ANNUAL
REPORT
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MESSAGE FROM THE PRESIDENT AND CEO
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GENESIS PROJECTS AND COMMUNITIES
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COMMUNITY INVOLVEMENT
12
MANAGEMENT’S DISCUSSION & ANALYSIS
49
CONSOLIDATED FINANCIAL STATEMENTS
86
CONTACT INFORMATION
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D riven primarily by a strong housing market, Genesis is
pleased to report earnings of $10.9 million for 2021. This
marks the 21st consecutive year we’ve reported positive
earnings. Annual revenue of $109.8 million was achieved largely
from 191 home sales and 247 lot sales. The year was capped in
December by the completion of our first equity issue since going
public in 1998. Supported by a solid financial position, a strong
new-home market, and a turnaround in the Alberta economy, we
are well-positioned to take advantage of our growth opportunities.
Moving forward, we expect tight housing market conditions to
continue amid an environment of very low supply of serviced lots
and increasing demand in the Calgary housing market. Alberta’s
relative housing affordability continues to attract newcomers who
dream of home ownership.
Key challenges in 2022 will be the management of supply-chain
issues in both our housing and land divisions and, most critically,
achieving key land approvals for three, possibly four, new projects
nearing the end of the approval process. High demand is expected
to continue, fueled by the strong economy, relative price and
lifestyle attractiveness of the Calgary Metropolitan Area compared
to other Canadian markets and expanded international immigration
targets set by the federal government.
In 2021, we invested $43.2 million in new communities, creating
295 new residential lots and 10.9 acres of multifamily and
commercial land parcels. Genesis also announced the acquisition
of a 157-acre parcel of land in the Belvedere area for future
residential development in east Calgary. We expect to close the
acquisition and finalize development approvals for this property
in 2022.
In December, $30 million of new capital was raised by way of a
rights issue, bringing our net cash (less loans) position to $31.3
million at December 31, 2021. This cash and our unlevered balance
sheet will be utilized to fund the growth that we are positioned to
deliver in the upcoming years.
The net cash position of $31.3 million, two recently acquired land
parcels (Lewiston and Huxley), 141 new home sales orders on hand
on December 31, 2021, five home-building opportunities in “Third-
Party Communities” – communities being developed by other
developers - and key additions to our management team help
create the necessary pillars for growth.
Supporting our growth is the strong local economy. Alberta has
turned the corner economically, with GDP growth of 8.2% in 2021
and RBC predicting GDP growth of 5.9% in 2022. Driven by higher
oil and natural gas prices and royalties, the Government of Alberta
in its recent budget indicated that it expects to achieve a close to a
balanced budget for the fiscal year ending in March of 2023.
Operational Highlights from 2021:
• Earnings – Earnings attributable to equity shareholders
reached $10.8 million ($0.24 per share) up from $0.2 million
($0.00 per share) in 2020. This result is directly attributed
to strong home and lot sales activity. Revenues topped
$100 million for the second consecutive year, at $109.8
million, and $43.2 million was invested in our land servicing
program up from $23.5 million in 2020.
• Home Sales – Genesis closed 191 home sales in 2021,
recording $92.4 million in revenues from home sales. 249
new home orders were entered into with 141 firm home
sales orders carried into 2022. Genesis’ home building
division for the first time began selling homes in Third-Party
Communities; opportunities in five Third Party Communities
have been secured.
• Lot Sales – 247 lot sales were recorded in 2021; 60 of
these sales were to third-party builders (non-Genesis
owned) for sales revenue of $11.4 million. Moving into
2022, Genesis had 98 lot sales commitments from third-
party builders on December 31, 2021.
• Equity Issue – A rights issue of 15-million shares netting
just under $30 million, fully subscribed by existing
shareholders, was completed in December 2021. .
• Development Approvals – Development approval
processes continued to advance on all Genesis projects
including four important future developments, being Logan
Landing (354 acres), Lewiston (130 acres), Huxley (157
acres) and the OMNI (185 acres). In 2022 each of these
projects enter the final stages of approval and all could be
under development in 2023.
• Net Cash Position – On December 31, 2021, Genesis
held $64.0 million of cash, which was $31.3 million higher
than our total outstanding loans of $32.7 million. This
conservative cash/debt position helps set the foundation
from which Genesis will grow in the upcoming years.
• Acquisition – Genesis entered into a binding agreement to
acquire a 157-acre parcel of future residential development
land in east Calgary at a cost of $29.15 million. Now
called Huxley, this community is expected to commence
development in 2023.
I want to thank all members of our team, including staff,
consultants, and contractors, for their extraordinary work,
and our board of directors for their consistent support and
guidance. Our strong performance during 2021 is a testament
to the entire team.
Additionally, I would like to thank our shareholders for their
strong support as demonstrated by the fully subscribed rights
issue. This support is a fundamental to the strong foundation
Genesis has established to deliver even more exceptional
homes and communities as we move forward.
IAIN STEWART
President and Chief Executive Officer
March 1, 2022
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COMMUNITIESGenesis Projects andGenesis CommunitiesNon-Genesis Communities -Genesis Home Sales ActivitiesE CALGARYNE CALGARYROCKY VIEW COUNTYN CALGARYSTONEY TRAIL NWSTONEY TRAIL SEYANKEE VALLEYBOULEVARDHWY 1 (16TH AVE)GLENMORE TRAIL SEMACLEOD TRAILCROWCHILD TRAIL NWHWY 22XDEERFOOT TRAILQE II HIGHWAYSE CALGARYNW CALGARYAIRDRIENW CALGARYCOCHRANESW CALGARYSW CALGARYVermilion HillSW CALGARYNorth Conrich
NE CALGARY
Genesis Centre
Inspiring Community Wellness
The Genesis Centre of Community Wellness is a great example of our
role as a community builder Community leaders in Northeast Calgary
were determined to bring the dynamic and diverse cultures of the local
communities together to promote safe, cooperative and actively healthy
neighbourhoods. To realize their dream, these visionary leaders founded
the Northeast Centre of Community Society (NECCS), an organization
dedicated to the challenge of building a facility that would serve the
sport, recreation, educational and cultural needs of the northeast. We
educational and cultural needs of the northeast. We saw the opportunity
to support and fund this incredible facility as a perfect alignment of our
core values. The dream quickly started to take shape, gaining support
and funding from the City of Calgary and YMCA, along with a generous
naming sponsorship from Genesis.
Genesis continues to play a part in the support of The Genesis Centre –
a 225,000 square foot, $120 million multi-purpose complex built to enrich
the health, wellness, and unity of communities in Northeast Calgary.
AIRDRIE
Genesis Place
Genesis Place, the amazing recreation facility in Airdrie, acts as a
gathering place, hub of activity and true heart of the community. We are
proud of our commitment and on-going support of Genesis Place and
what it means to the quality of life for the community of Airdrie.
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MANAGEMENT’S
DISCUSSION AND
ANALYSIS
FOR THE THREE MONTHS AND YEAR ENDED DECEMBER 31, 2021
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The Management’s Discussion and Analysis (“MD&A”) of the financial condition and results of operations of Genesis Land
Development Corp. (“Genesis”, “the Corporation”, “we”, “us”, or “our”) should be read in conjunction with the consolidated
financial statements and the notes thereto for years ended December 31, 2021 and 2020, prepared in accordance with
International Financial Reporting Standards (“IFRS”).
The consolidated financial statements and comparative information have been reviewed by the Corporation’s audit
committee, consisting of three independent directors, and approved by the board of directors of the Corporation. Additional
information, including the Corporation’s Annual Information Form (“AIF”) is available on SEDAR at www.sedar.com.
All amounts are in thousands of Canadian dollars, except per share amounts or unless otherwise noted. Basic and
diluted earnings (loss) per share, cash flows from operating activities per share (basic and diluted), and dividends per
share for prior periods have been recalculated to account for the impact of the Corporation’s share issue pursuant to
a rights offering that closed on December 17, 2021. This MD&A is dated as of March 2, 2022.
.
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STRATEGY AND 2021 BUSINESS PLAN
Strategy
Genesis Land Development Corp. (“Genesis” or the “Corporation”) is an integrated land developer and residential home builder
operating in the Calgary Metropolitan Area (“CMA”) holding a portfolio of well-located, entitled and unentitled primarily residential
lands and serviced lots in the CMA.
As a land developer, Genesis acquires, plans, rezones, subdivides, services and sells residential lots and commercial and industrial
lands to third party developers and builders, and sells lots and completed homes through a wholly-owned subsidiary, Genesis
Builders Group Inc. (“GBG”), its home building division. The land portfolio is planned, developed, serviced and sold as single-family
lots and townhouse, multi-family and commercial parcels at opportune times with the objective of maximizing the risk adjusted net
present value of the land and to maximize net cash flow.
GBG designs, builds and sells homes on a significant portion of its single-family lots and its townhouse land parcels. GBG also
acquires single-family lots from other land developers to build and sell single-family homes in additional CMA communities.
Genesis manages its financial position by prudently and opportunistically allocating its cash resources among the following:
Maintaining a strong balance sheet as the priority;
Acquiring and developing land either directly or through land development entities; and
Paying dividends and/or buying back its common shares.
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Highlights:
$109,761 of Revenues in year-end (“YE”) 2021: Higher sales volumes generated revenue of $109,761 in YE 2021 up
from $103,933 achieved in YE 2020. Fourth quarter (“Q4”) 2021 revenues of $26,531 were higher when compared to
$19,817 generated in Q4 2020.
Net Earnings in YE 2021 were $10,877: Net earnings were positive for the 21st consecutive year with net earnings
attributable to equity shareholders in YE 2021 of $10,877 ($0.24 net earnings per share - basic and diluted), compared
to $199 ($0.00 net earnings per share - basic and diluted) in YE 2020. Net earnings attributable to equity shareholders
in Q4 2021 were $4,252 ($0.09 net earnings per share - basic and diluted) compared to $125 ($0.00 net earnings per
share - basic and diluted) in Q4 2020.
191 Homes Sold - up 17% from 2020: In YE 2021, Genesis sold 191 homes, an increase of 17% from the 163 sold in
YE 2020. In Q4 2021, Genesis sold 51 homes, compared to 28 sold in Q4 2020. During YE 2021, Genesis had 249 new
home orders compared to 192 for YE 2020. Genesis had 141 outstanding new home orders on hand at December 31,
2021 (83 at December 31, 2020).
247 Lots Sold - up 10% from 2020: In YE 2021, Genesis sold 247 residential lots (60 to third-party builders and 187
through its home building division, GBG), an increase of 10% from 225 lots in YE 2020 (62 to third-party builders and
163 through GBG). In Q4 2021, Genesis sold 49 residential lots (2 to third-party builders and 47 through GBG) compared
to 30 lots in Q4 2020 (2 to a third-party builder and 28 through GBG).
$29,150 Land Acquisition: In YE 2021, Genesis entered into a binding agreement to acquire approximately 157 acres
of future residential development land in the City of Calgary. Genesis paid a non-refundable deposit of $2,186, with the
balance of $26,964 to be paid on closing, scheduled for April 2022. This project, now called “Huxley”, is expected to be
under development in 2023.
$50,000 Corporate Revolving Line of Credit: In YE 2021, Genesis put in place a $50,000 three-year fixed term secured
corporate revolving line of credit with MCAP Financial Corporation at an interest rate per annum equal to the higher of
prime +1.90% or 4.35%.
$30,000 Rights Offering: Genesis successfully closed a rights offering on December 17, 2021, issuing 15,000,000
common shares of the Corporation at $2.00 per share for gross proceeds of $30,000, representing 100% of the total
rights offered.
Cash on hand of $63,975: On December 31, 2021, Genesis had $63,975 in cash and cash equivalents, which exceeded
outstanding loans and credit facilities balances of $32,668 by $31,307.
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OPERATING HIGHLIGHTS
Key financial results and operating data for Genesis were as follows:
($000s, except for per share items or unless otherwise noted)
2021
2020
2021
2020
Three months ended
December 31, (1)
Year ended
December 31, (2)
Key Financial Data
Total revenues
Direct cost of sales
Gross margin before reversal of write-down / (write-down) (3)
Gross margin before reversal of write-down / (write-down) (%) (3)
Reversal of write-down / (write-down) of real estate held for
development and sale
Gross margin
Net earnings attributable to equity shareholders
Net earnings per share - basic and diluted
Cash flows (used in) from operating activities
Cash flows (used in) from operating activities per share - basic and
diluted
Key Operating Data
Land Development
Total residential lots sold (units)
Residential lot revenues
Gross margin on residential lots sold
Gross margin on residential lots sold (%)
Average revenue per lot sold
Development land revenues
Home Building
Homes sold (units)
Revenues (4)
Gross margin before write-down (3)
Gross margin before write-down (%) (3)
Gross margin on homes sold
Average revenue per home sold
New home orders (units)
Outstanding new home orders at period end (units)
Key Balance Sheet Data
Cash and cash equivalents
Total assets
Loans and credit facilities
Total liabilities
Shareholders’ equity
Total equity
26,531
(19,594)
6,937
26.1%
3,265
10,202
4,252
0.09
(6,326)
(0.15)
49
8,423
3,540
42.0%
172
-
51
26,024
3,397
13.1%
3,397
510
81
19,817
(14,306)
5,511
27.8%
(822)
4,689
125
0.00
22,858
0.52
30
4,772
2,560
53.6%
159
7,146
28
12,198
1,620
13.3%
1,620
436
54
109,761
(82,186)
27,575
25.1%
4,268
31,843
10,877
0.24
2,388
0.05
247
41,095
14,698
35.8%
166
5,870
191
92,416
12,226
13.2%
12,226
484
249
141
103,933
(76,581)
27,352
26.3%
(11,637)
15,715
199
0.00
47,983
1.08
225
39,189
16,336
41.7%
174
16,628
163
75,025
9,485
12.6%
8,670
459
192
83
As at Dec. 31,
2021
As at Dec. 31,
2020 (2)
63,975
324,929
32,668
88,991
228,624
235,938
29,743
266,494
21,470
66,734
187,676
199,760
Loans and credit facilities to total assets
(1) Three months ended December 31, 2021 and 2020 (“Q4 2021” and “Q4 2020”)
(2) Year ended December 31, 2021 and 2020 (“YE 2021” and “YE 2020”)
(3) Non-GAAP financial measure. Refer to heading “Non-GAAP Measures” in this MD&A
(4) Includes Other revenues and revenues of $7,916 for 47 lots in Q4 2021 and $29,620 for 187 lots in YE 2021 purchased by the Home Building division from the Land Development
10%
8%
division ($4,299 and 28 in Q4 2020; $26,909 and 163 in YE 2020) and sold with the home. These amounts are eliminated on consolidation
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Results from operations, including earnings and cash flows, vary considerably between periods for the reasons explained under
the heading “Factors Affecting Results of Operations” in this MD&A.
Factors Affecting Results of Operations
When reviewing the results, there are a number of factors that have historically affected Genesis’ results of operations, including:
the volatility of oil and gas prices and changes in the Canadian/US dollar exchange rate, both of which impact the Alberta
energy industry, and have significant impact on the CMA real estate market and economy;
changes to the regulatory environment, both direct and indirect, including for example, the land development approval
process, mortgage lending rules, immigration policies and economic restrictions imposed by regulatory authorities;
changes in interest rates, including residential mortgage rates and the rates of interest charged to Genesis on its various
credit facilities;
costs incurred for the development and servicing of land and the sale of residential lots and other land parcels occurs
over a substantial period of time and results in cash flows that vary considerably between periods, creating significant
volatility in the revenues, earnings and cash flows from operating activities;
changes in home construction costs due to the availability and timing of trades, material and overall supply chain issues;
land, lot and home prices and gross margins vary by community and lot/home type, the nature of the development work
required to be undertaken before the land and lots are ready for sale, and the original cost of the land and servicing; and
seasonality which has historically resulted in higher revenues and higher cash outflows in the summer and fall months
when home building sales and land servicing often peak.
Market Overview
The Alberta economy improved substantially in 2021 fueled by accommodative monetary policy, including low interest rates, and
improved prices for oil and natural gas. The Royal Bank of Canada has forecast Alberta’s GDP grew by 5.9% in 2021 which
compares to a negative 8.2% in 2020. This economic growth combined with lower supply in housing is reflected in CMA housing
market momentum in of 2021. According to the Calgary Real Estate Board (“CREB”), 2021 home sales of 27,686 were a record
for the CMA, 72% higher than 2020 and 44% higher than the 10-year average. Home supply is very low, down by 51% year over
year. As of December 2021, the available months of supply in Calgary was 1.5 months which compares to 3.06 months at
December 2020. As of December 2021, there was only 0.71 months of home supply on the Airdrie market a decrease of 71%
compared to December 2020. In Calgary, the benchmark price for detached homes increased by 12% to $547 in December 2021
compared to $491 in December 2020.
As a result of the strong market, as of December 31, 2021, Genesis had 141 outstanding new home orders, an increase of 70%
over the 83 outstanding new home orders at the same point in 2020. New home orders were 249 in YE 2021, up from 192 new
home orders in YE 2020. The strong demand has continued in 2022 to date.
Genesis continues to implement its growth strategy acquiring Lewiston (130 acres) in 2019 and contracting Huxley (157 acres) in
2021. These are proceeding through the regulatory process. GBG had housing operations in twelve communities (including five
communities being developed by third party developers) at YE 2021, up from nine communities a year earlier (including two
communities being developed by third party developers). Land servicing investments during 2021 were $43,211, including three
new subdivision phases, up from $23,510 in 2020.
Increased housing market activity was not limited to the CMA with most markets in North America seeing similar price increases
and market tightness. The increased demand across the continent is putting pressure on stressed supply chains, resulting in cost
increases and restricting the availability of some materials such as engineered products and appliances. These challenges are
being felt in both the Corporation’s home building and land development groups. Genesis’ team and key contractors, continue to
proactively address this issue.
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2021 Business Plan
Progress on 2021 Business Plan
The Corporation continues to closely monitor all expenditures for efficiency and effectiveness. During 2021, Genesis continued to
execute its business plan. The following discussion highlights progress made on key elements of the plan.
1) Obtaining Additional Zoning and Servicing Entitlements
Progress in obtaining additional zoning and servicing entitlements for its land continues, with approval processes becoming
subject to greater delay and uncertainty than in past years. As zoning and servicing entitlements are granted by the applicable
municipal authorities, there can be no assurance as to if and/or when the following communities will be available for development
or sale. The timelines discussed below are management’s best estimates at this time.
The following core projects are progressing through approval processes at local municipalities:
Logan Landing: Genesis owns 354 acres of undeveloped land in Calgary’s southeast quadrant referred to as “Logan
Landing”. An Area Structure Plan (“ASP”) for a new residential community on these lands was approved by Calgary City
Council (“Council”) in November 2019. Outline plan and land use applications have been submitted and City of Calgary
Planning Commission approval is anticipated in mid-2022. However, a Growth Management Overlay (“GMO”) restricting
development of these lands remains in place. Council adopts GMOs to control the supply of land available for
development at any time. In December 2021, Genesis re-applied for the removal of the GMO on Logan Landing. City of
Calgary administration is reviewing the GMO removal application and will provide a recommendation to City Council for
consideration in December 2022.
Lewiston: Genesis acquired 130 acres of residential development land in north Calgary in 2019. Outline plan and land
use applications were submitted and approved by the City of Calgary Planning Commission on July 22, 2021. As there
is a GMO restricting development of these lands, in December 2021 Genesis applied for removal of the GMO on
Lewiston. City Administration is reviewing the GMO removal application and will provide a recommendation to Council
for consideration in December 2022.
Huxley (Belvedere): Genesis has prepared and submitted an outline plan and land use plans for the 157 acres it recently
contracted in the Belvedere ASP. These lands are not subject to a GMO and Genesis is working to have approval to
proceed with servicing the first phase in Spring 2023.
OMNI ASP (in North Conrich): Genesis controls 610 acres of undeveloped land in Rocky View County (“County”)
bordering the northeast quadrant of the City of Calgary. Genesis has received ASP approval on a 185-acre commercial
and retail project on a portion of these lands. Progress continues with the County on the development of a conceptual
scheme for this project, with first reading received in September 2021. Second and third reading are anticipated in third
quarter (“Q3”) 2022. The remaining 425 acres are included in a special study area, with a concept plan and ASP
amendment receiving first reading from the County in September 2021.
2) Development and Sale of Land Parcels
Genesis continues to develop and implement detailed plans for each of its core land holdings, with the objective of maximizing the
risk adjusted net present value of the land and to sell or develop the land at the most opportune time. Please see information
provided under the heading “Real Estate Held for Development and Sale” in this MD&A.
Genesis periodically sells land parcels, generally for multifamily or commercial use, that have been developed within its
communities. In Q3 2021 and year-to-date (“YTD”) 2021, Genesis closed sales of three development land parcels in the City of
Calgary; the first being a 4.27-acre parcel for cash consideration of $2,550; the second being a 1.12-acre parcel for cash
consideration of $1,445; the third being a 1.12-acre parcel for cash consideration of $950. Non-core land positions are also sold to
third parties from time to time in the ordinary course of Genesis’ business. In first quarter (“Q1”) 2021 and YTD 2021, a 463.2-acre
parcel of land in British Columbia, held by a controlled limited partnership, was sold for $925.
