2023
ANNUAL
REPORT
2
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT 3
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT BayviewAIRDRIE
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GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT Table of
CONTENTS
Message from the President and CEO...................................... 07
Genesis Projects and Communities ...........................................08
Community Involvement..................................................................11
Genesis Builders Show Homes ....................................................12
Management’s Discussion & Analysis ........................................15
Consolidated Financial Statements............................................54
Contact Information ........................................................................93
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GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT Huxley
E CALGARY
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GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT Message from the
PRESIDENT & CEO
G
enesis is pleased to report after
tax earnings of $15 million for
2023 ($0.26 per share), with our
communities and new home orders
exceeding 300 for the first time. The
company enters 2024 with an order
book of 247 firm sales contracts, up
from 205 at the start of 2023.
home building division contributing
earnings of $14 million and the balance
contributed by our land development
division. This marks the 23rd consecutive
year of positive earnings. Annual revenue
increased to $203 million, almost double
the trailing five-year average of $125
million. Revenue and earnings were driven
by 286 home sales, 305 lot sales and 14
acres of multi-family and commercial land
parcel sales.
Genesis has been building a platform
to support long term growth over the
last few years. Key components of this
platform include:
• Strategically acquiring land
positions in the Calgary
Metropolitan Area (CMA);
• Steadily growing our home
building operations, to take
advantage of economies of scale;
• Continued focus on quality and
safety in all of our operations;
• Enhancing an already strong
culture and leadership team; and
• Capitalizing on our land
development expertise and
redeploying capital through the
creation of property development
limited partnerships.
After many years of transition, the
Genesis team is excited about the
prospects ahead.
As illustrated above, 2023 was a
watershed year for Genesis, resulting
from the foundation laid in prior years.
The success from this foundation
is now evident and will help propel
Genesis in a resilient CMA market for
years to come. Through 2023, much of
the increase in earnings and revenues
is attributable to the expansion of
Genesis’ home building business, with
increased sales coming from nine
Genesis’ land development group
is also experiencing rapid growth.
Genesis commenced the development
of three new communities in 2023,
Genesis’ first new community
developments since 2011. $69 million
was invested in our communities in
2023, creating 288 new residential
lots and 6.5 acres of multifamily and
commercial land parcels. Our inventory
of lots and land parcels will continue
to increase as we progress our three
new communities in the coming
years. Increasing land revenues takes
considerable time and investment as
projects must go through extensive
municipal approval processes and
approximately 18 months of land
development before revenues begin to
be realized. Lot sales from these new
communities are expected in 2024.
Genesis acquires land strategically and
opportunistically ensuring Genesis has
a significant and balanced land supply
in the CMA over the next ten to twenty
years. In 2023, Genesis invested $27
million to acquire an additional 485
acres of future development lands.
Since 2018, Genesis has invested over
$123 million in the acquisition of future
development lands.
Further, a significant step in executing
our growth plan was achieved with two
high quality builders investing in our
first community development limited
partnership. This partnership now
owns our Lewiston community, with
Genesis retaining a 60% interest in the
partnership and each of the builders
owning 20%. Genesis is the operator
of this development, and each of
the builders has a right of refusal to
acquire 30% of the residential lots
created in Lewiston. The creation of
this partnership and related project
financing surfaced $32 million of cash
for Genesis.
Partnerships such as this, allow Genesis
to immediately realize a portion of
the value created through the land
acquisition and approval processes
once the land is “shovel ready", while
retaining the role as operator, creating
a fee based income stream and having
quality builders as partners and likely
buyers of a large number of lots.
Our team has been strengthened with
the recruiting and onboarding of a
new CFO, Rob Sekhon, who rounds
out our executive team. Rob is a CPA,
CA with a strong track record and
increasing levels of responsibility over
a 20 year career. Rob joined Genesis
in September 2023 and his calm
and thoughtful approach is already
benefiting Genesis. Rob’s addition
to the team comes in anticipation of
Wayne King’s retirement and frees
Wayne up to lead a project upgrading
and ensuring our management
information systems are adapting to
new technologies and protected from
cyber risks. I look forward to Rob’s
increasing contributions as Genesis
executes its growth business plan.
Finally, I want to express a deep sense
of gratitude to all members of our
team, including staff, consultants, and
contractors, for their extraordinary
work, and our board of directors and
shareholders for their consistent
support and guidance – I feel fortunate
that I get to work with all of these
people. The growth platform created
through the efforts of the last several
years is a testament to the entire team.
IAIN STEWART
President and Chief Executive Officer
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GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
Genesis Projects
& COMMUNITIES
1
3
5
BAYSIDE
HUXLEY
2
4
6
BAYVIEW
LEWISTON
LOGAN LANDING
SAGE HILL CREST
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GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT 9
STONEY TRAIL NWYANKEE VALLEYBOULEVARDVETERANSBOULEVARDHWY 1 (16TH AVE)GLENMORE TRAIL SEMACLEOD TRAILCROWCHILD TRAIL NWHWY 22HWY 1AHWY 22XDEERFOOT TRAILQE II HIGHWAYPANTONE 2925 CC77 : M:30 Y:0 K:0R:28 G:146 B:209#009ADECity ofCalgaryAirdrieCochraneChestermereSTONEY TRAIL SEDEERFOOT TRAILSIMONS VALLEYEVANSTONCOVENTRY HILLSROYAL VISTAARBOUR LAKEBOWNESSVARSITYHILLHURSTDOWNTOWNLAKEBONAVISTALEGACYSHAWNESSYSOMERSETSIGNAL HILLRIVERBENDPUMPHILLMAHOGANYSETONHERITAGEPOINTEARTESIAMARLBOROUGHSUNRIDGETARADALESADDLE RIDGESKYVIEWRANCHYYCBRENTWOODNose Hill ParkHeritage ParkWHITE FARMSGenesis Projects & CommunitiesNon-Genesis Communities -Genesis Home Sales Activities123456GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT Airdrie
DRIVE-IN MOVIE
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GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT Community
INVOLVEMENT
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.
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 saw the opportunity to support and provide
some funding for 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.
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GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT Genesis Builders
SHOW HOMES
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GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT 13
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT LewistonN CALGARY
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GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT Management’s Discussion
AND ANALYSIS
FOR THE THREE MONTHS AND YEAR ENDED DECEMBER 31, 2023
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, 2023 and 2022, 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.sedarplus.com.
All amounts are in thousands of Canadian dollars, except per share amounts or unless otherwise noted. This MD&A is dated as of
March 6, 2024.
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GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
STRATEGY AND 2023 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”) with a strategy to grow its 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.
Genesis acquires land strategically and opportunistically ensuring Genesis has a significant and balanced land supply in the CMA
over the next ten to twenty years. Genesis may realize some of the value created through the land approval process by providing
opportunities for industry partners to participate in the final development of communities on the land.
GBG designs, builds and sells homes on a significant portion of Genesis’ single-family lots and 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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GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
Highlights:
•
$203,312 of Revenues in year-end (“YE”) 2023: Genesis generated revenues of $203,312 in YE 2023 up from
$140,357 achieved in YE 2022. Fourth quarter (“Q4”) 2023 revenues of $71,602 were higher when compared to $54,157
generated in Q4 2022.
• Net Earnings in YE 2023 were $14,512: Net earnings were positive for the 23rd consecutive year with net earnings
attributable to equity shareholders in YE 2023 of $14,512 ($0.26 net earnings per share - basic and diluted), compared
to $4,520 ($0.08 net earnings per share - basic and diluted) in YE 2022. Net earnings attributable to equity shareholders
in Q4 2023 were $8,056 ($0.15 net earnings per share - basic and diluted) compared to $3,062 ($0.05 net earnings per
share - basic and diluted) in Q4 2022.
•
•
•
305 Lots Sold: In YE 2023, Genesis sold 305 residential lots (118 to third-party builders and 187 through its home
building division, GBG), an increase of 29% from 236 lots in YE 2022 (144 to third-party builders and 92 through GBG).
In Q4 2023, Genesis sold 95 residential lots (42 to third-party builders and 53 through GBG) compared to 106 lots in Q4
2022 (84 to third-party builders and 22 through GBG).
286 Homes Sold: In YE 2023, Genesis sold a record 286 homes, an increase of 69% from the 169 sold in YE 2022. In
Q4 2023, Genesis sold 86 homes, compared to 57 sold in Q4 2022. During YE 2023, Genesis had 328 new home orders
compared to 233 for YE 2022. Genesis had 247 outstanding new home orders on hand at December 31, 2023 (205 at
December 31, 2022).
$16,200 of Development Land Sales: In YE 2023, Genesis sold four development land parcels for $16,200 versus five
parcels for $15,991 in YE 2022. Genesis sold three development land parcels for $11,958 in Q4 2023 versus two parcels
for $6,338 in Q4 2022.
• Cash on Hand of $37,546: On December 31, 2023, Genesis had $37,546 in cash and cash equivalents.
• Dividends of $0.17 per share in 2023: Total cash dividends of $9,663 ($0.17 per share) were paid during the year
ended December 31, 2023 of which $0.085 was declared and paid in Q4 2023.
