaries. Certain of our subsidiaries guaranteed obligations under the Term Loan Facility pursuant to the guaranty. In connection with the termination of the Term Loan Facility, we wrote-off the remaining unamortized debt issuance costs of $0.4 million, which is included in depreciation and amortization expense in our consolidated statement of income for the year ended December 31, 2015.

The Term Loan Facility bore interest at 9.0% per annum, payable quarterly, from October 27, 2014 through the first anniversary thereof and 10.0% per annum thereafter. We had a one-time right to elect to pay up to four consecutive quarters’ interest in kind. The Term Loan Facility was subject to mandatory prepayment with 100% of the net cash proceeds received from the incurrence of certain debt by us or the issuance of certain equity securities. Voluntary prepayments of the Term Loan Facility were permitted at any time. All prepayments made prior to October 27, 2016 were subject to a 1.0% prepayment premium.

Revolving Credit Facility

As of December 31, 2015, we had the following lines of credit (“LOC”):

During 2012, a subsidiary of JBGL opened a LOC issued by Inwood in the amount of $4.8 million maturing on April 13, 2014, bearing a minimum interest rate of 4.0% per annum, which was in effect during the year ended December 31, 2015, and collateralized by certain leased assets. The LOC was renewed during 2014 until April 13, 2015. This LOC was paid off as of March 31, 2015.

During 2012, a subsidiary of JBGL opened a LOC issued by Inwood in the amount of $3.0 million maturing on September 15, 2014, bearing a minimum interest rate of 4.0% per annum, which was in effect during the year ended December 31, 2015, and collateralized by certain leased assets. The LOC was renewed until April 13, 2015. This LOC was paid off as of March 31, 2015.

During 2012, a subsidiary of JBGL opened a LOC with Inwood in the amount of $8.0 million. On October 13, 2013, the JBGL subsidiary extended this revolving credit facility and increased the size from $8.0 million to $25.0 million maturing on October 13, 2014. Interest accrued and was payable monthly at a rate of 4.0%. The credit facility was renewed until October 13, 2015 and was secured by land owned in John’s Creek, Georgia. This LOC was replaced with a new revolving credit facility in July 2015.

On July 30, 2015, we replaced our $25.0 million revolving credit facility with a new revolving credit facility with Inwood, which provides for up to $50.0 million. The maturity date for the new revolving credit facility is July 30, 2017. The costs associated with the new revolving credit facility of $0.3 million were deferred and are included in other assets in our consolidated balance sheets. We are amortizing these debt issuance costs to interest expense over the term of the new revolving credit facility straight line over the term of the loan. Amounts outstanding under the new revolving credit facility is secured by mortgages on real property and security interests in certain personal property (to the extent that such personal property is connected with the use and enjoyment of the real property) that is owned by certain of our subsidiaries, including land owned in John’s Creek, Georgia, Allen, Texas, and Carrollton, Texas. The amounts outstanding under the new revolving credit facility are also guaranteed by certain of our subsidiaries.

The new revolving credit facility is subject to a borrowing base limitation equal to the sum of 50% of the total value of land and 60% of the total value of lots owned by certain of our subsidiaries, each as determined by an independent appraiser, with the value of land being restricted from being more than 50% of the borrowing base. Outstanding borrowings under the

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new revolving credit facility bear interest at a floating rate per annum equal to the rate announced by Bank of America, N.A., from time to time, as its “Prime Rate” (the “Index”) with such adjustments to the interest rate being made on the effective date of any change in the Index. Notwithstanding the foregoing, the interest may not, at any time, be less than 4% per annum or more than the lesser amount of 18% and the highest maximum rate allowed by applicable law. Beginning on August 30, 2015 and continuing on the 30th day of each consecutive month thereafter until the revolving credit facility matures on July 30, 2017, we must pay interest on the unpaid principal amount. The entire unpaid principal balance and any accrued but unpaid interest is due and payable on the maturity date. See Note 7 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for further discussion.

Under the terms of the new revolving credit facility, we are required, among other things, to maintain minimum multiples of net worth in excess of the outstanding new revolving credit facility balance, minimum interest coverage and maximum leverage.

On December 15, 2015, we entered into a credit agreement with the lenders named therein, and Citibank, N.A., as administrative agent, providing for a senior, unsecured revolving credit facility with aggregate lending commitments of up to $40.0 million (“Unsecured Revolving Credit Facility”). Subject to certain terms and conditions, we may, at our option, prior to the termination date, increase the amount of the revolving credit facility up to a maximum aggregate amount of $75.0 million. Commitments under the Unsecured Revolving Credit Facility will be available until the period ending December 14, 2018, which period may be extended for additional one year periods, subject to the consent of the lenders and the satisfaction of certain other terms and conditions. Citibank, N.A. and Credit Suisse AG, Cayman Islands Branch have initially committed to provide $25.0 million and $15.0 million, respectively.

The costs associated with the Unsecured Revolving Credit Facility of $0.5 million were deferred and are included in other assets in our consolidated balance sheets. We are amortizing these debt issuance costs to interest expense over the term of the Unsecured Revolving Credit Facility straight line over the term of the loan.

The Unsecured Revolving Credit Facility provides for interest rate options on advances at rates equal to either: (x) in the case of base rate advances, the highest of (i) Citibank’s base rate, (ii) the federal funds rate plus 0.5%, and (iii) the one-month LIBOR plus 1.0%, in each case plus 1.5%; or (y) in the case of Eurodollar rate advances, the reserve adjusted LIBOR plus 2.5%. Interest on amounts borrowed under the Unsecured Revolving Credit Facility is payable in arrears quarterly on the last day of each March, June, September and December during such periods. At December 31, 2015, the interest rate on outstanding borrowings under the Credit Facility was 2.9% per annum.

We will pay the lenders a commitment fee on the amount of the unused commitments on a quarterly basis at a rate per annum equal to 0.45%.

Outstanding borrowings under the Unsecured Revolving Credit Facility are subject to, among other things, a borrowing base. The borrowing base limitation is equal to the sum of: 100% of unrestricted cash (in excess of $15.0 million); 85% of the book value of model homes, construction in progress homes, sold completed homes, and speculative homes (subject to certain limitations on the age and number of speculative homes and model homes); 65% of the book value of finished lots and land under development; and 50% of the book value of entitled land (subject to certain limitations on the value of entitled land and land under development as a percentage of the borrowing base).

Additionally, under the terms of the Unsecured Revolving Credit Facility, we are required, among other things, to maintain compliance with various covenants, including financial covenants relating to a maximum Leverage Ratio, a minimum Interest Coverage Ratio, and a minimum Consolidated Tangible Net Worth, each as defined therein. Our compliance with these financial covenants is measured by calculations and metrics that are specifically defined or described by the terms of the Unsecured Revolving Credit Facility.

We were in compliance with the covenants under the LOC agreements described above as of December 31, 2015.

Notes Payable

On December 13, 2013, a subsidiary of JBGL signed a promissory note with Briar Ridge Investments, LTD for $9.0 million maturing at December 13, 2017, bearing interest at 6.0% per annum and collateralized by land purchased in Allen, Texas.

On April 15, 2013, a subsidiary of JBGL signed a promissory note for $3.5 million maturing on January 22, 2014, bearing interest at 6.0% per annum and collateralized by land located in Denton, Texas. The note was paid in full during 2014. On April

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16, 2014, a new promissory note was signed for $3.3 million maturing on April 30, 2015 bearing interest at 5.0% per annum collateralized by land located in Denton, Texas. $1.5 million of this note was repaid in July, 2014. This note was paid in full during the three months ended March 31, 2015.

On May 22, 2015, a subsidiary of JBGL signed a promissory note with Lyons Equities, Inc. Trustee for $1.0 million maturing on May 22, 2016, bearing interest at 3.5% per annum collateralized by land located in Allen, TX.

On July 20, 2015, a subsidiary of JBGL signed a promissory note with Centennial Park Richardson, LTD. for $0.3 million maturing on April 20, 2016, bearing interest at 0.0% per annum collateralized by land located in Richardson, TX. This note was paid in full in October 2015.

Our subsidiaries purchased lots under various agreements from unrelated third parties. The sellers of these lots have subordinated a percentage of the lot purchase price to various construction loans of our subsidiary. Notes were signed in relation to the subordination bearing interest at between eight and fourteen percent per annum, collateralized by liens on the homes built by us on each lot. The sellers will release their lien upon repayment of principal plus accrued interest at the closing of each individual home to a third party buyer.

Cash Flows

The following summarizes our primary sources and uses of cash in the periods presented:

Cash Flows — Year Ended December 31, 2015 to Year Ended December 31, 2014

The following summarizes our primary sources and uses of cash for the year ended December 31, 2015 as compared to the year ended December 31, 2014:

•

Operating activities. Net cash used in operating activities for the year ended December 31, 2015 was $47.6 million, compared to net cash provided of $1.8 million during the year ended December 31, 2014. The change was primarily attributable to (i) changes in working capital associated with inventory, as inventory increased by 25.1% for the year ended December 31, 2015 compared to a 20.0% increase in inventory for the year ended December 31, 2014, (ii) changes in working capital associated with earnest money deposits, as earnest money deposits increased by $11.2 million for the year ended December 31, 2015 compared to $3.4 million for the year ended December 31, 2014, and (iii) a decrease in accrued expenses of $3.5 million for the year ended December 31, 2015 compared to an increase of $4.7 million for the year ended December 31, 2014.

•

Investing activities. Net cash provided by investing activities for the year ended December 31, 2015 was $2.5 million, compared to net cash provided of $12.6 million during the year ended December 31, 2014. The change was primarily due to a decrease in notes receivable payments of $9.2 million and a decrease in proceeds from investment in direct financing leases of $2.8 million for the year ended December 31, 2015 as compared to the year ended December 31, 2014 partially offset by a decrease in issuance of notes receivable of $1.6 million.

•

Financing activities. Net cash provided by financing activities for the year ended December 31, 2015 was $43.8 million, compared to net cash used of $9.8 million during the year ended December 31, 2014. The change was primarily due to (i) a net increase in lines of credit and notes payable borrowings of $31.4 million for the year ended December 31, 2015 compared to a $17.6 million reduction in lines of credit and notes payable borrowings for the year ended December 31, 2014. (ii) an increase in cash received of $19.9 million from net proceeds from equity offerings less the repayment of the Term Loan Facility, and (iii) an increase in net distributions to and contributions from controlling and noncontrolling interests members of $16.5 million for the year ended December 31, 2015 as compared to the year ended December 31, 2014 partially offset by a decrease in cash received as part of reverse recapitalization of $31.9 million.

Cash Flows — Year Ended December 31, 2014 to Year Ended December 31, 2013

The following summarizes our primary sources and uses of cash for the year ended December 31, 2014 as compared to the year ended December 31, 2013:

•

Operating activities. Net cash provided by operating activities for the year ended December 31, 2014 was $1.8 million, compared to net cash used of $49.9 million during the year ended December 31, 2013. The change was primarily attributable to changes in working capital associated with inventory, as inventory increased by 20.0% for the year ended December 31, 2014 compared to an increase in inventory of 72.9% during the year ended December 31, 2013 and an increase in net income of approximately $16.7 million primarily related to a $26.6 million income tax benefit due to

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JBGL's change in partnership tax status which was triggered by the Transaction, and an increase in gross profit due to increase of 31 homes delivered for the year ended December 31, 2014, as our builder operations continued to experience revenue growth, and an increase of an additional 77 lot sales for the year ended December 31, 2014, partially offset by (i) an increase in selling, general and administrative expense of $3.5 million due to increase in community costs, such as, non-capitalized property taxes, rent expenses, and advertising and marketing expenses in anticipation of future growth in our business, (ii) an increase in salary expense and management fees expense - related party of $4.9 million due to increase in employee headcount and associated costs of benefits to support the growth in our business and (iii) an increase in interest expense of $1.1 million attributable to higher average balances on our line of credit.

•

Investing activities. Net cash provided in investing activities for the year ended December 31, 2014 was $12.6 million, compared to net cash provided of $10.8 million during the year ended December 31, 2013. The change was primarily due to a decrease in issuance of notes receivable of $2.6 million and an increase in proceeds from investment in direct financing leases of $2.4 million for the year ended December 31, 2014, partially offset by decrease in notes receivable payments of $2.8 million and an increase in acquisition of property and equipment of approximately $0.4 million.

•

Financing activities. Net cash used in financing activities for the year ended December 31, 2014 was $9.8 million, compared to net cash provided of $48.6 million during the year ended December 31, 2013. The change was primarily due to (i) a decrease in net distributions to and contributions from controlling and noncontrolling interests members of $56.9 million during the year ended December 31, 2014, (ii) a decrease in line of credit borrowings of $20.0 million and (iii) a decrease in proceeds from notes payable of $13.5 million, partially offset by cash received as part of the reverse recapitalization of $31.9 million.

Off-Balance Sheet Arrangements and Contractual Obligations

In the ordinary course of business, we enter into land purchase contracts with third party developers in order to procure lots for the construction of our homes. We are subject to customary obligations associated with entering into contracts for the purchase of land and improved lots. These purchase contracts typically require a cash deposit, and the purchase of properties under these contracts is generally contingent upon satisfaction of certain requirements, including obtaining applicable property and development entitlement. We also utilize option contracts with land sellers as a method of acquiring land in staged takedowns, which are the schedules that dictate when lots must be purchased to help manage the financial and market risk associated with land holdings, and to reduce the use of funds from our corporate financing sources. Option contracts generally require us to pay a non-refundable deposit for the right to acquire lots over a specified period of time at pre-determined prices. We generally have the right at our discretion to terminate our obligations under both purchase contracts and option contracts by forfeiting the cash deposit with no further financial responsibility to the land seller.

Our utilization of land option contracts is dependent on, among other things, the availability of land sellers willing to enter into these arrangements, the availability of capital to finance the development of optioned lots, general housing market conditions, and local market dynamics. Options may be more difficult to procure from land sellers in strong housing markets and are more prevalent in certain geographic regions.

Contractual Obligations Table

The following table summarizes our cash obligations as of December 31, 2015. We did not have any specific lot and/or land purchase obligations as of December 31, 2015.



	Payments Due by Period (in thousands)
Contractual Obligations	Total		Year 1		Years 2 – 3		Years 4 – 5		Years 5 and Beyond
Debt obligations⁽¹⁾	$	57,658	$	1,158	$	56,500	$	—	$	—
Operating leases	3,438		697		1,411		1,156		174
Total	$	61,096	$	1,855	$	57,911	$	1,156	$	174


(1)	Represents principal and interest payments due on our LOC and notes payable.

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Inflation

Homebuilding operations can be adversely impacted by inflation, primarily from higher land prices, and increased costs of financing, labor, materials and construction. In addition, inflation can lead to higher mortgage rates, which can significantly affect the affordability of mortgage financing to homebuyers. While we attempt to pass on cost increases to customers through increased prices, when weak housing market conditions exist, we may be unable to offset cost increases with higher selling prices.

Seasonality

Historically, the homebuilding industry experiences seasonal fluctuations in quarterly operating results and capital requirements. We typically experience the highest new home order activity in spring and summer, although this activity is also highly dependent on the number of active selling communities, timing of new community openings and other market factors. Since it typically takes five to eight months to construct a new home, we deliver more homes in the second half of the year as spring and summer home orders lead to home deliveries. Because of this seasonality, home starts, construction costs and related cash outflows have historically been highest in the second and third quarters, and the majority of cash receipts from home deliveries occurs during the second half of the year. We expect this seasonal pattern to continue over the long-term, although it may be affected by volatility in the homebuilding industry.

Significant Accounting Policies

Our financial statements have been prepared in accordance with GAAP. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of costs and expenses during the reporting period. On an ongoing basis, management evaluates estimates and judgments, including those which impact our most critical accounting policies. Management bases estimates and judgments on historical experience and on various other factors that we believe to be reasonable under the circumstances. Actual results may differ from estimates under different assumptions or conditions. Management believes that the following accounting policies are among the most important to the portrayal of our financial condition and results of operations and require among the most difficult, subjective or complex judgments.