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3) Servicing Additional Phases
Genesis commenced servicing of three new phases in 2021:
Bayside: Servicing of Bayside phase 12 in Airdrie, will add 84 single family lots. These lots are expected to be available
in 2022. Construction of a vehicle bridge to increase the connectivity of the community commenced in 2021. GBG and a
third party builder will be the home builders in this phase;
Bayview: Servicing of Bayview phase 2 in Airdrie, will add 118 single family lots, a 3.6-acre multi-family site and a 9.0-
acre school site. The single family lots are expected to be available in 2022. GBG and a third party builder will be the
home builders in this phase; and
Sage Hill: This well-located northwest Calgary community is considered an “infill development”. Servicing of the first
phase of 20 acres in this 51-acre development commenced in 2020. The first phase was completed during Q3 2021
providing 99 single family lots, a 3.2-acre multi-family parcel and a 4.1-acre commercial parcel. The second phase of
development of 22 acres commenced in Q3 2021 and will provide 93 lots and 3 multi-family parcels totaling 8.5-acres
that are expected to be available in 2022.
4)
Investing in Additional Lands
During Q1 2021, Genesis entered into a binding agreement to acquire approximately 157 acres of future residential development
land (Huxley) in the Belvedere Area Structure Plan on the east side of the City of Calgary. A non-refundable deposit of $2,186 was
paid, with the balance of $26,964 to be paid on closing, currently scheduled for April 2022. The land is not subject to a GMO and
Genesis has initiated the process for obtaining final land use and outline plan approvals from the City of Calgary. In addition,
Genesis entered into a binding agreement to acquire approximately 3.56 acres of land adjacent to this land for $663. Genesis paid
a deposit of $132, with the balance of $531 to be paid on closing, currently scheduled for July 2022.
In 2020, GBG contracted to acquire 70 lots from a third party developer in the first phase of Homestead and opened show homes
in April 2021. GBG also contracted to acquire 33 lots from a third party land developer in Alpine Park and opened show homes in
November 2021. In second quarter (“Q2”) 2021, GBG contracted to acquire 105 lots in three new phases of the following Calgary
communities, Homestead, Alpine Park and Silverton, from third party land developers. In Q3 2021, GBG contracted to acquire 35
lots in two additional communities, Fireside in Cochrane and Vermilion Hill in Calgary from third party land developers. In Q4 2021,
GBG contracted to acquire an additional 22 lots in Fireside and Homestead from third party land developers. Building and selling
homes in communities developed by other parties is one of the strategies being implemented to drive growth in Genesis’ home
building division.
5) Adding Select Third Party Builders in Genesis Communities
To diversify offerings and increase velocity of sales within its residential communities, Genesis holds regular discussions with
reputable third party builders interested in acquiring lots in future phases in Genesis’ communities. Genesis currently has three
third party builders building in its communities.
6)
Increasing the Velocity of Homes Sold by Genesis Builders Group
In YE 2021, GBG entered into 249 new home sales contracts, an increase of 30% from 192 new home sales contracts in YE 2020.
During Q4 2021, GBG entered into 81 new home sales contracts, an increase of 50% from 54 new home sales contracts in
Q4 2020. As of December 31, 2021, Genesis had 141 outstanding new home orders, an increase of 70% compared to 83 as at
December 31, 2020. To increase the velocity and to adapt to the current market conditions, Genesis has:
increased pricing on select models and completed spec homes;
managed the timing of construction for any new spec homes with the amount of spec home work-in-progress declining
to $2,602 at December 31, 2021, from $5,553 at December 31, 2020;
acquired lots in several communities from third party developers;
pursued construction cost efficiencies and actively managed supply chain challenges; and
continued to monitor and control overhead costs.
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7) Liquidity and Return of Capital
Return of Capital to Shareholders: On December 9, 2020, the Board of Directors declared a cash dividend of $0.15 per common
share for a total of $6,280 payable to shareholders of record on December 23, 2020, which was paid in January 2021.
Since 2014 when it paid its first dividend, Genesis has returned $58,138 to shareholders by way of dividends and bought back
nearly 3.1 million common shares for $8,787.
Rights Offering: On December 17, 2021, Genesis closed a rights offering, issuing 15,000,000 common shares of the Corporation
at $2.00 per share for gross proceeds of $30,000. Genesis intends to use the proceeds, net of offering expenses, to further the
development of existing projects, to pursue acquisition opportunities that may arise and to pay amounts due on previously
announced acquisitions, minimizing the need for additional debt facilities and maintaining the strong financial position.
Focus on Liquidity: As of December 31, 2021, Genesis had $63,975 of cash and cash equivalents on hand (YE 2020 - $29,743),
loans and credit facilities of $32,668 (YE 2020 - $21,470), real estate assets of $218,855 (YE 2020 - $193,309) and total assets of
$324,929 (YE 2020 - $266,494). The ratio of loans and credit facilities to total assets was 10% at December 31, 2021 compared
to 8% at December 31, 2020.
Outlook
Supported by a solid financial position, a strong new-home market and a turnaround in the Alberta economy, Genesis is well-
positioned to take advantage of growth opportunities.
The CMA economy was stronger in 2021, driven in part by improved oil and natural gas prices. International immigration to Calgary
continued to grow in 2021 with increased federal immigration targets and growing interprovincial migration. The Calgary Real
Estate Board forecasts that Calgary is entering 2022 with some of the tightest market conditions seen in over a decade and housing
market momentum will continue well into 2022. Despite these positive signs, economic uncertainty and volatility are likely to remain.
Increases in interest rates, supply chain issues and inflationary pressures will affect operations and could impact the overall
economic recovery. Genesis remains cautious in planning its strategy and operations.
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7
Direct cost of sales
(4,883)
(8,027)
(39.2%)
(31,616)
(37,950)
8,423
-
4,772
7,146
76.5%
N/R (3)
41,095
5,870
39,189
16,628
Land Development
Key Financial Data
Residential lot revenues (1)
Development land revenues
Gross margin before reversal of write-
down / (write-down) (2)
Gross margin before reversal of write-
down / (write-down) (%) (2)
Reversal of write-down / (write-down)
of real estate held for development and
sale
Gross margin
Gain in investments in land
development entities
Other expenses
Earnings (loss) before taxes
Key Operating Data
Residential lots sold to third parties
Residential lots sold through GBG -
home building
Total residential lots sold
Three months ended December 31,
Year ended December 31,
2021
2020
% change
2021
2020
% change
3,540
3,891
(9.0%)
15,349
17,867
(14.1%)
42.0%
32.6%
28.8%
32.7%
32.0%
2.2%
(822)
N/R (3)
4,268
(10,822)
N/R (3)
3,069
121.7%
19,617
7,045
3,265
6,805
562
(2,458)
4,909
2
47
49
-
(2,199)
870
2
28
30
159
N/R (3)
11.8%
N/R (3)
0.0%
67.9%
63.3%
8.2%
562
(8,138)
12,041
-
(7,407)
(362)
60
187
247
166
62
163
225
174
4.9%
(64.7%)
(16.7%)
N/R (3)
N/R (3)
9.9%
N/R (3)
(3.2%)
14.7%
9.8%
(4.6%)
Average revenue per lot sold
(1) Includes residential lot sales to third parties and to GBG
(2) Non-GAAP financial measure. Refer to heading “Non-GAAP Measures” in this MD&A
(3) Not relevant due to the size of the change
172
Gross margin by source of revenue
Three months ended December 31,
Year ended December 31,
2021
2020
% change
2021
2020
% change
8,423
(4,883)
3,540
42.0%
4,772
(2,212)
2,560
53.6%
76.5%
N/R (2)
38.3%
(21.6%)
41,095
39,189
(26,397)
(22,853)
14,698
35.8%
16,336
41.7%
4.9%
15.5%
(10.0%)
(14.1%)
Residential lots
Residential lot revenues (1)
Direct cost of sales
Gross margin
Gross margin (%)
(1) Includes residential lot sales to third parties and to GBG
(2) Not relevant due to the size of the change
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Development land
Development land revenues
Direct cost of sales
Gross margin before reversal of write-
down / (write-down) (1)
Gross margin before reversal of
write-down / (write-down) (%) (1)
Reversal of write-down / (write-down)
of real estate held for development
and sale
Three months ended December 31,
Year ended December 31,
2021
2020
% change
2021
2020
% change
-
-
-
-
7,146
(5,815)
1,331
18.6%
N/R (2)
N/R (2)
N/R (2)
N/R (2)
5,870
(5,219)
651
11.1%
16,628
(15,097)
1,531
9.2%
(64.7%)
(65.4%)
(57.5%)
20.7%
3,265
(822)
N/R (2)
4,268
(10,822)
N/R (2)
Gross margin
(1) Non-GAAP financial measure. Refer to heading “Non-GAAP Measures” in this MD&A
(2) Not relevant due to the size of the change
3,265
509
N/R (2)
4,919
(9,291)
N/R (2)
Results from operations, including earnings and cash flows, vary considerably between periods for the reasons explained under
the heading “Factors Affecting Results of Operations” in this MD&A.
Revenues and unit volumes
Total residential lot sales revenues in YE 2021 were $41,095 (247 lots) up from $39,189 (225 lots) in YE 2020. In YE 2021, 60 lots
were sold to third party builders compared to 62 lots sold to third party builders in YE 2020. In YE 2021, GBG also sold 187 homes
on Genesis lots, up 15% from 163 homes sold on Genesis lots in YE 2020. Residential lot sales to third party builders occur
periodically, depending on the timing of contractual arrangements with these builders.
Two lots were sold to third party builders in both Q4 2021 and Q4 2020. In Q4 2021, GBG sold 47 homes on Genesis lots, up 68%
from 28 homes it sold on Genesis lots in Q4 2020. Total residential lot sales revenues in Q4 2021 were $8,423 (49 lots) compared
to $4,772 (30 lots) in Q4 2020.
In YE 2021, four development land parcels were sold for $5,870 (including one owned by a limited partnership for $925) while five
parcels of development land (including one owned by a limited partnership for $320) were sold for total proceeds of $16,628 in
YE 2020. There was no development land sold in Q4 2021 while two parcels of development land were sold in Q4 2020 for $7,146.
Development land sales occur periodically and comprise sales of commercial, multi-family and other lands that Genesis does not
intend to build on through GBG.
Gross margin
Residential lots had a gross margin of 36% in YE 2021 compared to 42% in YE 2020. Residential lots had a gross margin of 42%
in Q4 2021 compared to 54% in Q4 2020. Gross margins were lower in both Q4 and YE 2021, compared to the same periods in
2020, as the sales in 2021 included 35 lots in Sage Hill which had no margin due to write-downs previously taken. Residential lot
and development land margins can vary significantly as described in the “Factors Affecting Results of Operations” in this MD&A.
Reversal of write-down / (write-down) of real estate held for development and sale
During 2021, Genesis recorded reversals of write-downs of $4,268 (Sage Hill Crest) previously taken on real estate held for
development and sale. During Q4 2021, the Corporation recorded a reversal of a write-down of $3,265 (Sage Hill Crest) previously
taken on real estate held for development and sale. The reversals were based on estimated returns realizable on completion of
development and sale of these lands.
During Q4 2020, the Corporation recorded a net write-down of $822. During 2020, the Corporation recorded total write-downs of
$10,822 on parcels of land held for development and sale, including $5,653 relating to Sage Hill Crest.
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Gain in investments in land development entities
The fair value of investments in land development entities are based on the market value approach method which were obtained
from external third-party appraisals. This method uses prices and other relevant information that have been generated by market
transactions involving identical or comparable assets. The Corporation recorded $562 as a gain in investment in land development
entities during 2021 (2020 - $Nil).
Other expenses
Other expenses
Three months ended December 31,
Year ended December 31,
2021
2020
% change
2021
2020
% change
General and administrative expense
(1,754)
(1,531)
Selling and marketing expense
Finance income
Finance expense
Total
(496)
81
(289)
(461)
296
(503)
(2,458)
(2,199)
14.6%
7.6%
(72.6%)
(42.5%)
11.8%
(5,541)
(1,753)
266
(1,110)
(8,138)
(4,796)
(1,740)
1,479
(2,350)
(7,407)
15.5%
0.7%
(82.0%)
(52.8%)
9.9%
The components of other expenses and the change are shown in the table above.
In YE 2021, other expenses totaled $8,138, 10% higher than $7,407 incurred in YE 2020. In Q4 2021, other expenses totaled
$2,458 or 12% higher than $2,199 incurred in Q4 2020. Other expenses were higher in both Q4 2021 and YTD 2021 due to higher
professional and legal fees (primarily related to the legal settlement with LPLP 2007 and its affiliated limited partnerships).
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10
LOCATION OF GENESIS’ LAND DEVELOPMENT PROJECTS
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E CALGARYHuxley (Belvedere)NE CALGARYROCKY VIEW COUNTYOMNI/425N CALGARYLewistonSTONEY TRAIL NWSTONEY TRAIL SEYANKEE VALLEYBOULEVARDHWY 1 (16TH AVE)GLENMORE TRAIL SEMACLEOD TRAILCROWCHILD TRAIL NWHWY 22XDEERFOOT TRAILQE II HIGHWAYSE CALGARYLogan LandingNW CALGARYNW CALGARYAIRDRIE
Home Building – Genesis Builders Group Inc. (GBG)
The home building business of Genesis is operated through its wholly-owned subsidiary, GBG.
Three months ended December 31,
Year ended December 31,
2021
2020
% change
2021
2020
% change
Key Financial Data
Revenues (1)
Direct cost of sales
Gross margin before write-down (2)
Gross margin before write-down (%) (2)
Write-down relating to a townhouse
project
Gross margin
Other expenses
Earnings (loss) before taxes
Key Operating Data
Homes sold (units)
Average revenue per home sold
New home orders (units)
26,024
12,198
(22,627)
(10,578)
3,397
13.1%
-
3,397
(2,769)
628
51
510
81
1,620
13.3%
-
1,620
(2,120)
(500)
28
436
54
Outstanding new home orders at period end (units)
(1) Revenues include residential home sales and other revenue
(2) Non-GAAP financial measure. Refer to heading “Non-GAAP Measures” in this MD&A
(3) Not relevant due to size of the change
92,416
75,025
(80,190)
(65,540)
113.3%
113.9%
109.7%
(1.5%)
12,226
13.2%
-
-
109.7%
30.6%
N/R (3)
82.1%
17.0%
50.0%
12,226
(9,912)
2,314
191
484
249
141
9,485
12.6%
(815)
8,670
(8,560)
110
163
459
192
83
23.2%
22.4%
28.9%
4.8%
N/R (3)
41.0%
15.8%
N/R (3)
17.2%
5.4%
29.7%
69.9%
Results from operations, including earnings and cash flows, vary considerably between periods for the reasons explained under
the heading “Factors Affecting Results of Operations” in this MD&A.
Revenues and unit volumes
Revenues for single-family homes and townhouses were $92,416 (191 units) in YE 2021, 23% higher than YE 2020 revenues of
$75,025 (163 units). In addition, 249 homes were contracted for sale in YE 2021, an increase of 30%, as compared to 192 in YE
2020, resulting in 141 outstanding new home orders at the end of 2021 as compared to 83 outstanding new home orders at the
end of 2020.
Revenues for single-family homes and townhouses were $26,024 (51 units) in Q4 2021, 113% higher than Q4 2020 revenues of
$12,198 (28 units). In addition, 81 homes were contracted for sale in Q4 2021, an increase of 50%, as compared to 54 in Q4 2020.
Homes sold in YE 2021 had an average price of $484 per home compared to $459 in YE 2020. Homes sold in Q4 2021 had an
average price of $510 per home compared to $436 in Q4 2020. Fluctuations in the average revenue per home sold are due to
differences in product mix and community sales. During 2021 and 2020, GBG's single-family homes product ranged in price from
$292-$899 depending on the location and the model being offered. Similarly, GBG's townhouse product ranged in price from $155-
$310 depending on the location and the model being offered. In Q4 2021, 42 single-family homes and 9 townhouses were sold
compared to 23 single-family homes and 5 townhouses in Q4 2020. In YE 2021, 150 single-family homes and 41 townhouses were
sold compared to 138 single-family homes and 25 townhouses in YE 2020.
187 of the 191 homes sold in YE 2021 were built on residential lots or parcels supplied by Genesis, with lot revenues of $29,620.
All 163 homes sold in YE 2020 were built on residential lots or parcels supplied by Genesis, with lot revenues of $26,909.
47 of the 51 homes sold in Q4 2021 were built on residential lots supplied by Genesis, with lot revenues of $7,916 while all 28
homes sold in Q4 2020 were built on residential lots or parcels supplied by Genesis, with lot revenues of $4,299.
12
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Genesis has invested in land development entities (a limited partnership and a joint venture) that provide the right to purchase a
number of lots in the new communities of Homestead and Vermilion Hill. Genesis views this as one of its strategies to drive growth
in GBG. In Q2 2021, GBG contracted to acquire 105 lots in three new phases in the communities of Homestead, Alpine Park and
Silverton, from third party land developers. In addition, during Q3 2021, GBG contracted to acquire 35 lots in two new communities,
Fireside in Cochrane and Vermilion Hill in Calgary from third party land developers. In Q4 2021, GBG contracted to acquire 22 lots
in the communities of Fireside and Homestead from third party land developers.
GBG builds single-family homes either after receiving a firm sale contract (a “pre-construction home”) or on a quick possession
(“spec”) basis and builds townhouses generally on a quick possession basis. Historically, the delivery time of a pre-construction
home was determined at the time of sale and typically ranged between 6 to 10 months; in 2021 supply chain issues became a
significant concern, with the supply of some materials and products being unpredictable, and delivery time lines have increased to
10 to 12 months. Construction of quick possession homes is started before GBG receives a firm sale contract to ensure there is
sufficient inventory for buyers seeking possession within a short period of time (often 30-90 days). Townhouses are multi-unit
complexes for which GBG commences construction prior to selling all the units in any individual building. This provides construction
efficiencies and requires GBG to build some townhouses on a spec basis and to hold them in inventory until sold. The timing of
the sale of spec homes is unpredictable, with spec home buyers usually being time sensitive, wanting to take possession in a short
time frame. Genesis closely monitors its home building work-in-progress to anticipate and react to market conditions in a timely
manner. As at YE 2021, GBG had $28,870 of work in progress, of which approximately $2,602 was related to spec homes (YE
2020 - $16,190 and $5,553, respectively).
The following table shows the split between quick possession sales (spec homes that are contracted and delivered within 90 days)
and pre-construction homes (homes built after receiving a firm sale contract). The timeline for pre-construction homes ranges from
around 8 to 10 months and can exceed this depending on the desired possession date.
Three months ended December 31,
Year ended December 31,
2021
2020
% change
2021
2020
% change
7
44
51
19
9
28
(63.2%)
N/R (1)
82.1%
66
125
191
86
77
163
(23.3%)
62.3%
17.2%
Quick possession sales (units)
Pre-construction home sales (units)
Total home sales (units)
(1) Not relevant due to size of the change
Gross margin
Gross margin before write-down on home sales was 13.2% in YE 2021 compared to 12.6% in YE 2020. Genesis realized gross
margin before write-down on home sales of 13.1% in Q4 2021 as compared to 13.3% in Q4 2020. Fluctuations in gross margin
before write-down are due to differences in product, community mix and market conditions and may drive price adjustments. In YE
2021, 150 single-family homes and 41 townhouses were sold compared to 138 single-family homes and 25 townhouses in YE
2020. In Q4 2021, 42 single-family homes and 9 townhouses were sold compared to 23 single-family homes and 5 townhouses in
Q4 2020.
Write-down on townhouse project
No write-down was required in YE 2021 (2020 - $815).
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Other expenses
Other expenses
General and administrative expense
Selling and marketing expense
Finance income
Finance expense
Total
(1) Not relevant due to size of the change
Three months ended December 31,
Year ended December 31,
2021
2020
% change
2021
2020
% change
(1,867)
(885)
16
(33)
(1,472)
(620)
3
(31)
(2,769)
(2,120)
26.8%
42.7%
N/R (1)
6.5%
30.6%
(6,484)
(3,390)
72
(110)
(5,613)
(2,722)
18
(243)
(9,912)
(8,560)
15.5%
24.5%
N/R (1)
(54.7%)
15.8%
The components of other expenses and the change are shown in the table above.
In YE 2021, other expenses were $9,912, 16% higher compared to $8,560 incurred in YE 2020. In Q4 2021, other expenses totaled
$2,769, 31% higher than $2,120 incurred in Q4 2020. Other expenses were higher in both Q4 and YTD 2021 due to higher
professional services, compensation expenses and sales and marketing expenses (including sales commissions). These increases
were due in part to higher levels of activity in the home building business.
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14
LOCATION OF GBG BUILDING COMMUNITIES
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STONEY TRAIL NWSTONEY TRAIL SEYANKEE VALLEYBOULEVARDHWY 1 (16TH AVE)GLENMORE TRAIL SEMACLEOD TRAILCROWCHILD TRAIL NWHWY 22XDEERFOOT TRAILQE II HIGHWAYGenesis CommunitiesThird Party CommunitiesCOCHRANESW CALGARYSW CALGARYVermilion HillSW CALGARYNE CALGARYNE CALGARYNW CALGARYAIRDRIENW CALGARY
Real Estate Held for Development and Sale
Real estate held for development and sale
Accumulated provision for write-downs
December 31,
2021
227,984
(9,129)
218,855
2020
% change
215,050
6.0%
(21,741)
(58.0%)
193,309
13.2%
Refer to note 5 in the consolidated financial statements for the years ended December 31, 2021 and 2020 which details the
components of the changes in the gross book value and net book value of real estate held for development and sale.