•
•
Land Acquisitions: In Q4 2023, Genesis closed the acquisition of 460 acres of future residential development land in
the southeast sector of the City of Calgary for $25,842.
Lewiston Lands Limited Partnership (“LLLP”): During the year ended December 31, 2023, Genesis sold a 20%
ownership stake in LLLP to each of two Calgary based third party builders. The transaction closed on January 16, 2023,
for total proceeds of $19,760, being $11,760 cash with the balance being the assumption of debt by the purchasers.
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GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
OPERATING HIGHLIGHTS
Key financial results and operating data for Genesis were as follows:
($000s, except for per share items or unless otherwise noted)
2023
2022
2023
2022
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 (3)
Gross margin before reversal of write-down (%) (3)
Gross margin
Net earnings attributable to equity shareholders
Net earnings per share - basic and diluted
Dividends declared and paid
Dividends declared and paid - per share
Key Operating Data
Land Development
Total residential lots sold (units)
Residential lot revenues
Gross margin before reversal of write-down (3)
Gross margin before reversal of write-down (%) (3)
Gross margin on residential lots sold
Average revenue per lot sold
Development land revenues
Home Building
Homes sold (units)
Revenues (4)
Gross margin on homes sold
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
Loan and credit facilities
Total liabilities
Shareholders’ equity
Total equity
71,602
(54,862)
16,740
23.4%
17,440
8,056
0.15
4,830
0.085
95
14,675
3,441
23.4%
4,141
154
11,958
86
52,230
12,603
24.1%
607
50
54,157
(45,487)
203,312
140,357
(157,481)
(114,285)
8,670
16.0%
9,756
3,062
0.05
4,265
0.075
106
18,015
3,808
21.1%
3,808
170
6,338
57
33,799
4,783
14.2%
593
31
45,831
22.5%
46,531
14,512
0.26
9,663
0.17
305
45,863
8,712
19.0%
9,412
150
16,200
286
167,126
36,423
21.8%
584
328
247
26,072
18.6%
27,158
4,520
0.08
8,530
0.15
236
40,639
8,113
20.0%
8,113
172
15,991
169
100,680
16,931
16.8%
596
233
205
As at Dec. 31,
2023 (2)
As at Dec. 31,
2022 (2)
37,546
440,083
103,587
198,942
231,142
241,141
36,598
364,140
65,057
136,803
224,632
227,337
Loan and credit facilities to total assets
(1) Three months ended December 31, 2023 and 2022 (“Q4 2023”” and “Q4 2022”)
(2) Year ended December 31, 2023 and 2022 (“YE 2023” and “YE 2022”)
(3) Non-GAAP financial measure. Refer to heading “Non-GAAP Measures” in this MD&A. There was a reversal of write-down of $700 related to write-downs previously taken on real estate
held for development and sale in Q4 2023 and YE 2023 (2022 - $1,086)
(4) Includes other revenues and revenues of $7,261 for 53 lots in Q4 2023 and $25,877 for 187 lots in YE 2023 purchased by the Home Building division from the Land Development
24%
18%
division ($3,995 and 22 in Q4 2022; $16,953 and 92 in YE 2022) and sold with the home. These amounts are eliminated on consolidation.
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GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
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 Royal Bank of Canada estimates Alberta’s 2023 GDP growth to be the highest in Canada at 2.2% and to remain near the top
of their growth rankings in 2024 at an estimated 1.7%. While economic growth is expected to slow with persistently high inflation
and interest rates, Alberta is expected to benefit from higher commodity prices and strong international and interprovincial migration
which is expected to help offset the impact on the economy and housing market in 2024.
According to the Calgary Real Estate Board (“CREB”), 2023 residential home sales remained robust largely due to strong migration
levels. Housing supply levels were low in 2023 compared to the demand throughout the year, resulting in stronger than expected
price growth.
Overall sales in Calgary were 27,416, 8% lower than the peak in 2022 but still higher than long-term trends and activity reported
prior to 2020. Home inventory levels remained low at 3,071, a 26% decrease from December 2022. Months of supply remained
below two months throughout 2023, and at 1.34 months is indicative of a sellers’ market. These persistently tight conditions
contributed to an increase of approximately 6% in benchmark prices in Calgary during the year. Although price growth was slower
in 2023 than the 12% growth in 2022, housing prices remained relatively strong in 2023 compared to other markets in Canada. In
neighboring Airdrie, where Genesis has two active projects, supply improved in 2023 but continues to remain historically low.
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GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
2023 Business Plan
Progress on 2023 Business Plan
During 2023, Genesis continued to execute its growth business plan. Genesis achieved some significant milestones in 2022 with
the removal of Growth Management Overlays (“GMOs”), and in 2023 with receiving final development approvals enabling Genesis
to proceed with development of its Lewiston, Logan Landing and Huxley communities in 2023.
Growth also continues for GBG which is now building in 10 communities in the CMA. In 2023, GBG contracted to acquire 136 lots
in the CMA from third party developers in the communities of Alpine Park, Fireside, Heartwood and Vermillion Hill. GBG is currently
building in seven third party communities, namely Alpine Park, Clearwater, Fireside, Heartwood, Homestead, Silverton and
Vermilion Hill. As of December 31, 2023, GBG had outstanding contracts to purchase 433 lots. GBG has 143 new home orders on
these lots.
The following describes progress made on key elements of the growth plan.
1) Obtaining Additional Zoning and Servicing Entitlements
Genesis has made substantial progress in obtaining additional zoning and servicing entitlements for land in recent months. Zoning
and servicing entitlements are granted by the applicable municipal authorities. The timelines discussed below are management’s
best estimates at this time, given the uncertainties related to the regulatory approval process and market conditions.
The following three core projects have made substantial progress in the approval processes at the City of Calgary:
•
•
Logan Landing: Genesis owns 354 acres of development 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 approvals were received from Council in Q2 2023.
Final pre-development approvals have been received and servicing of the site commenced in Q3 2023.
Lewiston: Genesis acquired 130 acres of residential development land in north Calgary in 2019. Outline Plan and Land
Use Applications approvals were received from Council in November 2022. Phase 1 Tentative Plan and engineering
drawings have been approved and Genesis commenced servicing in Q2 2023.
• Huxley (Belvedere): In Q3 2023 Genesis received Outline Plan and Land Use approval from the City of Calgary for the
157 acres it acquired in 2022, in the Belvedere ASP. Final approvals for site servicing were received in October 2023
and Genesis commenced site grading in Q4 2023.
The following project is progressing through approval process at Rocky View County (“County”):
OMNI ASP (in North Conrich): Genesis has received ASP approval on a 185-acre commercial and retail project on a
portion of the 610 acres of undeveloped land that Genesis controls in the County bordering the northeast quadrant of
the City of Calgary. Progress continues with the County on the approval of a conceptual scheme for this project, with first
reading received in September 2022. Approval is anticipated in the first quarter of 2024. Genesis and the County have
successfully worked with Alberta Transportation to finalize plans and funding arrangements for an interchange at Stoney
and Airport Trails with construction planned to start in the third quarter of 2024. Funding is in place and design of the
interchange is currently proceeding. Once completed, this interchange will provide primary transportation access to these
lands.
2) Development and Sale of Land Parcels
Genesis continues to develop and implement 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 multi-family or commercial use, that have been developed within its
communities.
During 2023, Genesis completed the sales of three development land parcels in the City of Calgary; a 3.34-acre parcel for cash
consideration of $4,242, a 4.10-acre parcel for cash consideration of $5,329 and a 2.91-acre parcel for $3,929 for a cash
consideration of $1,965 and the remainder being in the form of a vendor-take-back (“VTB”) mortgage receivable of $1,964, and
closed the sale of 3.60-acre parcel in the City of Airdrie for cash consideration of $2,700.
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GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
3) Servicing Additional Phases
Genesis commenced servicing in three new communities and a new phase in an existing community in 2023:
•
•
Lewiston: Servicing of the first phase in this north Calgary community will add 184 single-family lots. Shallow utility
installation commenced in Q4 2023. Lots became available to builders in Q2 2023 and are expected to be fully serviced
in 2024. GBG and two third parties (each with a 20% ownership interest) will be the home builders in this phase;
Logan Landing: Servicing of the first phase in this southeast Calgary community will add 266 single-family lots. Surface
construction commenced in Q4 2023. Lots are expected to be fully serviced in 2024. GBG and three third parties will be
the home builders in this phase;
• Huxley: Servicing of this east Calgary community will add 1,368 single-family lots. Site earthworks have commenced
with servicing expected to commence in Spring 2024. It is intended that GBG and two third parties will be the home
builders in this phase; and
• Bayview: Bayview phase 6 in Airdrie will add 225 single-family lots. Shallow utility installation commenced in Q4 2023.
Lots became available to builders in Q3 2023 and are expected to be fully serviced in 2024. GBG and two third parties
will be the home builders in this phase.