Principles of Consolidation

All significant intercompany balances and transactions have been eliminated in consolidation and combination. Investments in which we directly or indirectly have an interest of more than 50 percent and/or are able to exercise control over the operations have been fully consolidated and noncontrolling interests are stated separately in the consolidated financial statements as required under the provisions of FASB ASC 810, Consolidations.

Revenue Recognition

Revenue from sales of residential units, land and lots are not recognized until a sale is deemed to be consummated. Consummation is defined as a) when the parties are bound by the terms of a contract, b) all net consideration has been exchanged, c) any permanent financing for which the seller is responsible has been arranged, d) continuing investment is adequate to demonstrate a commitment to pay for the home and e) all conditions precedent to closing have been performed. Generally, consummation does not happen until a sale has closed. When the earnings process is complete and a sale has closed, income is recognized under the full accrual method which allows full recognition of the gain on the sale at the time of closing.

Inventories and Cost of Sales

Inventory consists primarily of land in the process of development, developed lots, model homes, completed homes, and raw land scheduled for development, primarily in Texas and Georgia. Inventory is valued at cost unless the carrying value is determined to not be recoverable in which case the affected inventory is written down to fair value. Cost includes any related pre-acquisition costs that are directly identifiable with a specific property so long as those pre-acquisition costs are recoverable at the sale of the property.

Residential lots held for sale and lots held for development include the initial cost of acquiring the land as well as certain costs capitalized related to developing the land into individual residential lots including interest and real estate taxes.

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Land, development and other project costs, including property taxes incurred during development and home construction, are capitalized. Land development and other common costs that benefit an entire community are allocated based on the relative sales value of the lots. The costs of lots are transferred to homes in progress when home construction begins. Home construction costs and related carrying charges are allocated to the cost of individual homes using the specific identification method.

Inventory costs for completed homes are expensed as cost of sales as homes are sold. Changes to estimated total development costs subsequent to initial home closings in a community are generally allocated to the unsold homes in the community on a pro-rata basis. The life cycle of a community generally ranges from two to six years, commencing with the acquisition of land, continuing through the land development phase, and concluding with the construction, sale, and delivery of homes.

Impairment of Real Estate Inventories

In accordance with the ASC Topic 360, Property, Plant, and Equipment, we evaluate our real estate inventory for indicators of impairment by individual community and development during each reporting period.

For our builder operations segment, due largely to the relatively short construction periods of homes (generally ranging from five to nine months) in our communities, our growth over the past four years, and the favorable conditions of the housing market since 2011, we have not experienced any circumstances during the years ended December 31, 2015 and December 31, 2014 that are indicators of potential impairment within our builder operations segment. During each reporting period, community gross margins are reviewed by management. In the event that inventory in an individual community is moving at a slower than anticipated absorption pace or the average sales prices or margins within an individual community are trending downward and are anticipated to continue to trend downward over the life of the community, we will further investigate these communities and evaluate them for impairment.

For our land development segment, we perform a quarterly review for indicators of impairment for each project which involves projecting future lot sales based on executed contracts and comparing these revenues to projected costs. In determining the allocation of costs to a particular land parcel, we rely on project budgets that are based on a variety of assumptions, including assumptions about schedules and future costs to be incurred. It is common that actual results differ from budgeted amounts for various reasons, including delays, increases in costs that have not been committed, unforeseen issues encountered during project development that fall outside the scope of existing contracts, or items that ultimately cost more or less than the budgeted amount. While the actual results for a particular project are accurately reported over time, a variance between the budget and actual costs could occur. To reduce the potential for such variances, we apply procedures on a consistent basis, including assessing and revising project budgets on a periodic basis, obtaining commitments from subcontractors and vendors for future costs to be incurred and utilizing the most recent information available to estimate costs.

Each reporting period, we review our real estate assets to determine whether the estimated remaining future cash flows of the development are more or less than the asset’s carrying value. The estimated cash flows are determined by projecting the remaining sales revenue from lot sales based on the contractual lot takedowns remaining or historical/projected home sales/delivery absorptions for homebuilding operations and then comparing that to the remaining projected expenditures for development or home construction. Remaining projected expenditures are based on the most current pricing/bids received from subcontractors for current phases or homes under development. For future phases of land development, management uses its best judgment to project potential cost increases. Management has typically assumed 5 – 10% cost increases on future phases, assuming no bids have been received from subcontractors. When projecting sales revenue, management does not assume improvement in market conditions.

If the estimated cash flows are more than the asset’s carrying value, no impairment adjustment is required. However, if the estimated cash flows are less than the asset’s carrying value, the asset is deemed impaired and will be written down to fair value. These impairment evaluations require us to make estimates and assumptions regarding future conditions, including the timing and amounts of development costs and sales prices of real estate assets, to determine if expected future cash flows will be sufficient to recover the asset’s carrying value.

Fair value is determined based on estimated future cash flows discounted for inherent risks associated with real estate assets. These discounted cash flows are impacted by expected risk based on estimated land development activities, construction and delivery timelines, market risk of price erosion, uncertainty of development or construction cost increases, and other risks specific to the asset or market conditions where the asset is located when assessment is made. These factors are specific to each community and may vary among communities.

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When estimating cash flows of a community, we make various assumptions, including: (i) expected sales prices and sales incentives to be offered, including the number of homes available, pricing and incentives being offered by us or other builders in other communities, and future sales price adjustments based on market and economic trends; (ii) expected sales pace and cancellation rates based on local housing market conditions, competition and historical trends; (iii) costs expended to date and expected to be incurred including, but not limited to, land and land development costs, home construction costs, interest costs, indirect construction and overhead costs, and selling and marketing costs; (iv) alternative product offerings that may be offered that could have an impact on sales pace, sales price and/or building costs; and (v) alternative uses for the property. Many assumptions are interdependent and a change in one may require a corresponding change to other assumptions. For example, increasing or decreasing sales absorption rates has a direct impact on the estimated per unit sales price of a home, the level of time-sensitive costs (such as indirect construction, overhead and carrying costs), and selling and marketing costs (such as model maintenance costs and advertising costs). Due to uncertainties in the estimation process, the significant volatility in demand for new housing and the long life cycle of many communities, actual results could differ significantly from such estimates.

We did not note any indicators of impairment for any projects, and no impairment adjustments related to real estate inventories were recorded, for the years ended December 31, 2015 and December 31, 2014.

Earnest Money Deposits

We account for variable interest entities in accordance with ASC Topic 810, Consolidation (“ASC 810”). Under ASC 810, an entity is a variable interest entity (“VIE”) when: (a) the equity investment at risk in the entity is not sufficient to permit the entity to finance its activities without additional subordinated financial support provided by other parties, including the equity holders; (b) the entity’s equity holders as a group either (i) lack the direct or indirect ability to make decisions about the entity, (ii) are not obligated to absorb expected losses of the entity or (iii) do not have the right to receive expected residual returns of the entity; or (c) the entity’s equity holders have voting rights that are not proportionate to their economic interests, and the activities of the entity involve or are conducted on behalf of the equity holder with disproportionately few voting rights.

If an entity is deemed to be a VIE pursuant to ASC 810, an enterprise that has both (i) the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and (ii) the obligation to absorb the expected losses of the entity or right to receive benefits from the entity that could be potentially significant to the VIE is considered the primary beneficiary and must consolidate the VIE. In accordance with ASC 810, we perform ongoing reassessments of whether an enterprise is the primary beneficiary of a VIE.

In the ordinary course of business, we enter into land option agreements in order to procure land for the construction of homes in the future. Pursuant to these land option agreements, we generally provide a deposit to the seller as consideration for the right to purchase land at different times in the future, usually at predetermined prices. Such contracts enable us to defer acquiring portions of properties owned by third parties or unconsolidated entities until we have determined whether and when to exercise its option, which reduces our financial risks associated with long-term land holdings. Option deposits and pre-acquisition costs (such as environmental testing, surveys, engineering, and entitlement costs) are capitalized if the costs are directly identifiable with the land under option and acquisition of the property is probable. Such costs are reflected in other assets and are reclassified to inventory upon taking title to the land. We write off deposits and pre-acquisition costs when it becomes probable that we will not go forward with the project or recover the capitalized costs. Such decisions take into consideration changes in local market conditions, the timing of required land takedowns, the availability and best use of necessary incremental capital, and other factors.

Under ASC 810, a non-refundable deposit paid to an entity is deemed to be a variable interest that will absorb some or all of the entity’s expected losses if they occur and, as such, our land option agreements are considered variable interests. Our land option agreement deposits, along with any related pre-acquisition costs, generally represent our maximum exposure to the land seller if we elect not to purchase the optioned property. Therefore, whenever we enter into a land option or purchase contract with an entity and make a non-refundable deposit, a VIE may have been created. However, we generally have little control or influence over the operations of these VIEs due to our lack of an equity interest in them. Additionally, creditors of the VIE typically have no recourse against us, and we do not provide financial or other support to these VIEs other than as stipulated in the land option agreements. In accordance with ASC 810, we perform ongoing reassessments of whether we are the primary beneficiary of a VIE. As a result of the foregoing, we were not required to consolidate any VIE as of December 31, 2015 and December 31, 2014.

Share-Based Compensation

We measure and account for share-based awards in accordance with ASC Topic 718, “Compensation - Stock Compensation”. We expense share-based payment awards made to employees and directors, including stock options and

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restricted stock awards. Share-based compensation expense associated with stock options and restricted stock awards with vesting contingent upon the achievement of service conditions is recognized on a straight-line basis, net of estimated forfeitures, over the requisite service period the awards are expected to vest. We estimate the value of stock options with vesting contingent upon the achievement of service conditions as of the date the award was granted using the Black-Scholes option pricing model. The Black-Scholes option-pricing model requires the use of certain input variables, such as expected volatility, risk-free interest rate and expected award life.

Income Taxes

The Company accounts for income taxes using the asset and liability method, under which deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company regularly reviews historical and anticipated future pre-tax results of operations to determine whether the Company will be able to realize the benefit of its deferred tax assets. A valuation allowance is required to reduce the potential deferred tax asset when it is more-likely-than-not that all or some portion of the potential deferred tax asset will not be realized due to the lack of sufficient taxable income. The Company establishes reserves for uncertain tax positions that reflect its best estimate of deductions and credits that may not be sustained on a more-likely-than-not basis.

Fair Value Measurements

We have adopted and implemented the provisions of FASB ASC 820-10, Fair Value Measurements, with respect to fair value measurements of (a) all elected financial assets and liabilities and (b) any nonfinancial assets and liabilities that are recognized or disclosed in the consolidated financial statements at fair value on a recurring basis (at least annually). Under FASB ASC 820-10, fair value is defined as an exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. These provisions establish a three-tiered fair value hierarchy that prioritizes inputs to valuation techniques used in fair value calculations. The three levels of input are defined as follows:



Level 1 —	unadjusted quoted prices for identical assets or liabilities in active markets accessible by us;

Level 2 —	inputs that are observable in the marketplace other than those classified as Level 1; and

Level 3 —	inputs that are unobservable in the marketplace and significant to the valuation.

Entities are encouraged to maximize the use of observable inputs and minimize the use of unobservable inputs. If a financial instrument uses inputs that fall in different levels of the hierarchy, the instrument will be categorized based upon the lowest level of input that is significant to the fair value calculation.

Our valuation methods may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while we believe our valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

Recent Accounting Pronouncements

See Note 2 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for recent accounting pronouncements.

Related Party Transactions

See Note 10 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for a description of our transactions with related parties.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our operations are interest rate sensitive. Because overall housing demand is adversely affected by increases in interest rates, a significant increase in mortgage interest rates may negatively affect the ability of homebuyers to secure adequate financing. Higher interest rates could adversely affect our revenues, gross margins and net income.

Our lines of credit have variable interest rates. An increase in interest rates could cause the cost of those lines to increase. As of December 31, 2015, we had $47.5 million outstanding on these lines of credit. However, the lines of credit are subject to minimum interest rates which we are currently being charged.

We do not enter into, or intend to enter into, swaps, forward or option contracts on interest rates or commodities or other types of derivative financial instruments for trading, hedging or speculative purposes.

Many of the statements contained in this section are forward looking and should be read in conjunction with the disclosures under the heading “Forward Looking Statements.”

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

We incorporate the information required for this item by reference to the financial statements listed in Item 15(a) of Part IV of this Annual Report on Form 10-K.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Company has established disclosure controls and procedures that are designed to ensure that information required to be disclosed in reports filed or submitted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission and, as such, is accumulated and communicated to the Company’s management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate to allow timely decisions regarding required disclosure. Management, together with our CEO and CFO, evaluated the effectiveness of the Company’s disclosure controls and procedures, as defined in Rule 13a-15(e) of the Exchange Act, as of December 31, 2015. Based on our evaluation, the CEO and CFO concluded that, due to material weaknesses in our internal control over financial reporting as described below, our disclosure controls and procedures were not effective as of December 31, 2015.

Despite the material weaknesses in internal control over financial reporting, management believes that the financial statements included in this annual report fairly present in all material respects our financial condition, results of operations, and cash flows for the periods presented in accordance with generally accepted accounting principles (“GAAP”).

Management’s Report on Internal Control over Financial Reporting

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Under the supervision and with the participation of our management, including the CEO and CFO, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2015 based upon Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

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A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

In connection with our assessment of the effectiveness of internal control over financial reporting at December 31, 2015, we identified the following material weaknesses in the Company’s control environment that existed at December 31, 2015:

•

The Company utilizes an integrated Enterprise Resource Planning (ERP) software system by a third-party service organization in the Company’s production and accounting for homebuilding and land development business. The Company was unable to obtain a Service Organization Control (“SOC”) 1 Type 2 report prepared in accordance with the AICPA Attestation Standards, Section 801, Reporting on Controls at a Service Organization, addressing the suitability of the design and operating effectiveness of controls relating to the application and business processing activities performed by the service organization on the Company’s behalf for the year ended December 31, 2015. As a result, the Company was unable to conclude that its service organization maintained effective controls over its information technology environment to (a) prevent unauthorized database and application access, and (b) maintain effective security administration and appropriate change management for the application maintained by the third-party service organization. This resulted in an inability to rely on the accuracy and completeness of data and key application reports obtained from the application at the third-party service organization used in the performance of important controls over certain key financial reporting processes, including accrued liabilities, vendor master file changes, reserves for housing completion, and budget data.


•	The Company did not maintain effective controls over the sufficiency and timeliness of review and approval of manual journal entries, including consolidating adjustments.


•	The Company did not maintain effective controls over the identification, evaluation, and disclosure of related party transactions.


•	The Company did not maintain effective controls over period-end accruals (cutoff), recording of inventory costs, costs of goods sold, and operating expenses to verify that all costs and expenses are captured completely and accurately for financial reporting.


•	The Company did not maintain effective controls to verify that financial statement amounts are appropriately classified and disclosed in the financial statements.

The material weaknesses described above could result in misstatements of the accounts and disclosures that would result in a material misstatement of the annual or interim consolidated and combined financial statements that would not be prevented or detected. The Company’s independent registered public accounting firm, Grant Thornton LLP, has issued an audit report on the Company’s internal control over financial reporting, which is included herein.

Planned Remediation of Material Weaknesses

Management is developing remediation plans to address the above material weaknesses. The remediation efforts, which are expected to be implemented during fiscal year 2016, include the following:

•

Management will move to an ERP self-host structure that involves hosting and managing the Company’s ERP software system and underlying infrastructure internally rather than obtaining that service from a third-party service organization. This will allow management greater flexibility and control to design, implement, and test the information technology general controls over security access and change management.