Real estate held for development and sale is affected by the sale of residential lots, homes, development land parcels, acquisitions
and development and construction activities. Real estate held for development and sale increased by $25,546 as at YE 2021
compared to YE 2020 mainly due to: (i) the acquisitions of 98 CMA residential lots from third party developers for $12,804; (ii)
active development and construction activities; and (iii) the reversals of $4,268 of write-downs previously taken on real estate held
for development and sale.
The following table presents Genesis’ real estate held for development and sale at net book value (that is net of provisions for
write-downs) as at December 31, 2021:
Real Estate Held for Development and Sale
Community
Airdrie - Bayside, Bayview, Canals
Calgary NW - Sage Meadows
Calgary NW - Sage Hill
Calgary NE - Saddlestone
Calgary N - Lewiston
Calgary SE - Logan Landing
Rocky View County - North Conrich (2)
Sub-total
Other lands (3) - non-core
Total land development
Home building construction work-in-progress
Third-party lots
Total home building work-in-progress
Total land development and home building
Limited Partnerships (2), (4)
Total real estate held for development and sale
Net Book Value
Lots, multi-
family &
commercial
parcels
Land held for
development (1)
Total
8,966
6,899
18,616
2,980
-
-
-
37,461
29
37,490
34,642
-
22,176
-
36,483
45,940
5,689
144,930
2,195
147,125
43,608
6,899
40,792
2,980
36,483
45,940
5,689
182,391
2,224
184,615
16,047
12,823
28,870
213,485
5,370
218,855
(1) Land held for development comprises lands not yet subdivided into single-family lots or parcels
(2) Includes the undivided interest of Genesis and two limited partnerships in North Conrich including the “Omni” project
(3) Other lands are non-core and available for sale
(4) Net of intra-segment eliminations of $4,194
16
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The following table presents the breakdown of Genesis’ serviced single-family lots, multi-family and commercial parcels shown
above, by community as at December 31, 2021:
Serviced Lots, Multi-family and
Commercial Parcels, by Community
Airdrie - Bayside, Bayview, Canals
Calgary NW - Sage Meadows
Calgary NW - Sage Hill
Calgary NE - Saddlestone
Other lots - non-core
Total
Net Book
Value
8,966
6,899
Single-family
lots
48
3
Townhouse
units
41
-
Townhouse/
multi-family
parcels
1
1
Commercial
parcels
-
-
18,616
2,980
37,461
29
37,490
64
27
142
13
155
-
-
41
-
41
1
-
3
-
3
2
-
2
-
2
The following table presents the estimated equivalent, if and when developed, by community of single-family lots and multi-family
and commercial acres of Genesis’ land held for development (shown previously) as at December 31, 2021 based on the
Corporation’s detailed plans for the development of its lands. Refer to the section in this MD&A entitled “Obtaining Additional
Zoning and Servicing Entitlements” for the status of Logan Landing, Lewiston and North Conrich. Given the uncertainties related
to the regulatory approval process and market conditions, there can be no assurance as to when or if any or all of these lands can
or will be fully developed.
Land Held for Development, by
Community
Airdrie - Bayside, Bayview
Calgary NW - Sage Hill
Calgary N - Lewiston
Calgary SE - Logan Landing
Rocky View County - North Conrich (2)
Other lands - non-core
Total
Net Book
Value
34,642
22,176
36,483
45,940
5,689
144,930
2,195
147,125
Land (acres) (1)
186
31
134
354
312
1,017
300
1,317
Estimated Equivalent if/when Developed
Single-family
(lots)
1,112
Multi-family
(acres)
9
Commercial
(acres)
2
183
892
1,190
-
3,377
-
3,377
11
3
16
-
39
-
39
-
4
-
-
6
-
6
(1) Land not yet subdivided into single-family and other lots or parcels
(2) Includes the undivided interest of Genesis in North Conrich including the “Omni” project
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Amounts Receivable
Amounts receivable
December 31,
2021
13,632
2020
% change
11,006
23.9%
Genesis generally receives a minimum 15% non-refundable deposit at the time of entering into a sale agreement for residential
lots with a third party builder. Title to a lot or home that is contracted for sale is not transferred by Genesis to the builder or purchaser
until full payment is received, thus mitigating credit risk.
The increase of $2,626 in amounts receivable was due to higher lot sales. As at YE 2021, Genesis had $12,135 in amounts
receivable related to the sale of 77 lots to third party builders compared to $10,466 (related to 63 lots) in amounts receivable as at
YE 2020.
Individual balances due from third party builders at YE 2021 that were 10% or more of total amounts receivable were $12,135 from
three third party builders (YE 2020 - $10,235 from two third party builders).
Vendor-take-back Mortgage Receivable
Vendor-take-back mortgage receivable
(1) Not relevant due to size of the change
December 31,
2021
-
2020 % change
2,719
N/R (1)
During Q1 2020, the Corporation closed the sale of an 8.17-acre parcel of development land in northwest Calgary for $8,987 in
consideration for a cash payment of $3,768 and a $5,219 vendor-take-back mortgage with an interest rate of 5% per annum. The
vendor-take-back mortgage receivable is to be repaid in three installments of which two installments of $1,250 each were paid on
March 31, 2020 and June 30, 2020. The last installment of $2,719 was paid on December 15, 2021. Interest totaling $132 was
received during 2021 (2020 - $127).
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Cash Flows from Operating Activities
Results from operations, including earnings and cash flows, vary considerably between periods for the reasons explained under
the heading “Factors Affecting Results of Operations” in this MD&A.
Cash flows (used in) from operating activities
Cash flows (used in) from operating activities per share - basic and
diluted
Three months ended
December 31,
2021
2020
(6,326)
22,858
(0.15)
0.52
Year ended
December 31,
2021
2,388
0.05
2020
47,983
1.08
The changes in cash flows from operating activities between Q4 2021 and Q4 2020 consist of the following:
Cash inflows from sale of residential homes by GBG
Cash inflows from sale of residential lots
Cash inflows from sale of development land
Cash outflows for home building activity
Cash outflows for land servicing
Cash outflows for lots / land acquisitions
Cash outflows paid to suppliers and employees
Other cash inflows
Total
Three months ended December 31,
2021
26,776
3,220
2,719
(16,675)
(17,277)
(1,165)
(4,434)
510
2020
$ change
13,488
2,488
26,646
(9,596)
(5,411)
(1,068)
(4,500)
811
13,288
732
(23,927)
(7,079)
(11,866)
(97)
66
(301)
(6,326)
22,858
(29,184)
The changes in cash flows from operating activities between YE 2021 and YE 2020 consist of the following:
Cash inflows from sale of residential homes by GBG
Cash inflows from sale of residential lots
Cash inflows from sale of development land
Cash outflows for home building activity
Cash outflows for land servicing
Cash outflows for lots / land acquisitions
Year ended December 31,
2021
95,480
13,981
8,589
(57,323)
(39,868)
(3,993)
2020
$ change
75,255
7,272
20,225
6,709
33,409
(24,820)
(34,311)
(23,012)
(17,574)
(22,294)
(4,246)
253
Cash outflows paid to suppliers and employees
(16,053)
(14,309)
(1,744)
Other cash inflows
Income tax refunds
Total
1,115
460
2,388
1,076
1,411
39
(951)
47,983
(45,595)
19
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Cash inflows from the sale of residential homes by GBG is related to the volume of homes sold. Genesis sells residential lots to
third party builders and typically receives 15% of the purchase price as a non-refundable deposit from the builder. On receipt of a
minimum 15% non-refundable deposit after agreed to services pertaining to the property have been substantially performed,
Genesis recognizes all of the sales revenue. The balance of the purchase price is generally received in cash at the time of closing
of the sale by the third party builder to a home buyer, which can be many months later, resulting in a timing difference between
sales revenue recognition and the actual receipt of cash.
Higher sales volumes of home and lots drove increased cash inflows and outflows for home building activity and land servicing in
order to meet future anticipated demand.
LIABILITIES AND SHAREHOLDERS’ EQUITY
The following table presents Genesis’ liabilities and equity at YE 2021 and YE 2020:
Loans and credit facilities
Dividend payable
Customer deposits
Accounts payable and accrued liabilities
Lease liabilities
Provision for future development costs
Income taxes payable
Total liabilities
Non-controlling interest
Shareholders’ equity
Total liabilities and equity
The ratio of total liabilities to equity is as follows:
Total liabilities
Total equity
Total liabilities to equity (1)
(1) Calculated as total liabilities divided by total equity
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December 31,
2021
32,668
-
9,002
26,408
842
17,979
2,092
88,991
7,314
228,624
324,929
% of total
10%
-
3%
8%
0%
6%
1%
28%
2%
70%
100%
2020
21,470
6,280
3,889
14,092
790
20,213
-
66,734
12,084
187,676
266,494
% of total
8%
3%
1%
5%
0%
8%
-
25%
5%
70%
100%
December 31, 2021 December 31, 2020
88,991
235,938
38%
66,734
199,760
33%
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Loans and Credit Facilities
Corporate revolving line of credit
Land development servicing loans
Demand operating line for single-family homes
Project specific townhouse construction loans
Vendor-take-back mortgage payable – Lewiston (1)
Unamortized deferred fees on loans and credit
facilities
Balance, end of period
(1) Repaid in January 2022
Q4 2021
Q3 2021
Q2 2021
Q1 2021
Q4 2020
16,237
5,794
1,917
-
9,312
33,260
(592)
32,668
9,537
1,311
1,831
-
9,312
21,991
(641)
21,350
8,159
-
1,181
-
9,312
18,652
(638)
18,014
2,606
-
1,983
1,333
18,624
24,546
(700)
23,846
-
-
1,662
1,185
18,624
21,471
(1)
21,470
The continuity of Genesis’ corporate revolving line of credit, land development servicing loans and VTB mortgage payable,
excluding deferred fees on loans and credit facilities, is as follows:
Year ended December 31, 2021
Corporate
revolving line of
credit
-
41,240
(25,003)
16,237
Land
development
servicing
loans
-
7,759
(1,965)
5,794
VTB payable -
Lewiston
18,624
-
(9,312)
9,312
Year ended
December 31,
2020
Total
18,624
48,999
(36,280)
31,343
Total
30,779
3,116
(15,271)
18,624
Balance, beginning of period
Advances
Repayments
Balance, end of period
Loans and credit facilities are used primarily to finance the costs of developing land, building homes and for land purchases.
Genesis accesses these facilities, cash from operations and cash on hand in a balanced manner to finance its operations.
Genesis has various covenants in place with its lenders with respect to its loan and credit facilities. Such covenants include credit
usage restrictions; cancellation, prepayment, confidentiality and cross default clauses; sales coverage requirements; conditions
precedent for funding; and other terms such as, but not limited to, maintaining contracted lot prices, restrictions on encumbrances,
liens and charges, material changes to project plans, and material changes in the Corporation’s ownership structure.
Genesis and its consolidated entities were in compliance with all lender covenants for all periods in this MD&A.
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Corporate revolving line of credit
During Q1 2021, the Corporation put in place a $50,000 three-year fixed term secured corporate revolving line of credit with a
major Canadian financial institution at an interest rate per annum equal to the higher of prime +1.90% or 4.35%. This is secured
by specific dedicated lands and a general corporate charge on all assets of the Corporation. As at December 31, 2021, the amount
drawn on this facility was $16,237. Subsequent to December 31, 2021, in February 2022, the loan was renewed and matures on
February 1, 2025.
Land development servicing loan
As at December 31, 2021, Genesis has a land project loan facility with $5,794 drawn (YE 2020 - $Nil). Up to $13,652 is available
to finance future development and servicing costs from this facility as land development activities progress. This facility bears
interest at prime +0.50% per annum and matures on May 12, 2024. The Corporation renewed and amended this credit facility in
Q3 2021.
Demand operating line for single-family homes
GBG has a demand operating line of $6,500 bearing interest at prime +0.75% per annum. As at December 31, 2021, the amount
drawn on this facility was $1,917 (YE 2020 - $1,662). Subsequent to December 31, 2021, in January 2022, the loan was amended
to increase the operating line of credit facility from $6,500 to $10,000.
Project specific townhouse construction loans
As at December 31, 2021, GBG has a townhouse project loan facility with $Nil drawn (YE 2020 - $614). Up to $2,500 is available
from this facility to finance future construction costs on this townhouse project. This facility bears interest at prime +0.90% per
annum and matures on August 28, 2022. The Corporation renewed this credit facility in Q4 2021.
During Q2 2021, the Corporation closed a townhouse project loan facility with $Nil drawn at the time it was closed. As at YE 2020,
the amount drawn on this facility was $571.
Vendor-take-back mortgage payable
Genesis entered into an $18,624 vendor-take-back mortgage on the purchase of its north Calgary lands (Lewiston) in September
2019. The vendor-take-back mortgage is secured by the land, has an interest rate of 5% per annum and is repayable in two equal
installments of $9,312 in May 2021 and 2022. The first installment of $9,312 was paid in May 2021. Subsequent to December 31,
2021, in January 2022, the final installment of $9,312 was paid.
Provision for Future Development Costs
When Genesis sells lots, land parcels and homes, it remains responsible for the payment of certain future development costs
known as provision for future development costs (“FDC”).
In Genesis’ land development business, FDC represents the estimated remaining construction and other development costs related
to each lot or parcel that has previously been sold by Genesis, if any. These estimated costs include the direct and indirect
construction and other development costs, including municipal levies, expected to be incurred by Genesis during the remainder of
the development process, net of expected future recoveries from third parties that are allocable to the relevant lot or parcel. FDC
is reviewed periodically and, when a prior estimate is known to be different from the actual costs incurred or expected to be incurred,
an adjustment is made to FDC and a corresponding adjustment is made to cost of sales and in some cases, to real estate held for
development and sale.
FDC for GBG are additional future costs relating to previously sold homes estimated to be incurred, which are primarily for seasonal
and other work (such as paving and landscaping) and estimated warranty expenses over the one-year warranty period.
FDC as at YE 2021 was $15,096 for the land division (YE 2020 - $18,737) and $2,883 for GBG (YE 2020 - $1,476). For additional
details, please see information provided under the heading “Critical Accounting Estimates” in this MD&A.
22
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LIQUIDITY AND CAPITAL RESOURCES
Genesis had cash and cash equivalents of $63,975 and loans and credit facilities of $32,668 at YE 2021 compared to $29,743 and
$21,470 respectively, at YE 2020 resulting in net cash (refer to heading “Non-GAAP Measures” in this MD&A) of $31,307 at YE
2021 compared to net cash (refer to heading “Non-GAAP Measures” in this MD&A) of $8,273 at YE 2020. The YE 2021 cash and
cash equivalents balance includes the $29,894 net proceeds from the December 2021 equity issue as a result of the successful
rights offering which was 100% subscribed. The components of loans and credit facilities are detailed below. For additional details,
please see information provided under the heading “Loans and Credit Facilities” in this MD&A.
Cash and cash equivalents
Corporate revolving line of credit
Land development servicing and home building loans
VTB payable
Total loans and credit facilities
Net cash (1) (2)
(1) Calculated as the difference between cash and cash equivalents and total loans and credit facilities
(2) Non-GAAP financial measure. Refer to heading “Non-GAAP Measures” in this MD&A
(3) Not relevant due to size of the change
Loans and credit facilities as a percentage of total assets (1)
Corporate revolving line of credit
Land development servicing and home building loans
VTB payable
Loans and credit facilities to total assets
Total liabilities to equity (2)
(1) Calculated as each component of loans and credit facilities divided by total assets
(2) Calculated as total liabilities divided by total equity
(3) Not relevant due to size of the change
Net cash (1) as a percentage of total assets
Cash and cash equivalents
Loans and credit facilities
Net cash (1) (2)
Net cash to total assets (3)
(1) Non-GAAP financial measure. Refer to heading “Non-GAAP Measures” in this MD&A
(2) Calculated as the difference between cash and cash equivalents and total loans and credit facilities
(3) Calculated as net cash divided by total assets
(4) Not relevant due to size of the change
December 31,
2020 % change
29,743
-
2,846
N/R (3)
N/R (3)
N/R (3)
18,624
(50.0%)
21,470
52.2%
8,273
N/R (3)
December 31,
2020
% change
-
1.1%
7.0%
8.1%
33.4%
N/R (3)
N/R (3)
(58.6%)
23.5%
12.9%
December 31,
2020
% change
29,743
21,470
8,273
3.1%
N/R (4)
52.2%
N/R (4)
N/R (4)
2021
63,975
15,723
7,633
9,312
32,668
31,307
2021
4.8%
2.3%
2.9%
10.0%
37.7%
2021
63,975
32,668
31,307
9.6%
Based on the Corporation’s operating history, relationships with lenders and committed sales contracts, management believes that
Genesis has the ability to continue to renew or repay its financial obligations as they become due. The Corporation expects to
generate sufficient liquidity from its cash flows from operating activities, undrawn credit facilities and cash on hand to meet its
financial obligations (including the above liabilities) and commitments as they become due.
23
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Finance Expense
Interest incurred
Interest relating to VTB (1)
Financing fees amortized
Interest and financing fees capitalized
(1) VTB related to Lewiston lands
(2) Not relevant due to size of the change
Three months ended December 31,
Year ended December 31,
2021
2020
% change
2021
2020
% change
200
117
74
(69)
322
226
234
75
-
535
(11.5%)
(50.0%)
(1.3%)
N/R (2)
(39.8%)
479
658
249
(166)
1,220
1,329
931
333
-
2,593
(64.0%)
(29.3%)
(25.2%)
N/R (2)
(53.0%)
Finance expense was lower in Q4 2021 compared to Q4 2020 mainly due to (i) lower VTB balance of $9,312 in Q4 2021 compared
to $18,624 in Q4 2020; and (ii) interest and financing fees capitalized as a component of development activities.
Finance expense was lower in YE 2021 compared to YE 2020 due to (i) an installment of $9,312 made towards the balance in
May 2021, reducing the VTB payable balance and its corresponding interest expense incurred compared to an $18,624 VTB
payable for a full year in 2020; (ii) significantly lower average loan balances throughout 2021 excluding the VTB balance; and (iii)
$166 of interest and financing fees capitalized as a component of development activities in 2021 (2020 - $nil).
The weighted average interest rate of loan agreements with various financial institutions was 3.92% (YE 2020 - 3.26%) based on
December 31, 2021 balances.
Income Taxes Payable (Recoverable)
The continuity in income taxes payable (recoverable) is follows:
Balance, beginning of period
Provision for current income tax
Income tax refunds net of payments
Balance, end of period
December 31, 2021
December 31, 2020
(559)
2,191
460
2,092
(1,144)
(826)
1,411
(559)
As at December 31, 2021, income taxes payable of $2,092 is a result of tax on the current year’s income, partially offset by
installment payments made during the year. All refunds relating to the prior year have been received and are included in net
receipts.
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Shareholders’ Equity
As at March 2, 2022, the Corporation had 56,863,335 common shares issued and outstanding. The common shares of the
Corporation are listed for trading on the Toronto Stock Exchange under the symbol “GDC”.
The Corporation’s normal course issuer bid (“NCIB”) expired on October 12, 2021. The Corporation purchased and cancelled
common shares under its NCIBs as follows:
Number of shares purchased and cancelled
Total cost
Average price per share purchased
Shares cancelled as a % of common shares
outstanding at beginning of period
Three months ended
December 31,
2021
2020
Year ended
December 31,
2021
-
-
-
-
106,982
175
1.66
0.25%
-
-
-
-
2020
296,592
465
1.58
0.70%
On November 10, 2021, the Corporation announced the offering of rights (the “Rights Offering”) to eligible holders of its common
shares (the “Common Shares”) at the close of business on the record date of November 18, 2021, on the basis of one right (a
“Right”) for each Common Share held. Each whole Right entitled the holder to subscribe for 0.3583088 of a Common Share upon
payment of the subscription price of $2.00 per Common Share. The Rights Offering closed on December 17, 2021, and all Rights
were exercised in exchange for 15,000,000 Common Shares. The Corporation received gross proceeds of $30,000 and paid
issuance costs of $106. The net proceeds of $29,894 are shown in the Statements of Changes in Equity.
Contractual Obligations and Debt Repayment
Contractual obligations (excluding accounts payable, accrued liabilities, income taxes payable, customer deposits and provision
for future development costs) at YE 2021 were as follows:
Current
January 2023 to December 2023
January 2024 to December 2024
January 2025 and thereafter
Loans and
Credit
Facilities (1)
11,229
-
22,031
-
Levies and
Municipal
Fees
Land and Lot
Purchase
Contracts
Lease
Obligations (2)
4,942
5,255
1,697
-
33,563
13,651
2,338
-
427
440
426
909
Total
33,260
11,894
49,552
2,202
(1) Excludes deferred fees on loans and credit facilities
(2) Includes variable operating costs
Total
50,161
19,346
26,492
909
96,908
Levies and municipal fees are related to municipal agreements signed by Genesis on commencement of development of certain
real estate assets. Non-payment of levies and municipal fees could result in the municipalities drawing upon letters of credit or
surety bonds, impact the development of the associated real estate assets and impact Genesis’ status as a developer with the
municipality. Genesis is current with regard to all levies and fees due to municipal authorities.
Land and lot purchase contracts of $49,552 relate to the purchase of real estate, including residential lots ($22,057) and
development land ($27,495), as part of Genesis’ operations. These contracts may require payment of an initial deposit with the
balance of the contract price being paid at agreed future dates.