4)
Investing in Additional Lands
During Q1 2023, Genesis paid $1,253 to GLP5 NE Calgary Development Inc. to acquire an additional 25 acres in the OMNI project
in North Conrich. This results in Genesis holding a 73% interest (previously 59%) in the 185-acre OMNI project with the remaining
27% being held by Genesis Limited Partnership #4. Refer to heading “Related Party Transactions” in this MD&A for additional
information. During Q3 2022, Genesis paid $6,699 to Genesis Limited Partnership #4 and GLP5 NE Calgary Development Inc.
(controlled entities within the consolidated entity) to acquire their 49% undivided interest in 456 acres of land in North Conrich in
Rocky View County (adjacent to the eastern boundary of Calgary). This transaction brings Genesis interest in these lands to 100%.
During Q4 2023, Genesis closed the acquisition of 460 acres of future residential development land in the southeast sector of the
City of Calgary for $25,842. Total cash payments of $7,754 were made by the closing date, and the remaining balance of $18,088
being in the form of a VTB mortgage payable which is to be paid over four years in equal installments of $4,522. The first payment
is due in November 2024.
Building and selling homes in communities developed by other parties is a key strategy adopted in 2020 to drive growth and
profitability in Genesis’ home building division. GBG is now active in ten communities, seven of which are third party communities.
Since 2020 GBG has acquired 613 third party lots of which 136 were acquired in 2023.
5) Land Development Partnerships
Genesis considers establishing land partnerships when a new community has received full municipal approvals. Partners are
usually other home builders selected carefully, to add value to the execution of the community’s development program.
During Q1 2023, Genesis sold two 20% interests, for a total of 40%, in the Lewiston Lands Limited Partnership to two builder
partners. $11,760 of proceeds, net of assumption of debt of $8,000, were realized by Genesis.
6) 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 is currently working
with five third party builders of which three are currently building in communities for which Genesis is the land developer.
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GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
7)
Increasing the Velocity of Homes Sold by GBG
In YE 2023, GBG entered into 328 new home sales contracts, an increase of 41% from 233 new home sales contracts in YE 2022.
During Q4 2023, GBG entered into 50 new home sales contracts compared to 31 new home sales contracts in Q4 2022. As of
December 31, 2023, Genesis had 247 outstanding new home orders, an increase of 21% compared to 205 as at December 31,
2022. To increase the velocity of homes sold, adapt to the current market conditions, and manage supply chain and cost increases,
Genesis:
•
•
•
•
acquires lots in several communities from third party developers;
adjusts pricing on select models to meet market conditions;
pursues construction cost efficiencies and actively manages supply chain challenges; and
continues to monitor and control overhead costs.
In 2023, GBG contracted to acquire 136 lots in the CMA from third party developers in the communities of Alpine Park, Fireside,
Heartwood and Vermillion Hill. GBG is currently building in seven third party communities, namely Alpine Park, Clearwater,
Fireside, Heartwood, Homestead, Silverton and Vermilion Hill. As of December 31, 2023, GBG had outstanding contracts to
purchase 433 lots. GBG has 143 new home orders on these lots.
8) Liquidity and Return of Capital
Liquidity: As of December 31, 2023, Genesis had $37,546 of cash and cash equivalents on hand (YE 2022 - $36,598), loan and
credit facilities of $103,587 (YE 2022 - $65,057), real estate assets of $342,791 (YE 2022 - $265,683) and total assets of $440,083
(YE 2022 - $364,140). The ratio of loan and credit facilities to total assets was 24% as at December 31, 2023 compared to 18%
as at December 31, 2022.
Return of Capital to Shareholders: In 2023 Genesis declared and paid dividends of $0.17 per share ($9,663), with $0.085 paid in
Q2 2023 and $0.085 in Q4 2023. Since 2014, when Genesis paid its first dividend, it has returned an aggregate of $76,331 to
shareholders by way of dividends and bought back nearly 3.1 million common shares for an aggregate cost of $8,922.
Outlook
Genesis continues to execute on its growth strategy in both its land and housing divisions, sustained by a backlog of new-home
orders and the continued strength of the CMA market. Housing demand remains relatively strong with the continued historic low
supply of homes for sale supported by housing demand from migrants to Alberta. This has been somewhat offset by housing price
increases, higher interest rates, inflationary pressures, tight labour markets and continuing supply chain constraints impacting new
home orders, and home affordability.
Supply chain issues and inflation are moderating but continue to impact construction costs and timelines in both our land
development and home building divisions. Some of the strain eased through 2023 as home sales activity slowed across most North
American markets. However, the lack of skilled labour and of some products and materials remain concerns. Genesis continues
to address these concerns by working proactively with key contractor partners and home buyers.
22
7
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
Land Development
Key Financial Data
Residential lot revenues (1)
Development land revenues
Direct cost of sales
Gross margin before reversal of write-
down (2)
Gross margin before reversal of write-
down (%) (2)
Reversal of write-down of real estate
held for development and sale
Gross margin
Gain in investments in land
development entities
Other expenses
Earnings (loss) before income 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,
2023
2022
% change
2023
2022
% change
14,675
11,958
18,015
6,338
(22,496)
(20,466)
4,137
3,887
(18.5%)
88.7%
9.9%
6.4%
45,863
16,200
40,639
15,991
(52,655)
(47,489)
9,408
9,141
12.9%
1.3%
10.9%
2.9%
15.5%
16.0%
(3.1%)
15.2%
16.1%
(5.6%)
700
4,837
1,106
(3,384)
2,559
42
53
95
1,086
4,973
560
(2,726)
2,807
84
22
106
(35.5%)
700
1,086
(35.5%)
(2.7%)
97.5%
24.1%
(8.8%)
(50.0%)
N/R (3)
(10.4%)
(9.4%)
10,108
1,106
(11,554)
(340)
118
187
305
150
10,227
560
(9,061)
1,726
144
92
236
172
(1.2%)
97.5%
27.5%
N/R (3)
(18.1%)
103.3%
29.2%
(12.8%)
170
Average revenue per lot sold
(1) Includes residential lot sales to third parties, residential lot sales to GBG and other revenues
(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
154
Gross margin by source of revenue
Residential lots
Residential lot revenues (1)
Direct cost of sales
Gross margin before reversal of write-
down
Gross margin before reversal of write-
down (%)
Reversal of write-down of real estate
held for development and sale
Three months ended December 31,
Year ended December 31,
2023
2022
% change
2023
2022
% change
14,675
18,015
(11,234)
(14,207)
(18.5%)
(20.9%)
45,863
40,639
(37,151)
(32,526)
3,441
3,808
(9.6%)
8,712
8,113
12.9%
14.2%
7.4%
23.4%
21.1%
700
-
10.9%
N/R (2)
8.7%
19.0%
20.0%
(5.0%)
700
9,412
-
8,113
N/R (2)
16.0%
Gross margin
(1) Includes residential lot sales to third parties, residential lot sales to GBG and other revenues
(2) Not relevant due to the size of the change
4,141
3,808
8
23
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
Development land
Development land revenues
Direct cost of sales
Gross margin before reversal of write-
down (1)
Gross margin before reversal of write-
down (%) (1)
Reversal of write-down of real estate
held for development and sale
Gross margin
Three months ended December 31,
Year ended December 31,
2023
2022
% change
2023
2022
% change
11,958
(11,262)
696
5.8%
-
696
6,338
(6,259)
79
1.2%
1,086
88.7%
79.9%
N/R (2)
N/R (2)
N/R (2)
1,165
(40.3%)
16,200
15,991
(15,504)
(14,963)
1.3%
3.6%
696
4.3%
-
696
1,028
(32.3%)
6.4%
(32.8%)
1,086
N/R (2)
2,114
(67.1%)
(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
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
Residential lot sales to third party builders occur periodically, usually when newly developed phases first become available for sale.
Total residential lot sales revenues in YE 2023 were $45,863 (305 lots) up from $40,639 (236 lots) in YE 2022. In YE 2023, 118
lots were sold to third party builders compared to 144 lots sold to third party builders in YE 2022. In YE 2023, GBG sold 187 homes
on Genesis lots, up 103% from 92 homes sold on Genesis lots in YE 2022.
Total residential lot sales revenues in Q4 2023 were $14,675 (95 lots) down from $18,015 (106 lots) in Q4 2022. In Q4 2023, 42
lots were sold to third party builders compared to 84 lots sold to third party builders in Q4 2022. In Q4 2023, GBG also sold 53
homes on Genesis lots, compared to 22 homes sold on Genesis lots in Q4 2022.
Four parcels of development land were sold in YE 2023 for $16,200 while five parcels of development land were sold in YE 2022
for $15,991. In Q4 2023, three development land parcels were sold for $11,958 while two development land parcels sold in Q4
2022 for $6,338. 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 before reversal of write-down of 19% in YE 2023 compared to 20% in YE 2022. Residential
lots had a gross margin before reversal of write-down of 23% in Q4 2023 compared to 21% in Q4 2022. Gross margins in Q4 2023
and YE 2023 were affected by the reversal of write-downs previously taken on real estate held for development and sale. Gross
margins before reversal of write-down were lower in YE 2023 compared to the same period in 2022. Residential lot and
development land revenue and margins can vary significantly as described in the “Factors Affecting Results of Operations” in this
MD&A.