•

Management will design and implement processes and controls over the review and approval of manual journal entries to ensure that all manual journal entries are reviewed and approved and appropriately supported prior to being posted in the general ledger. Further, management is pursuing opportunities to design a preventative ERP application access control to ensure that all manual journal entries are appropriately reviewed and approved prior to posting to the general ledger. Finally, management is in the process of reorganizing the roles and responsibilities in the accounting and financial reporting processes, which will, among other items, improve controls over the journal entry review process.


•	Management will design and implement processes and controls over the identification, evaluation, approval, and disclosure of related party transactions.

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•

Management will design and implement processes and controls over the review of period-end accruals and cut-off procedures and recording of inventory costs, cost of goods sold, and operating expenses. Further, management is in the process of reorganizing the roles and responsibilities in the accounting and financial reporting processes that will, among other items, improve the process and controls related to this material weakness.


•	Management will design and implement processes and controls over the classification of transactions within the Company’s general ledger accounts and corresponding classification within the financial statements.

The Company is committed to maintaining a strong internal control environment and believes that these remediation efforts will represent significant improvements in our controls. The Company has started to implement these steps. Some of these steps will, however, take time to be fully integrated and sustainable. As the Company continues to evaluate changes to its internal controls over financial reporting, it may determine that additional processes and controls may be necessary to sufficiently respond to the material weaknesses identified above and improve its control environment.

Changes in Internal Control over Financial Reporting

During the quarter ended December 31, 2015, there were no changes in our internal controls that have materially affected or are reasonably likely to have a material effect on our internal control over financial reporting.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders

Green Brick Partners, Inc.

We have audited the internal control over financial reporting of Green Brick Partners, Inc. (formerly named Biofuel Energy Corp.) and subsidiaries (the “Company”) as of December 31, 2015, based on criteria established in the 2013 Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting (“Management’s Report”). Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

A material weakness is a deficiency, or combination of control deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. The following material weaknesses have been identified and included in management’s assessment;

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•

The Company was unable to demonstrate that its service organization maintained effective controls over its information technology environment to (a) prevent unauthorized database and application access, and (b) maintain effective security administration and appropriate change management for the application maintained by the third-party service organization. This resulted in an inability to rely on the accuracy and completeness of data and key application reports obtained from the application at the third-party service organization used in the performance of important controls over certain key financial reporting processes, including accrued liabilities, vendor master file changes, reserves for housing completion, and budget data.


•	The Company did not maintain effective controls over the sufficiency and timeliness of review and approval of manual journal entries, including consolidating adjustments.


•	The Company did not maintain effective controls over the identification, evaluation, and disclosure of related party transactions.


•	The Company did not maintain effective controls over period-end accruals (cutoff), recording of inventory costs, cost of goods sold and operating expenses to verify that all costs and expenses are captured completely and accurately for financial reporting.


•	The Company did not maintain effective controls to verify that financial statement amounts are appropriately classified and disclosed in the financial statements.

In our opinion, because of the effect of the material weaknesses described above on the achievement of the objectives of the control criteria, the Company has not maintained effective internal control over financial reporting as of December 31, 2015, based on criteria established in the 2013 Internal Control-Integrated Framework issued by COSO.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements of the Company as of and for the year ended December 31, 2015. The material weaknesses identified above were considered in determining the nature, timing, and extent of audit tests applied in our audit of the 2015 consolidated financial statements, and this report does not affect our report dated March 30, 2016, which expressed an unqualified opinion on those financial statements.

/s/ GRANT THORNTON LLP

Dallas, Texas

March 30, 2016

ITEM 9B. OTHER INFORMATION

None.

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PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Information regarding our executive officers is reported in Part I of this Annual Report on Form 10-K. All other information required by this Item 10 will be set forth in our Proxy Statement or in a future amendment to this Annual Report on Form 10-K and is incorporated herein by reference.

ITEM 11. EXECUTIVE COMPENSATION

Information required by this Item 11 will be set forth in our Proxy Statement or in a future amendment to this Annual Report on Form 10-K and is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Information required by this Item 12 will be set forth in our Proxy Statement or in a future amendment to this Annual Report on Form 10-K and is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Information required by this Item 13 will be set forth in our Proxy Statement or in a future amendment to this Annual Report on Form 10-K and is incorporated herein by reference.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

Information required by this Item 14 will be set forth in our Proxy Statement or in a future amendment to this Annual Report on Form 10-K and is incorporated herein by reference.

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PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)(1) Financial Statements



Green Brick Partners, Inc. - Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm	59
Consolidated Balance Sheets, December 31, 2015 and 2014	60
Consolidated Statements of Income for the years ended December 31, 2015, 2014 and 2013	61
Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2015, 2014 and 2013	62
Consolidated Statements of Cash Flows for the years ended December 31, 2015, 2014 and 2013	63
Notes to Consolidated Financial Statements	65
(a)(2) Financial Statement Schedules. Financial statements schedules are omitted because they are not required or applicable or the required information is included in the consolidated financial statements or notes thereto.
(a)(3) Exhibits. The list of exhibits in the Exhibit Index to this Annual Report on Form 10-K is incorporated herein by reference.	88

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GREEN BRICK PARTNERS, INC.

INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS



Green Brick Partners, Inc. - Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm	59
Consolidated Balance Sheets, December 31, 2015 and 2014	60
Consolidated Statements of Income for the years ended December 31, 2015, 2014 and 2013	61
Consolidated Statements of Changes in Stockholders' Equity for the years ended December 31, 2015, 2014 and 2013	62
Consolidated Statements of Cash Flows for the years ended December 31, 2015, 2014 and 2013	63
Notes to Consolidated Financial Statements	65

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders

Green Brick Partners, Inc.

We have audited the accompanying consolidated balance sheets of Green Brick Partners, Inc. (formerly named BioFuel Energy Corp.) (a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2015 and 2014, and the related consolidated statements of income, changes in stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2015. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Green Brick Partners Inc., and subsidiaries, as of December 31, 2015 and 2014, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2015 in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company’s internal control over financial reporting as of December 31, 2015, based on criteria established in the 2013 Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated March 30, 2016, expressed an adverse opinion thereon.

/s/ GRANT THORNTON LLP

Dallas, Texas

March 30, 2016

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GREEN BRICK PARTNERS, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)



	As of December 31,
	2015		2014
Assets
Cash and cash equivalents	$	19,909	$	21,267
Restricted cash	1,392		1,709
Accounts receivable	3,314		749
Inventory	344,132		275,141
Investment in direct financing leases	—		2,768
Property and equipment, net	802		791
Earnest money deposits	17,845		6,676
Deferred income tax assets, net	80,663		89,197
Other assets	5,819		2,027
Total assets	$	473,876	$	400,325
Liabilities and stockholders’ equity
Accounts payable	$	13,530	$	13,551
Accrued expenses	5,719		11,299
Customer and builder deposits	6,938		9,752
Obligations related to land not owned under option agreements	18,176		7,914
Borrowings on lines of credit	47,500		14,061
Notes payable	10,158		12,151
Term loan facility	—		150,000
Total liabilities	102,021		218,728
Commitments and contingencies (Note 13)	—		—
Stockholders’ equity
Green Brick Partners, Inc. stockholders’ equity
Common shares, $0.01 par value: 100,000,000 shares authorized; 48,833,323 and 31,346,084 issued and outstanding as of December 31, 2015 and 2014, respectively	488		313
Additional paid-in capital	271,867		101,626
Retained earnings	87,177		69,919
Total Green Brick Partners, Inc. stockholders’ equity	359,532		171,858
Noncontrolling interests	12,323		9,739
Total stockholders’ equity	371,855		181,597
Total liabilities and stockholders’ equity	$	473,876	$	400,325

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

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GREEN BRICK PARTNERS, INC.

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)



	For the Year Ended December 31,
	2015			2014			2013
Sale of residential units	$	254,267		$	200,650		$	168,591
Sale of land and lots	36,878			45,452			33,735
Total revenues	291,145			246,102			202,326
Cost of residential units	196,529			149,809			122,781
Cost of land and lots	27,125			34,082			21,513
Total cost of sales	223,654			183,891			144,294
Total gross profit	67,491			62,211			58,032
Salary expense	(20,685		)	(14,868		)	(10,251		)
Management fees expense – related party	—			(1,266		)	(1,016		)
Selling, general and administrative expense	(13,665		)	(10,099		)	(6,623		)
Operating profit	33,141			35,978			40,142
Interest expense	(281		)	(1,393		)	(315		)
Depreciation and amortization expense	(865		)	(291		)	(127		)
Interest and fees income	—			265			2,503
Interest on direct financing leases income	13			781			1,039
Profit participation on notes receivable	—			—			597
Other income, net	2,708			869			804
Income before taxes	34,716			36,209			44,643
Income tax provision (benefit)	9,171			(24,853		)	327
Net income	25,545			61,062			44,316
Less: net income attributable to noncontrolling interests	10,220			11,036			12,309
Net income attributable to Green Brick Partners, Inc.	$	15,325		$	50,026		$	32,007

Net income attributable to Green Brick Partners, Inc. per common share:
Basic	$0.38			$3.40			$2.88
Diluted	$0.38			$3.40			$2.88
Weighted average common shares used in the calculation of net income attributable to Green Brick Partners, Inc. per common share:
Basic	40,068			14,712			11,109
Diluted	40,099			14,712			11,109

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

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GREEN BRICK PARTNERS, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(In thousands, except share data)



	Common Stock			Additional Paid-in Capital			Retained Earnings			Total Green Brick Partners, Inc. Stockholders’ Equity			Noncontrolling Interests			Total Stockholders’ Equity
	Shares	Amount		Additional Paid-in Capital			Retained Earnings			Total Green Brick Partners, Inc. Stockholders’ Equity			Noncontrolling Interests			Total Stockholders’ Equity
Balance at December 31, 2012	11,108,500	$	111	$	98,699		$	20,485		$	119,295		$	2,393		$	121,688
Contributions	—	—		57,286			—			57,286			1,756			59,042
Distributions	—	—		—			(19,478		)	(19,478		)	(6,749		)	(26,227		)
Net income	—	—		—			32,007			32,007			12,309			44,316
Balance at December 31, 2013	11,108,500	$	111	$	155,985		$	33,014		$	189,110		$	9,709		$	198,819
Share-based compensation	—	—		40			—			40			—			40
Common stock issued in private and public offering	14,000,000	140		69,860			—			70,000			—			70,000
Issuance of common stock for reverse recapitalization	6,237,584	62		(124,259		)	—			(124,197		)	—			(124,197		)
Contributions	—	—		—			—			—			787			787
Distributions	—	—		—			(13,121		)	(13,121		)	(11,793		)	(24,914		)
Net income	—	—		—			50,026			50,026			11,036			61,062
Balance at December 31, 2014	31,346,084	$	313	$	101,626		$	69,919		$	171,858		$	9,739		$	181,597
Share-based compensation	—	—		383			—			383			—			383
Issuance of common stock under 2014 Equity Plan	42,342	—		91			—			91			—			91
Issuance of common stock in connection with secondary offering, net of issuance costs	17,444,897	175		169,767			—			169,942			—			169,942
Contributions	—	—		—			—			—			87			87
Distributions	—	—		—			—			—			(7,723		)	(7,723		)
Out-of-period adjustment	—	—		—			1,933			1,933			—			1,933
Net income	—	—		—			15,325			15,325			10,220			25,545
Balance at December 31, 2015	48,833,323	$	488	$	271,867		$	87,177		$	359,532		$	12,323		$	371,855

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

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GREEN BRICK PARTNERS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)



	For the Year Ended December 31,
	2015			2014			2013
Cash flows from operating activities:
Net income	$	25,545		$	61,062		$	44,316
Adjustment to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization expense	865			291			127
Share-based compensation	474			40			—
Deferred income taxes, net	8,352			(25,338		)	—
Changes in operating assets and liabilities
Decrease (increase) in restricted cash	317			(326		)	(1,063		)
Increase in accounts receivable	(2,566		)	(303		)	(333		)
Increase in inventory	(58,728		)	(38,026		)	(96,630		)
Increase in earnest money deposits	(11,169		)	(3,384		)	(1,983		)
Increase in other assets	(4,361		)	(828		)	(982		)
(Decrease) increase in accounts payable	(21		)	4,898			4,137
(Decrease) increase in accrued expenses	(3,465		)	4,706			3,957
Decrease in customer and builder deposits	(2,814		)	(1,022		)	(1,445		)
Net cash (used in) provided by operating activities	(47,571		)	1,770			(49,899		)
Cash flows from investing activities:
Proceeds from sale of investment in direct financing leases	2,768			5,581			3,168
Issuance of notes receivable	—			(1,600		)	(4,201		)
Repayments of notes receivable	—			9,156			11,917
Acquisition of property and equipment	(307		)	(520		)	(98		)
Net cash provided by investing activities	2,461			12,617			10,786
Cash flows from financing activities:
Cash received as part of reverse recapitalization	—			31,916			—
Borrowings from lines of credit	86,000			19,000			39,000
Proceeds from notes payable	3,206			7,989			21,462
Repayments of lines of credit	(52,561		)	(22,147		)	(28,336		)
Repayments of notes payable	(5,199		)	(22,434		)	(16,309		)
Repayment of term loan facility	(150,000		)	—			—
Proceeds from equity offering, net of issuance costs	169,942			—			—
Contributions from controlling interests	—			—			57,286
Contributions from noncontrolling interests	87			787			1,756
Distributions to controlling interests	—			(13,121		)	(19,478		)
Distributions to noncontrolling interests	(7,723		)	(11,793		)	(6,749		)
Net cash provided by (used in) financing activities	43,752			(9,803		)	48,632
Net (decrease) increase in cash and cash equivalents	(1,358		)	4,584			9,519
Cash and cash equivalents at beginning of year	21,267			16,683			7,164
Cash and cash equivalents at end of year	$	19,909		$	21,267		$	16,683

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Supplemental disclosure of cash flow information:
Cash paid for interest, net of capitalized interest	$	2,764		$	1,433		$	497
Cash paid for taxes	$	1,339		$	636		$	665
Supplemental disclosure of noncash investing and financing activities:
Increase in land not owned under option agreements	$	(8,935	)	$	(7,279	)	$	—
Accrued debt issuance costs	$	52		$	235		$	—
Out-of-period equity adjustment	$	1,933		$	—		$	—

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

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GREEN BRICK PARTNERS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION AND BASIS OF PRESENTATION

When used in these notes, references to the “Company”, “Green Brick”, “we”, “us” or “our” refer to the combined company, which has been renamed Green Brick Partners, Inc. and its subsidiaries, resulting from the acquisition by BioFuel Energy Corp. and its then consolidated subsidiaries (“BioFuel”) of JBGL Builder Finance LLC and its consolidated subsidiaries and affiliated companies (collectively “Builder Finance”), and JBGL Capital Companies (“Capital”), a combined group of commonly managed limited liability companies and partnerships (collectively with Builder Finance, “JBGL”) by means of a reverse recapitalization transaction on October 27, 2014.

The cash portion of the purchase price was primarily funded from the proceeds of a $70.0 million rights offering conducted by the Company (the $70.0 million includes proceeds from purchases of shares of common stock by certain funds and accounts managed by Greenlight Capital, Inc. and its affiliates (“Greenlight”) and Third Point LLC and its affiliates (“Third Point”)) and $150.0 million of debt financing provided by Greenlight pursuant to a loan agreement, with the lenders from time to time party thereto (the “Loan Agreement”). In 2015, the Loan Agreement was repaid in full.

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As a result of the Transaction, Green Brick changed its business direction and is now in the real estate industry. We are a uniquely structured company that combines residential land development and homebuilding. We acquire and develop land, provide land and construction financing to our controlled builders and participate in the profits of our controlled builders. Our core markets are in the high growth U.S. metropolitan areas of Dallas, Texas and Atlanta, Georgia. We are engaged in all aspects of the homebuilding process, including land acquisition and development, entitlements, design, construction, marketing and sales and the creation of brand images at our residential neighborhoods and master planned communities.