Genesis has certain lease agreements that are entered in the normal course of operations. Genesis signed a sublease for a new
head office in Calgary in April 2020 and moved in September 2020. The sublease expires in February 2027 and the total payments
over the remaining term of the lease for base rent and parking is $804. In the event the office lease is terminated early, Genesis is
liable to pay the landlord for the loss of its income for the unexpired portion of the lease, in addition to damages and other expenses
incurred by the landlord, if any. Genesis also has other minor operating leases.
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In 2012, Genesis entered into a memorandum of understanding with the Northeast Community Society to contribute $5,000 over
10 years for 15-year naming rights to the “Genesis Centre for Community Wellness”, a recreation complex in northeast Calgary
($500 each year, ending in 2021). All ten installments totaling $5,000 were paid as at December 31, 2021. Over a period of 10
years, commencing in 2008 and ending in 2017, Genesis contributed $200 each year for a total of $2,000 for 40-year naming rights
to “Genesis Place”, a recreation complex in the City of Airdrie.
As a normal part of business, Genesis has entered into arrangements and incurred obligations that will impact future operations
and liquidity, some of which are reflected as short-term liabilities.
Current Contractual Obligations and Commitments
Loans and credit facilities, excluding deferred fees on loans and credit facilities
Accounts payable and accrued liabilities
Dividend payable
Total short-term liabilities
Levies and municipal fees
Land and lot purchase contracts
Commitments (1), (2)
December 31, 2021
December 31, 2020
11,229
24,597
-
35,826
4,942
33,563
427
74,758
12,159
14,092
6,280
32,531
6,415
652
831
40,429
(1) Commitments at December 31, 2021 comprises lease obligations
(2) Commitments at December 31, 2020 comprises naming rights and lease obligations
At YE 2021, Genesis had obligations due within the next 12 months of $74,758 of which $11,229 related to loans and credit
facilities. Repayment is either linked directly to the collection of lot receivables and sales proceeds or due at maturity. Accounts
payable and accrued liabilities includes $7,789 related to residential lot purchases from third party developers and the balance
mainly relates to trades payable. Management expects that Genesis will have sufficient liquidity from its cash flows from operating
activities, supplemented by undrawn credit facilities and cash on hand, to meet its financial obligations (including the above
liabilities) as they become due. The cash dividend declared on December 9, 2020 in the aggregate amount of $6,280 was paid in
January 2021.
OFF BALANCE SHEET ARRANGEMENTS
Letters of Credit and Surety Bonds
Genesis has an ongoing requirement to provide irrevocable letters of credit and surety bonds to municipalities as part of the sub-
division plan registration process. These letters of credit and surety bonds indemnify the municipalities by enabling them to draw
upon them if Genesis does not perform its contractual obligations. At YE 2021, these amounted to approximately $7,747 (YE 2020
- $3,666).
Levies and Municipal Fees
For additional details, please see information provided under the heading “Contractual Obligations and Debt Repayment” in this
MD&A.
Land and Lot Purchase Contracts
For additional details, please see information provided under the heading “Contractual Obligations and Debt Repayment” in this
MD&A.
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SELECTED ANNUAL INFORMATION
Total revenues
Gross margin before reversal of write-down / write-down (1)
Gross margin
Net earnings attributable to equity shareholders
Net earnings per share – basic and diluted
Total assets
Loans and credit facilities
Cash dividends per share, declared
2021
2020
109,761
103,933
27,575
31,843
10,877
0.24
27,352
15,715
199
0.00
2019
68,097
22,220
21,420
1,701
0.04
2018
81,437
22,233
20,413
4,124
0.09
2017
150,933
54,324
53,229
16,998
0.37
324,929
266,494
296,268
278,156
301,425
32,668
-
21,470
0.14 (2)
51,546
31,696
-
0.23
30,135
0.43 (3)
(1)) Non-GAAP financial measure. Refer to heading “Non-GAAP Measures” in this MD&A
(2) A cash dividend of $0.14 per share was declared in December 2020 and was paid in January 2021
(3) A cash dividend of $0.43 per share was declared in December 2017 and was paid in January 2018
Return on shareholders’ equity (“ROE”) (1)
2021
5.2%
2020
0.1%
2019
0.9%
2018
2.1%
2017
8.3%
Average shareholders’ equity (2)
208,150
190,817
192,964
196,684
203,574
(1) Calculated as Net earnings attributable to equity shareholders divided by average Shareholders’ equity
(2) Calculated as the sum of Shareholders’ equity per the financial statements at the beginning and end of each year divided by two
ROE is calculated as net earnings attributable to equity shareholders divided by average shareholders’ equity. The many factors
that affect net earnings have been explained throughout this MD&A. In addition, shareholders’ equity was affected by dividends
and the repurchase and cancellation of shares under Genesis’ NCIB. For additional details on dividends and NCIB, please see
information provided under the heading Liquidity and return of capital in this MD&A.
For additional details, please see information provided under the heading Factors Affecting Results of Operations in this MD&A
which discusses the factors that affect Genesis’ results and seasonality.
Summary analysis for last 3 years
Total revenues consist of residential lot sales, development land sales, residential home sales and other revenues. Residential lot
sales volumes were 247, 225 and 161 units in 2021, 2020 and 2019, respectively, reflecting market conditions in each period. In
addition, development land sales were $5,870, $16,628 and $550 for 2021, 2020 and 2019 respectively. Development land sales
are lumpy in nature and comprise sales of non-core lands, commercial lands and other lands that Genesis does not intend to build
on.
Residential homes sold were 191, 163 and 128 in 2021, 2020 and 2019 respectively. Included in this were single-family homes
sales of 150, 138 and 111 units in 2021, 2020 and 2019 respectively.
Gross margins in 2021 were higher mainly due higher volumes of residential lots and homes and due to a reversal of write-downs
of $4,268 in YE 2021. Gross margins on development land sales can vary significantly and are also impacted by write-downs or
reversal of write-downs on real estate held for development and sale. There was a reversal of write-down $4,268 in 2021 and write-
downs of $10,822 and $800 in 2020 and 2019 respectively. Net earnings and net earnings per share - basic and diluted were
affected as a result of the above.
Total assets increased by $58,435 in 2021 compared to 2020. This was mainly due to an increase in real estate held for
development and sale by $25,546 and an increase in cash and cash equivalents of $34,232 primarily from proceeds of rights
offering.
Total assets decreased by $29,774 in 2020 compared to 2019. This was mainly due to a decrease in real estate held for
development and sale by $28,960 and a reduction of $17,839 in VTB mortgage receivable, partially offset by an increase in cash
and cash equivalents of $13,495 during the year.
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Total assets increased by $18,112 in 2019 compared to 2018. This was mainly due to the purchase of 130 acres of future residential
development land in north Calgary for $23,725 and investments of $5,608 in two land development entities in Calgary. This was
partially offset by a decrease in accounts receivable of $8,829 due to the collection of these amounts during the year.
Total loans and credit facilities increased by $11,198 in 2021 compared to 2020. This was mainly due to higher loan balances for
active land development and home building activities. The increase was partially offset by the repayment of the first $9,312
installment related to the acquisition of a $18,624 VTB for the purchase of the Calgary north lands.
Total loans and credit facilities decreased by $30,076 in 2020 compared to 2019. This was mainly due to the final installment of
$8,000 paid in January 2020 on the VTB related to Genesis’ southeast Calgary lands and the repayment of a $14,470 loan that
was used to fund the $20,500 VTB from a limited partnership. In addition, Genesis paid off and closed several loans and credit
facilities in December 2020.
Total loans and credit facilities increased in 2019 compared to 2018. This was mainly due to the acquisition of a $18,624 VTB
related to the purchase of the Calgary north lands and the acquisition of a $14,470 loan that was used to fund the $20,500 VTB
from a limited partnership.
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SUMMARY OF QUARTERLY RESULTS
Q4
2021
26,531
4,252
Revenues
Net earnings (loss) (1)
EPS (2)
0.09
(1) Net earnings (loss) attributable to equity shareholders
(2) Net earnings (loss) per share - basic and diluted
Q3
2021
34,988
2,615
0.06
Q2
2021
29,529
2,688
0.06
Q1
2021
18,713
1,322
0.03
Q1
2021
-
6,280
-
0.14
Q4
2020
Q3
2020
Q2
2020
19,817
29,739
30,725
125
0.00
3,813
0.09
3,644
0.08
Q1
2020
23,652
(7,383)
(0.17)
Q4
2020
6,280
-
0.14
-
Q3
2020
Q2
2020
Q1
2020
-
-
-
-
-
-
-
-
-
-
-
-
Q4
2021
Q3
2021
Q2
2021
-
-
-
-
-
-
-
-
-
-
-
-
Q4
2021
Q3
2021
Q2
2021
Q1
2021
Q4
2020
Q3
2020
Q2
2020
Q1
2020
2
47
49
Q4
2021
51
Q4
2021
-
Q4
2021
(6,326)
(0.15)
38
47
85
Q3
2021
47
Q3
2021
4,945
Q3
2021
1,247
0.03
4
62
66
Q2
2021
62
Q2
2021
-
Q2
2021
7,084
0.16
16
31
47
Q1
2021
31
Q1
2021
925
Q1
2021
383
0.01
2
28
30
Q4
2020
28
Q4
2020
7,146
Q4
2020
22,858
0.52
23
53
76
Q3
2020
53
Q3
2020
320
Q3
2020
9,893
0.22
35
52
87
Q2
2020
52
Q2
2020
175
Q2
2020
7,044
0.16
2
30
32
Q1
2020
30
Q1
2020
8,987
Q1
2020
8,188
0.18
Dividends declared
Dividends paid
Dividends declared - per
share
Dividends paid - per share
Residential lots sold to third-
parties (units)
Residential lots sold through
GBG (units)
Total residential lots sold
(units)
Homes sold (units)
Development land revenues
Cash flows (used in) from
operating activities
Amount
Per share - basic and diluted
In general, revenues and net earnings are mainly affected by the volume of residential lot and home sales, development land
parcel sales, and write-downs or reversals of write-downs, if any. Seasonality affects the land development and home building
industry in Canada, particularly winter weather conditions. For additional details, please see information provided under the heading
“Factors Affecting Results of Operations” in this MD&A which discusses the factors that affect Genesis’ results and seasonality
further.
During Q4 2021, Genesis sold 2 residential lots to third party builders and 51 homes of which 47 homes built on Genesis’ lots.
Revenues were lower in Q4 2021, compared to Q3 2021, due to no development land sales and significantly lower residential lot
sales, with this being partially offset by higher residential home sales during the quarter. Q4 2021 included $3,265 related to
reversal of write-downs previously taken, while Q3 2021 included a $1,003 corresponding reversal of a write-down. Gross margins
in Q4 2021 were higher than in Q3 2021 with residential lots and home sales all contributing to this. In Q4 2021, the Corporation
recorded $562 as a gain in investments in land development entities with no gain recorded in Q3 2021. General and administrative
expenses, selling and marketing expenses and net finance expenses were higher in Q4 2021 compared to Q3 2021. Income tax
expenses were $1,226 in Q4 2021 compared to $801 in Q3 2021. As a result of these factors, net earnings in Q4 2021 were higher
than in Q3 2021.
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During Q3 2021, Genesis sold 38 residential lots to third party builders and 47 homes. Revenues were higher in Q3 2021, compared
to Q2 2021, due to higher development land and residential lot sales, with this being partially offset by lower residential home sales
during the quarter. Gross margins in Q3 2021 were marginally lower than in Q2 2021. While development land sales had a higher
gross margin than in Q2 2021, this higher gross margin was offset by lower gross margins on residential lots and homes in Q3
2021. Q3 2021 gross margins also included $1,003 related to the reversal of a write-down previously taken with no corresponding
reversal of write-down or write-down in Q2 2021. Both selling and marketing expenses and net finance expenses were lower in Q3
2021 compared to Q2 2021 while general and administrative expenses were higher between Q3 2021 and Q2 2021. Income tax
expenses were $801 in Q3 2021 compared to $955 in Q2 2021. As a result of these factors, net earnings in Q3 2021 were
comparable to Q2 2021.
During Q2 2021, Genesis sold 4 residential lots to third party builders and 62 homes. Revenues were higher in Q2 2021, compared
to Q1 2021, due to higher residential home sales, with this being partially offset by lower development land and residential lot sales
during the quarter. Gross margins in Q2 2021 were significantly higher than in Q1 2021 mainly due to the higher volume of homes
and total residential lots sold. Both general and administrative expenses, selling and marketing expenses were higher in Q2 2021
compared to Q1 2021 while net finance expenses were marginally lower between Q2 2021 and Q1 2021. Income tax expenses
were $955 in Q2 2021 compared to $393 in Q1 2021. As a result of these factors, net earnings in Q2 2021 were higher than in Q1
2021.
During Q1 2021, Genesis sold 16 residential lots to third party builders, 31 homes and one development land parcel held by a
controlled limited partnership. Revenues were lower in Q1 2021, compared to Q4 2020, due to lower development land revenues
in Q1 2021, with this being partially offset by higher residential lot and home sales during the quarter. Gross margins in Q1 2021
were higher than in Q4 2020 mainly due to no write-down of real estate held for development and sale in Q1 2021 compared to
$822 in Q4 2020. While residential lots and homes had a higher gross margin than in Q4 2020, this higher gross margin was offset
by lower gross margin on development land sales in Q1 2021. General and administrative expenses were lower in Q1 2021
compared to Q4 2020 while selling and marketing expenses and net finance expenses were comparable between Q1 2021 and
Q4 2020. Income tax expenses were $393 in Q1 2021 compared to $496 in Q4 2020. As a result of these factors, net earnings in
Q1 2021 were higher than in Q4 2020.
During Q4 2020, Genesis sold two residential lots to third party builders, 28 homes and two development land parcels. Revenues
were lower in Q4 2020 compared to Q3 2020 due to lower residential lot and home sales in Q4 2020 compared to Q3 2020. This
was partially offset by higher development land revenues in Q4 2020. Gross margins in Q4 2020 were affected by a lower volume
of residential homes and lots sold and by a write-down of $822. Gross margins are also affected by the product mix for both
residential homes and residential lots. General and administrative expenses were higher in Q4 2020 compared to Q3 2020 while
selling and marketing expenses and net finance expenses were comparable between Q4 2020 and Q3 2020. Income tax expenses
were $496 in Q4 2020 compared to $850 in Q3 2020. As a result of these factors, net earnings in Q4 2020 were lower than in to
Q3 2020.
During Q3 2020, Genesis sold 23 residential lots to third party builders, 53 homes and a development land parcel held by a
controlled limited partnership. Revenues were lower in Q3 2020 compared to Q2 2020 due to lower residential lot sales in Q3 2020
compared to Q2 2020. This was partially offset by higher development land revenues in Q3 2020. Gross margins in Q3 2020 were
lower than in Q2 2020 mainly due to the product mix and impacted both residential homes and residential lots. The development
land parcel sold in Q3 2020 had a slight negative margin. General and administrative expenses, selling and marketing expenses,
net finance and income tax expenses were marginally lower in Q3 2020 than Q2 2020. As a result of these factors, net earnings
in Q3 2020 were higher than in to Q2 2020.
During Q2 2020, Genesis sold 35 residential lots to third party builders, 52 homes and a non-core development land parcel.
Revenues were higher in Q2 2020 compared to Q1 2020 due to higher residential lot and homes sales in Q2 2020 compared to
Q1 2020. This was partially offset by lower development land revenues in Q2 2020. Gross margins in Q2 2020 were higher than
in Q1 2020 mainly due to there being no write-down of real estate held for development and sale in Q2 2020 while there was a
$10,815 write-down of real estate held for development and sale in Q1 2020. General and administrative expenses, selling and
marketing expenses and net finance expenses were slightly lower in Q2 2020 than Q1 2020. Income tax expenses were incurred
during Q2 2020 due to net earnings for the quarter compared to income tax recoveries due to losses incurred during Q1 2020.
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During Q1 2020, Genesis sold 2 residential lots to third party builders, 30 homes and a development land parcel. Revenues were
lower in Q1 2020 compared to Q4 2019 due to lower residential lot and homes sales in Q1 2020 compared to Q4 2019. This was
partially offset by higher development land revenues in Q1 2020. Gross margins in Q1 2020 were lower than in Q4 2019 due to
the development land parcel which had a negligible margin and the $10,000 write-down of real estate held for development and
sale. Selling and marketing expenses and net finance expenses were comparable in both Q1 2020 and Q4 2019. General and
administrative expenses were lower in Q1 2020 compared to Q4 2019 which include costs incurred to purchase a VTB from LPLP
2007. Due to the net loss incurred in Q1 2020, there were income tax recoveries compared to income tax expenses in Q4 2019.
SUMMARY OF ACCOUNTING CHANGES
The Corporation adopted no new IFRSs or interpretations as of January 1, 2021.
NEW ACCOUNTING PRONOUNCEMENTS
There were no new accounting pronouncements or amendments to existing standards that impacted or are expected to impact
the Corporation in 2021 and 2022.
CRITICAL ACCOUNTING ESTIMATES
The preparation of consolidated financial statements in accordance with IFRS requires management to make judgments and
estimates that affect the reported amounts of revenues, expenses (including stock-based compensation), assets and liabilities,
and the disclosure of contingent liabilities at the reporting date for the land development and the home building businesses. On an
ongoing basis, management evaluates its judgments and estimates in relation to revenues, expenses, assets and liabilities.
Management uses historical experience, third party appraisals and reports and various other factors it believes to be reasonable
under the given circumstances as the basis for its judgments and estimates. Actual outcomes may differ from these estimates
under different assumptions and conditions. There were no material changes made to the critical accounting estimates for YE 2021
and YE 2020. Refer to note 2(p) in the consolidated financial statements for the years ended December 31, 2021 and 2020 for
additional information on judgments and estimates.
Provision for Future Development Costs
Changes in estimated future development costs (net of recoveries, if any) related to land, lots and homes previously sold by
Genesis and for which it has ongoing obligations directly impacts the amount recorded for the future development liability, cost of
sales, gross margin and, in some cases, the value of real estate under development and held for sale. This liability is subject to
uncertainty due to the longer time frames involved, particularly in land development.
Reversal of Write-down / Write-down of Real Estate Held for Development and Sale
The Corporation estimates the net realizable value (“NRV”) of real estate held for development and sale at least annually or
whenever events or changes in circumstances indicate the carrying value may exceed NRV. The estimate is based on valuations
conducted by independent real estate appraisers, other professional reports and estimates and takes into account recent market
transactions of similar and adjacent lands and housing projects in the same geographic area.
Valuation of Amounts Receivable
Amounts receivable are reviewed on a regular basis to estimate recoverability of balances. Any overdue amounts and any known
issues about the financial condition of debtors are taken into account when estimating recoverability.
Investments in land development entities
The fair value of investments in land development entities are based on the market approach method. This method uses prices
and other relevant information that have been generated by market transactions involving identical or comparable assets.
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DISCLOSURE CONTROLS AND PROCEDURES AND INTERNAL CONTROL OVER FINANCIAL REPORTING
The Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) are responsible for establishing and maintaining disclosure
controls and procedures (“DC&P”) and internal control over financial reporting (“ICFR”), as those terms are defined in National
Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings. The CEO and CFO have designed, or caused
to be designed under their direct supervision, Genesis’ DC&P to provide reasonable assurance that:
(i)
(ii)
material information relating to the Corporation, including its consolidated subsidiaries, is made known to them by others
within those entities, particularly during the period in which the annual filings are being prepared; and
information required to be disclosed in the annual filings, interim filings or other reports filed or submitted under securities
legislation is recorded, processed, summarized and reported on a timely basis.
The CEO and CFO have also designed, or caused to be designed under their direct supervision, Genesis’ ICFR to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with IFRS. The ICFR have been designed using the control framework established in Internal Control –
Integrated Framework (2013) published by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).
The CEO and CFO have evaluated the design and operating effectiveness of Genesis' DC&P and ICFR and concluded that
Genesis' DC&P and ICFR were effective as at December 31, 2021. While Genesis’ CEO and CFO believe that the Corporation’s
internal controls and procedures provide a reasonable level of assurance that such controls and procedures are reliable, an internal
control system cannot prevent all errors and fraud. It is management’s belief that any control system, no matter how well conceived
or operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.
There were no changes in the Corporation’s ICFR during the three months and year ended December 31, 2021 that have materially
affected or are reasonably likely to materially affect the Corporation’s ICFR. Due to the COVID-19 pandemic, Genesis successfully
transitioned to working remotely in March 2020.
RISKS AND UNCERTAINTIES
The CMA economy has experienced a volatile economic period due to the continuing COVID-19 pandemic restrictions put in place
and this combined with volatile energy prices, resulted in a decrease in economic activity and an increased unemployment level.
These and other factors have had a negative impact on the CMA. The impact of the lifting of restrictions and the future price of oil
are unknown at this time. As a result, it is not possible to reliably estimate the length and overall impact of these developments
and the impact on the financial results and condition of the Corporation in future periods.
In the normal course of business, Genesis is exposed to certain risks and uncertainties inherent in the real estate development
and home building industries. Real estate development and home building are cyclical and capital-intensive businesses. As a
result, the profitability and liquidity of Genesis could be adversely affected by external factors beyond the control of management.
Risks and uncertainties faced by Genesis include industry risk, competition, supply and demand, geographic risk, development
and construction costs, credit and liquidity risks, finance risk, interest risk, management and key personnel risk, mortgage rates
and financing risk, general uninsured losses, cyber-security and business continuity risk, environmental risk and government
regulations.