Reversal of write-down of real estate held for development and sale
During 2023, Genesis recorded a reversal of write-down of $700 related to write-downs previously taken on real estate held for
development and sale. The reversal of the write-down was taken to reflect the estimated returns realizable on completion of
development and sale of these lands (2022 - $1,086).
24
9
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
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 $1,106 as a gain in investment in land
development entities during 2023 (2022 - $560).
Other expenses
Other expenses
Three months ended December 31,
Year ended December 31,
2023
2022
% change
2023
2022
% change
General and administrative expense
(2,123)
(1,788)
Selling and marketing expense
Finance income
Finance expense
Total
(1) Not relevant due to the size of the change
(519)
393
(1,135)
(3,384)
(567)
352
(723)
(2,726)
18.7%
(8.5%)
11.6%
57.0%
24.1%
(7,567)
(1,798)
1,406
(3,595)
(11,554)
(6,435)
(1,756)
488
(1,358)
(9,061)
17.6%
2.4%
N/R (1)
N/R (1)
27.5%
The components of other expenses and the changes are shown in the table above.
In YE 2023, other expenses totaled $11,554 or 28% higher than $9,061 incurred in YE 2022. Other expenses were higher in YE
2023 mainly due to higher net finance expense and general and administrative expense, specifically compensation expenses in
YE 2023. Net finance expenses were higher due to higher interest rates and higher average loan balances in YE 2023 as compared
to YE 2022.
In Q4 2023, other expenses totaled $3,384 or 24% higher than $2,726 incurred in Q4 2022. Other expenses were higher in Q4
2023 due to higher net finance expense and general and administrative expense, specifically compensation expenses. Net finance
expenses were higher due to higher interest rates and higher average loan balance in Q4 2023 as compared to Q4 2022.
Higher compensation expenses in YE 2023 and in Q4 2023 were driven by increases in staffing and salary levels reflecting higher
activity levels, inflation and a competitive labor market.
10
25
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
LOCATION OF GENESIS’ LAND DEVELOPMENT PROJECTS
Location of Genesis’ Land Development Projects
26
11
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
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,
2023
2022
% change
2023
2022
% change
Key Financial Data
Revenues (1)
Direct cost of sales
Gross margin
Gross margin (%)
Other expenses
Earnings before income taxes
Key Operating Data
Homes sold (units)
Average revenue per home sold
New home orders (units)
Outstanding new home orders at period end (units)
(1) Revenues include residential home sales and other revenue
(2) Not relevant due to size of the change
52,230
33,799
54.5%
167,126
(39,627)
(29,016)
36.6%
(130,703)
12,603
24.1%
(5,050)
7,553
86
607
50
4,783
14.2%
(3,732)
1,051
57
593
31
163.5%
69.7%
35.3%
N/R (2)
50.9%
2.4%
61.3%
100,680
(83,749)
16,931
16.8%
36,423
21.8%
(17,858)
(12,640)
18,565
4,291
286
584
328
247
169
596
233
205
66.0%
56.1%
115.1%
29.8%
41.3%
N/R (2)
69.2%
(2.0%)
40.8%
20.5%
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 $167,126 (286 units) in YE 2023, 66% higher than YE 2022 revenues of
$100,680 (169 units). In addition, 328 homes were contracted for sale in YE 2023, an increase of 41%, as compared to 233 in YE
2022, resulting in 247 outstanding new home orders at the end of 2023 as compared to 205 outstanding new home orders at the
end of 2022.
Revenues for single-family homes and townhouses were $52,230 (86 units) in Q4 2023, 55% higher than Q4 2022 revenues of
$33,799 (57 units). In addition, 50 homes were contracted for sale in Q4 2023, an increase of 61%, as compared to 31 in Q4 2022.
Homes sold in YE 2023 had an average price of $584 per home compared to $596 in YE 2022. Homes sold in Q4 2023 had an
average price of $607 per home compared to $593 in Q4 2022. Fluctuations in the average revenue per home sold are due to
differences in product mix, community, and market conditions. During 2023 and 2022, GBG's single-family homes product ranged
in price from $386-$1,900 depending on the location and the models being offered. Similarly, GBG's townhouse product ranged in
price from $172-$399 depending on the location and the models being offered. In Q4 2023, 77 single-family homes and 9
townhouses were sold compared to 56 single-family homes and 1 townhouse in Q4 2022. In YE 2023, 268 single-family homes
and 18 townhouses were sold compared to 162 single-family homes and 7 townhouses in YE 2022.
187 of the 286 homes sold in YE 2023 were built on residential lots supplied by Genesis, with lot revenues of $25,877 while 92 of
the 169 homes sold in YE 2022 were built on residential lots or parcels supplied by Genesis, with lot revenues of $16,953. In Q4
2023, 53 of the 86 homes sold were built on residential lots supplied by Genesis, with lot revenues of $7,261 while 22 of the 57
homes sold in Q4 2022 were built on residential lots or parcels supplied by Genesis, with lot revenues of $3,995.
In 2023, GBG contracted to acquire 136 lots in the CMA from third party developers in the communities of Alpine Park, Fireside,
Heartwood and Vermillion Hill. GBG is currently building in seven third party communities, namely Alpine Park, Clearwater,
Fireside, Heartwood, Homestead, Silverton and Vermilion Hill. As of December 31, 2023, GBG had outstanding contracts to
purchase 433 lots. GBG has 143 new home orders on these lots.
12
27
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
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. The delivery time of a pre-construction home is
approximately 10 to 12 months. Construction of quick possession homes commences 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 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 2023, GBG had $88,314 of work in progress, of which approximately $6,243 related to spec homes and
$4,954 related to the associated third party lots (YE 2022 - $48,506 of work in progress, of which $1,378 related to spec homes
and $2,744 related to the associated third party lots).The increase in work in progress is mainly related to higher outstanding new
home orders and the building up of the spec home inventory to meet demand.
The following table shows the split between quick possession sales and pre-construction homes.
Three months ended December 31,
Year ended December 31,
2023
2022
% change
2023
2022
% change
18
68
86
7
50
57
N/R (1)
36.0%
50.9%
54
232
286
20
149
169
N/R (1)
55.7%
69.2%
Quick possession sales (units)
Pre-construction home sales (units)
Total home sales (units)
(1) Not relevant due to the size of the change
Gross margin
Genesis realized gross margin on home sales of 21.8% in YE 2023 as compared to 16.8% in YE 2022 and a gross margin on
home sales of 24.1% in Q4 2023 compared to 14.2% in Q4 2022. Fluctuations in gross margin are due to changes in market
conditions and differences in product and community mix. In YE 2023, 268 single-family homes and 18 townhouses were sold
compared to 162 single-family homes and 7 townhouses in YE 2022. In Q4 2023, 77 single-family homes and 9 townhouses were
sold compared to 56 single-family homes and 1 townhouse in Q4 2022.
Other expenses
Other expenses
General and administrative expense
Selling and marketing expense
Finance income
Finance expense
Total
(1) Not relevant due to the size of the change
Three months ended December 31,
Year ended December 31,
2023
2022
% change
2023
2022
% change
(2,796)
(2,076)
63
(241)
(2,338)
(1,248)
1
(147)
(5,050)
(3,732)
19.6%
66.3%
N/R (1)
63.9%
35.3%
(10,531)
(6,686)
137
(778)
(8,351)
(4,059)
24
(254)
(17,858)
(12,640)
26.1%
64.7%
N/R (1)
N/R (1)
41.3%
The components of other expenses and the changes are shown in the table above.
In YE 2023, other expenses were $17,858, 41% higher than $12,640 incurred in YE 2022. In Q4 2023, other expenses totaled
$5,050, 35% higher than $3,732 incurred in Q4 2022. Other expenses were higher in both Q4 and YE 2023 due to higher
compensation expenses, selling and marketing expenses (including sales commissions) and net finance expenses. Higher
compensation expenses were driven by increases in staffing and salary levels reflecting higher activities levels, inflation and a
competitive labor market. Increase in selling and marketing expenses was primarily due to higher levels of sales activity in the
home building business. Higher net finance expenses were due to higher average loan balances and higher interest rates in 2023
compared to the same periods in 2022.
28
13
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
LOCATION OF GBG BUILDING COMMUNITIES
Location of GBG Building Communities
14
29
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
Real Estate Held for Development and Sale
Real estate held for development and sale
December 31,
2023
342,791
2022
% change
265,683
29.0%
Refer to note 5 in the consolidated financial statements for the years ended December 31, 2023 and 2022 which details the
components of the changes in the net book value of real estate held for development and sale.
Real estate held for development and sale increases as a result of acquisitions and development activities and declines as a result
of sales of residential lots, homes and development land parcels. Real estate held for development and sale increased by $77,108
as at YE 2023 compared to YE 2022 mainly due to: (i) the acquisition of 460 acres of future residential development land in the
southeast sector of the City of Calgary for $25,842; (ii) increase in residential lots from third party developers for $25,736; and (iii)
active development and construction activities.