The consolidated financial statements set forth in this Annual Report on Form 10-K consist of JBGL and BioFuel Energy, LLC. The consolidated financial statements for all periods prior to the reverse recapitalization are the historical financial statements of JBGL, and have been retroactively restated to give effect to the Transaction.

Basis of Presentation and Principles of Consolidation

The consolidated financial statements include the historic accounts of JBGL and are consolidated with Green Brick beginning October 27, 2014. All intercompany balances and transactions have been eliminated in consolidation. Investments in which the Company directly or indirectly has an interest of more than 50 percent and/or is able to exercise control over the operations have been fully consolidated and noncontrolling interests are stated separately in the consolidated financial statements as required under the provisions of FASB ASC 810, Consolidations. The Company has created subsidiaries for each significant community and or project in which it invests. We had ninety-two subsidiaries as of December 31, 2015.

2. SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of the consolidated financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes, including the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all cash and short term liquid investments with original maturities of 90 days or less to be cash and cash equivalents. The cash balances of the Company are held in multiple financial institutions. At times, cash and cash equivalent balances at certain banks and financial institutions may exceed insurable amounts. The Company believes it mitigates this risk by monitoring the financial stability of institutions holding material cash balances. The Company has not experienced any losses in such accounts and believes that the risk of loss is minimal.

Restricted Cash

Restricted cash primarily relates to refundable customer deposits, some of which are held in escrow.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable represent amounts due from customers and third parties originating during the normal course of business. As of December 31, 2015 and 2014, all amounts are considered fully collectible and no allowance for doubtful accounts is recorded. The allowance for doubtful accounts is estimated based on our historical losses, the existing economic conditions, and the financial stability of our customers. Receivables are written-off in the period that they are deemed uncollectible.

Inventory and Cost of Sales

Inventory consists of land in the process of development, undeveloped land, developed lots, completed homes, raw land scheduled for development, and land not owned under option agreements in Texas and Georgia. Inventory is valued at cost unless the carrying value is determined to be not recoverable in which case the affected inventory is written down to fair value. Cost includes any related pre-acquisition costs that are directly identifiable with a specific property so long as those pre-acquisition costs are recoverable at the sale of the property.

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Land, development and other project costs, including interest and property taxes incurred during development and home construction, are capitalized. Land development and other common costs that benefit an entire community are allocated to individual lots or homes based on relative sales value. The costs of lots are transferred to work in progress when home construction begins. Home construction costs and related carrying charges (principally interest and property taxes) are allocated to the cost of individual homes using the specific identification method.

Inventory costs for completed homes are expensed as cost of sales as homes are sold. Changes to estimated total development costs subsequent to initial home closings in a community are generally allocated to the unsold homes in the community on a pro-rata basis. The life cycle of a community generally ranges from two to six years, commencing with the acquisition of land, continuing through the land development phase, construction, and concluding with the sale and delivery of homes.



	As of December 31,
	2015		2014
Completed home inventory and residential lots held for sale	$	85,342	$	58,846
Work in process	236,383		192,796
Undeveloped land	6,193		16,220
Land not owned under option agreements	16,214		7,279
Total Inventory	$	344,132	$	275,141

Impairment of Real Estate Inventory

For our builder operations segment, due largely to the relatively short construction periods of homes (generally ranging from five to nine months) in the communities, our growth over the past four years, and the favorable conditions of the housing market since 2011, we have not experienced any circumstances during the years ended December 31, 2015 and December 31, 2014 that are indicators of potential impairment within our builder operations segment. During each reporting period, community gross margins are reviewed by management. In the event that inventory in an individual community is moving at a slower than anticipated absorption pace or the average sales prices or margins within an individual community are trending downward and are anticipated to continue to trend downward over the life of the community, the Company will further investigate these communities and evaluate them for impairment.

Each reporting period, the Company reviews our real estate assets to determine whether the estimated remaining future cash flows of the development are more or less than the asset’s carrying value. The estimated cash flows are determined by projecting the remaining sales revenue from lot sales based on the contractual lot takedowns remaining or historical/projected home sales/delivery absorptions for homebuilding operations and then comparing that to the remaining projected expenditures for development or home construction. Remaining projected expenditures are based on the most current pricing/bids received from subcontractors for current phases or homes under development. For future phases of land development, management uses its best judgment to project potential cost increases. Management has typically assumed 5 – 10% cost increases on future phases, assuming no bids have been received from subcontractors. When projecting sales revenue, management does not assume improvement in market conditions.

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When estimating cash flows of a community, the Company makes various assumptions, including: (i) expected sales prices and sales incentives to be offered, including the number of homes available, pricing and incentives being offered by us or other builders in other communities, and future sales price adjustments based on market and economic trends; (ii) expected sales pace and cancellation rates based on local housing market conditions, competition and historical trends; (iii) costs expended to date and expected to be incurred including, but not limited to, land and land development costs, home construction costs, interest costs, indirect construction and overhead costs, and selling and marketing costs; (iv) alternative product offerings that may be offered that could have an impact on sales pace, sales price and/or building costs; and (v) alternative uses for the property. Many assumptions are interdependent and a change in one may require a corresponding change to other assumptions. For example, increasing or decreasing sales absorption rates has a direct impact on the estimated per unit sales price of a home, the level of time-sensitive costs (such as indirect construction, overhead and carrying costs), and selling and marketing costs (such as model maintenance costs and advertising costs). Due to uncertainties in the estimation process, the significant volatility in demand for new housing and the long life cycle of many communities, actual results could differ significantly from such estimates.

For the years ended December 31, 2015 and 2014, the Company has not identified any indicators of impairment or changes in circumstances that may indicate that the carrying amount of an asset may be impaired.

Capitalization of Interest

The Company capitalizes interest costs incurred to inventory during active development and other qualifying activities. Interest capitalized as cost of inventory is charged to cost of sales as related homes, land and/or lots are closed. Interest incurred on undeveloped land is directly expensed and included in interest expense in our consolidated statements of income.

Interest costs incurred, capitalized and expensed were as follows (in thousands):



	2015			2014			2013
Interest capitalized at beginning of year	$	3,713		$	1,065		$	53
Interest incurred	9,625			4,146			1,380
Interest charged to cost of sales	(3,972		)	(105		)	(53		)
Interest charged to interest expense	(281		)	(1,393		)	(315		)
Interest capitalized at end of year	$	9,085		$	3,713		$	1,065

Earnest Money Deposits

The Company accounts for variable interest entities in accordance with ASC Topic 810, Consolidation (“ASC 810”). Under ASC 810, an entity is a variable interest entity (“VIE”) when: (a) the equity investment at risk in the entity is not sufficient to permit the entity to finance its activities without additional subordinated financial support provided by other parties, including the equity holders; (b) the entity’s equity holders as a group either (i) lack the direct or indirect ability to make decisions about the entity, (ii) are not obligated to absorb expected losses of the entity or (iii) do not have the right to receive expected residual returns of the entity; or (c) the entity’s equity holders have voting rights that are not proportionate to their economic interests, and the activities of the entity involve or are conducted on behalf of the equity holder with disproportionately few voting rights.

If an entity is deemed to be a VIE pursuant to ASC 810, an enterprise that has both: (i) the power to direct the activities of a VIE that most significantly impact the entity’s economic performance; and (ii) the obligation to absorb the expected losses of the entity or right to receive benefits from the entity that could be potentially significant to the VIE, is considered the primary

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beneficiary and must consolidate the VIE. In accordance with ASC 810, the Company performs ongoing reassessments of whether an enterprise is the primary beneficiary of a VIE.

In the ordinary course of business, the Company enters into land option agreements in order to procure land for the construction of homes in the future. Pursuant to these land option agreements, the Company generally provides a deposit to the seller as consideration for the right to purchase land at different times in the future, usually at predetermined prices. Such contracts enable the Company to defer acquiring portions of properties owned by third parties or unconsolidated entities until the Company has determined whether and when to exercise its option, which reduces the Company’s financial risks associated with long-term land holdings. Option deposits and pre-acquisition costs (such as environmental testing, surveys, engineering, and entitlement costs) are capitalized if the costs are directly identifiable with the land under option and acquisition of the property is probable. Such costs are reflected in other assets and are reclassified to inventory upon taking title to the land. The Company writes off deposits and pre-acquisition costs when it becomes probable that the Company will not go forward with the project or recover the capitalized costs. Such decisions take into consideration changes in local market conditions, the timing of required land takedowns, the availability and best use of necessary incremental capital, and other factors. As of December 31, 2015, the Company had land option agreements with potential purchase payments through 2019.

Under ASC 810, a non-refundable deposit paid to an entity is deemed to be a variable interest that will absorb some or all of the entity’s expected losses if they occur and, as such, the Company’s land option agreements are considered variable interests. The Company’s land options agreement deposits along with any related pre-acquisition costs represent the Company’s maximum exposure to the land seller if the Company elects not to purchase the optioned property. Therefore, whenever the Company enters into a land option or purchase contract with an entity and makes a non-refundable deposit, a VIE assessment is reviewed. However, the Company generally has little control or power to direct the activities that most significantly impact the VIE's economic performance due to the Company’s lack of an equity interest in them. Additionally, creditors of the VIE typically have no recourse against the Company, and the Company does not provide financial or other support to these VIEs other than as stipulated in the land option agreements. In accordance with ASC 810, the Company performs ongoing reassessments of whether the Company is the primary beneficiary of a VIE. As a result of the foregoing, the Company was not required to consolidate any VIE as of December 31, 2015 and 2014.

Sales with Option to Repurchase

The Company sold land and then entered into land option contracts to repurchase the land from the buyers. Our utilization of land option contracts is dependent on, among other things, the availability of land sellers willing to enter into these arrangements, the availability of capital to finance the development of optioned lots, general housing market conditions, and local market dynamics. Options may be more difficult to procure from land sellers in strong housing markets and are more prevalent in certain geographic regions. For accounting purposes in accordance with ASC 360-20-40-38, Property, Plant, and Equipment, these transactions are considered a financing rather than a sale. As a result, the Company recorded $16.2 million and $7.3 million at December 31, 2015 and 2014, respectively, to land not owned under option agreements with a corresponding increase to obligations related to land not owned under option agreements on the consolidated balance sheets.

Investment in Direct Financing Leases

Through December 31, 2014, the Company entered into a series of direct finance leases for a portfolio of model homes. The Company leased these model homes to the entity that it acquired the homes from. The lessee had the option to repurchase the model homes at a predetermined price. The direct financing leases bore interest at rates from 10% to 12%. The lease payments were recorded as interest on direct financing leases income in the consolidated statements of income. All direct financing leases were sold in 2015.

Property and Equipment, Net

Property and equipment are stated at cost less accumulated depreciation. Repairs and maintenance are expensed as incurred. Depreciation is computed over the estimated useful lives of the assets using the straight line method. The estimated useful lives of assets range from three to ten years.

Customer and Builder Deposits

The Company typically requires customers to submit a deposit for home purchases and for builders to submit a deposit in connection with their construction loan agreements. The deposits serve as a guarantee to performance under home purchase and building contracts. Cash received as customer deposits are shown as restricted cash on the consolidated balance sheets.

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Warranties

The Company accrues an estimate of its exposure to warranty claims based on both current and historical home sales data and warranty costs incurred. The Company offers homeowners a comprehensive third party warranty on each home. Homes are generally covered by a ten year warranty for qualified and defined structural defects, one year for defects and products used, and two years for electrical, mechanical and plumbing systems. The Company accrues between $250 and $800 per home closed for future warranty claims, and evaluates the adequacy of the reserve annually. Warranty accruals are included within accrued expenses on the consolidated balance sheets.

Net Income Attributable to Green Brick Partners, Inc. per Share

The Company's restricted stock awards have the right to receive forfeitable dividends on an equal basis with common stock and therefore are not considered participating securities that must be included in the calculation of net income per share using the two-class method. Basic earnings per share is computed by dividing net income by the weighted average number of common shares outstanding during each period, adjusted for non-vested shares of restricted stock awards during each period. Diluted earnings per share is calculated using the treasury stock method and includes the effect of all dilutive securities, including stock options and restricted stock awards.

The computation of basic and diluted net income attributable to Green Brick Partners, Inc. per share using the treasury stock method is as follows (in thousands, except per share amounts):



	Years End December 31,
	2015		2014		2013
Basic net income attributable to Green Brick Partners, Inc. per share
Net income attributable to Green Brick Partners, Inc. —basic	$	15,325	$	50,026	$	32,007
Weighted-average number of shares outstanding —basic	40,068		14,712		11,109
Basic net income attributable to Green Brick Partners, Inc. per share	$	0.38	$	3.40	$	2.88
Diluted net income attributable to Green Brick Partners, Inc. per share
Net income attributable to Green Brick Partners, Inc. —diluted	$	15,325	$	50,026	$	32,007
Weighted-average number of shares used to compute basic net income attributable to Green Brick Partners, Inc.	40,068		14,712		11,109
Dilutive effect of stock options and restricted stock awards	30		—		—
Weighted-average number of shares outstanding —diluted	40,099		14,712		11,109
Diluted net income attributable to Green Brick Partners, Inc. per share	$	0.38	$	3.40	$	2.88

The following securities that could potentially dilute earnings per share in the future are not included in the determination of diluted net income attributable to Green Brick Partners, Inc. per common share (in thousands):



	Years End December 31,
	2015	2014	2013
Antidilutive options to purchase common stock	62	129	—

Revenue Recognition

Revenue from sales of residential units, land and lots are not recognized until a sale is deemed to be consummated. Consummation is defined as: a) when the parties are bound by the terms of a contract; b) all net consideration has been exchanged; c) any permanent financing for which the seller is responsible has been arranged; d) continuing investment is adequate to demonstrate a commitment to pay for the home; and e) all conditions precedent to closing have been performed. Generally, consummation does not happen until a sale has closed. When the earnings process is complete and a sale has closed, income is recognized under the full accrual method which allows full recognition of the gain on the sale at the time of closing.

Cost Recognition

Lot acquisition, materials, direct costs, interest and indirect costs related to the acquisition, development, and construction of lots and homes are capitalized. Direct and indirect costs of developing residential lots are allocated evenly to all applicable lots. Capitalized costs of residential lots are charged to earnings when the related revenue is recognized. Costs in connection with developed lots and completed homes and other selling and administrative costs are charged to earnings when incurred.

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Advertising Expense

The Company expenses advertising as incurred. Advertising costs are included in selling, general and administrative expense in the consolidated statements of income. Advertising expense for the years ended December 31, 2015, 2014 and 2013 totaled $0.5 million, $0.4 million and $0.5 million, respectively.

Debt Issuance Costs

Debt issuance costs of $0.8 million and $0.4 million at December 31, 2015 and December 31, 2014, represent costs incurred related to the new revolving credit facility and the Term Loan Facility, respectively, as defined in Note 7, and are included as part of other assets on the consolidated balance sheets. $0.2 million of the debt issuance costs incurred during the year ended December 31, 2014 was included in accrued expenses on the consolidated balance sheet at December 31, 2014. These costs are amortized straight line through interest expense over the term of the related debt facility.

Share-Based Compensation

The Company measures and accounts for share-based awards in accordance with ASC Topic 718, “Compensation - Stock Compensation”. The Company expenses share-based payment awards made to employees and directors, including stock options and restricted stock awards. Share-based compensation expense associated with stock options and restricted stock awards with vesting contingent upon the achievement of service conditions is recognized on a straight-line basis, net of estimated forfeitures, over the requisite service period the awards are expected to vest. The Company estimates the value of stock options with vesting contingent upon the achievement of service conditions as of the date the award was granted using the Black-Scholes option pricing model. The Black-Scholes option-pricing model requires the use of certain input variables, such as expected volatility, risk-free interest rate and expected award life.