There may be additional risks that management may need to consider from time to time. For a more detailed discussion on the
Corporation’s risk factors, refer to Genesis’ AIF for the year ended December 31, 2021 available on SEDAR at www.sedar.com.
Development and Construction Cost Risk
Genesis may be impacted by higher prices of labour, consulting fees, construction services and materials. Costs of development
and building have fluctuated over the past several years and are typically passed on to the end customer through higher pricing.
Any significant increase that Genesis cannot pass on to the end customer may have a negative material impact on profits. Supply
chain pressures have become an increasing risk due to economic restrictions put in place to control the spread of the SARS-COV2
virus, the impacts are unknown and largely unpredictable but could impact both the price and timely availability of materials.
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Credit and Liquidity Risk
Credit risk arises from the possibility that third-party builders who agree to acquire lots from Genesis may experience financial
difficulty and be unable to fulfill their lot purchase commitments.
Liquidity risk is the risk that Genesis will not be able to obtain financing for its servicing and other needs or be able to meet its
financial obligations as they fall due. If Genesis is unable to generate sufficient sales, renew existing credit facilities or secure
additional financing, its ability to meet its obligations as they become due may be impacted. Based on the Corporation’s operating
history, relationships with lenders and committed sales contracts, management believes that Genesis has the ability to continue to
renew or repay its financial obligations as they become due.
Finance Risk
Genesis uses debt and other forms of financing in its business to execute the corporate strategy. Genesis uses project specific
credit facilities to fund land development costs and construction operating lines for home construction purposes. Should Genesis
be unable to retain or obtain such credit facilities, its ability to achieve its goals could be impacted. In order to reduce finance risk,
Genesis endeavors to match the term of financing with the expected revenues of the underlying land asset.
Management regularly reviews the Corporation’s credit facilities in accordance with review and renewal dates prescribed in the
related agreements. The Corporation has successfully managed the requirements in accordance with project development plans
and operating requirements.
Litigation Risk
All industries are subject to legal claims, with or without merit. The Corporation may be involved from time to time in various legal
proceedings which may include potential liability from its operating activities and, as a public company, possibly from violations of
securities laws or breach of fiduciary duty by its directors or officers. Defense and settlement costs can be substantial, even with
respect to legal claims that have no merit. Due to the inherent uncertainty associated with litigation, the resolution of any legal
proceeding could have a material effect on the financial position and results of operations of the Corporation.
Cybersecurity and Business Continuity Risk
Genesis’ operations, performance and reputation depend on how its technology networks, systems, offices and sensitive
information are protected from cyberattacks. Genesis’ operations and business continuity depend on how well it protects, tests,
maintains and replaces its networks, systems and associated equipment. The protection and effective organization of Genesis’
systems, applications and information repositories are central to the security and continuous operation of its business.
Cyberattacks and threats (such as hacking, computer viruses, denial of service attacks, industrial espionage, unauthorized access
to confidential information, or other breaches of network or IT security) continue to evolve and Genesis’ IT defenses need to be
regularly monitored and adapted. Vulnerabilities could harm Genesis’ brand and reputation as well as its business relationships
and could adversely affect its operations and financial results.
Genesis continues to carefully manage this risk and has the following in place to reduce and/or manage cybersecurity and business
continuity risk: enterprise grade firewalls with the ability to detect port scanning, denial of service attacks and content filtering and
application control to permit or deny traffic on the network. Genesis also has anti-virus software with behaviour based real-time
threat end-point protection, ability to scan and lock down unauthorized system changes and/or file encryption and prevent
suspicious network behaviour. In addition, all incoming and outgoing emails are scanned for content, suspicious URLs and the
existence of recipients within the organization. Regular internal backups of network databases and files are made in case of data
corruption or encryption. Internet facing services are additionally protected by MFA security methods. The Corporation maintains
various types of insurance to cover certain potential risks and regularly evaluates the adequacy of this coverage.
There may be additional risks that management may need to consider as circumstances require. For a more detailed discussion
on the Corporation’s risk factors, refer to Genesis’ AIF for the year ended December 31, 2021 available on SEDAR at
www.sedar.com.
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NON-GAAP MEASURES
Non-GAAP measures do not have any standardized meaning according to IFRS, and therefore may not be comparable to similar
measures presented by other reporting issuers.
Gross margin before reversal of write-down / write-down is a non-GAAP measure, and therefore may not be comparable to
similar measures presented by other reporting issuers. Gross margin before write-down is calculated by adjusting for write-down
of real estate held for development and sale. Gross margin before write-down of real estate held for development and sale is used
to assess the performance of the business without the effects of the non-cash write-down of real estate held for development and
sale. Management believes it is useful to exclude write-down from the analysis as it could affect the comparability of financial
results between periods and could potentially distort the analysis of trends in business performance. Excluding this item does not
imply it is non-recurring. The most comparable GAAP financial measure is gross margin.
The tables below show the calculation of gross margin before reversal of write-down / (write-down), which is derived from gross
margin:
Residential Lots
Residential lot revenues
Gross margin
Write-down of real estate held for development and sale
Gross margin before write-down
Gross margin before write-down (%)
Development Land
Development land revenues
Gross margin
(Reversal of write-down) / write-down of real estate held for
development and sale
Gross margin before reversal of write-down /
(write-down)
Gross margin before reversal of write-down /
(write-down) (%)
Homes
Revenues for homes
Gross margin
Write-down of real estate held for development and sale
Gross margin before write-down
Gross margin before write-down (%)
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Year ended
December 31,
2021
41,095
14,698
-
14,698
35.8%
Year ended
December 31,
2021
5,870
4,919
(4,268)
2020
39,189
16,336
-
16,336
41.7%
2020
16,628
(9,291)
10,822
Three months ended
December 31,
2021
2020
8,423
3,540
-
3,540
42.0%
4,772
2,560
-
2,560
53.6%
Three months ended
December 31,
2021
2020
-
7,146
509
822
3,265
(3,265)
-
-
1,331
651
1,531
18.6%
11.1%
9.2%
Three months ended
December 31,
Year ended
December 31,
2021
26,024
3,397
-
3,397
13.1%
2020
12,198
1,620
-
1,620
13.3%
2021
92,416
12,226
-
12,226
13.2%
2020
75,025
8,670
815
9,485
12.6%
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Residential Lots, Development Land and
Homes
Three months ended
December 31,
Year ended
December 31,
Total revenues
Gross margin
(Reversal of write-down) / write-down of real estate held for
development and sale
Gross margin before reversal of write-down /
(write-down)
Gross margin before reversal of write-down /
(write-down) (%)
2021
26,531
10,202
(3,265)
2020
19,817
4,689
822
2021
109,761
31,843
2020
103,933
15,715
(4,268)
11,637
6,937
5,511
27,575
27,352
26.1%
27.8%
25.1%
26.3%
Net cash is a non-GAAP measure, and therefore may not be comparable to similar measures presented by other reporting issuers.
Net cash is calculated as the difference between cash and cash equivalents and loans and credit facilities. Management believes
that net cash is an important measure to monitor leverage and evaluate the balance sheet. The most comparable GAAP financial
measure is loans and credit facilities.
The table below show the calculation of net cash:
Cash and cash equivalents
Loans and credit facilities
Net cash
TRADING AND SHARE STATISTICS
The Corporation’s trading and share statistics for 2021 and 2020 are provided below:
Average daily trading volume
Share price ($/share)
High
Low
Close
Market capitalization at December 31,
Shares outstanding
OTHER
December 31,
2021
December 31,
2020
63,975
32,668
31,307
2021
11,857
3.00
1.97
2.31
29,743
21,470
8,273
2020
22,219
2.45
0.81
2.09
131,354
56,863,335
87,494
41,863,335
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ADVISORIES
Cautionary Note Regarding Forward-Looking Statements
This MD&A contains certain statements which constitute forward-looking statements or information (“forward-looking statements”) within the
meaning of applicable securities legislation, including Canadian Securities Administrators’ National Instrument 51-102 - Continuous Disclosure
Obligations, concerning the business, operations and financial performance and condition of Genesis. Generally, these forward-looking
statements can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”,
“proposed”, “scheduled”, “future”, “likely”, “seeks”, “estimates”, “plans”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”,
or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur”
or “be achieved”.
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Although Genesis believes that the anticipated future results, performance or achievements expressed or implied by forward-looking statements
are based upon reasonable assumptions and expectations, the reader should not place undue reliance on forward-looking statements because
they involve assumptions, known and unknown risks, uncertainties and other factors many of which are beyond the Corporation’s control, which
may cause the actual results, performance or achievements of Genesis to differ materially from anticipated future results, performance or
achievement expressed or implied by such forward-looking statements. Accordingly, Genesis cannot give any assurance that its expectations
will in fact occur and cautions that actual results may differ materially from those in the forward-looking statements.
Forward-looking statements are based on material factors or assumptions made by us with respect to, among other things, opportunities that
may or may not be pursued by us; changes in the real estate industry; fluctuations in the Canadian and Alberta economy; changes in the number
of lots sold and homes delivered per year; and changes in laws or regulations or the interpretation or application of those laws and regulations.
Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are
difficult to predict and many of which are outside of our control. Forward-looking statements in this MD&A and factors that could cause actual
results to differ materially from such statements include, but are not limited to, those outlined in the following table:
Forward-looking statements in this MD&A include, but are not limited to:
statements relating to the COVID-19 pandemic;
the availability of excess cash on hand and its proposed use;
the future exercise of any right to purchase;
the future payment of dividends and/or common share buybacks;
the timing for removal of the GMO restricting development of the Logan
Landing lands and the Lewiston lands;
the timing and approval of the Logan Landing;
Lewiston and Huxley outline plans and land use applications, and
anticipated commencement of development of these lands;
the timing and approval of the conceptual scheme for the OMNI ASP and
concept plan and ASP amendment for the remaining OMNI lands;
timing for closing of the acquisition of the Huxley lands, and the anticipated
number of housing units in the community upon completion;
the expected completion dates of various projects that GBG is currently
engaged in, the timeline for pre-construction homes and anticipated lot
yields for projects under development;
plans and strategies surrounding the acquisition of additional land;
commencement of the servicing phase and the construction phase of
various communities and projects;
the financing of such phases and expected increased leverage;
anticipated general economic and business conditions, including forecasted
economic growth;
potential changes, if any, to the federal mortgage lending rules;
expectations for lot and home prices;
construction starts and completions;
future development costs;
anticipated expenditures on land development activities;
GBG’s sales process and construction margins;
the payment of dividends; and
the ability to continue to renew or repay financial obligations and to meet
liabilities as they become due.
Factors that could cause actual results to differ
materially from those set forth in the forward-
looking statements include, but are not limited to:
the impact of contractual arrangements and
incurred obligations on future operations and
liquidity;
local real estate conditions, including the
development of properties in close proximity
to Genesis’ properties;
the uncertainties of real estate development
and acquisition activity;
fluctuations in interest rates;
ability to access and raise capital and debt
financing on favorable terms, or at all;
not realizing on the anticipated benefits from
transactions or not realizing on such
anticipated benefits within the expected time
frame;
the cyclicality of the oil and gas industry;
changes in the Canadian US dollar exchange
rate;
labour matters;
product availability due to supply chain issues
and (or) cost increases;
governmental regulations;
general economic and financial conditions;
stock market volatility; and
other risks and factors described from time to
time in the documents filed by Genesis with
the securities regulators in Canada available
at www.sedar.com, including in this MD&A
under the heading “Risks and Uncertainties”
and the AIF under the heading “Risk Factors”.
The forward-looking statements contained in this MD&A are made as of the date of this MD&A, based only on information currently available to
us, and, except as required by applicable law, Genesis does not undertake any obligation to publicly update or to revise any of the forward-
looking statements, whether as a result of new information, future events or otherwise.
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CONSOLIDATED
FINANCIAL
STATEMENTS
DECEMBER 31, 2021 AND 2020
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MANAGEMENT’S REPORT
To the Shareholders of Genesis Land Development Corp.:
The consolidated financial statements and all information in
the Management’s Discussion and Analysis (“MD&A”) are the
responsibility of management. The consolidated financial
statements have been prepared by management in accordance
with the accounting policies in the notes to the consolidated
financial statements.
the
consolidated financial statements have been prepared within
acceptable limits of materiality, and are in accordance with
International Financial Reporting Standards (“IFRS”) appropriate
in the circumstances. The financial information in the MD&A has
been reviewed by management to ensure consistency with the
consolidated financial statements.
the opinion of management,
In
safeguarded and financial records properly maintained to provide
reliable information for the preparation of consolidated financial
statements.
The consolidated financial statements have been further examined
by the Board of Directors and by its Audit Committee, which meets
regularly with the auditors and management to review the activities
of each. The Audit Committee is composed of three independent
directors, and reports to the Board of Directors.
MNP LLP, an
independent firm of Chartered Professional
Accountants, was engaged to audit the consolidated financial
statements in accordance with Canadian generally accepted
auditing standards and IFRS to provide an independent auditors’
opinion.
Management maintains appropriate systems of internal control.
Policies and procedures are designed to give reasonable
assurance that transactions are properly authorized, assets are
IAIN STEWART
President and Chief Executive Officer
WAYNE KING
Chief Financial Officer
March 2, 2022
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INDEPENDENT AUDITOR’S REPORT
To the Shareholders of Genesis Land Development Corp.:
Basis for Opinion
Opinion
We have audited the consolidated financial statements of Genesis
Land Development Corp. and its subsidiaries (the “Corporation”),
which comprise the consolidated balance sheets as at December
31, 2021 and December 31, 2020, and the consolidated statements
of comprehensive income (loss), changes in equity and cash flows
for the years then ended, and notes to the consolidated financial
statements, including a summary of significant accounting policies.
In our opinion, the accompanying consolidated financial statements
present fairly, in all material respects, the consolidated financial
position of the Corporation as at December 31, 2021 and December
31, 2020, and its consolidated financial performance and its
consolidated cash flows for the years then ended in accordance
with International Financial Reporting Standards.
We conducted our audits in accordance with Canadian generally
accepted auditing standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities
for the Audit of the Consolidated Financial Statements section of
our report. We are independent of the Corporation in accordance
with the ethical requirements that are relevant to our audits of
the consolidated financial statements in Canada, and we have
fulfilled our other ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment,
were of most significance in our audit of the consolidated financial
statements of the current period. These matters were addressed in
the context of our audit of the consolidated financial statements as a
whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
KEY AUDIT MATTERS DESCRIPTION
AUDIT RESPONSE
Real Estate Held for Development and Sale
As at December 31, 2021, approximately 67% of the Corporation’s
assets or $218.9 million are comprised of real estate held for
development and sale (refer to Note 5). As described in Note 2e,
real estate held for development and sale is measured at lower of
cost or net realizable value.
The determination of the net realizable value of real estate
held for development and sale is considered to be a significant
estimate. Each valuation requires consideration of various inputs
including, but not limited to, the type of real estate, its location,
stage of development and comparable market transactions. We
therefore considered real estate held for development and sale
to be a key audit matter.
We responded to this matter by performing audit procedures in
relation to real estate held for development and sale. Our audit
work in relation to this included, but was not restricted to, the
following:
• We obtained the independent appraisals completed for
the Corporation’s real estate holdings. We verified that
management had appropriately deducted future development
costs and estimated selling costs from the appraised values to
determine the net realizable value. We compared the carrying
value to the estimated net realizable value.
• We engaged our internal valuations group to review
the independent appraisals to verify that the valuation
methodologies used by the independent appraisers was
generally accepted.
• For real estate held for development and sale in which no
appraisal was obtained, we assessed the carrying value based
on recent sales made in the various phases. We performed
a recalculation using the current year average sales price,
multiplied by the number of lots remaining in each phase. We
ensured expected future development costs and estimated
selling costs were applied to the values in order to analyze
the reasonability of net realizable value when compared to the
carrying values in the general ledger.
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• We assessed the appropriateness of the disclosures relating
to the assumptions used in real estate held for development
and sale in the notes to the consolidated financial statements.
We responded to this matter by performing procedures in relation
to the provision for future land development and housing project
costs. Our audit work in relation to this included, but was not
restricted to, the following:
• We obtained copies of the estimated cost reports prepared by
independent experts (engineers and architects) engaged by
management.
• We obtained reliance letters from the independent appraisers
and confirmed their professional qualifications and their role
as specialists.
• For internally estimated future development costs, we had
thorough discussions with managers in the land and home
divisions of the Corporation to understand management’s
estimation process. We assessed the reasonableness of the
internal estimates based on known historical and current
information. We compared the prior year costs to complete
(“CTC”) balance to current year CTC by community and
analyzed significant variances to ensure that the change in
CTC from the prior year is reasonable. We also compared
estimates in management’s calculation to the reports obtained
from independent engineer specialists. In addition, we
recalculated the allocation of common land development
costs to specific development phases and completed
analytical procedures based on the percentage of lots sold to
identify unexpected and unusual variances in the expected
CTC balance.
• We performed a look back analysis by comparing the previous
provision for future development cost estimates to subsequent
actual costs incurred to gain comfort over management’s
process for determining estimates of future development
costs.
• We assessed the appropriateness of the disclosures relating
to the assumptions used in the provision for future land
development costs in the notes to the consolidated financial
statements.
Provision for Future Development Costs
As described in Notes 2n and 12, the Corporation has obligations
related to the completion of land under development and housing
projects. The Corporation recognizes a liability for the future costs
to be incurred.
The liability recognized for future land development and housing
project costs involves inputs which rely on significant judgment
from management, as well as significant reliance on the estimates
made by third party engineers and architects. As such, future
development and housing project costs have a high degree of
subjectivity. We therefore considered the provision for future
development costs to be a key audit matter.
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Other Information
Management is responsible for the other information. The other
information comprises:
• Management’s Discussion and Analysis.
• The information, other than the consolidated financial statements
and our auditor’s report thereon, in the Annual Report.
Our opinion on the consolidated financial statements does not cover
the other information and we do not and will not express any form of
assurance conclusion thereon.
In connection with our audits of the consolidated financial statements,
our responsibility is to read the other information identified
above and, in doing so, consider whether the other information is
materially inconsistent with the consolidated financial statements or
our knowledge obtained in the audits or otherwise appears to be
materially misstated.
We obtained Management’s Discussion and Analysis prior to
the date of this auditor’s report. If, based on the work we have
performed on the other information, we conclude that there is a
material misstatement of this other information, we are required to
report that fact. We have nothing to report in this regard.
The Annual Report is expected to be made available to us after the
date of the auditor’s report. If, based on the work we will perform
on this other information, we conclude that there is a material
misstatement therein, we are required to communicate the matter to
those charged with governance.
Responsibilities of Management and Those Charged with
Governance for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation
of the consolidated financial statements in accordance with
International Financial Reporting Standards, and for such internal
control as management determines is necessary to enable the
preparation of consolidated financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is
responsible for assessing the Corporation’s ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless
management either intends to liquidate the Corporation or to cease
operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the
Corporation’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Consolidated
Financial Statements
Our objectives are to obtain reasonable assurance about whether
the consolidated financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue
an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance but is not a guarantee that an audit
conducted in accordance with Canadian generally accepted auditing
standards will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the
basis of these consolidated financial statements.
As part of an audit in accordance with Canadian generally accepted
auditing standards, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the
consolidated financial statements, whether due to fraud or error,
design and perform audit procedures responsive to those risks,
and obtain audit evidence that is sufficient and appropriate
to provide a basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher than for
one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of
internal control.
• Obtain an understanding of internal control relevant to the audit
in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the Corporation’s internal control.
• Evaluate the appropriateness of accounting policies used
and the reasonableness of accounting estimates and related
disclosures made by management.
• Conclude on the appropriateness of management’s use of the
going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related
to events or conditions that may cast significant doubt on the
Corporation’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to
draw attention in our auditor’s report to the related disclosures in
the consolidated financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based
on the audit evidence obtained up to the date of our auditor’s
report. However, future events or conditions may cause the
Corporation to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the
consolidated financial statements, including the disclosures, and
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whether the consolidated financial statements represent the
underlying transactions and events in a manner that achieves fair
presentation.
• Obtain sufficient appropriate audit evidence regarding the
financial information of the entities or business activities within
the Corporation to express an opinion on the consolidated
financial statements. We are responsible for the direction,
supervision and performance of the group audit. We remain
solely responsible for our audit opinion.
We communicate with those charged with governance regarding,
among other matters, the planned scope and timing of the audits
and significant audit findings, including any significant deficiencies
in internal control that we identify during our audits.
We also provide those charged with governance with a statement
that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships
and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
the matters communicated with
From
those charged with
governance, we determine those matters that were of most
significance in the audit of the consolidated financial statements
of the current period and are therefore the key audit matters.
We describe these matters in our auditor’s report unless law or
regulation precludes public disclosure about the matter or when, in
extremely rare circumstances, we determine that a matter should not
be communicated in our report because the adverse consequences
of doing so would reasonably be expected to outweigh the public
interest benefits of such communication.
The engagement partner on the audit resulting in this independent
auditor’s report is Stephen Bonnell.
Chartered Professional Accountants
Calgary, Alberta
March 2, 2022
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5
I
GENESIS LAND DEVELOPMENT CORP.