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, 2023:
Real Estate Held for Development and Sale
Community
Airdrie - Bayside, Bayview, Canals
Calgary NW - Sage Meadows
Calgary NW - Sage Hill Crest
Calgary N - Lewiston (owned by LLLP)
Calgary SE - Logan Landing
Calgary SE - White Lands
Calgary E - Huxley
Rocky View County - North Conrich
Rocky View County - OMNI
Other lands (2) - non-core
Total land development
Home building construction work-in-progress
Third party lots
Total home building
Total real estate held for development and sale
(1) Land held for development comprises lands not yet subdivided into single-family lots or parcels
(2) Other lands are non-core and available for sale
Lots, multi-
family &
commercial
parcels
20,382
3,614
13,392
-
-
-
-
-
-
40
37,428
Net Book Value
Land held for
development (1)
27,751
-
-
57,038
61,652
22,700
33,436
6,858
5,609
2,005
Total
48,133
3,614
13,392
57,038
61,652
22,700
33,436
6,858
5,609
2,045
217,049
254,477
38,874
49,440
88,314
342,791
30
15
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
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, 2023:
Serviced Lots, Multi-family and
Commercial Parcels, by Community
Airdrie - Bayside, Bayview, Canals
Calgary NW - Sage Meadows
Calgary NW - Sage Hill Crest
Other lots - non-core
Total
Net Book
Value
20,382
Single-family
lots
162
Townhouse
units
16
Townhouse/
multi-family
parcels
1
Commercial
parcels
-
3,614
13,392
37,388
40
37,428
-
47
209
13
222
-
-
16
-
16
1
-
2
-
2
-
1
1
-
1
The following table presents the estimated equivalent, by community of single-family lots and multi-family and commercial acres
of Genesis’ land held for development (shown previously) as at December 31, 2023, based on the Corporation’s 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 Lewiston, Logan Landing, Huxley (Belvedere) and North Conrich. The timelines discussed are management’s best
estimates at this time, given the uncertainties related to the regulatory approval process and market conditions.
Land Held for Development, by
Community
Airdrie - Bayside, Bayview
Calgary N - Lewiston (owned by LLLP)
Calgary SE - Logan Landing
Calgary SE - White Lands
Calgary E - Huxley
Rocky View County - North Conrich
Rocky View County - OMNI
Other lands - non-core
Total
(1) Land not yet subdivided into single-family and other lots or parcels
Net Book
Value
Land (1)
(acres)
Single-family
(lots)
Multi-family
(acres)
Commercial
(acres)
Estimated Equivalent if/when Developed
27,751
57,038
61,652
22,700
33,436
6,858
5,609
215,044
2,005
217,049
94
134
354
460
161
425
185
1,813
300
2,113
635
952
1,606
2,500
1,368
-
-
7,061
-
7,061
2
3
7
-
-
-
-
12
-
12
2
4
3
-
-
-
-
9
-
9
16
31
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
Amounts Receivable
Amounts receivable
December 31,
2023
28,156
2022
% change
22,165
27.0%
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. There are no amounts receivable past due.
The increase of $5,991 in amounts receivable was mainly due to higher lot sales to third party builders. As at YE 2023, Genesis
had $26,623 (191 lots) in amounts receivable related to third party builders compared to $21,207 (155 lots) in amounts receivable
as at YE 2022.
Individual balances due from third party builders at YE 2023 that were 10% or more of total amounts receivable were $26,623 from
two third party builders (YE 2022 - $21,207 from two third party builders).
Vendor-take-back Mortgage Receivable
Vendor-take-back mortgage receivable
(1) Not relevant due to the size of the change
December 31,
2023
1,976
2022
% change
-
N/R (1)
The Corporation closed the sale of a 2.91-acre parcel of development land on December 1, 2023 for $3,929, comprised of cash
consideration of $1,965 and the remainder as a VTB mortgage receivable of $1,964 bearing an annual interest at the prime rate.
The principal and interest on the VTB mortgage receivable is due on or before March 15, 2024.
32
17
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
Cash Flows (used in) 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.
Three months ended
December 31,
2023
2022
Year ended
December 31,
2023
2022
Cash flows (used in) operating activities
(13,501)
(1,686)
(7,799)
(43,756)
Cash flows (used in) operating activities per share - basic and
diluted
(0.24)
(0.03)
(0.14)
(0.77)
The changes in cash flows from operating activities between Q4 2023 and Q4 2022 consist of the following:
Operating Activities - Inflows (Outflows)
Residential home sales
Residential lot sales
Development land sales
Residential home construction
Land development
Lots and land acquisitions
Suppliers and employees
Income tax
Other
Total
Three months ended December 31,
2023
52,835
5,289
9,995
(28,178)
(32,099)
(12,686)
(8,278)
(682)
303
2022
$ change
33,425
19,410
3,135
6,338
2,154
3,657
(26,032)
(2,146)
(8,215)
(3,394)
(6,787)
(544)
388
(23,884)
(9,292)
(1,491)
(138)
(85)
(13,501)
(1,686)
(11,815)
The changes in cash flows from operating activities between YE 2023 and YE 2022 consist of the following:
Operating Activities - Inflows (Outflows)
Residential home sales
Sale of ownership interest in LLLP
Residential lot sales
Development land sales
Residential home construction
Land development
Lots and land acquisitions
Suppliers and employees
Income tax
Other
Total
Year ended December 31,
2023
2022
$ change
167,673
104,049
11,760
16,948
14,237
-
16,742
15,991
63,624
11,760
206
(1,754)
(104,662)
(84,478)
(20,184)
(68,146)
(19,590)
(24,056)
(3,332)
1,369
(7,799)
(33,820)
(34,326)
(39,245)
(19,572)
(4,246)
823
19,655
(4,484)
914
546
(43,756)
35,957
18
33
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
The increases in cash inflows from the sale of residential homes by GBG are primarily related to increases in 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.
The year over year change in cash flows from operating activities is mainly due to higher cash inflows from the sale of residential
homes and the sale of ownership interests in LLLP and lower cash outflows for land and lot acquisitions. These were partially offset
by higher cash outflows for home building and land servicing activities and lower cash inflows from residential lots and development
land sales. In YE 2023, cash outflows for lots and land acquisitions include the $7,753 cash payment for the acquisition of
approximately 460 acres of future residential development land in southeast Calgary. In YE 2022, cash outflows for lots and land
acquisitions include the $26,964 payment for the acquisition of approximately 157 acres of future residential development land
(Huxley) in the Belvedere ASP in the City of Calgary as well as the payment of $3,300 non-refundable deposit for the acquisition
of approximately 160 acres of future residential development land in southeast Calgary. Higher outflows on home building activities
in YE 2023 reflect the large number of spec homes and outstanding new home orders for which homes are being built. In addition,
lower income tax payments were made in YE 2023 compared to YE 2022.
LIABILITIES AND SHAREHOLDERS’ EQUITY
The following table presents Genesis’ liabilities and equity at YE 2023 and YE 2022:
Loan and credit facilities
Provision for future development costs
Customer deposits
Accounts payable and accrued liabilities
Accounts payable related to residential lot purchases
Lease liabilities
Income tax 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
December 31,
December 31,
2023
% of total
103,587
24%
20,569
17,470
22,579
32,319
712
1,706
198,942
9,999
231,142
440,083
5%
4%
5%
7%
0%
0%
45%
2%
53%
100%
2022
65,057
24,034
15,753
12,470
17,944
841
704
136,803
2,705
224,632
364,140
% of total
18%
7%
4%
3%
5%
0%
0%
37%
1%
62%
100%
December 31, 2023 December 31, 2022
198,942
241,141
83%
136,803
227,337
60%
34
19
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
Loan and Credit Facilities
Corporate revolving line of credit
Demand land project servicing loans
Demand operating line - LLLP
Demand operating line - Huxley Lands Limited
Partnership (“HLLP”)
Demand land project servicing loan - LLLP
Demand operating line for single-family homes
VTB mortgage payable
Unamortized portion of the discount on the VTB
Unamortized deferred fees on loan and credit
facilities
Q4 2023
Q3 2023
Q2 2023
Q1 2023
Q4 2022
12,800
12,729
21,500
15,098
13,455
13,664
18,088
107,334
(3,010)
(737)
19,024
11,552
21,336
-
4,179
11,110
-
21,257
10,156
20,931
-
-
8,575
-
11,350
11,682
20,554
-
-
6,732
-
25,626
12,522
20,198
-
-
7,364
-
67,201
60,919
50,318
65,710
-
(779)
-
(774)
-
(864)
-
(653)
Balance, end of period
103,587
66,422
60,145
49,454
65,057
The continuity of Genesis’ loan and credit facilities, excluding deferred fees and unamortized portion of the discount on the VTB,
is as follows:
Year ended December 31, 2023
VTB mortgage
payable
-
18,088
-
-
18,088
Loan and credit
facilities
65,710
82,887
(59,450)
99
89,246
Year ended
December 31,
2022
Total
33,260
84,151
(51,701)
-
65,710
Total
65,710
100,975
(59,450)
99
107,334
Balance, beginning of year
Advances
Repayments
Interest expense
Balance, end of year
Loan 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.