Income Taxes

Until October 27, 2014, JBGL (the accounting acquirer of Green Brick) was not a taxable entity for U.S. federal and state income tax purposes with the exception of Texas. Taxes on its net income were borne by its members through the allocation of taxable income. Upon completion of the reverse recapitalization of Green Brick, JBGL became part of a consolidated taxable entity. The Transaction resulted in the change of JBGL’s tax status that resulted in the recognition of a one-time income tax benefit in the consolidated statement of income of approximately $26.6 million in the year ended December 31, 2014.

BioFuel had approximately $182.3 million of federal net operating loss carryforwards and approximately $21.6 million of state net operating loss carryforwards as of the Transaction Date. The Company re-assessed the need for a valuation allowance as of the Transaction Date and concluded, on a more-likely-than-not basis, that the deferred income tax assets, except for the state loss carryforwards, would be realized, giving consideration to the historical, current year and projected operating results of Green Brick. As a result of the re-assessment, the Company recorded $63.9 million of net deferred income tax assets at the Transaction Date, with an offset in additional paid-in-capital. The effect of the re-assessment had no impact on income tax expense.

The Company accounts for income taxes using the asset and liability method, under which deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases, operating losses and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in years in which temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company regularly reviews historical and anticipated future pre-tax results of operations to determine whether we will be able to realize the benefit of deferred tax assets. A valuation allowance is required to reduce the deferred tax asset when it is more-likely-than-not that all or some portion of the deferred tax asset will not be realized due to the lack of sufficient taxable income. The Company establishes reserves for uncertain tax positions that reflect its best estimate of deductions and credits that may not be sustained on a more-likely-than-not basis.

As of December 31, 2015, we had deferred tax assets of $80.7 million, which was net of a valuation allowance in the amount of $1.2 million relating to state loss carryforwards. The deferred tax assets are primarily related to $55.6 million for federal net operating loss carryforwards and $24.8 million for basis in partnerships. For accounting purposes, a valuation allowance is required to reduce a deferred tax asset if it is determined that it is more-likely-than-not that all or some portion of the deferred tax asset will not be realized due to the lack of sufficient taxable income or other limitation on the Company’s ability to utilize the loss carryforward. Prior to the Transaction, BioFuel had recorded a valuation allowance against the full

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value of the deferred tax assets related to federal and state net operating losses due to a history of operating losses. The valuation allowance attributable to deferred tax assets other than the state loss carryforwards recorded by BioFuel prior to the Transaction Date was reversed through equity on the Transaction Date.

The net operating loss carryforwards will begin to expire beginning with the year ending December 31, 2029. The Company’s ability to utilize its net operating loss carryforwards will depend on the amount of taxable income that the Company generates in future periods. Based on our 2015, 2014, and 2013 taxable income results and forecast projections of taxable income, Company management expects that the Company should generate sufficient taxable income to utilize substantially all of the net operating loss carryforwards before they expire. The Company will continue to evaluate the appropriateness of a valuation allowance in future periods based on the consideration of all available evidence, including the generation of taxable income, using the more-likely-than-not standard.

Fair Value Measurements

The Company has adopted and implemented the provisions of FASB ASC 820-10, Fair Value Measurements, with respect to fair value measurements of: (a) all elected financial assets and liabilities; and (b) any nonfinancial assets and liabilities that are recognized or disclosed in the consolidated financial statements at fair value on a recurring basis (at least annually). Under FASB ASC 820-10, fair value is defined as an exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. These provisions establish a three-tiered fair value hierarchy that prioritizes inputs to valuation techniques used in fair value calculations. The three levels of input are defined as follows:



Level 1 —	unadjusted quoted prices for identical assets or liabilities in active markets accessible by the Company;

Level 2 —	inputs that are observable in the marketplace other than those classified as Level 1; and

Level 3 —	inputs that are unobservable in the marketplace and significant to the valuation.

At December 31, 2015 and 2014 there were no assets or liabilities carried at fair value.

Noncontrolling Interests

We own 50% controlling interests in several builders. The financial statements of these builders are consolidated in our consolidated financial statements. The noncontrolling interests attributable to the 50% minority interests not owned by us are included as part of noncontrolling interests on the consolidated balance sheets.

Segment Information

The Company’s operations are organized into two reportable segments: builder operations and land development. Builder operations consist of two operating segments: Texas and Georgia. In accordance with ASC 280, Segment Reporting, in determining the most appropriate reportable segments, we considered similar economic and other characteristics, geography including product types, production processes, average selling prices, gross profits, suppliers, land acquisition results, and underlying demand and supply.

Reclassifications

Model home furnishings for the year ended December 31, 2014 has been reclassified from property and equipment, net in the accompanying consolidated balance sheet to inventory to conform with the current year presentation. Depreciation of model home furnishings for the years ended December 31, 2014 and December 31, 2013 has been reclassified from depreciation and amortization expense in the accompanying consolidated statements of income to cost of residential units to conform to the current year presentation. As of December 31, 2014, a reclassification in the amount of $11.8 million was made from work in process to completed home inventory and residential lots held for sale to conform with the current year presentation.

Out-of-Period Adjustment

During the fourth quarter ended December 31, 2015, the Company recorded an out-of-period adjustment associated with a $1.9 million overaccrual of distributions payable recorded during the fourth quarter ended December 31, 2014. As a result, as of

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December 31, 2014, accrued expenses was overstated and retained earnings were understated by $1.9 million. After evaluating the quantitative and qualitative aspects of the out-of-period adjustment, management has determined that the adjustment is not material to the current year or any prior period financial statements.

Recent Accounting Pronouncements

In May 2014, FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The standard will replace most existing revenue recognition guidance in GAAP when it becomes effective. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which delayed the effective date of ASU No. 2014-09 by one year. ASU No. 2014-09 is effective for the Company beginning on January 1, 2018. Early adoption is permitted for reporting periods beginning after December 15, 2016. The standard permits the use of either the full retrospective approach or the modified retrospective approach. The Company has not yet selected a transition method and is currently evaluating the effect that the standard will have on its consolidated financial statements and related disclosures.

In February 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis, which amends the consolidation requirements in ASC 810, primarily related to limited partnerships and VIEs. The standard is effective for the Company beginning on January 1, 2016. Early adoption is permitted. The Company does not believe that the adoption of this standard will have a material effect on its consolidated financial statements and related disclosures.

In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs, which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The standard is effective for the Company beginning on January 1, 2016. Early adoption is permitted for financial statements that have not been previously issued. This standard is to be applied on a retrospective basis and represents a change in accounting principle. The Company does not believe that the adoption of this standard will have a material effect on its consolidated financial statements and related disclosures.

In August 2015, the FASB issued ASU No. 2015-15, Interest — Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements — Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting, which clarifies the treatment of debt issuance costs from line-of-credit arrangements after the adoption of ASU No. 2015-03. The standard clarifies that the SEC staff would not object to an entity deferring and presenting debt issuance costs related to a line-of-credit arrangement as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of such arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The Company does not believe that the adoption of this standard will have a material effect on its consolidated financial statements and related disclosures.

In November 2015, the FASB issued ASU No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, as part of its simplification initiative. The standard amends the existing guidance to require that deferred income tax liabilities and assets be classified as noncurrent in a classified balance sheet, and eliminates the prior guidance which required an entity to separate deferred tax liabilities and assets into a current amount and a noncurrent amount in a classified balance sheet. The standard is effective for the Company beginning on January 1, 2017. Early adoption is permitted as of the beginning of an interim or annual period. Additionally, the new guidance may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. The Company does not believe that the adoption of this standard will have a material effect on its consolidated financial statements and related disclosures.

3. REVERSE RECAPITALIZATION

The authorized common stock of the Company consists of 100,000,000 shares with a $0.01 par value.

On June 10, 2014, the Company entered into a definitive transaction agreement with the owners of JBGL, which provided that we would acquire JBGL for $275 million, payable in cash and shares of our common stock. The Transaction was completed on October 27, 2014. Pursuant to the terms of the Transaction, we paid the $275 million purchase price with approximately $191.8 million in cash and the remainder in 11,108,500 shares of our common stock valued at approximately $7.49 per share.

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After giving effect to the Transaction, there were 31,346,084 shares of our common stock outstanding. Prior to the Transaction, we were a non-operating public shell company with nominal operations and assets consisting of cash, deferred tax assets, and nominal other nonoperating assets.

For accounting purposes, this transaction is being accounted for as a reverse recapitalization and has been treated as a recapitalization of JBGL, the accounting acquirer. JBGL's financial statements became the financial statements of the registrant The Company did not recognize goodwill or any intangible assets in connection with the transaction. The historical financial consolidated statements of the Company are those of JBGL. From the date of the Transaction and subsequent, the consolidated financial statements include the results of the consolidated entities of the Company.

For financial reporting purposes, the 11,108,500 shares issued by BioFuel in conjunction with the Transaction have been presented as outstanding for all periods. All share and per share amounts have been retroactively restated to the earliest periods presented to reflect the transaction. The contributions from and distributions to equity holders during the periods presented were contributed from and distributed to equity holders whom were members of JBGL pre-Transaction.

The following table summarizes the net identifiable liabilities of BioFuel retained on the Transaction Date (in thousands):



Cash	$	31,916
Deferred tax assets	65,020
Deferred tax assets valuation allowance	(1,161		)
Other assets	591
Debt	(150,000		)
Other liabilities	(312		)
Net liabilities acquired	$	(53,946	)

BioFuel incurred acquisition costs of approximately $3.2 million included in additional paid-in-capital on our consolidated balance sheet for the year ended December 31, 2014. Since the transaction was considered a reverse recapitalization, the presentation of pro-forma financial information was not required.

4. PROPERTY AND EQUIPMENT

The following is a summary of property and equipment and related accumulated depreciation by major classification as of December 31, 2015 and 2014 (in thousands):



	December 31, 2015			December 31, 2014
Office furniture and equipment	$	258		$	196
Leasehold improvements	595			—
Computers and equipment	108			465
Field trailers	10			10
Design center	470			470
	1,441			1,141
Less: accumulated depreciation	(639		)	(350		)
Total property and equipment, net	$	802		$	791

Depreciation expense for the years ended December 31, 2015, 2014 and 2013 totaled $0.3 million, $0.2 million, and $0.1 million, respectively.

5. EQUITY OFFERING

On July 1, 2015, the Company completed an underwritten public offering of 17,000,000 shares of its common stock at a price to the public of $10.00 per share and granted to the underwriters a 30-day option to purchase up to an aggregate of 841,500 additional shares of common stock to cover over-allotments (the “Equity Offering”). On July 23, 2015, the underwriters exercised the option and purchased 444,897 additional shares. All of the shares were sold by the Company pursuant to an effective shelf registration statement previously filed with the SEC.

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The Equity Offering resulted in net proceeds to Green Brick of approximately $170.0 million, after deducting underwriting discounts and offering expenses. On July 1, 2015, Green Brick used approximately $154.9 million of the net proceeds from the Equity Offering to repay all of the outstanding principal, interest and a prepayment premium under the Term Loan Facility. Upon repayment, the Term Loan Facility was terminated and all security interests in, and all liens held by Greenlight with respect to, the assets of Green Brick securing the amounts owed under the Term Loan Facility were terminated and released. Green Brick used the remaining net proceeds for working capital and general corporate purposes.

6. EARNEST MONEY DEPOSITS

Earnest money deposits act as security for option agreements for the purchase of land for the construction of homes in the future. As of December 31, 2015 and 2014, there were 1,084 and 1,082 lots under option, respectively, with a total exercise price of approximately $79.3 million and $71.6 million, respectively. The option agreements in place at December 31, 2015 and 2014 provide for potential land purchase payments in each year through 2019.

These lot option contracts do not have takedown schedules. If each option agreement in place at December 31, 2015 was exercised, expected land purchase payments under these agreements would be as follows (in thousands):



	Total
2016	$	40,667
2017	24,031
2018	13,047
2019	1,593
	$	79,338

7. DEBT

Term Loan Facility

Term loan facility outstanding at December 31, 2015 and 2014 consists of the following (in thousands):



	December 31, 2015		December 31, 2014
Term Loan Facility	$	—	$	150,000

On October 27, 2014, in connection with the Transaction, the Company entered into the Loan Agreement, a guaranty and a pledge and security agreement with certain funds and accounts managed by Greenlight, our largest shareholder. Greenlight beneficially owns approximately 49.4% of the voting power of the Company. The Loan Agreement provided for a five year term loan facility in an aggregate principal amount of $150.0 million which funded part of the Transaction (the “Term Loan Facility”). Certain subsidiaries of the Company guaranteed obligations under the Term Loan Facility pursuant to the guaranty.

The Term Loan Facility bore interest at 9.0% per annum, payable quarterly, from October 27, 2014 through the first anniversary thereof and 10.0% per annum thereafter. The Company had a one-time right to elect to pay up to four consecutive quarters’ interest in kind. The Term Loan Facility was subject to mandatory prepayment with 100% of the net cash proceeds received from the incurrence of certain debt by the Company or the issuance of certain equity securities. Voluntary prepayments of the Term Loan Facility were permitted at any time. All prepayments made prior to October 27, 2016 were subject to a 1.0% prepayment premium.

The Term Loan Facility was secured by a first priority lien on substantially all of our assets and substantially all of the assets, subject to certain exceptions, of each of the Company’s subsidiaries.

On July 1, 2015 we used approximately $154.9 million of the net proceeds from the Equity Offering to repay all of the outstanding principal, interest and a prepayment premium under the Term Loan Facility. Upon repayment, the Term Loan Facility was terminated. In connection with the termination of the Term Loan Facility, we wrote-off the remaining unamortized debt issuance costs of $0.4 million, which is included in depreciation and amortization expense in our consolidated statement of income for the year ended December 31, 2015. See Note 5 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for further discussion on the Equity Offering.

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Lines of Credit

Lines of credit outstanding at December 31, 2015 and 2014 consist of the following (in thousands):



	December 31, 2015		December 31, 2014
Promissory note to Inwood National Bank (“Inwood”):
Direct finance leases A⁽¹⁾	$	—	$	662
Direct finance leases B⁽²⁾	—		899
John’s Creek⁽³⁾	—		12,500
Revolving credit facility⁽⁴⁾	17,500		—
Unsecured revolving credit facility⁽⁵⁾	30,000		—
Total lines of credit	$	47,500	$	14,061


(1)	During 2012, a subsidiary of JBGL opened a line of credit (“LOC”) with Inwood in the amount of $4.8 million maturing on April 13, 2014, bearing interest at 4.0%, which was in effect three months ended March 31, 2015, and collateralized by the leased assets. The LOC was renewed during 2014 until April 13, 2015. This LOC was paid off as of March 31, 2015.


(2)	During 2012, a subsidiary of JBGL opened a LOC issued by Inwood in the amount of $3.0 million maturing on September 15, 2014, bearing interest at 4.0%, which was in effect for the three months ended March 31, 2015, and collateralized by the leased assets. The LOC was renewed until April 13, 2015. This LOC was paid off as of March 31, 2015.

(3)

(4)

On July 30, 2015, the Company replaced it's John's Creek credit facility with a new revolving credit facility with Inwood, which provides for up to $50.0 million and is secured by land owned in John’s Creek, Georgia, Allen, TX, and Carrollton, TX. The maturity date for the new revolving credit facility is July 30, 2017. The costs associated with the new revolving credit facility of $0.3 million were deferred and are included in other assets in our consolidated balance sheets. The Company is amortizing these debt issuance costs to interest expense over the term of the new revolving credit facility straight line. Amounts outstanding under the new revolving credit facility is secured by mortgages on real property and security interests in certain personal property (to the extent that such personal property is connected with the use and enjoyment of the real property) that is owned by certain of the Company's subsidiaries, including land owned in John’s Creek, Georgia, Allen, Texas, and Carrollton, Texas. The amounts outstanding under the new revolving credit facility are also guaranteed by certain of the Company's subsidiaries.