CONSOLIDATED BALANCE SHEETS
(In thousands of Canadian dollars)
Notes
December 31, 2021
December 31, 2020
Assets
Real estate held for development and sale
Amounts receivable
Vendor-take-back mortgage receivable
Investments in land development entities
Other operating assets
Right-of-use assets
Deferred tax assets
Income tax recoverable
Cash and cash equivalents
Total assets
Liabilities
Loans and credit facilities
Dividend payable
Customer deposits
Accounts payable and accrued liabilities
Lease liabilities
Income taxes payable
Provision for future development costs
Total liabilities
Commitments and contingencies
Subsequent events
Equity
Share capital
Contributed surplus
Retained earnings
Shareholders’ equity
Non-controlling interest
Total equity
5
6, 20a
7
8
9
10
11
13
14d
5, 20a
10
12
19
13b, 13c,
13d, 19c,
22
14
15c
22
218,855
13,632
-
6,170
14,738
655
6,904
-
63,975
324,929
32,668
-
9,002
26,408
842
2,092
17,979
88,991
82,383
1,045
145,196
228,624
7,314
235,938
193,309
11,006
2,719
5,608
14,750
712
8,088
559
29,743
266,494
21,470
6,280
3,889
14,092
790
-
20,213
66,734
52,489
868
134,319
187,676
12,084
199,760
Total liabilities and equity
324,929
266,494
See accompanying notes to the consolidated financial statements.
ON BEHALF OF THE BOARD:
/s/ Stephen J. Griggs
Director and Chair
Director and Chair of the Audit Committee
/s/ Steven Glover
7
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GENESIS LAND DEVELOPMENT CORP.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
For the years ended December 31, 2021 and 2020
(In thousands of Canadian dollars except per share amounts)
Year ended December 31,
Notes
2021
2020
Revenues
Sales revenue
Other revenue
Direct cost of sales
Reversal of write-down / (write-down) of real estate held for development and
sale
Gross margin
Gain in investments in land development entities
General and administrative
Selling and marketing
Earnings from operations
Finance income
Finance expense
Earnings (loss) before income taxes
Income tax (expense) recovery
Net earnings (loss) being comprehensive earnings (loss)
Attributable to non-controlling interest
Attributable to equity shareholders
21
5
8
16
17
18
11
22
Net earnings per share - basic and diluted
14b
See accompanying notes to the consolidated financial statements.
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109,713
48
109,761
(82,186)
4,268
(77,918)
31,843
562
(12,025)
(5,143)
(16,606)
15,237
338
(1,220)
14,355
(3,375)
10,980
103
10,877
0.24
103,443
490
103,933
(76,581)
(11,637)
(88,218)
15,715
-
(10,408)
(4,463)
(14,871)
844
1,497
(2,593)
(252)
47
(205)
(404)
199
0.00
.
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8
GENESIS LAND DEVELOPMENT CORP.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
For the years ended December 31, 2021 and 2020
(In thousands of Canadian dollars except number of shares)
Equity attributable to Corporation’s shareholders
Notes
15c
14c
14d
22
Common shares - Issued
Number of
Shares
42,159,927
Amount
52,867
-
-
(296,592)
(378)
-
-
-
-
-
-
Contributed
Surplus
603
265
-
-
-
-
Retained
Earnings
140,487
-
(87)
Total
Shareholders’
Equity
Non-
Controlling
Interest
Total
Equity
193,957
18,938
212,895
265
(465)
-
-
-
265
(465)
(6,280)
(6,280)
(6,280)
-
199
-
(6,409)
(6,409)
199
(445)
(246)
41,863,335
52,489
868
134,319
187,676
12,084
199,760
At December 31, 2019
Share-based payments
Normal course issuer bid
Dividends declared
Distributions
Net earnings (loss) being
comprehensive earnings
(loss) and other
At December 31, 2020
At December 31, 2020
41,863,335
52,489
Share-based payments
Issued on rights offering,
net
Distributions
Net earnings being
comprehensive earnings
and other
At December 31, 2021
15c
14e
5, 22
-
-
15,000,000
29,894
-
-
-
-
868
177
-
-
-
134,319
187,676
12,084
199,760
-
-
-
177
29,894
-
-
177
29,894
-
(4,773)
(4,773)
10,877
10,877
3
10,880
56,863,335
82,383
1,045
145,196
228,624
7,314
235,938
See accompanying notes to the consolidated financial statements.
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9
GENESIS LAND DEVELOPMENT CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended December 31, 2021 and 2020
(In thousands of Canadian dollars)
Notes
Year ended December 31,
2021
2020
Operating activities
Receipts from residential lot sales
Receipts from development land sales
Receipts from residential home sales
Other cash receipts / (payments)
Paid for land development
Paid for lots / land acquisition
Paid for residential home construction
Paid to suppliers and employees
Interest received
Income tax refunds
Cash flows from operating activities
Investing activities
Acquisition of equipment
Change in restricted cash
Contribution made for joint venture
Cash flows used in investing activities
Financing activities
Advances from loans and credit facilities
Repayments of loans and credit facilities
Repayment of vendor-take-back mortgage payable
Interest and fees paid on loans and credit facilities
Distributions to unit holders of limited partnerships
Dividends paid
Proceeds from rights offering, net
Repurchase and cancellation of shares under NCIB
Cash flows from (used in) financing activities
Change in cash and cash equivalents
Cash and cash equivalents, beginning of period
Cash and cash equivalents, end of period
See accompanying notes to the consolidated financial statements.
10
13,981
8,589
95,480
777
(39,868)
(3,993)
(57,323)
(16,053)
338
460
2,388
(875)
250
(260)
(885)
61,517
(40,416)
(9,312)
(1,871)
(803)
(6,280)
29,894
-
32,729
34,232
29,743
63,975
7,272
33,409
75,255
(421)
(17,574)
(4,246)
(34,311)
(14,309)
1,497
1,411
47,983
(815)
(256)
-
(1,071)
17,241
(40,539)
(8,000)
(1,337)
(317)
-
-
(465)
(33,417)
13,495
16,248
29,743
13
13b
5
14d
14e
14c
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GENESIS LAND DEVELOPMENT CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2021 and 2020
(All tabular amounts and amounts in footnotes to tables are in thousands of Canadian dollars except number of shares)
1.
DESCRIPTION OF BUSINESS
Genesis Land Development Corp. (the “Corporation” or “Genesis”) was incorporated under the Business Corporation Act (Alberta)
on December 2, 1997.
The Corporation is engaged in the acquisition, development and sale of land, residential lots and homes primarily in the greater
Calgary area. The Corporation reports its activities as two business segments: land development and home building.
The Corporation is listed for trading on the Toronto Stock Exchange under the symbol “GDC”. Genesis’ head office and registered
office are located at 6240, 333 - 96 Ave. NE, Calgary, AB T3K 0S3.
In March 2020, a global pandemic was declared, and a number health and safety recommendations were enacted by regulatory
authorities. The Corporation has had to adapt its operations in both 2020 and 2021 to address the impact of COVID-19 regulations
and requirements and ensure all requirements are being followed. The Corporation remains cautious as there is continued uncertainty
as to the extent and duration of the economic and regulatory implications of COVID-19 which could have an adverse impact on the
Corporation’s financial position, negative impact on the value of it long term assets, future revenue and profitability of ongoing
operations.
The consolidated financial statements of Genesis were approved for issuance by the Board of Directors on March 2, 2022.
2.
SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION
The significant accounting policies of the Corporation are set out below. These policies have been consistently applied to each of the
years presented, unless otherwise indicated.
a)
Statement of compliance
The consolidated financial statements of the Corporation are prepared in accordance with International Financial Reporting
Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).
b) Basis of presentation
The consolidated financial statements have been prepared under the historical cost convention except for the financial assets
classified as fair value through profit or loss and stock options and deferred share units that have been measured at fair value.
The consolidated financial statements are presented in Canadian dollars, which is the Corporation’s functional currency, and
all values are rounded to the nearest thousand, except per share values and where otherwise indicated.
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11
GENESIS LAND DEVELOPMENT CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2021 and 2020
(All tabular amounts and amounts in footnotes to tables are in thousands of Canadian dollars except number of shares)
2.
c)
SIGNIFICANT ACCOUNTING POLICIES (continued)
Basis of consolidation
The consolidated financial statements include the accounts of the Corporation and its wholly-owned subsidiaries, as well as
the consolidated revenues, expenses, assets, liabilities and cash flows of limited partnership entities that the Corporation
controls. When the Corporation has less than 50% equity ownership in these limited partnership entities, the Corporation may
still have control over these entities’ activities, projects, financial and operating policies due to contractual arrangements.
Accordingly, the accounts of the limited partnerships have been consolidated in the Corporation’s financial statements.
Controlled entities are fully consolidated from the date of acquisition, being the date on which the Corporation obtains control,
and continues to be consolidated until the date when such control ceases. Control exists when the Corporation has the power,
directly or indirectly, to govern the financial and operating policies of an entity. All intra-group transactions, balances, dividends
and unrealized gains and losses resulting from intra-group transactions are eliminated on consolidation.
Non-controlling interests represent the portion of profit or loss and net assets not owned by the Corporation and are presented
separately from shareholders’ equity in the consolidated statements of comprehensive income (loss) and within equity in the
consolidated balance sheets. Losses within a controlled entity are attributed to the non-controlling interest even if that results
in a deficit balance.
d) Revenue recognition
(i) Residential lot sales
Lot sales to third parties are recognized when the Corporation’s performance obligations are satisfied, and transfer of
control has passed to the purchaser.
Performance obligations are considered satisfied when the Corporation has the ability to release the lot to the purchaser
after agreed to services pertaining to the property have been substantially performed.
Indicators of transfer of control to a purchaser include a present right to payment at the closing date of the contract, the
purchaser having full access to the lot and the purchaser’s ability to obtain a building permit from the relevant authority,
all indicating that significant risk and rewards of ownership have been transferred to the purchaser who has signed a
contract and has made a minimum 15% non-refundable deposit. In order to mitigate credit risk, the Corporation does
not transfer title to sold residential lots until full payment is received.
Deposits received upon signing of contracts for purchases of lots on which revenue recognition criteria have not been
met are recorded as customer deposits.
(ii) Development land sales
Development land sales to third parties are recognized when the Corporation’s performance obligations are satisfied,
and transfer of control has passed to the purchaser.
Performance obligations are satisfied after agreed to services pertaining to the property have been substantially
performed.
Indications of transfer of control to a purchaser include registering the subdivision plan with the land titles office and
transferring title of the land to the purchaser on receipt of full payment, all indicating significant risk and rewards of
ownership are transferred to the purchaser. In situations where extended payment terms are provided to a purchaser,
an appropriate rate of interest is included, and the Corporation secures appropriate security for the remaining unpaid
portion before title to the land is transferred to the purchaser.
Deposits received upon signing of contracts for purchases of land on which revenue recognition criteria have not been
met are recorded as customer deposits.
12
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GENESIS LAND DEVELOPMENT CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2021 and 2020
(All tabular amounts and amounts in footnotes to tables are in thousands of Canadian dollars except number of shares)
2.
SIGNIFICANT ACCOUNTING POLICIES (continued)
(iii) Residential home sales
Home sales to third parties are recognized when the Corporation’s performance obligations are satisfied, and transfer
of control has passed to the purchaser.
Performance obligations are considered satisfied when title to the completed home is conveyed to the purchaser, at
which time all proceeds are received or collection is reasonably assured.
Deposits received from customers upon signing of contracts for purchases of completed homes for which revenue
recognition criteria have not been met are recorded as customer deposits.
(iv) Finance income
Finance income is recognized as it accrues using the effective interest rate method.
(v) Other revenue
Rental income is recognized on a straight-line basis over the term of the rental agreement. Rental income is incidental
to ownership of real estate and does not result in classification of real estate as investment property. All real estate is
classified as inventory. Deposits forfeited are recognized as income.
e) Real estate held for development and sale
Land under development, land held for future development and housing projects under construction are inventory and are
measured at the lower of cost and estimated net realizable value (“NRV”). NRV is the estimated selling price in the ordinary
course of the business at the balance sheet date, less costs to complete and estimated selling costs.
Cost includes land acquisition costs, other direct costs of development and construction, borrowing costs, property taxes and
legal costs. These costs are allocated to each phase of the project in proportion to saleable acreage.
f)
Borrowing costs
Borrowing costs consist of interest and other costs incurred in connection with the borrowing of the funds. The acquisition or
construction of real estate assets takes a substantial period of time, which is a year or more, to develop it for its intended use
or sale. Borrowing costs attributable to real estate held for development and sale are recorded as part of the respective
inventory carrying cost from the date of commencement of development work until the date of completion. All other borrowing
costs are expensed in the period in which they are incurred. The recording of interest to inventory is suspended if the project’s
development is suspended for a prolonged period.
g)
Property and equipment
Property and equipment is stated at cost, net of any accumulated depreciation and accumulated impairment losses.
Depreciation is provided on all operating property and equipment based on the straight-line method over the estimated useful
lives of the property and equipment. The useful lives of the properties are as follows:
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Vehicles and other equipment
Office equipment and furniture
Computer hardware and software
Showhome furniture
Leasehold improvements
5 years
7 years
3 years
3 years
Lesser of useful life of the improvement or the lease term
13
.
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GENESIS LAND DEVELOPMENT CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2021 and 2020
(All tabular amounts and amounts in footnotes to tables are in thousands of Canadian dollars except number of shares)
2.
SIGNIFICANT ACCOUNTING POLICIES (continued)
h)
Income taxes
Income tax is recognized in the consolidated statements of comprehensive income (loss) except to the extent that it related to
items recognized directly in equity, in which case it is recognized in equity.
Income taxes comprise the following:
(i) Current income tax
Current income tax assets and liabilities are measured at the amount expected to be paid to tax authorities, net of
recoveries, using tax rates and laws that are enacted or substantively enacted as at the balance sheet date.
(ii) Deferred tax
Deferred tax is provided at the balance sheet date using the liability method on all temporary differences between the
tax basis of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred tax assets are recognized to the extent that it is probable that taxable income will be available, against which
deductible temporary differences, carried forward tax credits or tax losses can be utilized.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset
is realized or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted
at the balance sheet date.
The Corporation’s consolidated financial statements include some entities that are limited partnerships (note 22) and
are not subject to income taxes. The income or loss for Canadian tax purposes is attributable to the taxable income of
the limited partners in accordance with the provisions of the Income Tax Act (Canada). The calculation of income tax
expense reflects the exclusion of taxable income allocated to limited partners that form part of the non-controlling
interest.
i)
Cash and cash equivalents
Cash and cash equivalents consist of cash held with banks and short-term deposits with an original maturity of three months
or less.
j)
Leases
The Corporation recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset
is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at
or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the
underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier
of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use
assets are determined on the same basis as those of property and equipment.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date.
The lease liability is measured at amortized cost using the effective interest method. It is remeasured when there is a change
in future lease payments arising from a change in an index or rate, if there is a change in the Corporation’s estimate of the
amount expected to be payable under a residual value guarantee, or if the Corporation changes its assessment of whether it
will exercise a purchase, extension or termination option.
14
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GENESIS LAND DEVELOPMENT CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2021 and 2020
(All tabular amounts and amounts in footnotes to tables are in thousands of Canadian dollars except number of shares)
2.
SIGNIFICANT ACCOUNTING POLICIES (continued)
k)
Financial assets
Financial assets are classified and measured based on the business model in which they are held and the characteristics of
their contractual cash flows. The three primary measurement categories for financial assets are: amortized cost, fair value
through profit and loss (“FVTPL”), and fair value through other comprehensive income (“FVOCI”).
Financial assets measured at amortized cost are assets that are held within a business model whose objective is to hold assets
to collect contractual cash flows and its contractual terms give rise on specified dates to cash flows that are solely payments
of principal and interest on the principal amount outstanding. Financial instruments classified as amortized cost are initially
measured at fair value plus directly attributable transaction costs and are subsequently measured at amortized cost using the
effective interest rate method, less impairment. The amortization and losses arising from impairment are recognized in the
consolidated statements of comprehensive income (loss).
Financial assets at FVOCI are assets that are held within a business model whose objective is achieved by both collecting
contractual cash flows and selling financial assets and its contractual terms give rise on specified dates to cash flows that are
solely payments of principal and interest on the principal amount outstanding.
Financial assets at FVTPL are assets that do not meet the criteria for amortized cost or FVOCI. Financial assets classified as
FVTPL are carried on the balance sheet at fair value with changes in fair value recognized in the consolidated statements of
comprehensive income (loss). Transaction costs are expensed as incurred.
Financial assets are derecognized when the contractual rights to the cash flows from the asset expire, or the Corporation
transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the
risks and rewards of ownership of the financial assets are transferred. Any interest in transferred financial assets that is created
or retained is recognized as a separate asset or liability.
Loss allowance for trade receivables is calculated using the expected lifetime credit loss model and recorded at the time of
initial recognition. Title to land sold is typically transferred on receipt of full payment from the purchaser. In situations where
extended payment terms are provided to a purchaser, the Corporation secures adequate security for the remaining unpaid
portion before title to the land is transferred to the purchaser. The Corporation experiences no material impact of the loss
allowance for trade receivables due to the above. The expected loss allowance using the lifetime credit loss approach, has no
material impact on the consolidated financial statements.
The Corporation recognizes bad debt expense or recovery relating to amounts receivable on sold lots, net of the value of the
related sold lots, on the termination of the relevant agreement, which are taken back into the Corporation’s lot inventory. Bad
debt expense or recovery is included in the Corporation’s general and administrative expenses.
l)
Financial liabilities
The classification of financial liabilities is determined by the Corporation at initial recognition. The classification categories are:
amortized cost and FVTPL.
Financial liabilities classified as amortized cost are financial liabilities initially measured at fair value less directly attributable
transaction costs and are subsequently measured at amortized cost using the effective interest method. Interest expense is
recognized in the consolidated statements of comprehensive income (loss).
Financial liabilities measured at FVTPL are financial liabilities measured at fair value with changes in fair value and interest
expense recognized in the consolidated statements of comprehensive income (loss).
Financial liabilities are derecognized when the contractual obligations are discharged, cancelled or expire.
15
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GENESIS LAND DEVELOPMENT CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2021 and 2020
(All tabular amounts and amounts in footnotes to tables are in thousands of Canadian dollars except number of shares)
2.
SIGNIFICANT ACCOUNTING POLICIES (continued)
Financial assets and financial liabilities are offset, and the net amount presented on the balance sheet when, and only when,
the Corporation has a legal right to offset the amounts and intends either to settle on a net basis or to realize the asset and
settle the liability simultaneously.
The Corporation’s financial instruments (assets and liabilities) are classified as follows:
Cash
Cash equivalents
Deposits
Equity investments in land development entities
Restricted cash
Amounts receivable
Vendor-take-back mortgage receivable
Accounts payable and accrued liabilities
Loans and credit facilities
m) Earnings per share
FVTPL
Amortized cost
Amortized cost
FVTPL
FVTPL
Amortized cost
Amortized cost
Amortized cost
Amortized cost
The amount of basic earnings per share is calculated by dividing the comprehensive earnings attributable to equity holders by
the weighted average number of shares outstanding during the period. The diluted earnings per share amount is calculated
giving effect to the potential dilution that would occur if stock options were exercised. The treasury stock method is used to
determine the dilutive effect of stock options.
The calculation of basic and diluted earnings per share for all periods presented is adjusted retrospectively when the number
of common shares outstanding increases as a result of a rights offering.
n)
Provision for future development costs
The Corporation sells land, lots and homes for which it is responsible to pay for future development costs. For land
development, the provision for future development costs represents the estimated remaining construction costs related to
previously sold land, including all direct and indirect costs expected to be incurred during the remainder of the servicing period,
net of expected recoveries. The provision is reviewed periodically and, when the estimate is known to be different from the
actual costs incurred or expected to be incurred, an adjustment is made to the provision for future development costs and a
corresponding adjustment is made to land under development and/or cost of sales. For home building, the provision for future
development costs represents the costs likely to be incurred on remaining seasonal work and estimated warranty charges over
the one-year warranty period.
o)
Share-based compensation
The Corporation has a long-term incentive plan comprised of a stock option plan and a deferred share unit (“DSU”) plan.
(i) Stock options
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The Corporation’s stock option plan allows for the recipients to purchase common shares. Vesting provisions and
exercise prices are set at the time of issuance by the Board of Directors. Options vest over a number of years on
various anniversary dates from the date of the original grant. Options are issued with exercise prices not less than the
fair market value of the common shares at the date of grant and with terms not exceeding ten years from the date of
grant.
The fair value of share-based payments related to the stock options granted is calculated at the grant date using the
Black-Scholes Option-Pricing Model. The costs of the share-based payments are recognized on a proportionate basis
over the related vesting period of each tranche of the grant as an expense with recognition of the corresponding
increase in contributed surplus. Any consideration paid on the exercise of stock options, together with any related
contributed surplus, is credited to the share capital account.
Share-based payments may be settled in cash or equity at the sole discretion of the Corporation and are accounted
for as equity-settled plans.
The dilutive effect of outstanding options is reflected in the computation of earnings per share.
16
GENESIS LAND DEVELOPMENT CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2021 and 2020
(All tabular amounts and amounts in footnotes to tables are in thousands of Canadian dollars except number of shares)
2.
SIGNIFICANT ACCOUNTING POLICIES (continued)
(ii) Deferred share unit plan
DSUs are notional common shares of the Corporation that do not settle until the recipient leaves the Corporation. The
Corporation’s DSU plan allows for the participants to receive cash-settled DSUs. The fair value of DSUs and the cash
payment, when made, is based on the common share price of the Corporation at the relevant time. Vesting provisions
for DSUs are determined at the time of issuance.