Corporate revolving line of credit
Genesis has a $50,000 corporate revolving line of credit with a major Canadian financial institution at an interest rate per annum
of prime +1.90%. This is secured by specific dedicated lands and a general corporate charge on all assets of the Corporation. As
at December 31, 2023, the amount drawn on this facility was $12,800 (YE 2022 - $25,626). Subsequent to December 31, 2023,
the facility was extended and now matures on February 1, 2027. In addition, the interest rate per annum has been reduced to
prime +1.65%.
20
35
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
Demand land project servicing loans
As at December 31, 2023, Genesis had land project servicing facilities with $12,729 drawn (YE 2022 - $12,522). Up to $7,400 is
available to finance future development and servicing costs as land development activities progress. These facilities bear interest
at prime +0.50% per annum, mature between May 12, 2024 and March 19, 2025 and are secured by agreements receivable, real
estate held for development and sale, and a corporate guarantee.
Demand land project servicing loan for LLLP
In Q2 2023 LLLP entered into a demand land project servicing credit facility up to $35,428 with a major Canadian chartered bank
at an interest rate per annum of prime +0.50%. This facility is secured by specific lands, and a Genesis corporate guarantee, and
matures on July 31, 2026. As at December 31, 2023, the amount drawn on this facility was $13,455.
Demand operating line for LLLP
LLLP has a demand operating credit facility of $21,500 with a major Canadian chartered bank at an interest rate per annum of
prime +0.50%. This facility is secured by specific lands, and a Genesis corporate guarantee, and matures on October 27, 2025.
As at December 31, 2023, the amount drawn on this facility was $21,500 (YE 2022 - $20,198).
Demand operating line for HLLP
In Q4 2023 Huxley Lands Limited Partnership entered into a demand operating credit facility up to $16,000 with a major Canadian
chartered bank at an interest rate per annum of prime +0.25%. This facility is secured by specific lands, and a Genesis corporate
guarantee, and matures on November 30, 2026. As at December 31, 2023, the amount drawn on this facility was $15,098.
Demand operating line for single-family homes and lots
GBG has a demand operating line of $25,000 bearing interest at prime +0.75% per annum. This facility is secured by housing
projects under development and a corporate guarantee. As at December 31, 2023, the amount drawn on this facility was $13,664
(YE 2022 - $7,364). The facility does not have a specified maturity date.
VTB mortgage payable
Genesis entered into a $18,088 VTB mortgage payable on the purchase of its southeast Calgary lands in December 2023. The
VTB mortgage payable is secured by specific lands, has an interest rate of 0% per annum and is repayable in four equal annual
installments of $4,522 each, commencing November 20, 2024 and ending November 20, 2027. This 0% loan was recorded as
$15,078 being the present value of the $18,088 discounted at an assumed market rate of 8%.
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 estimated future costs relating to previously sold homes, which are primarily for seasonal and other work (such
as finishing and landscaping) and estimated warranty expenses over the one-year warranty period.
FDC as at YE 2023 was $15,899 for the land division (YE 2022 - $20,105) and $4,670 for GBG (YE 2022 - $3,929). For additional
details, please see information provided under the heading “Critical Accounting Estimates” in this MD&A.
36
21
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
LIQUIDITY AND CAPITAL RESOURCES
Genesis had cash and cash equivalents of $37,546 and drawn loan and credit facilities of $103,587 at YE 2023 compared to
$36,598 and $65,057 respectively at YE 2022, resulting in net debt (refer to heading “Non-GAAP Measures” in this MD&A) of
$66,041 at YE 2023 compared to net debt of $28,459 at YE 2022. The components of loan and credit facilities are detailed below.
For additional details, please see information provided under the heading “Loan and Credit Facilities” in this MD&A.
Cash and cash equivalents
Corporate revolving line of credit
Demand land project servicing and home building loans
Demand land project servicing and operating line - LLLP
Demand operating line - HLLP
VTB mortgage payable
Total loan and credit facilities
Net debt (1) (2)
(1) Calculated as the difference between cash and cash equivalents and total loan 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
Loan and credit facilities as a percentage of total assets (1)
Corporate revolving line of credit
Demand land project servicing and home building loans
Demand land project servicing and operating line - LLLP
Demand operating line - HLLP
VTB mortgage payable
Loan and credit facilities to total assets
Total liabilities to equity (2)
(1) Calculated as each component of loan 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 debt (1) as a percentage of total assets
Cash and cash equivalents
Loan and credit facilities
Net debt (1) (2)
Net debt 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 loan and credit facilities
(3) Calculated as net debt divided by total assets
(4) Not relevant due to size of the change
December 31,
2022
% change
2023
37,546
12,274
26,367
34,832
15,036
15,078
36,598
25,104
19,815
20,138
-
-
103,587
65,057
(66,041)
(28,459)
December 31,
2023
2.8%
6.0%
7.9%
3.4%
3.4%
23.5%
82.5%
2022
6.9%
5.4%
5.5%
-
-
17.8%
60.2%
December 31,
2022
36,598
65,057
(28,459)
(7.8%)
2023
37,546
103,587
(66,041)
(15.0%)
2.6%
(51.1%)
33.1%
73.0%
N/R (3)
N/R (3)
59.2%
N/R (3)
% change
(59.4%)
11.1%
43.6%
N/R (3)
N/R (3)
32.0%
37.0%
% change
2.6%
59.2%
N/R (4)
92.0%
22
37
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
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.
Finance Expense
Interest incurred
Interest relating to VTBs
Financing fees amortized
Interest and financing fees capitalized
Three months ended December 31,
Year ended December 31,
2023
2022
% change
2023
2022
% change
(1,534)
(1,092)
(199) (1)
(106)
463
(1,376)
-
(87)
309
(870)
40.5%
N/R (3)
21.8%
49.8%
58.2%
(4,912)
(1,989)
(199) (1)
(105) (2)
(386)
1,124
(4,373)
(340)
822
(1,612)
N/R (3)
89.5%
13.5%
36.7%
N/R (3)
(1) VTB related to Southeast Calgary lands. The VTB is to be paid in four equal annual installments of $4,522 each, commencing November 2024 and ending November 2027
(2) VTB related to Lewiston lands. VTB was repaid in January 2022
(3) Not relevant due to size of the change
Finance expenses were higher in Q4 2023 and YE 2023 compared to the same periods in 2022 mainly due to higher interest rates
and higher average loan balances. Interest and financing fees are recorded as a component of real estate held for development
and sale.
The weighted average interest rate of loan agreements with various financial institutions was 7.90% (YE 2022 - 7.52%) based on
December 31, 2023 balances.
38
23
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
Income Tax Payable
The continuity in income tax payable is as follows:
Balance, beginning of year
Provision for current income tax
Net payments
Balance, end of year
December 31, 2023
December 31, 2022
704
4,334
(3,332)
1,706
2,092
2,858
(4,246)
704
As at December 31, 2023, income tax payable is a result of tax on the current year’s income, offset by installment payments made
during the year.
Shareholders’ Equity
As at March 6, 2024, the Corporation had 56,785,508 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 renewed its normal course issuer bid (“NCIB”) on December 13, 2023. The NCIB commenced on December 18,
2023 and will terminate on the earlier of: (i) December 17, 2024; and (ii) the date on which the maximum number of common
shares are purchased pursuant to the bid. The Corporation may purchase for cancellation up to 2,840,528 common shares under
the NCIB.
The prior NCIB, which expired on December 15, 2023, allowed the Corporation to purchase for cancellation up to 2,843,166
common shares.
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,
2023
2022
Year ended
December 31,
2023
2022
30,505
69
2.23
0.05%
-
-
-
-
61,027
135
2.20
0.11%
-
-
-
-
During YE 2023, the Corporation purchased and cancelled 61,027 common shares for $135 at an average cost of $2.20 per share
(representing 0.11% of issued and outstanding shares at the beginning of period) compared to nil purchase in YE 2022.
During Q4 2023, the Corporation purchased and cancelled 30,505 common shares for $69 at an average cost of $2.23 per share
(representing 0.05% of issued and outstanding shares at the beginning of period) compared to nil purchase in Q4 2022.
The Corporation repurchased 16,800 common shares between January 1, 2024 and March 6, 2024 for cancellation for $40 at an
average cost of $2.36 per share under the NCIB. As of the date of this MD&A, there are 2,820,728 common shares remaining for
purchase under the currently authorized NCIB.
24
39
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
Contractual Obligations and Debt Repayment
Contractual obligations (excluding accounts payable, accrued liabilities, income tax payable, customer deposits and provision for
future development costs) at YE 2023 were as follows:
Loan and
Credit
Facilities (1)
Levies and
Municipal
Fees
Lot
Purchase
Contracts (2)
Current
January 2025 to December 2025
26,916
30,022
January 2026 to December 2026
45,875
January 2027 to December 2027
4,521
8,516
5,050
4,428
-
12,158
15,042
3,785
-
Land
Purchase
Contract (3)
-
26,700
-
-
Lease
Obligations (4)
585
436
421
72
Total
48,175
77,250
54,509
4,593
Total
107,334
17,994
30,985
26,700
1,514
184,527
(1) Excludes deferred fees on loan and credit facilities and unamortized portion of the discount on the VTB
(2) Lot purchase contracts are from both third party-developers and from LLLP
(3) Includes $26,700 related to the purchase of approximately 160 acres of future residential development land in the southeast sector of the City of Calgary. The purchase is scheduled
to close on January 31, 2025
(4) Includes variable operating costs
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.