The new revolving credit facility is subject to a borrowing base limitation equal to the sum of 50% of the total value of land and 60% of the total value of lots owned by certain of the Company's subsidiaries, each as determined by an independent appraiser, with the value of land being restricted from being more than 50% of the borrowing base. Outstanding borrowings under the new revolving credit facility bear interest at a floating rate per annum equal to the rate announced by Bank of America, N.A., from time to time, as its “Prime Rate” (the “Index”) with such adjustments to the interest rate being made on the effective date of any change in the Index. Notwithstanding the foregoing, the interest may not, at any time, be less than 4% per annum or more than the lesser amount of 18% and the highest maximum rate allowed by applicable law. Beginning on August 30, 2015 and continuing on the 30th day of each consecutive month thereafter until the revolving credit facility matures on July 30, 2017, the Company must pay interest on the unpaid principal amount. The entire unpaid principal balance and any accrued but unpaid interest is due and payable on the maturity date.

Under the terms of the new revolving credit facility, the Company is required, among other things, to maintain minimum multiples of net worth in excess of the outstanding new revolving credit facility balance, minimum interest coverage and maximum leverage. The Company was in compliance with these financial covenants under the revolving credit facility as of December 31, 2015.

(5)

On December 15, 2015, the Company entered into a credit agreement with the lenders named therein, and Citibank, N.A., as administrative agent, providing for a senior, unsecured revolving credit facility with aggregate lending commitments of up to $40.0 million (“Unsecured Revolving Credit Facility”). Subject to certain terms and conditions, the Company may, at its option, prior to the termination date, increase the amount of the revolving credit facility up to a maximum aggregate amount of $75.0 million. Commitments under the Unsecured Revolving Credit Facility will be available until the period ending December 14, 2018, which period may be extended for additional one year periods, subject to the consent of the

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lenders and the satisfaction of certain other terms and conditions. Citibank, N.A. and Credit Suisse AG, Cayman Islands Branch have initially committed to provide $25.0 million and $15.0 million, respectively.

The costs associated with the Unsecured Revolving Credit Facility of $0.5 million were deferred and are included in other assets in our consolidated balance sheets. The Company is amortizing these debt issuance costs to interest expense over the term of the loan using the straight line method.

The Company will pay the lenders a commitment fee on the amount of the unused commitments on a quarterly basis at a rate per annum equal to 0.45%.

Additionally, under the terms of the Unsecured Revolving Credit Facility, the Company is required, among other things, to maintain compliance with various covenants, including financial covenants relating to a maximum Leverage Ratio, a minimum Interest Coverage Ratio, and a minimum Consolidated Tangible Net Worth, each as defined therein. The Company's compliance with these financial covenants is measured by calculations and metrics that are specifically defined or described by the terms of the Unsecured Revolving Credit Facility. The Company was in compliance with these covenants as of December 31, 2015.

Notes Payable

Notes payable outstanding at December 31, 2015 and 2014 consist of the following (in thousands):



	December 31, 2015		December 31, 2014
Notes payable to unrelated third parties:
Briar Ridge Investments, LTD⁽¹⁾	$	9,000	$	9,000
Lakeside DFW Land, LTD⁽²⁾	—		1,824
Lyons Equities, Inc. Trustee⁽³⁾	988		—
Centennial Park Richardson, LTD⁽⁴⁾	—		—
Subordinated Lot Notes⁽⁵⁾	170		1,327
Total notes payable	$	10,158	$	12,151


(1)	On December 13, 2013, a subsidiary of JBGL signed a promissory note for $9 million maturing at December 13, 2017, bearing interest at 6.0% collateralized by land purchased in Allen, Texas. Accrued interest at December 31, 2015 was $0.

(2)

On April 15, 2013, a subsidiary of JBGL signed a promissory note for $3.5 million maturing on January 22, 2014 bearing interest at 6.0% collateralized by land located in Denton, Texas. This note was paid in full during 2014. On April 16, 2014, a new promissory note was signed for $3.3 million maturing on April 30, 2015 bearing interest at 5.0% collateralized by land located in Denton, Texas. $1.5 million of this note was repaid in July 2014. This note was paid in full during the three months ended March 31, 2015.


(3)	On May 22, 2015, a subsidiary of JBGL signed a promissory note for $1.0 million maturing on May 22, 2016, bearing interest at 3.5% per annum collateralized by land located in Allen, TX.


(4)	On July 20, 2015, a subsidiary of JBGL signed a promissory note for $0.3 million maturing on April 20, 2016, bearing interest at 0.0% per annum collateralized by land located in Richardson, TX. This note was paid in full in October 2015.


(5)	Subsidiaries of the Company purchased lots under various agreements from unrelated third parties. The sellers of these lots have subordinated a percentage of the lot purchase price to various construction loans of subsidiaries of the Company’s

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construction loans. Notes were signed in relation to the subordination bearing interest at between 8.0% and 14.0% percent, collateralized by liens on the homes built on each lot. The sellers will release their lien upon payment of principle plus accrued interest at the closing of each individual home to a third party buyer.

The approximate annual minimum principal payments over the next five years under the debt agreements as of December 31, 2015 are (in thousands):



	Line of Credit		Notes Payable		Total
2016	$	—	$	1,158	$	1,158
2017	17,500		9,000		26,500
2018	30,000		—		30,000
2019	—		—		—
2020 and thereafter	—		—		—
	$	47,500	$	10,158	$	57,658

8. SHARE-BASED COMPENSATION

2014 Omnibus Equity Incentive Plan (the “2014 Equity Plan”)

On October 17, 2014, the Company’s stockholders approved the Green Brick Partners, Inc. 2014 Omnibus Equity Incentive Plan (the “2014 Equity Plan”). The Board of Directors of the Company had previously approved the 2014 Equity Plan on July 8, 2014, subject to stockholder approval. The 2014 Equity Plan became effective upon the completion of the Transaction on October 27, 2014. The purpose of the 2014 Equity Plan is to provide a means for the Company to attract and retain key personnel and to provide a means whereby current and prospective directors, officers, employees, consultants and advisors can acquire and maintain an equity interest in the Company, or be paid incentive compensation, which may (but need not) be measured by reference to the value of the Company’s common stock, thereby strengthening their commitment to the welfare of the Company and aligning their interests with those of the Company’s stockholders. The 2014 Equity Plan will terminate automatically on the tenth anniversary of the date it becomes effective. No awards will be granted under the 2014 Equity Plan after that date, but awards granted prior to that date may extend beyond that date.

Under the 2014 Equity Plan, awards of stock options, including both incentive stock options and nonqualified stock options, stock appreciation rights, restricted stock and restricted stock units, other share-based awards and performance compensation awards may be granted. The maximum number of shares of the Company’s common stock that is authorized and reserved for issuance under the 2014 Equity Plan is 2,350,956 shares, subject to adjustment for certain corporate events or changes in the Company’s capital structure.

In general, the Company’s employees or those reasonably expected to become the Company's employees, consultants and directors, are eligible for awards under the 2014 Equity Plan, provided that incentive stock options may be granted only to employees. After the consummation of the Transaction and the effectiveness of the 2014 Equity Plan, the Company has three executive officers, six non-employee directors and approximately 200 other employees (including employees of our controlled builders) who are eligible to receive awards under the 2014 Equity Plan. A written agreement between the Company and each participant will evidence the terms of each award granted under the 2014 Equity Plan.

The shares that may be issued pursuant to awards are shares of the Company’s common stock and the maximum aggregate amount of common stock which may be issued upon exercise of all awards under the 2014 Equity Plan, including incentive stock options, may not exceed 2,350,956 shares, subject to adjustment to reflect certain corporate transactions or changes in the Company’s capital structure. If any award under the 2014 Equity Plan expires or otherwise terminates, in whole or in part, without having been exercised in full, the common stock withheld from issuance under that award will become available for future issuance under the plan. If shares issued under the 2014 Equity Plan are reacquired by the Company pursuant to the terms of any forfeiture provision, those shares will become available for future awards under the plan. Awards that can only be settled in cash will not be treated as shares of common stock granted for purposes of the 2014 Equity Plan. The maximum amount that can be paid to any single participant in any one calendar year pursuant to a cash bonus award under the 2014 Equity Plan is $2,000,000. At December 31, 2015, 2,308,614 shares remain available for future grant of awards under the 2014 Equity Plan.

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Share-Based Award Activity

On October 27, 2014, the Company entered into an employment agreement with its Head of Land Acquisition and Development, Jed Dolson, pursuant to which Mr. Dolson was awarded a one-time special bonus equal to $1,250,000 (the “Special Bonus”), which vests in four substantially equal installments beginning on October 27, 2014 and on each of the first three anniversaries thereof. The employment agreement provides that the Special Bonus shall be payable in cash or shares of common stock. The Company considered the allocation of the Special Bonus and deemed it advisable and in the best interests of the Company and its shareholders that the installment of the Special Bonus that vested on October 27, 2015 (the “2015 Installment”) be payable in cash and in a number of shares of common stock. In November 2015, the Company entered into a stock bonus award agreement with Mr. Dolson, pursuant to which Mr. Dolson was granted 19,434 shares of common stock (the “Stock Bonus Award”) subject to the terms set forth in the 2014 Equity Plan and the Stock Bonus Award agreement. The Stock Bonus Award was 100% vested and non-forfeitable. The Stock Bonus Award has a weighted grant-date fair value of $8.04 per share. The fair value of the Stock Bonus Award was recorded as share-based compensation expense in November 2015.

In April 2015, the Company granted 22,908 restricted stock awards (“RSAs”) to certain non-employee Board of Directors, pursuant to the 2014 Equity Plan. The RSAs will become fully vested in April 2016. The RSAs have a weighted average grant-date fair value of $8.73 per share. The fair value of the outstanding shares of restricted stock awards will be recorded as share-based compensation expense over the vesting period.

A summary of share-based awards activity during the year ended December 31, 2015 is as follows:



	Number of Shares (in thousands)		Weighted Average Grant Date Fair Value per Share
Nonvested, December 31, 2014	—		$	—
Granted	42		$	8.40
Vested	(19	)	$	8.04
Forfeited	—		$	—
Nonvested, December 31, 2015	23		$	8.73

Stock Options

In connection with the Transaction, the Company entered into a stock option agreement with its Chief Executive Officer, James R. Brickman, pursuant to which Mr. Brickman received a one-time award of stock options to purchase 500,000 shares of common stock. The stock option has a per share exercise price equal to approximately $7.49, which is based on the weighted average price of the Company’s common stock for the five trading days immediately prior to the date of grant, October 27, 2014. Subject to Mr. Brickman’s continued employment, the stock option will vest and become exercisable in five substantially equal installments on each of the first five anniversaries of the date of grant. In the event that Mr. Brickman’s employment is terminated by the Company without cause, any unvested portion of the stock option will vest and become exercisable as of the date of such termination. These stock options were not granted under the 2014 Equity Plan.

Except as otherwise directed by the Compensation Committee, the exercise price for stock options cannot be less than the fair market value of our common stock on the grant date. The options generally vest and become exercisable in five substantially equal installments on each of the first five anniversaries of the grant date. Compensation expense related to these options is expensed on a straight line basis over the five year service period. There were no stock options issued during the years ended December 31, 2015 and December 31, 2014.

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A summary of stock option activity during the year ended December 31, 2015 is as follows:



	Number of Shares (in thousands)	Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Options outstanding, December 31, 2014	500	$	7.49
Granted	—	—
Exercised	—	—
Forfeited	—	—
Options outstanding, December 31, 2015	500	$	7.49	8.73	$	—
Options exercisable, December 31, 2015	100	$	7.49	8.73	$	—

A summary of our unvested stock options during the year ended December 31, 2015 is as follows (shares in thousands):



	Number of Shares (in thousands)		Weighted Average Per Share Grant Date Fair Value
Unvested, December 31, 2014	500		$	2.88
Granted	—		$	—
Vested	(100	)	$	2.88
Forfeited	—		$	—
Unvested, December 31, 2015	400		$	2.88

Valuation of Share-Based Awards

We utilized the Black-Scholes option pricing model for estimating the grant date fair value of stock options with the following assumptions:



	Risk-Free Interest Rate		Expected Term (in years)	Weighted Average Expected Stock Price Volatility		Expected Dividend Yield		Weighted Average Per Share Grant Date Fair Value
Fiscal year 2014	1.94	%	6.5	37.2	%	—	%	$	—

We based the risk-free interest rates on the implied yield available on U.S. Treasury constant maturities in effect at the time of the grant with remaining terms equivalent to the respective expected terms of the stock options. Because we do not have any history of stock option exercises, we calculated the expected award term using the simplified method. We determined the expected volatility based on a combination of implied market volatilities and other factors. We have not paid any dividends since our inception and do not anticipate paying any cash dividends on our common stock in the foreseeable future.

In addition to the variables above, we are also required to estimate at the grant date the likelihood that the award will ultimately vest (the “pre-vesting forfeiture rate”), and revise the estimate, if necessary, in future periods if the actual forfeiture rate differs. We determine the forfeiture rate based on historical activity of the grantees, including the groups in which the grantees are part of, such as directors, executives and employees. We utilized a forfeiture rate of 0% during the year ended December 31, 2014.

Share-Based Compensation Expense

Share-based compensation expense was $474,339 and $39,641 for the years ended December 31, 2015 and December 31, 2014, respectively. There were no share-based awards issued during the year ended December 31, 2013. At December 31, 2015, the estimated total remaining unamortized share-based compensation expense related to unvested restricted stock awards and stock options, net of forfeitures, was $1.4 million which is expected to be recognized over a weighted-average period of 3.5 years.

9. EMPLOYEE BENEFITS

Prior to 2015, we had a qualifying 401(k) defined contribution plan that covered employees at one of our subsidiaries, The Providence Group LLC (“TPG”). During the year ended December 31, 2015, we extended the qualifying 401(k) defined contribution plan to all employees of the Company. Each year, we may make discretionary matching contributions equal to a

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percentage of the employees' contributions. The Company did not contribute any matching contributions to the 401(k) plan during the years ended December 31, 2015, 2014 and 2013.

10. RELATED PARTY TRANSACTIONS

During 2015, 2014 and 2013, the Company had related party transactions through the normal course of business. These transactions include the following:

Through November 2014, the Company leased its Dallas, Texas headquarters on a month-to-month basis from family members of the Company's Chief Executive Officer. The Company terminated this lease during the fourth quarter of 2014. During 2014 and 2013, the Company paid rent of $13,913 and $28,137, respectively under this agreement which is included in selling, general and administrative expense in the consolidated statements of income.

Through the Transaction Date, the Company paid a quarterly management fee to an executive calculated at .375% of cumulative capital contributions of certain members of Builder Finance at the end of each quarter. During 2014 and 2013, the Company incurred $1.3 million and $1.0 million, respectively of expenses from this arrangement which are included as management fees in the consolidated statements of income.

The Company received interest income from companies that are affiliates of the Company in connection with construction loans. Interest income received during 2015, 2014 and 2013, totaled $0.0 million, $0.0 million, and $0.7 million, respectively and are included in interest and fees in the consolidated statements of income.

On October 27, 2014, in connection with the Transaction, the Company entered into a Loan Agreement, a guaranty and a pledge and security agreement with certain funds and accounts managed by Greenlight, our largest shareholder. Greenlight beneficially owns approximately 49.4% of the voting power of the Company. The Loan Agreement provides for a five year term loan facility in an aggregate principal amount of $150.0 million which funded part of the Transaction. Certain subsidiaries of the Company guarantee obligations under the Term Loan Facility pursuant to the guaranty. The Term Loan Facility bore interest at 9.0% per annum, payable quarterly, from October 27, 2014 through the first anniversary thereof and 10.0% per annum thereafter. On July 1, 2015 we used approximately $154.9 million of the net proceeds from the Equity Offering to repay all of the outstanding principal, interest and a prepayment premium under the Term Loan Facility. See Note 7 for further discussion of this repayment.