The fair value of the DSUs is recognized as share-based compensation expense, with a corresponding increase in
accrued liabilities over the vesting period. The amount recognized as an expense is based on the estimate of the
number of DSUs expected to vest. DSUs are measured at their fair value at each reporting period on a mark-to-market
basis. The accrued liability is reduced on the cash payout of any DSU.
p)
Significant accounting judgments and estimates
The preparation of consolidated financial statements requires management to make judgments and estimates that affect the
reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at the reporting date.
On an ongoing basis, management evaluates its judgments and estimates in relation to revenues, expenses, assets and
liabilities. Management uses historical experience and various other factors it believes to be reasonable under the given
circumstances as the basis for its judgments and estimates. Actual outcomes may differ from these estimates under different
assumptions and conditions.
The following are the most significant accounting judgments and estimates made by the Corporation in applying accounting
policies:
Judgments
(i) Revenue recognition
Revenue recognition for development lands requires judgment to determine when performance obligations are satisfied
and transfer of control has passed to the purchaser. The Corporation reviews each contract and evaluates all the factors
to determine the appropriate date to recognize revenue.
(ii) Consolidation
The Corporation applies judgment in determining control over certain limited partnerships based on a review of all
contractual agreements to determine if the Corporation has control over the activities, projects, financial and operating
policies of the limited partnerships.
(iii)
Income taxes
The Corporation applies judgment in determining the total provision for current and deferred taxes. There are many
transactions and calculations for which the ultimate tax determination and timing of payment is uncertain due to the
interpretation of complex tax regulations, changes in tax laws, and the amount and timing of future taxable income.
Given the long-term nature and complexity of the business, differences arising between the actual results and the
assumptions made, or future changes to such assumptions, could necessitate future adjustments to the provision for
current and deferred taxes.
(iv) Net realizable value (“NRV”)
NRV for land and housing projects held for development and sale is estimated with reference to market prices and
conditions existing at the balance sheet date. This is determined by the Corporation having considered suitable external
advice including independent real estate appraisers and recent market transactions of similar and adjacent lands and
housing projects in the same geographic area.
17
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GENESIS LAND DEVELOPMENT CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2021 and 2020
(All tabular amounts and amounts in footnotes to tables are in thousands of Canadian dollars except number of shares)
2.
SIGNIFICANT ACCOUNTING POLICIES (continued)
(v) Legal contingencies
The Corporation applies judgment as it relates to the outcome of legal proceedings to determine whether a provision
and disclosure in the consolidated financial statements is required. Among the factors considered in making such
judgments are the nature of litigation, claim or assessment, the legal process and potential level of damages, the
progress of the case, the opinions or views of legal advisers and any decision of the Corporation’s management as to
how it will respond to the litigation, claim or assessment.
Estimates
(i)
Provision for future development costs
Changes in estimated future development costs, which are generally provided by third party service providers, directly
impact the amount recorded for the future development liability, cost of sales, gross margin and, in some cases, the
value of real estate under development and held for sale. This liability is subject to uncertainty due to the long time
frames involved, specifically in land development.
(ii) Reversal of write-down / Write-down of real estate held for development and sale
The Corporation estimates the NRV of real estate held for development and sale and investments in land development
entities at least annually for impairment or whenever events or changes in circumstances indicate the carrying value
may exceed NRV. The estimate is based on valuations conducted by independent real estate appraisers and other
third-party advisors and is also based on housing projects in the same geographic area.
(iii) Valuation of amounts receivable and vendor-take-back mortgage receivable
Amounts receivable are reviewed on a regular basis to estimate recoverability of balances. Any amounts becoming
overdue and any known issues about the financial condition of debtors are taken into account when estimating
recoverability.
(iv) Share-based compensation
The fair values of equity-settled share-based payments are estimated using the Black-Scholes options pricing model.
These estimates are based on the Corporation’s share price and on several assumptions, including the risk-free interest
rate, the future forfeiture rate, time to expiry, and the expected volatility of the Corporation's share price. Accordingly,
these estimates are subject to measurement uncertainty.
(v)
Investments in land development entities
The fair value of investments in land development entities are based on the market approach method. This method
uses prices and other relevant information that have been generated by market transactions involving identical or
comparable assets.
3.
STANDARDS AND AMENDMENTS TO EXISTING STANDARDS DURING 2021
The Corporation adopted no new IFRSs and interpretations during 2021.
4.
NEW ACCOUNTING PRONOUNCEMENTS
There were no new accounting pronouncements or amendments to existing standards that impacted or are expected to impact the
Corporation in 2021 and 2022.
18
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GENESIS LAND DEVELOPMENT CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2021 and 2020
(All tabular amounts and amounts in footnotes to tables are in thousands of Canadian dollars except number of shares)
5.
REAL ESTATE HELD FOR DEVELOPMENT AND SALE
Lots, Multi-
family &
Commercial
Parcels
Land Held
for
Development
Home
Building
Total
Limited
Partnerships
Intra-
segment
Elimination
Consolidated
Total
Gross book value
As at December 31, 2020
48,699
141,812
16,738
207,249
11,995
(4,194)
215,050
Development activities
3,430
30,851
41,596
75,877
317
Transfer
Acquisition
Sold
20,811
(20,811)
-
-
-
(31,048)
-
-
12,804
12,804
(42,268)
(73,316)
(2,748)
-
-
-
-
-
-
76,194
-
12,804
(76,064)
As at December 31, 2021
41,892
151,852
28,870
222,614
9,564
(4,194)
227,984
Provision for write-downs
As at December 31, 2020
5,169
14,135
548
19,852
(5,907)
-
(548)
(6,455)
Sold
Transfer
Reversal of write-down of real
estate held for development and
sale
5,855
(5,855)
(715)
(3,553)
-
-
-
-
(4,268)
9,129
As at December 31, 2021
4,402
4,727
1,889
(1,889)
-
-
-
-
-
-
-
-
21,741
(8,344)
-
(4,268)
9,129
Net book value
As at December 31, 2020
As at December 31, 2021
43,530
37,490
127,677
16,190
187,397
10,106
(4,194)
193,309
147,125
28,870
213,485
9,564
(4,194)
218,855
During the year ended December 31, 2021, the Corporation closed the sales of four parcels of development land for $5,870 (2020 -
$16,628). This included the sale of a 463.2-acre parcel of development land, located in British Columbia, belonging to a limited
partnership for $925. The limited partnership made a distribution of $803 to its unit holders from the proceeds of this sale.
During the year ended December 31, 2021, the Corporation entered into binding agreements to acquire 98 residential lots in the
Calgary Metropolitan Area for $12,804. The Corporation paid non-refundable deposits of $3,678, with the balance of $9,126, due on
closing which is scheduled between February 2022 and April 2023. This amount is included in accounts payable and accrued
liabilities as at December 31, 2021 (December 31, 2020 - $Nil).
During the year ended December 31, 2021, interest of $166 (2020 - $Nil) was capitalized as a component of development activities.
During the year ended December 31, 2021, the Corporation recorded reversals of write-downs of $4,268 related to write-downs
previously taken on real estate held for development and sale. The reversals of the write-downs were taken to reflect the estimated
returns realizable on completion of development and sale of these lands.
During the year ended December 31, 2020, the Corporation recorded write-downs of $11,637. A net write-down of $10,822 was
taken on three parcels of land inventory and a parcel of land held for development and a write-down of $815 was taken on a
townhouse project.
19
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GENESIS LAND DEVELOPMENT CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2021 and 2020
(All tabular amounts and amounts in footnotes to tables are in thousands of Canadian dollars except number of shares)
6.
AMOUNTS RECEIVABLE
Agreements receivable
Other receivables
2021
12,135
1,497
13,632
2020
10,466
540
11,006
Agreements receivable for lot sales have various terms of repayment with purchasers generally having between 6 and 24 months to
pay the balance owing for the purchased lots. On receipt of a minimum 15% non-refundable deposit and after agreed to services
pertaining to the property have been substantially performed, the purchaser is deemed to have control over the lot and is permitted
to start construction. In order to mitigate credit risk, the Corporation does not transfer title to sold residential lots until full payment is
received (see note 20a). Certain agreements receivable and mortgages receivable, if any, are interest bearing.
7.
VENDOR-TAKE-BACK MORTGAGE RECEIVABLE
Vendor-take-back mortgage receivable
2021
-
-
2020
2,719
2,719
During 2020, the Corporation closed the sale of an 8.17-acre parcel of development land in northwest Calgary for $8,987 in
consideration for a cash payment of $3,768 and a $5,219 vendor-take-back mortgage with an interest rate of 5% per annum. The
vendor-take-back mortgage was repayable in three installments of which two installments of $1,250 each were paid on March 31,
2020 and June 30, 2020. The last installment of $2,719 was paid on December 15, 2021. Interest totaling $132 was received during
2021 (2020 - $127).
8.
INVESTMENTS IN LAND DEVELOPMENT ENTITIES
Investment in land development limited partnership – 5% interest
Investment in land development joint venture – 8% interest
2021
1,890
4,280
6,170
2020
1,850
3,758
5,608
The fair value of investments in land development entities are based on the market approach method which were obtained from
external third-party appraisals. This method uses prices and other relevant information that have been generated by market
transactions involving identical or comparable assets. The Corporation recorded $562 as a gain in investment in land development
entities during 2021 (2020 - $Nil).
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20
GENESIS LAND DEVELOPMENT CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2021 and 2020
(All tabular amounts and amounts in footnotes to tables are in thousands of Canadian dollars except number of shares)
9.
OTHER OPERATING ASSETS
Deposits
Prepayments
Restricted cash
Property, equipment and other
2021
6,676
589
5,992
1,481
2020
5,960
480
7,351
959
14,738
14,750
Deposits include amounts paid to development authorities as security to guarantee the completion of construction projects under
development. The deposits are refundable upon completion of the related projects and earn interest at rates approximating those
earned on guaranteed investment certificates. The Corporation has also provided letters of credit and surety bonds as security to
guarantee the completion of certain construction projects (see note 19a for additional information). Deposits also include amounts
paid towards purchase of lots and land. Restricted cash includes amounts that has been placed in trust pending distribution to
LPLP2007 unit holders (refer to note 19c for additional information).
10.
LEASES
Right-of-Use Assets
As at January 1, 2021
Additions
Depreciation charge for the year (1)
As at December 31, 2021
As at December 31, 2020
Lease Liabilities
As at January 1, 2021
Additions
Lease payments
Interest for the year (1)
As at December 31, 2021
As at December 31, 2020
Photocopiers
60
9
(19)
50
60
Photocopiers
62
9
(21)
3
53
62
Lease Liabilities – undiscounted cash flows
Photocopiers
January 1, 2022 to December 31, 2022
January 1, 2023 to February 27, 2027
As at December 31, 2021
As at December 31, 2020
(1) Discount rate used ranged between 3.26% and 4.84%.
22
34
56
67
21
Office
Building
630
-
(102)
528
630
Office
Building
705
-
(40)
34
699
705
Trucks
22
-
(13)
9
22
Trucks
23
-
(14)
1
10
23
Showhomes
Leaseback
-
140
(72)
68
-
Showhomes
Leaseback
-
163
(86)
3
80
-
Office
Building
Trucks
Showhomes
Leaseback
63
741
804
844
10
-
10
24
81
-
81
-
Total
712
149
(206)
655
712
Total
790
172
(161)
41
842
790
Total
176
775
951
935
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GENESIS LAND DEVELOPMENT CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2021 and 2020
(All tabular amounts and amounts in footnotes to tables are in thousands of Canadian dollars except number of shares)
10.
LEASES (continued)
Amounts recognized in statements of
comprehensive income
Interest on lease liabilities
Total for the year ended December 31, 2021
Total for the year ended December 31, 2020
Photocopiers
Office
Building
Trucks
Showhomes
Leaseback
3
3
3
34
34
23
Office
Building
34
6
40
144
1
1
1
Trucks
1
13
14
14
3
3
-
Showhomes
Leaseback
3
83
86
-
Amounts recognized in the statement of cash
flows (2)
Photocopiers
Interest paid
Payment of lease liabilities
Total for the year ended December 31, 2021
Total for the year ended December 31, 2020
3
18
21
20
(2) These amounts are included in the line item “paid to suppliers and employees” in the consolidated statements of cash flows.
11.
a)
INCOME TAXES
Income tax was recognized in the consolidated statements of comprehensive income (loss) as follows:
2021
Current income tax expense (recovery)
Deferred income tax expense
Income tax expense (recovery)
2,191
1,184
3,375
Total
41
41
27
Total
41
120
161
178
2020
(826)
779
(47)
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b)
Income tax expense differed from that which would be expected from applying the combined statutory Canadian federal and
provincial income tax rates of 23.00% (2020 - 24.00%) to earnings before income taxes. The difference resulted from the
following:
Earnings (loss) before income taxes
Statutory tax rate
Expected income tax expense (recovery)
Change in tax rate impact on future tax
Share-based compensation
Other
Non-controlling interest
Tax expense (recovery) for the year
c)
The deferred tax assets (liabilities) of the Corporation were as follows:
Deferred tax assets
Deferred tax liabilities
Net deferred tax assets
22
2021
14,355
23.00%
3,302
-
135
(38)
(24)
3,375
2021
7,672
(768)
6,904
2020
(252)
24.00%
(60)
201
172
(457)
97
(47)
2020
8,911
(823)
8,088
GENESIS LAND DEVELOPMENT CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2021 and 2020
(All tabular amounts and amounts in footnotes to tables are in thousands of Canadian dollars except number of shares)
11.
INCOME TAXES (continued)
d)
The components of the net deferred tax asset were as follows:
Real estate held for development and sale
Reserves from land sales
Unamortized financing costs
Other temporary differences
Net deferred tax assets
12.
PROVISION FOR FUTURE DEVELOPMENT COSTS
The movement in the provision for future development costs is as follows:
2021
4,542
(598)
2,810
150
6,904
As at December 31, 2020
Additions
Changes to estimates
Development activities
As at December 31, 2021
As at December 31, 2019
Additions
Changes to estimates
Development activities
As at December 31, 2020
Land Development
Home Building
18,737
5,253
(67)
(8,827)
15,096
1,476
11,758
(416)
(9,935)
2,883
Land Development
Home Building
1,274
7,008
(306)
(6,500)
1,476
17,828
7,729
(554)
(6,266)
18,737
23
2020
5,417
(555)
2,740
486
8,088
Total
20,213
17,011
(483)
(18,762)
17,979
Total
19,102
14,737
(860)
(12,766)
20,213
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GENESIS LAND DEVELOPMENT CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2021 and 2020
(All tabular amounts and amounts in footnotes to tables are in thousands of Canadian dollars except number of shares)
13.
LOANS AND CREDIT FACILITIES
Secured by agreements receivable and real estate held for development and sale
a) Demand land project servicing loan from a major Canadian chartered bank, payable on
collection of agreements receivable, bearing interest at prime +0.50% per annum, secured by real
estate held for development and sale with a carrying value of $11,583. The loan matures on May
12, 2024.
Secured by real estate held for development and sale
b) The VTB bearing interest at 5% per annum was entered into on September 13, 2019 in partial
payment for the purchase of approximately 130 acres of future residential development land in
north Calgary. The VTB is secured by these lands which have a carrying value of $36,483. The
VTB is repayable in two installments of approximately $9,312 each in May 2021 and 2022. The
first installment of $9,312 was paid in May 2021. Subsequent to December 31, 2021, in January
2022, the final installment of $9,312 was paid.
Secured by specific dedicated lands and a general corporate charge on all assets of the
Corporation
c) Corporate revolving line of credit up to $50,000 with a major Canadian financial institution at
an interest rate per annum equal to the higher of prime +1.90% or 4.35%. Subsequent to
December 31, 2021, in February 2022, the loan was renewed and matures on February 1, 2025.
Secured by housing projects under development
d) Demand operating line of credit up to $6,500 from a major Canadian chartered bank, bearing
interest at prime +0.75% per annum, secured by a general security agreement over assets of the
home building division. Subsequent to December 31, 2021, in January 2022, the loan was
amended to increase the operating line of credit facility up to $10,000.
e) Demand project specific townhouse construction loans from a major Canadian chartered bank,
payable on collection of sale and closing proceeds, bearing interest at prime +0.90% per annum,
secured by the project with a carrying value of $2,797. One loan was closed in June 2021 and the
other loan matures on August 28, 2022.
Deferred fees on loans and credit facilities
2021
2020
5,794
-
9,312
18,624
16,237
-
1,917
1,662
-
1,185
33,260
(592)
32,668
21,471
(1)
21,470
A lender has a general security agreement on all property of the Corporation and its subsidiaries, in addition to specific security
mentioned above.
The weighted average interest rate of loan agreements with financial institutions was 3.92% (December 31, 2020 - 3.26%) based on
December 31, 2021 balances.
During the year ended December 31, 2021, the Corporation received advances of $61,517 (2020 - $17,241) relating to various loan
facilities. These are secured by real estate held for development and sale, housing projects under development, specific dedicated
lands and a general corporate charge on all assets of the Corporation. These loan facilities bear interest ranging from prime +0.50%
to the higher of prime +1.90% or 4.35% per annum, with maturity dates ranging from August 28, 2022 to May 12, 2024. During the
year ended December 31, 2021, the Corporation incurred interest expenses of $1,096 directly related to these loans (2020 - $2,232).
The Corporation and its subsidiaries have various covenants in place with their lenders with respect to credit facilities including credit
usage restrictions; cancellation, prepayment, confidentiality and cross default clauses; sales coverage requirements; conditions
precedent for funding; and other terms such as, but not limited to, maintaining contracted lot prices, restrictions on encumbrances,
liens and charges, material changes to project plans, and material changes in the Corporation’s ownership structure. As at December
31, 2021 and 2020, the Corporation and its subsidiaries were in compliance with all loan covenants.
24
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GENESIS LAND DEVELOPMENT CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2021 and 2020
(All tabular amounts and amounts in footnotes to tables are in thousands of Canadian dollars except number of shares)
13.
LOANS AND CREDIT FACILITIES (continued)
Based on the contractual terms, the Corporation’s loans and credit facilities are to be repaid within the following time periods
(excluding deferred fees on loans and credit facilities):
January 1, 2022 to December 31, 2022
January 1, 2023 to December 31, 2023
January 1, 2024 to December 31, 2024
14.
SHARE CAPITAL
a) Authorized
11,229
-
22,031
33,260
Unlimited number of common shares without par value.
Unlimited number of preferred shares without par value, none issued.
b) Weighted average number of shares
The following table sets forth the weighted average number of common shares outstanding for the year ended December 31, 2021
and 2020:
Basic
Effect of dilutive securities - stock options
Diluted
Year ended December 31,
2021
2020
44,642,895
44,385,301
-
-
44,642,895
44,385,301
All 855,000 options outstanding at the year ended December 31, 2021 (2020 - 2,535,000) were excluded in calculating diluted
earnings per share as their weighted average exercise price was higher than the average market price of the Corporation’s shares
during the period.
Basic and diluted earnings per share and weighted average number of shares for prior periods have been recalculated to account
for the impact of the Corporation’s share issue pursuant to a rights offering (note 14e) that closed on December 17, 2021.
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25
GENESIS LAND DEVELOPMENT CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2021 and 2020
(All tabular amounts and amounts in footnotes to tables are in thousands of Canadian dollars except number of shares)
14.
c)
SHARE CAPITAL (continued)
Normal course issuer bid (“NCIB”)
The Corporation’s NCIB expired on October 12, 2021. This NCIB allowed the Corporation to purchase for cancellation up to 2,098,885
common shares.
The following table sets forth the number of common shares repurchased and cancelled during the year ended December 31, 2021
and 2020 under the NCIB.
Number of shares repurchased and cancelled
Reduction in share capital
Change in retained earnings
Reduction in shareholders’ equity
Average purchase price per share
d)
Dividends paid
Year ended December 31,
2021
-
-
-
-
-
2020
296,592
378
87
465
1.58
No dividends were declared during the year ended December 31, 2021. Cash dividends of $6,280 ($0.15 per share), declared on
December 9, 2020, were paid on January 11, 2021.
e)
Rights offering
On November 10, 2021, the Corporation announced the offering of rights (the “Rights Offering”) to eligible holders of its common
shares (the “Common Shares”) at the close of business on the record date of November 18, 2021, on the basis of one right (a “Right”)
for each Common Share held. Each whole Right entitled the holder to subscribe for 0.3583088 of a Common Share upon payment
of the subscription price of $2.00 per Common Share. The Rights Offering closed on December 17, 2021, and all Rights were
exercised in exchange for 15,000,000 Common Shares. The Corporation received gross proceeds of $30,000 and paid issuance
costs of $106. The net proceeds of $29,894 are shown in the Statements of Changes in Equity.
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26
GENESIS LAND DEVELOPMENT CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2021 and 2020
(All tabular amounts and amounts in footnotes to tables are in thousands of Canadian dollars except number of shares)
15.
SHARE-BASED COMPENSATION
a)
Stock Option Plan
Share-based payments may be settled in cash or equity at the sole discretion of the Corporation and are accounted for as
equity-settled plans. Stock options have a 7-year term and vest 25% on each of the first, second, third and fourth anniversary dates
of the grant.