Lot purchase contracts are related to the purchase of lots from third-party developers and LLLP as part of GBG’s operations. These
contracts generally require an initial deposit with the balance of the contract price being paid at agreed future dates.
Land purchase contract is related to the purchase of future residential development lands as part of Genesis' growth strategy.
Genesis has certain lease agreements that are entered in the normal course of operations. Genesis' sublease for its head office
signed in April 2020 expires in February 2027. The total payments over the remaining term of the office lease for base rent and
parking is $563. 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.
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.
40
25
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
Current Contractual Obligations and Commitments
Loan and credit facilities, excluding deferred fees on loan and credit facilities and
unamortized portion of the discount on the VTB
Accounts payable and accrued liabilities
Accounts payable related to residential lot purchases
Total short-term liabilities
Levies and municipal fees
Lot purchase contracts
Land purchase contract
Lease obligations
December 31, 2023
December 31, 2022
26,916
22,579
24,131
73,626
8,516
12,158
-
585
94,885
7,364
12,470
13,036
32,870
7,475
7,401
531
547
48,824
At YE 2023, Genesis had obligations due within the next 12 months of $94,885 of which $26,916 related to loan and credit facilities.
Repayment is either linked directly to the collection of lot receivables and sales proceeds or due at maturity. 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.
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 2023, these amounted to approximately $7,103 (YE 2022
- $5,414).
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.
26
41
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
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
Loan and credit facilities
Cash dividends per share (2)
2023
2022
2021
2020
203,312
140,357
109,761
103,933
45,831
46,531
14,512
0.26
26,072
27,158
4,520
0.08
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
440,083
364,140
324,929
266,494
296,268
103,587
65,057
32,668
21,470
51,546
0.17
0.15
0.14
-
-
(1)) Non-GAAP financial measure. Refer to heading “Non-GAAP Measures” in this MD&A
(2) Amount paid in the year. Genesis declared dividends of $0.17 per share, $0.15 per share and $nil per share in 2023, 2022 and 2021, respectively.
Return on shareholders’ equity (“ROE”) (1)
2023
6.4%
2022
2.0%
2021
5.2%
2020
0.1%
2019
0.9%
Average shareholders’ equity (2)
227,887
226,628
208,150
190,817
192,964
(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 three years
Total revenues consist of residential lot sales, development land sales, residential home sales and other revenues. Residential lot
sales volumes were 305, 236 and 247 units in 2023, 2022, and 2021, respectively, reflecting market conditions in each period. In
addition, development land sales were $16,200, $15,991 and $5,870 for 2023, 2022 and 2021 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 286, 169 and 191 in 2023, 2022, and 2021 respectively. Included in this were single-family homes
sales of 268, 162 and 150 units in 2023, 2022, and 2021 respectively.
Gross margin before reversal of write-down was $45,831 in 2023, higher than the prior year mainly due to higher volumes of
residential lots and homes sales. Gross margin before reversal of write-down was $26,072 in 2022, lower than the prior year mainly
due to lower margin on residential lots, partially offset by higher margin on residential homes and development land. Gross margin
before reversal of write-down was $27,575 in 2021, relatively unchanged from the prior year with residential lots, development land
and residential homes all contributing to this. 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 of
$700 on residential lot sales in 2023, a net reversal of write-down of $1,086 on development land sales in 2022 and a reversal of
write-down of $4,268 on development land sales in 2021 respectively. Net earnings and net earnings per share - basic and diluted
were affected as a result of the above. Net earnings attributable to equity shareholders were $14,512, $4,520 and $10,877 in 2023,
2022 and 2021, respectively. Net earnings per share (basic and diluted) were $0.26 per share, $0.08 per share and $0.24 per
share in 2023, 2022 and 2021, respectively.
Total assets increased by $75,943 in 2023 compared to 2022. This was mainly due to an increase in real estate held for
development and sale by $77,108 and an increase of $7,967 in amounts receivable and VTB mortgage receivable, partially offset
by a reduction of $9,772 in other operating assets during the year.
42
27
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
Total assets increased by $39,211 in 2022 compared to 2021. This was mainly due to an increase in real estate held for
development and sale by $46,828 and an increase of $8,533 in amounts receivable, partially offset by a reduction of $27,377 in
cash and cash equivalents during the year.
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 loan and credit facilities increased by $38,530 in 2023 compared to 2022. This was mainly due to the addition of the VTB
mortgage payable related to the purchase of the southeast Calgary lands, the addition of a $15,098 land loan in HLLP and higher
land project servicing and home building project loan balances.
Total loan and credit facilities increased by $32,389 in 2022 compared to 2021. This was mainly due to addition of a LLLP loan of
$20,198, higher land project servicing and home building project loan draws used to develop new phases and home building
projects. The increase was partially offset by the repayment of the final $9,312 installment related to the acquisition of a $18,624
VTB for the purchase of the Calgary north lands.
Total loan 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 payment of the first $9,312 installment
related to the acquisition of a $18,624 VTB for the purchase of the Calgary north lands.
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GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
SUMMARY OF QUARTERLY RESULTS
Q4
2023
71,602
8,056
Revenues
Net earnings (loss) (1)
EPS (2)
0.15
(1) Net earnings (loss) attributable to equity shareholders
(2) Net earnings (loss) per share - basic and diluted
Q3
2023
Q2
2023
Q1
2023
Q4
2022
Q3
2022
Q2
2022
Q1
2022
41,173
53,188
37,349
54,157
43,610
22,211
20,379
2,203
0.04
4,093
0.07
160
0.00
3,062
0.05
1,857
0.04
97
0.00
(496)
(0.01)
Dividends declared and paid
Dividends declared and 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
Q4
2023
(13,501)
Per share - basic and diluted
(0.24)
Q4
2023
4,830
0.085
Q3
2023
-
-
Q2
2023
4,833
0.085
Q1
2023
-
-
Q4
2022
4,265
0.075
Q3
2022
4,265
0.075
Q2
2022
Q1
2022
-
-
-
-
Q4
2023
Q3
2023
Q2
2023
Q1
2023
Q4
2022
Q3
2022
Q2
2022
Q1
2022
42
53
95
Q4
2023
86
Q4
2023
11,958
1
43
44
Q3
2023
71
Q3
2023
-
Q3
2023
(9,922)
(0.17)
45
59
104
Q2
2023
69
Q2
2023
4,242
Q2
2023
7,590
0.13
30
32
62
Q1
2023
60
Q1
2023
-
Q1
2023
8,034
0.14
84
22
106
Q4
2022
57
Q4
2022
6,338
54
20
74
Q3
2022
45
Q3
2022
7,453
2
22
24
Q2
2022
36
Q2
2022
-
4
28
32
Q1
2022
31
Q1
2022
2,200
Q4
2022
(1,686)
(0.03)
Q3
2022
(2,737)
(0.05)
Q2
2022
(12,891)
Q1
2022
(26,442)
(0.22)
(0.47)
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 2023, Genesis sold 42 residential lots to third party builders and 86 homes of which 53 homes were built on Genesis’
lots. Revenues were higher in Q4 2023, compared to Q3 2023, due to higher residential home sales, residential lot sales to third
parties and development land sales during the quarter. Q4 2023 included $700 related to reversal of write-downs previously taken,
while there were no write-downs or reversal of write-downs in Q3 2023. Gross margins in Q4 2023 were higher than in Q3 2023
with residential lots, residential home and development land sales all contributing to this. In Q4 2023, the Corporation recorded
$1,106 as a gain in investments in land development entities with no gain recorded in Q3 2023. Selling and marketing expenses
and net finance expenses were higher compared to Q3 2023. Income tax expenses were $2,246 in Q4 2023 compared to $807 in
Q3 2023. As a result of these factors, net earnings were $8,056 in Q4 2023 compared to net earnings of $2,203 in Q3 2023.
During Q3 2023, Genesis sold one residential lot to third party builders and 71 homes of which 43 homes were built on Genesis’
lots. Revenues were lower in Q3 2023, compared to Q2 2023, due to lower residential lot sales to third parties, lower residential
home sales, and no development land sales during the quarter. Gross margins in Q3 2023 were lower than in Q2 2023. General
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GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
and administrative expenses and net finance expenses were higher compared to Q2 2023. Income tax expenses were $807 in Q3
2023 compared to $1,070 in Q2 2023. As a result of these factors, net earnings were $2,203 in Q3 2023 compared to net earnings
of $4,093 in Q2 2023.
During Q2 2023, Genesis sold 45 residential lots to third party builders and 69 homes of which 59 homes were built on Genesis’
lots. Revenues were higher in Q2 2023, compared to Q1 2023, due to higher residential home sales, residential lot sales to third
parties and a development land sale during the quarter. Gross margins in Q2 2023 were higher than in Q1 2023. General and
administrative expenses and net finance expenses were lower while selling and marketing expenses were higher in Q2 2023
compared to Q1 2023. Income tax expenses were $1,070 in Q2 2023 compared to $39 in Q1 2023. As a result of these factors,
net earnings were $4,093 in Q2 2023 compared to net earnings of $160 in Q1 2023.