In 2012, we formed Centre Living Homes, LLC (“Centre Living”), a builder that focuses on a limited number of homes and luxury townhomes each year in the Dallas, Texas market. Trevor Brickman, the son of Green Brick's Chief Executive Officer, is the President of Centre Living. Effective as of January 1, 2015, Centre Living's operating agreement was amended and restated to the same general terms as with our other builders, such that Green Brick's ownership interest in Centre Living is 50% and Trevor Brickman's ownership interest is 50% for future operations beginning January 1, 2015. Subsequent to this amendment, Green Brick has 51% voting control over the operations of Centre Living. As such, 100% of Centre Living's operations are included within our consolidated financial statements for the years ended December 31, 2015, December 31, 2014 and December 31, 2013. The noncontrolling interest attributable to Centre Living was $0.3 million as of December 31, 2015.

In September 2015, the Company purchased 11 lots from an entity affiliated with the president of TPG, one of its controlled builders. The lots are part of a 19-home community, The Parc at Cogburn in Atlanta. The total paid for the lots in 2015 was $1.8 million. Under the option agreement in place, the total that would be expected to be paid for the remaining lots would be $1.3 million, all during 2016.

In November 2015, the Company purchased 12 lots from an entity affiliated with the president of TPG, one of its controlled builders. The lots are part of a 92-townhome community, Glens at Sugarloaf in Atlanta. No deposits were paid by the Company in contracting for the lots. The total paid for the lots in 2015 was $1.0 million. During March 2016, the Company purchased the remaining 80 townhome lots within the community at a discounted price of $4.8 million from the affiliated entity. See Note 15 for further discussion of this purchase.

During March 2016, the Company purchased undeveloped land for an eventual 83 lot community, Academy Street in Atlanta. Simultaneously, the Company entered into a partnership agreement with an entity affiliated with the president of TPG to develop the community for sale of the lots to TPG. Contributions, voting percentages, and profits will be 80% for the Company and 20% for the affiliated entity. Total capital contributions are estimated at $12.0 million.

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During March 2016, the Company purchased undeveloped land for an eventual 73-townhome community, Suwanee Station in Atlanta. Simultaneously, the Company entered into a partnership agreement with an entity affiliated with the president of TPG to develop the community for sale of the lots to TPG. Contributions, voting percentages, and profits will be 50% for the Company and 50% for the affiliated entity. Total capital contributions are estimated at $2.0 million.

11. INCOME TAXES

Provision for Income Taxes

The components of income before income taxes attributable to our operations are as follows (in thousands):



	Years Ended December 31,
	2015			2014			2013
Current:
Federal	$	—		$	—		$	—
State	819			485			327
Total current	819			485			327
Deferred
Federal	8,412			(23,308		)	—
State	(60		)	(2,030		)	—
Total deferred	8,352			(25,338		)	—
Total income tax provision (benefit)	$	9,171		$	(24,853	)	$	327

Deferred Income Taxes

The primary differences between the financial statement and tax bases of assets and liabilities are as follows (in thousands):



	December 31, 2015			December 31, 2014
Deferred tax assets:
Accrued bonuses	$	39		$	315
Accrued payroll	49			11
Stock-based compensation	125			14
Federal net operating loss carryover	55,622			62,575
State net operating loss carryover	1,161			1,161
Basis in partnerships	24,773			26,123
Warranty accrual	166			161
Historical BioFuel capitalized start-up costs	24			24
Historical BioFuel - other	16			16
	81,975			90,400
Valuation allowance	(1,161		)	(1,161		)
Deferred tax assets, net	80,814			89,239

Deferred tax liabilities:
Prepaid insurance	(34		)	(11		)
Noncontrolling interests impact of M-1s	(117		)	(31		)
Deferred tax liabilities, net	(151		)	(42		)

The Company assesses the recoverability of deferred tax assets and the need for a valuation allowance on an ongoing basis. In making this assessment, management considers all available positive and negative evidence and available income tax planning to determine whether it is more-likely-than-not that some portion or all of the deferred tax assets will be realized in future periods. This assessment requires significant judgment and estimates involving current and deferred income taxes, tax

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attributes relating to the interpretation of various tax laws, historical bases of tax attributes associated with certain assets and limitations surrounding the realization of deferred tax assets.

The Company files a federal corporate income tax return. The operations of JBGL subsequent to the Transaction Date was included in the Company’s federal income tax filing.

As of December 31, 2015, the federal net operating loss carryforward was approximately $158.9 million, which will begin to expire beginning with the year ending December 31, 2029. The U.S. federal statute of limitations remains open for our 2012 and subsequent tax years. Due to the carryover of the federal net operating losses for years 2008 and forward, income tax returns going back to the 2008 year are subject to adjustment. The Colorado and Minnesota statute of limitations remains open for our 2011 and subsequent tax years. The Nebraska statute of limitations remains open for our 2012 and subsequent tax years. Additionally, JBGL's partnerships filed returns in Texas and Georgia. The Georgia statute of limitations remains open for the 2012 and subsequent tax years. Any Georgia adjustments relating to returns filed by the partnerships would be borne by the partners. The Texas statute of limitations remains open for the 2011 and subsequent tax years.

The Company is not presently under examination by the Internal Revenue Service, nor has it been contacted.

The Company has no uncertain income tax positions at December 31, 2015.

Effective Tax rate Reconciliation

A reconciliation between our effective tax rate on income before income tax provision (benefit) and the U.S. federal statutory rate is as follows (amounts in thousands):



	Years Ended December 31,
	2015			2014			2013
Tax on pre-tax book income (before reduction for noncontrolling interests)	$	12,151		$	12,673		$	—
Pre-Transaction earnings taxed to partners	—			(10,634		)	—
Tax effect of non-controlled earnings post Transaction	(3,577		)	(644		)	—
Change in partnership tax status	—			(25,244		)	—
Change in partnership tax status - state benefit	—			(1,320		)	—
State tax expense, net	533			315			327
Deferred other	(36		)	—			—
State deferred tax expense	(39		)	—			—
Perm items - other	139			1			—
Total tax expense	$	9,171		$	(24,853	)	$	327
	26.4		%	(68.6		)%	0.7		%

Net Operating Losses and Valuation Allowances

As of December 31, 2015, we have $158.9 million of federal net operating loss carryforwards that will expire beginning with the year ending in December 31, 2029. Our ability to utilize our net operating loss carryforwards depends on the amount of taxable income we generate in future periods. Based on our 2015, 2014 and 2013 taxable income results and projections of taxable income, management expects that the Company will generate sufficient taxable income to utilize substantially all of the federal net operating loss carryforwards before they expire. We also have approximately $21.6 million of state net operating loss carryforwards that have varying dates of expiration. We believe it is more-likely-than-not that the state loss carryforwards will expire prior to their utilization. As a result, a $21.6 million valuation allowance is recorded against the state loss carryforwards in full. The assessment of the need for a valuation allowance considered all available positive and negative information and available tax planning.

Prior to the Transaction Date, JBGL was not a taxable entity for U.S. federal income tax purposes. Taxes on its net income were borne by its members through the allocation of taxable income. Upon completion of the reverse recapitalization of Green Brick, JBGL became part of a consolidated taxable entity. The Transaction resulted in the change of JBGL’s tax status that resulted in the recognition of a one-time income tax benefit in the income statement of approximately $26.6 million in the year ended December 31, 2014.

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BioFuel had approximately $182.3 million of federal net operating loss carryforwards and approximately $21.6 million of state net operating loss carryforwards as of the Transaction Date. The Company re-assessed the need for a valuation allowance as of the Transaction Date and concluded, on a more-likely-than-not basis, that the deferred income tax assets, except for the state loss carryforwards, would be realized, giving consideration to the historical, current year and projected operating results of JBGL. As a result of the re-assessment, the Company recorded $63.9 million of net deferred income tax assets at the Transaction Date, with an offset in additional paid-in-capital. The effect of the re-assessment had no impact on income tax expense.

The rollforward of valuation allowances is as follows (amounts in thousands):



	Years Ended December 31,
	2015		2014
Valuation allowance at beginning of the year	$	1,161	$	—
BioFuel valuation allowance at the Transaction Date	—		65,020
Release of valuation allowance at Transaction Date⁽¹⁾	—		(63,859		)
Valuation allowance at end of the year	$	1,161	$	1,161

(1)Amount was released through additional paid-in capital at the Transaction Date.

12. FAIR VALUE MEASUREMENTS

Fair Value of Financial Instruments

The Company’s financial instruments, none of which are held for trading purposes, include cash and cash equivalents, restricted cash, accounts receivable, notes receivable, investment in direct financing lease, earnest money deposits, other assets, accounts payable, accrued liabilities, customer and builder deposits, obligations related to land not owned under option agreements, borrowings on lines of credit, and notes payable. The Company estimates that due to the short term nature of underlying instruments or the proximity of the underlying transaction to the applicable reporting date that the fair value of all financial instruments does not differ materially from the aggregate carrying values recorded in the consolidated financial statements at December 31, 2015 and 2014. Per the fair value hierarchy, level 1 financial instruments include: cash and cash equivalents, restricted cash, earnest money deposits, and customer and builder deposits. All other instruments are deemed to be level 3.

Fair Value of Nonfinancial Instruments

Nonfinancial assets and liabilities include items such as inventory and long lived assets that are measured at cost unless the carrying value is determined to be not recoverable in which case the affected instrument is written down to fair value. During the years ended December 31, 2015 and 2014, the Company did not record any fair value adjustments to those financial and nonfinancial assets and liabilities measured at fair value on a nonrecurring basis.

13. COMMITMENTS AND CONTINGENCIES

Warranties

Warranty activity, included in accrued expenses in our consolidated balance sheets, for 2015, 2014 and 2013 consists of the following (in thousands):



	2015			2014			2013
Beginning balance	$	460		$	328		$	58
Additions	667			388			290
Charges	(653		)	(256		)	(20		)
Ending balance	$	474		$	460		$	328

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Commitments

Prior to 2015, the Company had a month to month lease with a related party (See Note 10). The Company also has leases associated with office space in Georgia and Texas which are classified as operating leases. Rent expense under these leases totaled $0.6 million, $0.5 million, and $0.2 million in 2015, 2014 and 2013, respectively and are included in the selling, general and administrative expense in the consolidated statements of income.

The approximate annual minimum lease payments over the next five years under the operating lease as of December 31, 2015 are (in thousands):



2016	$	697
2017	703
2018	708
2019	710
2020 and thereafter	620
	$	3,438

Legal Matters

Lawsuits, claims and proceedings may be instituted or asserted against us in the normal course of business. The Company is also subject to local, state and federal laws and regulations related to land development activities, house construction standards, sales practices, employment practices and environmental protection. As a result, the Company may be subject to periodic examinations or inquiry by agencies administering these laws and regulations.

The Company records a reserve for potential legal claims and regulatory matters when they are probable of occurring and a potential loss is reasonably estimable. The Company accrues for these matters based on facts and circumstances specific to each matter and revises these estimates when necessary.

In view of the inherent difficulty of predicting outcomes of legal claims and related contingencies, the Company generally cannot predict their ultimate resolution, related timing or eventual loss. If evaluations indicate loss contingencies that could be material are not probable, but are reasonably possible, the Company will disclose their nature with an estimate of possible range of losses or a statement that such loss is not reasonably estimable. At December 31, 2015 and 2014, the Company did not have any accruals for asserted or unasserted matters.

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14. SEGMENT INFORMATION

Financial information relating to Company’s reportable segments was as follows. Operational results of each reportable segment are not necessarily indicative of the results that would have been achieved had the reportable segment been an independent, stand-alone entity during the periods presented.



	Years End December 31,
(in thousands)	2015		2014		2013
Revenues:
Builder Operations
Texas	$	121,979	$	83,958	$	52,764
Georgia	132,288		116,692		115,827
Land Development	36,878		45,452		33,735
	$	291,145	$	246,102	$	202,326
Gross profit:
Builder Operations
Texas	$	30,642	$	19,665	$	14,890
Georgia	27,096		31,176		30,920
Land Development	9,753		11,370		12,222
	$	67,491	$	62,211	$	58,032
Inventory:
Builder Operations
Texas	$	60,768	$	45,609	$	25,918
Georgia	158,623		129,361		99,239
Land Development	124,741		100,171		104,044
	$	344,132	$	275,141	$	229,201

15. SUBSEQUENT EVENTS

During March 2016, the Company’s Board of Directors has authorized a share repurchase program of up to 1,000,000 shares of the Company’s common stock through 2017. The timing, volume and nature of share repurchases will be at the discretion of management and dependent on market conditions, corporate and regulatory requirements and other factors, and may be suspended or discontinued at any time. The authorized repurchases will be made from time to time in the open market, through block trades or in privately negotiated transactions. No assurance can be given that any particular amount of common stock will be repurchased. All or part of the repurchases may be implemented under a Rule 10b5-1 trading plan, which would allow repurchases under pre-set terms at times when the Company might otherwise be prevented from doing so under insider trading laws or because of self-imposed blackout periods. This repurchase program may be modified, extended or terminated by the Board of Directors at any time. The Company intends to finance the repurchases with available cash.

During March 2016, the Company purchased the remaining 80 lots within a 92-townhome community, Glens at Sugarloaf in Atlanta. The Seller was an entity affiliated with the president of TPG, one of its controlled builders. The price paid for the lots was $4.8 million and represents a bulk discount from the individual lot prices which the Company had contracted to purchase the lots from the affiliated entity.

During March 2016, the Company purchased undeveloped land for an eventual 83 lot community, Academy Street in Atlanta. Simultaneously, the Company entered into a partnership agreement with an entity affiliated with the president of TPG, one of its controlled builders, to develop the community for sale of the lots to TPG. Contributions, voting percentages, and profits will be 80% for the Company and 20% for the affiliated entity. Total capital contributions are estimated at $12.0 million.

During March 2016, the Company purchased undeveloped land for an eventual 73-townhome community, Suwanee Station in Atlanta. Simultaneously, the Company entered into a partnership agreement with an entity affiliated with the president of TPG, one of its controlled builders, to develop the community for sale of the lots to TPG. Contributions, voting percentages, and profits will be 50% for the Company and 50% for the affiliated entity. Total capital contributions are estimated at $2.0 million.

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16. QUARTERLY FINANCIAL DATA (UNAUDITED)

Summarized unaudited quarterly results of operations for the years ended December 31, 2015 and December 31, 2014 are as follows (in thousands, except per share amounts):



Year ended December 31, 2015	First Quarter		Second Quarter		Third Quarter		Fourth Quarter
Revenues	$	58,452	$	71,987	$	75,198	$	85,508
Gross profits	16,210		17,183		15,718		18,380
Net income attributable to Green Brick Partners, Inc.	4,018		3,788		2,826		4,693
Net income attributable to Green Brick Partners, Inc. per common share:⁽¹⁾
Basic	$0.13		$0.12		$0.06		$0.10
Diluted	$0.13		$0.12		$0.06		$0.10
Year ended December 31, 2014	First Quarter		Second Quarter		Third Quarter		Fourth Quarter
Revenues	$	63,009	$	65,843	$	49,676	$	67,574
Gross profits	15,766		16,379		14,913		15,153
Net income attributable to Green Brick Partners, Inc.	7,349		7,410		3,694		31,573
Net income attributable to Green Brick Partners, Inc. per common share:
Basic	$0.66		$0.67		$0.33		$1.24
Diluted	$0.66		$0.67		$0.33		$1.24

(1) Per share amounts for the four quarters do not add to per share amounts for the year due to rounding differences in quarterly amounts and due to the impact of differences between the quarterly and annual weighted average share calculations.