Details of stock options are as follows:
Outstanding - beginning of period
Options cancelled pursuant to revised long-term
incentive plan
Outstanding - end of period
Exercisable - end of period
Year ended December 31,
2021
2020
Number of
Options
2,535,000
(1,680,000)
855,000
641,250
Weighted
Average
Exercise Price
$3.31
$3.31
$3.31
$3.31
Number of
Options
2,535,000
-
2,535,000
1,072,500
Weighted
Average
Exercise Price
$3.31
-
$3.31
$3.34
Outstanding
Exercisable
Range of Exercise
Prices ($)
Number at
December 31, 2021
Weighted Average
Exercise Price
Number at
December 31, 2021
Weighted Average
Exercise Price
Weighted Average
Remaining
Contractual Life in
Years
3.12 - 3.48
855,000
$3.31
641,250
$3.31
3.85
No stock options were issued during the year ended December 31, 2021 (2020 - Nil).
b) Deferred Share Unit Plan (“DSU”)
The Corporation’s cash settled DSU plan provides for DSUs to be issued to directors and designated employees. DSUs are issued
with various vesting terms, currently ranging between three to four years. Details of outstanding DSUs are as follows:
Outstanding - beginning of period
DSUs granted
DSUs cancelled
Outstanding - end of period
Vested - end of period
Year ended December 31,
2021
354,258
334,033
(114,548)
573,743
115,490
2020
70,941
283,317
-
354,258
92,068
The outstanding liability related to cash settled DSUs as at December 31, 2021 was $947 (December 31, 2020 - $537) and is recorded
in accounts payable and accrued liabilities. DSUs are measured at fair value at each reporting period on a mark-to-market basis.
27
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GENESIS LAND DEVELOPMENT CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2021 and 2020
(All tabular amounts and amounts in footnotes to tables are in thousands of Canadian dollars except number of shares)
15.
SHARE-BASED COMPENSATION (continued)
c) Share-based compensation expense
Share-based compensation was recorded and included as a part of general and administrative expense and is comprised of the
following:
Stock options
Deferred share units related to grants which are to be cash settled
Total share-based compensation expense
16.
GENERAL AND ADMINISTRATIVE
The general and administrative expense of the Corporation consisted of the following:
Compensation and benefits
Share-based compensation
Corporate administration
Professional services
Year ended December 31,
2021
177
410
587
Years ended December 31,
2021
7,359
587
2,291
1,788
2020
265
453
718
2020
6,855
718
1,775
1,060
12,025
10,408
Compensation and benefits of the directors and key management personnel, included in the general and administrative expenses
above, were as follows:
Salaries, wages and benefits
Share-based compensation
17.
SELLING AND MARKETING
Selling and marketing expenses of the Corporation consisted of the following:
Advertising and marketing
Sales commissions
Years ended December 31,
2021
2,112
587
2,699
Years ended December 31,
2021
3,114
2,029
5,143
2020
1,951
718
2,669
2020
2,786
1,677
4,463
28
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GENESIS LAND DEVELOPMENT CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2021 and 2020
(All tabular amounts and amounts in footnotes to tables are in thousands of Canadian dollars except number of shares)
18.
FINANCE EXPENSE
Finance expense of the Corporation consisted of the following:
Interest incurred
Interest relating to VTB (note 13)
Financing fees amortized
Interest and financing fees capitalized (note 5)
19. COMMITMENTS AND CONTINGENCIES
Years ended December 31,
2021
479
658
249
(166)
1,220
2020
1,329
931
333
-
2,593
a)
b)
c)
The Corporation has issued letters of credit and surety bonds pursuant to servicing agreements with municipalities to indemnify
them in the event that the Corporation does not perform its contractual obligations. As at December 31, 2021, these amounted
to $7,747 (December 31, 2020 - $3,666).
The Corporation is committed to pay levies and municipal fees relating to signed municipal agreements on commencement of
development of certain real estate assets with the following future payments:
January 1, 2022 to December 31, 2022
January 1, 2023 to December 31, 2023
January 1, 2024 to December 31, 2024
4,942
5,255
1,697
11,894
The Corporation was named as a co-defendant in an action brought by three limited partners of LPLP 2007 and its affiliated
RRSP limited partnerships. In December 2021, the parties reached a final settlement of the litigation. The settlement was
approved by the Court, which certified a class consisting of all remaining unitholders in LPLP 2007 or its affiliated RRSP limited
partnerships at that time. The settlement is binding on all class members. An amount of $523 was included in accounts payable
and accrued liabilities as at December 31, 2021. Subsequent to December 31, 2021, a total settlement of $523 has been paid
out to the plaintiffs.
d)
The Corporation has contracted to acquire 163 residential lots in the Calgary Metropolitan Area for $24,670 from third-party
land developers. The Corporation has paid deposits totaling $2,613 with the remainder being payable as follows:
January 1, 2022 to December 31, 2022
January 1, 2023 to December 31, 2023
January 1, 2024 to December 31, 2024
6,068
13,651
2,338
22,057
e)
During the year ended December 31, 2021, the Corporation entered into a binding agreement to acquire approximately 157
acres of future residential development land in the City of Calgary for $29,150. The Corporation paid a non-refundable deposit
of $2,186, with the balance of $26,964 to be paid on closing, currently scheduled for April 2022. In addition, the Corporation
entered into a binding agreement to acquire approximately 3.56 acres of land adjacent to this land for $663. The Corporation
paid a deposit of $132, with the balance of $531 to be paid on closing, currently scheduled for July 2022.
29
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7
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GENESIS LAND DEVELOPMENT CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2021 and 2020
(All tabular amounts and amounts in footnotes to tables are in thousands of Canadian dollars except number of shares)
20.
FINANCIAL INSTRUMENTS
The fair values of cash and cash equivalents, restricted cash, accounts payable and accrued liabilities approximate their carrying
values as they are typically expected to be settled within twelve months. The fair value of deposits approximates their carrying value
as the terms of deposits are comparable to the market terms for similar instruments.
The fair values of the Corporation’s loans and credit facilities, amounts receivable and vendor-take-back mortgage receivable were
estimated based on current market rates for loans of the same risk and maturities.
The fair value of investments in land development entities are based on the market approach method. This method uses prices and
other relevant information that have been generated by market transactions involving identical or comparable assets.
Fair value measurements recognized in the consolidated balance sheets are categorized using a fair value hierarchy that reflects the
significance of inputs used in determining the fair values. The three fair value hierarchy levels are as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices)
or indirectly (i.e. derived from prices); and
Level 3: Inputs for the asset or liability that is not based on observable market data (unobservable inputs).
The Corporation’s current financial assets are measured at amortized cost or fair value through profit and loss (“FVTPL”). The
estimated fair value of financial assets and liabilities measured at FVTPL as at December 31, 2021 and December 31, 2020 are
presented in the following table:
Carrying Value
Fair Value
Fair Value
Hierarchy
Measurement
Basis
As at
Dec. 31, 2021
As at
Dec. 31, 2020
As at
Dec. 31, 2021
As at
Dec. 31, 2020
Financial Assets
Cash
Investments in land development
entities
Restricted cash(1)
(1) Included in other operating assets.
Level 1
Level 3
Level 1
FVTPL
FVTPL
FVTPL
63,975
6,170
5,992
29,743
5,608
7,351
63,975
6,170
5,992
29,743
5,608
7,351
During the year ended December 31, 2021 and 2020, no transfers were made between the levels in the fair value hierarchy.
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30
GENESIS LAND DEVELOPMENT CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2021 and 2020
(All tabular amounts and amounts in footnotes to tables are in thousands of Canadian dollars except number of shares)
20.
FINANCIAL INSTRUMENTS (continued)
a) Risks associated with financial instruments
(i) Credit risk
The Corporation recognizes bad debt expense (or recovery) relating to amounts receivable on sold lots, net of the value of the related
sold lots which are taken back into the Corporation’s lot inventory on the termination of the relevant agreement. Termination could
occur when the buyer fails to perform or observe terms of covenants of the relevant agreement. Agreements receivable for lot sales
have various terms of repayment with purchasers generally having between 6 and 24 months to pay the balance owing for the
purchased lots.
Recovery of bad debt expense is included in the Corporation’s general and administrative expenses. In order to mitigate credit risk,
the Corporation does not transfer title to sold residential lots until full payment is received. Individual balances due from customers
as at December 31, 2021, which comprise greater than 10% of total amounts receivable, totaled $12,135 from three customers
(December 31, 2020 - $10,235 from two customers).
Aging of amounts receivable on sold lots was as follows:
Not past due
(ii) Liquidity risk
2021
12,135
12,135
2020
10,466
10,466
The contractual maturities of financial liabilities and other commitments as at December 31, 2021 were as follows:
<1 Year
>1 Year
Total
Financial liabilities
Accounts payable and accrued liabilities
Loans and credit facilities excl. deferred fees on loans and credit facilities (note 13)
Commitments
Lease obligations (including variable operating costs)
Land and lot purchase contracts (note 19d and note 19e)
Levies and municipal fees (note 19b)
24,597
11,229
35,826
427
33,563
4,942
38,932
74,758
1,811
22,031
23,842
1,775
15,989
6,952
24,716
48,558
26,408
33,260
59,668
2,202
49,552
11,894
63,648
123,316
As at December 31, 2021, the Corporation had obligations due within the next 12 months of $74,758 (December 31, 2020 - $39,777).
Based on the Corporation’s operating history, its relationship with its lenders and committed sales contracts, management believes
that the Corporation has the ability to continue to renew or repay its financial obligations as they come due. During the year ended
December 31, 2021, the Corporation renewed two loans (note 13a and note 13e) and put in place a corporate revolving line of credit
of $50,000 (note 13c). Subsequent to December 31, 2021, the Corporation amended to increase the operating line of credit facility
from $6,500 to $10,000 (note 13d) and renewed the corporate revolving line of credit (note 13c).
(iii) Market risk
The Corporation is exposed to interest rate risk to the extent that certain agreements receivable and certain loans and credit facilities
are at a floating rate of interest. A 1% change in interest rates would result in a change in interest incurred of approximately $239
annually on floating rate loans (2020 - $28).
31
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9
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GENESIS LAND DEVELOPMENT CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2021 and 2020
(All tabular amounts and amounts in footnotes to tables are in thousands of Canadian dollars except number of shares)
20.
FINANCIAL INSTRUMENTS (continued)
b) Capital management
The Corporation’s policy is to maintain a sufficient capital base in order to retain investor, creditor and market confidence and to
sustain the future development of the business. The Corporation is in compliance with all externally imposed capital requirements.
The Corporation manages its capital structure and makes adjustments to it in light of changes in regional economic conditions and
the risk characteristics of the underlying real estate industry within that region.
The Corporation considered its capital structure at the following dates to specifically include:
Loans and credit facilities (note 13)
Shareholders’ equity
2021
32,668
228,624
261,292
2020
21,470
187,676
209,146
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GENESIS LAND DEVELOPMENT CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2021 and 2020
(All tabular amounts and amounts in footnotes to tables are in thousands of Canadian dollars except number of shares)
21.
SEGMENTED INFORMATION
The income producing business units of the Corporation reported the following activities for the year ended December 31, 2021 and
2020:
Land Development Segment
Intrasegment
Elimination
(184)
LP
203
Home
Building
Segment
92,416
-
Intersegment
Elimination
(29,620)
-
Total
41,095
5,870
(31,616)
(80,190)
29,620
Genesis
41,076
4,945
(30,771)
4,268
19,518
562
925
(845)
-
283
-
4,268
-
(184)
19,617
12,226
-
562
-
(8,142)
(180)
184
(8,138)
(9,912)
11,938
103
-
12,041
2,314
276,751
13,895
(6,482)
284,164
39,527
62,653
6,609
(2,288)
66,974
20,779
Land Development Segment
Intrasegment
Elimination
-
LP
49
Home
Building
Segment
75,025
-
Intersegment
Elimination
(26,909)
-
Total
39,189
16,628
(37,950)
(65,540)
26,909
Genesis
39,140
16,308
(37,612)
(10,822)
7,014
320
(338)
-
31
(6,971)
(436)
43
(405)
(10,822)
7,045
(815)
8,670
(7,407)
(8,560)
(362)
110
232,166
14,701
(6,320)
240,547
23,825
57,181
2,744
(2,226)
57,699
6,913
-
-
-
-
-
1,238
1,238
-
-
-
-
2,122
2,122
-
-
-
-
-
-
-
-
-
Total
103,891
5,870
(82,186)
4,268
31,843
562
(18,050)
14,355
324,929
88,991
Total
87,305
16,628
(76,581)
(11,637)
15,715
(15,967)
(252)
266,494
66,734
214,098
7,286
(4,194)
217,190
18,748
-
235,938
Year ended December 31, 2021
Revenues
Revenues - development lands
Direct cost of sales
Reversal of write-down of real
estate held for development and
sale
Gross margin
Gain in investments in land
development entities
G&A, selling & marketing and net
finance expense or income
Earnings before income taxes and
non-controlling interest
Segmented assets as at
December 31, 2021
Segmented liabilities as at
December 31, 2021 (1), (2)
Segmented net assets as at
December 31, 2021 (1), (2)
Year ended December 31, 2020
Revenues
Revenues - development lands
Direct cost of sales
Write-down of real estate held for
development and sale
Gross margin
G&A, selling & marketing and net
finance expense or income
Earnings (loss) before income
taxes and non-controlling interest
Segmented assets as at
December 31, 2020
Segmented liabilities as at
December 31, 2020 (1), (2)
Segmented net assets as at
December 31, 2020 (1), (2)
174,985
11,957
(4,094)
182,848
16,912
-
199,760
(1) Segmented liabilities under the Genesis land development segment include $3,113 due to the home building segment (December 31, 2020 - $4,118 due from the
land development segment to the home building segment).
(2) Segmented liabilities under the LP segment is comprised of accounts payable and accrued liabilities and includes $2,288 (December 31, 2020 -$2,226) due to
Genesis.
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GENESIS LAND DEVELOPMENT CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2021 and 2020
(All tabular amounts and amounts in footnotes to tables are in thousands of Canadian dollars except number of shares)
22.
CONSOLIDATED ENTITIES
The Statements include the accounts of the Corporation and its wholly-owned subsidiaries, as well as the consolidated revenues,
expenses, assets, liabilities and cash flows of limited partnership entities that the Corporation controls. The Corporation has less
than 50% equity ownership in these limited partnership entities; however, the Corporation has control over these entities’ activities,
projects, financial and operating policies due to contractual arrangements. As such, the relationship between the Corporation and
the limited partnership entities indicates that they are controlled by the Corporation. Accordingly, the accounts of the limited
partnerships have been consolidated in the Corporation’s financial statements. Subsidiaries of the Corporation are general partners
in three limited partnership group structures.
LPLP 2007 is a limited partnership controlled by the Corporation. In 2019, the Corporation completed a transaction with LPLP 2007,
whereby the Corporation acquired the third-party, secured vendor-take-back mortgage receivable held by LPLP 2007. Consideration
paid to LPLP 2007 included a cash payment of $10,360 to LPLP 2007 by the Corporation, with the net proceeds were placed in the
trust account of counsel to LPLP 2007 to be available for pro rata distribution its limited partners.
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GENESIS LAND DEVELOPMENT CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2021 and 2020
(All tabular amounts and amounts in footnotes to tables are in thousands of Canadian dollars except number of shares)
22.
CONSOLIDATED ENTITIES (continued)
All entities are incorporated in Canada and are listed in the following table:
% equity interest as at
December 31, 2021
December 31, 2020
Name
Land Development
Genpol Inc.
Genpol LP
1504431 Alberta Ltd.
Genesis Sage Meadows Partnership
Genesis Land Development (Southeast) Corp.
Genesis Keystone Ltd.
Polar Hedge Enhanced Income Trust
Genesis Land Development (Ricardo Ranch) Corp.
Sage Hill Crest Apartments Corp.
Home Building
Genesis Builders Group Inc.
The Breeze Inc.
Joint Venture
Kinwood Communities Inc.
Limited Partnerships
LP 4/5 Group
Genesis Limited Partnership #4 (1)
Genesis Limited Partnership #5, GLP5 GP Inc., GLP5 NE Calgary Development Inc.
Genesis Northeast Calgary Ltd.
LP 8/9 Group
Genesis Limited Partnership #8 (1)
Genesis Limited Partnership #9, GP GLP9 Inc., GLP9 Subco Inc.
GP GLP8 Inc.
LPLP 2007 Group
Limited Partnership Land Pool (2007)
GP LPLP 2007 Inc.
GP RRSP 2007 Inc., LPLP 2007 Subco Inc.
LPLP 2007 Subco #2 Inc., LP RRSP Limited Partnership #1
LP RRSP Limited Partnership #2
(1) The allocation of profit or loss is 0% in accordance with the terms of the limited partnership agreement.
35
100%
100%
0.0002%
99.9998%
100%
100%
100%
100%
100%
100%
100%
50%
0.001%
0%
100%
53.63%
0%
100%
0.023%
100%
0%
0%
0%
100%
100%
0.0002%
99.9998%
100%
100%
100%
100%
0%
100%
100%
50%
0.001%
0%
100%
53.63%
0%
100%
0.023%
100%
0%
0%
0%
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GENESIS LAND DEVELOPMENT CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2021 and 2020
(All tabular amounts and amounts in footnotes to tables are in thousands of Canadian dollars except number of shares)
22.
CONSOLIDATED ENTITIES (continued)
The following tables summarize the information relating to the Corporation's subsidiaries that have material non-controlling interests
and may include inter-group balances that are eliminated on consolidation and become a component of the net non-controlling
interest:
BALANCE SHEETS
Assets
December 31, 2021
LP 4/5
LP 8/9
LPLP 2007
Total
Real estate held for development and sale
9,564
Amounts receivable
Due from related parties
Other operating assets including restricted
cash
Cash and cash equivalents
Total assets
Liabilities
Accounts payable and accrued liabilities
Due to related parties
Total liabilities
Net assets
Non-controlling interest (%)
-
-
-
-
9,564
3
2,288
2,291
7,273
100%
-
6
51
4,198
31
4,286
4,273
-
4,273
13
100%
-
-
45
-
-
45
45
-
45
-
100%
December 31, 2020
9,564
6
96
4,198
31
13,895
4,321
2,288
6,609
7,286
LP 4/5
LP 8/9
LPLP 2007
Total
Assets
Real estate held for development and sale
9,263
Amounts receivable
Other operating assets including restricted
cash
Cash and cash equivalents
Total assets
Liabilities
Customer deposits
Accounts payable and accrued liabilities
Due to related parties
Total liabilities
Net assets
Non-controlling interest (%)
-
-
-
9,263
-
-
1,805
1,805
7,458
100%
36
844
-
100
13
957
100
17
248
365
592
100%
-
8
4,458
15
4,481
-
401
173
574
3,907
100%
10,107
8
4,558
28
14,701
100
418
2,226
2,744
11,957
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GENESIS LAND DEVELOPMENT CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2021 and 2020
(All tabular amounts and amounts in footnotes to tables are in thousands of Canadian dollars except number of shares)
22.
CONSOLIDATED ENTITIES (continued)
SUMMARIZED STATEMENTS OF COMPREHENSIVE INCOME
Revenues
Net (loss) / earnings
Non-controlling interest (%)
Revenues
Net loss
Non-controlling interest (%)
SUMMARIZED STATEMENT OF CASH FLOWS
Cash flows (used in) / from operating
activities
Cash flows used in financing activities
Net (decrease) / increase in cash and cash
equivalents
Cash flows from operating activities
Cash flows used in financing activities
Net increase in cash and cash equivalents
Year ended December 31, 2021
LP 8/9
1,109
211
100%
LPLP 2007
-
76
100%
Year ended December 31, 2020
LP 8/9
350
(30)
100%
LPLP 2007
-
(252)
100%
Year ended December 31, 2021
LP 8/9
(13)
-
(13)
LPLP 2007
90
(74)
16
LP 4/5
19
(184)
100%
LP 4/5
19
(122)
100%
LP 4/5
-
-
-
Year ended December 31, 2020
LP 4/5
LP 8/9
LPLP 2007
-
-
-
4
-
4
125
(119)
6
Total
1,128
103
Total
369
(404)
Total
77
(74)
3
Total
129
(119)
10
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37
IAIN STEWART
President and CEO
WAYNE KING
PARVESHINDERA SIDHU
President, Genesis Builders Group Inc.
and Vice-President, Home Building
ARNIE STEFANIUK
Vice-President, Land Development
BRIAN WHITWELL
Vice-President, Asset Management
Directors
STEPHEN J. GRIGGS
Chair
STEVEN GLOVER
Lead Director
MARK W. MITCHELL
Director
LOUDON OWEN
Director
IAIN STEWART
Director
Transfer Agent
COMPUTERSHARE TRUST
COMPANY OF CANADA
600, 530 - 8th Avenue SW
Calgary, AB T2P 3S8
Stock Exchange
TORONTO STOCK EXCHANGE
Stock Symbol – GDC
Auditors
MNP LLP
1500, 640 - 5th Avenue SW
Calgary, AB T2P 3G4
Genesis Land Development Corp.
6240, 333 – 96 Ave NE
Calgary, AB T3K 0S3
Main 403 265 8079
Email info@genesisland.com
www.genesisland.com
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GENESIS LAND DEVELOPMENT CORP.6240, 333 – 96 AVENUE NECALGARY, AB T3K 0S3MAIN: 403 265 8079EMAIL: INFO@GENESISLAND.COMWWW.GENESISLAND.COM