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(a)(3) Exhibits

EXHIBITS INDEX



Number		Description
2.1#		Transaction Agreement, dated as of June 10, 2014, by and among BioFuel Energy Corp., JBGL Capital L.P., JBGL Exchange (Offshore), LLC, JBGL Willow Crest (Offshore), LLC, JBGL Hawthorne (Offshore), LLC, JBGL Inwood (Offshore), LLC, JBGL Chateau (Offshore), LLC, JBGL Castle Pines (Offshore), LLC, JBGL Lakeside (Offshore), LLC, JBGL Mustang (Offshore), LLC, JBGL Kittyhawk (Offshore), LLC, JBGL Builder Finance (Offshore), LLC, Greenlight Onshore Investments, LLC, JBGL Exchange, LLC, JBGL Willow Crest, LLC, JBGL Hawthorne, LLC, JBGL Inwood, LLC, JBGL Chateau, LLC, JBGL Castle Pines, LP, JBGL Castle Pines Management, LLC, JBGL Lakeside, LLC, JBGL Mustang, LLC, JBGL Kittyhawk, LLC, JBGL Builder Finance LLC and Brickman Member Joint Venture (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed June 13, 2014).
3.1		Amended and Restated Certificate of Incorporation, (incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K filed October 31, 2014).
3.2		Amended and Restated Bylaws of BioFuel Energy Corp, dated as of March 20, 2009, (incorporated by reference to Exhibit 3.2 to the Company’s Form 8-K filed March 23, 2009).
4.1		Specimen Common Stock Certificate, (incorporated by reference to Exhibit 4.1 to the Company’s Form 8-K filed October 31, 2014).
4.2		Certificate of Designation of Series B Junior Participating Preferred Stock of BioFuel Energy Corp. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed March 28, 2014).
4.3		Section 382 Rights Agreement, dated as of March 27, 2014, between BioFuel Energy Corp. and Broadridge Corporate Issuer Solutions, Inc., as Rights Agent, which includes the Form of Certification of Designation of Series B Junior Participating Preferred Stock as Exhibit A, the Form of Rights Certificate as Exhibit B and the Summary of Rights to Purchase Preferred Stock as Exhibit C (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed March 28, 2014).
4.4		Amendment No. 1, dated as of August 12, 2015, to Section 382 Rights Agreement, between Green Brick Partners, Inc. and Broadridge Corporate Issuer Solutions, Inc., as Rights Agent (incorporated by reference to Exhibit 4.1 of the Company's Current Report on Form 8-K filed August 14, 2015).
4.5		Form of Rights Certificate (incorporated by reference to Exhibit 3.1.3 to the Company’s Registration Statement Amendment No. 1 on Form S-1 (File No. 333-197446) filed on August 21, 2014).
10.1		Letter Agreement, dated as of July 15, 2014, by and among BioFuel Energy Corp., Greenlight Capital Offshore Partners, Greenlight Capital, L.P., Greenlight Capital Qualified, L.P., Greenlight Reinsurance, Ltd., Greenlight Capital (Gold), LP and Greenlight Capital Offshore Master (Gold), Ltd. (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed July 15, 2014).
10.2		Letter Agreement, dated as of July 15, 2014, by and among BioFuel Energy Corp., Third Point Partners L.P., Third Point Partners Qualified L.P., Third Point Offshore Master Fund L.P., Third Point Ultra Master Fund L.P. and Third Point Reinsurance Company Ltd. (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed July 15, 2014).
10.3		Voting Agreement, dated as of June 10, 2014, by and among BioFuel Energy Corp., Greenlight Capital Offshore Partners, Greenlight Capital, L.P., Greenlight Capital Qualified, L.P., Greenlight Reinsurance, Ltd., Greenlight Capital (Gold), LP and Greenlight Capital Offshore Master (Gold), Ltd. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed June 13, 2014).
10.4		Registration Rights Agreement, dated as October 27, 2014, by and among the Company and JBGL Exchange (Offshore), LLC, JBGL Willow Crest (Offshore), LLC, JBGL Hawthorne (Offshore), LLC, JBGL Inwood (Offshore), LLC, JBGL Chateau (Offshore), LLC, JBGL Castle Pines (Offshore), LLC, JBGL Lakeside (Offshore), LLC, JBGL Mustang (Offshore), LLC, JBGL Kittyhawk (Offshore), LLC, JBGL Builder Finance (Offshore), LLC, Greenlight Capital Qualified, LP, Greenlight Capital, LP, Greenlight Capital Offshore Partners, Greenlight Reinsurance, Ltd., Greenlight Capital (Gold), LP, Greenlight Capital Offshore Master (Gold), Ltd., Scott L. Roberts, L. Loraine Brickman Revocable Trust, Roger E. Brickman GST Marital Trust, James R. Brickman, Blake Brickman, Jennifer Brickman Roberts, Trevor Brickman and Natalie Brickman, (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed October 31, 2014).
10.5		Backstop Registration Rights Agreement, dated as October 27, 2014, between the Company and Third Point Partners L.P., Third Point Partners Qualified L.P., Third Point Offshore Master Fund L.P., Third Point Ultra Master Fund L.P. and Third Point Reinsurance Company Ltd., (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed October 31, 2014).
10.6		Commitment Letter, dated as of June 10, 2014, between BioFuel Energy Corp. and Greenlight Capital, Inc., on behalf of its affiliated funds and managed accounts (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed June 13, 2014).

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Number		Description
10.7		Loan Agreement, dated as of October 27, 2014, by and among the Company, the lenders from time to time party thereto and Greenlight APE, LLC, (incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8-K filed October 31, 2014).
10.8		Guaranty, dated as of October 27, 2014, by and among, the Company, certain subsidiaries of the Company from time to time party thereto and Greenlight APE, LLC, (incorporated by reference to Exhibit 10.8 to the Company’s Current Report on Form 8-K filed October 31, 2014).
10.9		Pledge and Security Agreement, dated as of October 27, 2014, by and among the Company, certain subsidiaries of the Company from time to time party thereto and Greenlight APE, LLC, (incorporated by reference to Exhibit 10.9 to the Company’s Current Report on Form 8-K filed October 31, 2014).
10.10		Amended and Restated Limited Liability Company Operating Agreement of The Providence Group of Georgia, L.L.C., dated as of July 1, 2011 (incorporated by reference to Exhibit 10.20 to the Company’s Registration Statement on Form S-1 (File No. 333-197446) filed on July 16, 2014).
10.11		Amended and Restated Company Agreement of CB JENI Homes DFW LLC, dated as April 1, 2012 (incorporated by reference to Exhibit 10.21 to the Company’s Registration Statement on Form S-1 (File No. 333-197446) filed on July 16, 2014).
10.12		Company Agreement of Southgate Homes DFW LLC, dated as of January 29, 2013 (incorporated by reference to Exhibit 10.22 to the Company’s Registration Statement on Form S-1 (File No. 333-197446) filed on July 16, 2014).
10.13		Amended and Restated Limited Liability Company Operating Agreement of JBGL A&A, LLC, dated November 15, 2011 (incorporated by reference to Exhibit 10.23 to the Company’s Registration Statement on Form S-1 (File No. 333-197446) filed on July 16, 2014).
10.14†*		Green Brick Partners, Inc. 2014 Omnibus Equity Incentive Plan (incorporated by reference to Exhibit 10.14 to the Company's Annual Report on Form 10-K filed March 31, 2015).
10.15†		Employment Agreement, dated as of October 27, 2014, between the Company and James R. Brickman, (incorporated by reference to Exhibit 10.15 to the Company’s Current Report on Form 8-K filed October 31, 2014).
10.16†		Green Brick Partners, Inc. Stock Option Agreement, dated as of October 27, 2014, between the Company and James R. Brickman, (incorporated by reference to Exhibit 10.16 to the Company’s Current Report on Form 8-K filed October 31, 2014).
10.17†		Employment Agreement, dated as of October 27, 2014, between the Company and John Jason Corley, (incorporated by reference to Exhibit 10.17 to the Company’s Current Report on Form 8-K filed October 31, 2014).
10.18†		Employment Agreement, dated as of January 15, 2015, between the Company and Richard A. Costello, (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed January 22, 2015).
10.19†		Employment Agreement, dated as of October 27, 2014, between the Company and Jed Dolson, (incorporated by reference to Exhibit 10.18 to the Company’s Current Report on Form 8-K filed October 31, 2014).
10.20		Promissory Note, dated as of October 13, 2011, by JBGL Builder Finance LLC for the benefit of Inwood National Bank (incorporated by reference to Exhibit 10.25 to the Company’s Registration Statement on Form S-1 (File No. 333-197446) filed on July 16, 2014) .
10.21		Promissory Note, dated October 13, 2012, by JBGL Builder Finance LLC for the benefit of Inwood National Bank (incorporated by reference to Exhibit 10.26 to the Company’s Registration Statement on Form S-1 (File No. 333-197446) filed on July 16, 2014).
10.22		Second Renewal, Extension and Modification of Promissory Note and Second Amendment to Business Loan Agreement, dated as of October 13, 2013, by and between JBGL Builder Finance LLC and Inwood National Bank (incorporated by reference to Exhibit 10.27 to the Company’s Registration Statement on Form S-1 (File No. 333-197446) filed on July 16, 2014).
10.23		Commercial Security Agreement, dated as of October 13, 2011, by and between JBGL Builder Finance LLC and Inwood National Bank (incorporated by reference to Exhibit 10.28 to the Company’s Registration Statement on Form S-1 (File No. 333-197446) filed on July 16, 2014).
10.24		Commercial Security Agreement, dated as of October 13, 2012 by and between JBGL Builder Finance LLC and Inwood National Bank (incorporated by reference to Exhibit 10.29 to the Company’s Registration Statement on Form S-1 (File No. 333-197446) filed on July 16, 2014).
10.25		Business Loan Agreement (Asset Based), dated as of October 13, 2011, by and between JBGL Builder Finance LLC and Inwood National Bank (incorporated by reference to Exhibit 10.30 to the Company’s Registration Statement on Form S-1 (File No. 333-197446) filed on July 16, 2014).
10.26		Business Loan Agreement, dated as of October 13, 2012, by and between JBGL Builder Finance LLC and Inwood National Bank (incorporated by reference to Exhibit 10.31 to the Company’s Registration Statement on Form S-1 (File No. 333-197446) filed on July 16, 2014).

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Number		Description
10.27		Cross-Pledge Agreement, dated as of October 11, 2013, between Inwood National Bank, JBGL Builder Finance LLC and JBGL Model Fund 1, LLC (incorporated by reference to Exhibit 10.32 to the Company’s Registration Statement on Form S-1 (File No. 333-197446) filed on July 16, 2014).
10.28		Loan Agreement, dated as of December 13, 2013, between PlainsCapital Bank and JBGL Capital, LP (incorporated by reference to Exhibit 10.33 to the Company’s Registration Statement on Form S-1 (File No. 333-197446) filed on July 16, 2014).
10.29		Promissory Note, dated as of December 13, 2013, by JBGL Capital, LP for the benefit of PlainsCapital Bank (incorporated by reference to Exhibit 10.34 to the Company’s Registration Statement on Form S-1 (File No. 333-197446) filed on July 16, 2014).
10.30		Guaranty Agreement, dated as of December 13, 2013, by JBGL Castle Pines, LP, JBGL Chateau, LLC, JBGL Exchange LLC, JBGL Hawthorne, LLC, JBGL Inwood LLC, JBGL Kittyhawk, LLC, JBGL Mustang LLC and JBGL Willow Crest LLC, for the benefit of PlainsCapital Bank (incorporated by reference to Exhibit 10.35 to the Company’s Registration Statement on Form S-1 (File No. 333-197446) filed on July 16, 2014).
10.31†*		2014 Omnibus Equity Incentive Plan Stock Bonus Award Agreement, dated as of November 9, 2015, by and between the Company and Jed Dolson.
10.32		Third Renewal, Extension, and Modification of Promissory Note and Third Amendment to Business Loan Agreement, effective as of September 23, 2014, by and between JBGL Builder Finance LLC and Inwood National Bank (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed June 22, 2015).
10.33		Loan Agreement, dated as of July 30, 2015, by and among Green Brick Partners, Inc., Inwood National Bank, JBGL Mustang, LLC, JBGL Exchange, LLC, JBGL Chateau, LLC, Johns Creek 206, LLC and JBGL Builder Finance, LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed August 5, 2015).
10.34		Revolving Line of Credit Note, dated as of July 30, 2015, issued by Green Brick Partners, Inc. in favor of Inwood National Bank (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed August 5, 2015).
10.35		Guaranty Agreement, dated as of July 30, 2015, by and among JBGL Mustang, LLC, JBGL Chateau, LLC, JBGL Exchange, LLC, JBGL Builder Finance, LLC, and Johns Creek 206, LLC (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed August 5, 2015).
10.36		Deed of Trust and Security Agreement, dated as of July 30, 2015, by JBGL Mustang, LLC, as grantor, to Gary L. Tipton, as trustee, for the benefit of Inwood National Bank (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed August 5, 2015).
10.37		Deed of Trust and Security Agreement, dated as of July 30, 2015, by JBGL Exchange, LLC, as grantor, to Gary L. Tipton, as trustee, for the benefit of Inwood National Bank (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed August 5, 2015).
10.38		Deed of Trust and Security Agreement, dated as of July 30, 2015, by JBGL Chateau, LLC, as grantor, to Gary L. Tipton, as trustee, for the benefit of Inwood National Bank (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed August 5, 2015).
10.39		Deed to Secure Debt, Assignment of Rents and Leases, Security Agreement and Fixture Filing, dated as of July 30, 2015, by Johns Creek 206, LLC, as grantor, to Inwood National Bank, as grantee (incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8-K filed August 5, 2015).
10.40†		Settlement Agreement and Mutual Release, dated as of December 2, 2015, between the Company and John Jason Corley (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed December 11, 2015).
10.41		Credit Agreement, dated as of December 15, 2015, among Green Brick Partners, Inc., the lenders named therein, and Citibank, N.A., as administrative agent (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed December 18, 2015).
10.42		Guarantee Agreement, dated as of December 15, 2015, among Green Brick Partners, Inc., certain subsidiaries of Green Brick Partners, Inc. from time to time party thereto, and Citibank, N.A., as agent (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed December 18, 2015).
21.1*		List of Subsidiaries of the Company.
23.1*		Consent of Grant Thornton LLP, Independent Registered Public Accounting Firm to the Company
31.1*		Certification of the Company’s Chief Executive Officer Pursuant To Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 7241).
31.2*		Certification of the Company’s Chief Financial Officer Pursuant To Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 7241).
32.1*		Certification of the Company’s Chief Executive Officer Pursuant To Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350).

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Number		Description
32.2*		Certification of the Company’s Chief Financial Officer Pursuant To Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350).
101.INS*		XBRL Instance Document.
101.SCH*		XBRL Taxonomy Extension Schema Document.
101.CAL*		XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*		XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*		XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*		XBRL Taxonomy Extension Presentation Linkbase Document.

* Filed with this Form 10-K

† Management Contract or Compensatory Plan


#	The Company hereby undertakes to furnish supplementally a copy of any omitted schedule or exhibit to such agreement to the U.S. Securities and Exchange Commission upon request.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on March 30, 2016.

Green Brick Partners, Inc.



/s/ James R. Brickman
By: James R. Brickman
Its: Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated below.



Signature	Title	Date
/s/ James R. Brickman	Chief Executive Officer and Director (Principal Executive Officer)	March 30, 2016
James R. Brickman

/s/ Richard A. Costello	Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)	March 30, 2016
Richard A. Costello

/s/ Elizabeth K. Blake	Director	March 30, 2016
Elizabeth K. Blake

/s/ Harry Brandler	Director	March 30, 2016
Harry Brandler

/s/ David Einhorn	Chairman of the Board	March 30, 2016
David Einhorn

/s/ John R. Farris	Director	March 30, 2016
John R. Farris

/s/ Kathleen Olsen	Director	March 30, 2016
Kathleen Olsen

/s/ Richard Press	Director	March 30, 2016
Richard Press