During Q1 2023, Genesis sold 30 residential lots to third party builders and 60 homes of which 32 homes were built on Genesis’
lots. Revenues were lower in Q1 2023, compared to Q4 2022, due to lower residential home sales, residential lot sales to third
parties and development land sales during the quarter. Q1 2023 included no write-down or reversal of write-down, while Q4 2022
included $1,086 related to net reversal of write-downs previously taken. Therefore, gross margins in Q1 2023 were lower than in
Q4 2022. In Q1 2023, there was no change in the fair value of the Corporation’s investments in land development entities, while a
gain of $560 was recorded in Q4 2022. Selling and marketing expenses, general and administrative expenses and net finance
expenses were marginally higher in Q1 2023 compared to Q4 2022. Income tax expenses were $39 in Q1 2023 compared to $836
in Q4 2022. As a result, net earnings were $160 in Q1 2023 compared to net earnings of $3,062 in Q4 2022.
During Q4 2022, Genesis sold 84 residential lots to third party builders and 57 homes of which 22 homes were built on Genesis’
lots. Revenues were higher in Q4 2022, compared to Q3 2022, due to higher residential home sales and residential lot sales to
third parties, partially offset by lower development land sales during the quarter. Q4 2022 included $1,086 related to net reversal
of write-downs previously taken, while Q3 2022 included no write-down or reversal of write-down. Gross margins in Q4 2022 were
higher than in Q3 2022 with residential lots and development land sales all contributing to this. In Q4 2022, the Corporation recorded
$560 as a gain in investments in land development entities with no gain recorded in Q3 2022. Selling and marketing expenses,
general and administrative expenses and net finance expenses were higher in Q4 2022 compared to Q3 2022. Income tax
expenses were $836 in Q4 2022 compared to $680 in Q3 2022. As a result, net earnings were $3,062 in Q4 2022 compared to
net earnings of $1,857 in Q3 2022.
During Q3 2022, Genesis sold 54 residential lots to third party builders and 45 homes of which 20 homes were built on Genesis’
lots. Revenues were higher in Q3 2022, compared to Q2 2022, due to higher residential home sales, residential lot sales to third
parties and development land sales during the quarter. As a result, gross margins in Q3 2022 were higher than in Q2 2022. Selling
and marketing expenses and net finance expenses were higher while general and administrative expenses were lower in Q3 2022
compared to Q2 2022. Income tax expenses were $680 in Q3 2022 compared to $84 in Q2 2022. As a result of these factors, net
earnings were $1,857 in Q3 2022 compared to net earnings of $97 in Q2 2022.
During Q2 2022, Genesis sold 2 residential lots to third party builders and 36 homes of which 22 homes were built on Genesis’
lots. Revenues were higher in Q2 2022, compared to Q1 2022, due to higher residential home sales, partially offset by lower
development land sales and residential lot sales to third parties during the quarter. As a result, gross margins in Q2 2022 were
higher than in Q1 2022. General and administrative, selling and marketing, net finance expenses and income tax expenses were
comparable between Q2 2022 to Q1 2022. As a result of these factors, net earnings were $97 in Q2 2022 compared to a net loss
of $496 in Q1 2022.
During Q1 2022, Genesis sold 4 residential lots to third party builders and 31 homes of which 28 homes were built on Genesis’
lots. Revenues were lower in Q1 2022, compared to Q4 2021, due to lower residential home sales, partially offset by higher
development land and residential lot sales to third parties during the quarter. Q1 2022 included no write-down or reversal of write-
down, while Q4 2021 included a reversal of write-down of $3,265. Gross margins in Q1 2022 were lower than in Q4 2021
accordingly. In Q1 2022, there was no change in investments in land development entities, while the Corporation recorded a gain
of $562 in Q4 2021. General and administrative expenses and net finance expenses were marginally higher while selling and
marketing expenses were lower in Q1 2022 compared to Q4 2021. Income tax expenses were $28 in Q1 2022 compared to $1,226
in Q4 2021. As a result of these factors, net loss was $496 in Q1 2022 compared to net earnings of $4,252 in Q4 2021.
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GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
RELATED PARTY TRANSACTIONS
Transactions occurred during the year ended December 31, 2023, with the following related parties:
In 2005, the Corporation sold a 49% undivided interest in approximately 610 acres to Genesis Limited Partnership #4 and GLP5
NE Calgary Development Inc. (collectively, “LP4/5 group”) for $7,670. In July 2022, the Corporation repurchased from LP4/5 group
their 49% undivided interest in 456 acres of land for $6,699 with LP4/5 group still owning a 49% undivided interest in the remaining
154 acres of land. Cash proceeds to LP4/5 group were $5,038 with the remainder of $1,661 being applied against debt owed to
the Corporation by LP4/5 group. In February 2023, the Corporation paid $1,253 to GLP5 NE Calgary Development Inc. to acquire
an additional 25 acres in the OMNI project in North Conrich. Genesis holds a 100% interest in 456 acres of land and a 73% interest
(previously 59%) in the 185-acre OMNI project, with the remaining 27% being held by Genesis Limited Partnership #4.
SUBSEQUENT EVENTS
Subsequent to December 31, 2023, the following occurred:
Genesis extended its $50,000 corporate revolving line of credit facility in March 2024 with a new maturity date of February 1, 2027.
In addition, the interest rate per annum has been reduced to prime +1.65%.
SUMMARY OF ACCOUNTING CHANGES
The Corporation adopted no new IFRSs or interpretations as of January 1, 2023.
NEW ACCOUNTING PRONOUNCEMENTS
There were no new accounting pronouncements or amendments to existing standards that impacted or are expected to impact the
Corporation in 2023 and 2024.
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 2023
and YE 2022. Refer to note 2(r) in the consolidated financial statements for the years ended December 31, 2023 and 2022 for
additional information on judgments and estimates.
Provision for Future Development Costs
Changes in estimated future development costs, which are generally obtained from 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.
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.
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GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
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.
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, 2023. 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, 2023 that have materially
affected or are reasonably likely to materially affect the Corporation’s ICFR.
RISKS AND UNCERTAINTIES
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.
In Q4 2023, the Alberta economy continued to grow driven by population gains, relative housing affordability and supportive
commodity markets. This was somewhat offset by increasing home prices, high lending rates and continued inflationary pressures
that weighed on demand. While overall demand increased in Q4 2023, given the volatile economy, 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.
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, 2023 available on SEDAR+ at
www.sedarplus.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 and the impacts are unknown and largely
unpredictable but could impact both the price and timely availability of materials.
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GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
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 cybersecurity risk. To do so, Genesis has the following in place: third party reviews and
implementation of all reasonable recommendations, 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, 2023 available on SEDAR+ at
www.sedarplus.com.
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GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
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, which is derived from gross margin:
Development Land
Development land revenues
Gross margin
(Reversal of write-down) of real estate held for development and
sale
Gross margin before reversal of write-down
Gross margin before reversal of write-down (%)
Residential Lots
Residential lot revenues
Gross margin
(Reversal of write-down) of real estate held for development and
sale
Gross margin before reversal of write-down
Gross margin before reversal of write-down (%)
Three months ended
December 31,
2023
2022
11,958
696
-
696
5.8%
6,338
1,165
(1,086)
79
1.2%
Three months ended
December 31,
2023
2022
14,675
4,141
(700)
3,441
23.4%
18,015
3,808
-
3,808
21.1%
Year ended
December 31,
2023
16,200
696
-
696
4.3%
Year ended
December 31,
2023
45,863
9,412
(700)
8,712
19.0%
2022
15,991
2,114
(1,086)
1,028
6.4%
2022
40,639
8,113
-
8,113
20.0%
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GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
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 (%)
Three months ended
December 31,
Year ended
December 31,
2023
52,230
12,603
-
12,603
24.1%
2022
33,799
4,783
-
4,783
14.2%
2023
167,126
36,423
-
36,423
21.8%
Development Land, Residential Lots and
Homes
Three months ended
December 31,
Year ended
December 31,
Total revenues
Gross margin
2023
71,602
17,440
2022
54,157
9,756
2023
203,312
46,531
2022
100,680
16,931
-
16,931
16.8%
2022
140,357
27,158
(Reversal of write-down) of real estate held for development and
sale
Gross margin before reversal of write-down
Gross margin before reversal of write-down (%)
(700)
(1,086)
(700)
(1,086)
16,740
23.4%
8,670
16.0%
45,831
22.5%
26,072
18.6%
Net debt is a non-GAAP measure, and therefore may not be comparable to similar measures presented by other reporting issuers.
Net debt is calculated as the difference between cash and cash equivalents and loan and credit facilities. Management believes
that net debt is an important measure to monitor leverage and evaluate the balance sheet. The most comparable GAAP financial
measure is loan and credit facilities.
The table below shows the calculation of net debt:
Cash and cash equivalents
Loan and credit facilities
Net debt
TRADING AND SHARE STATISTICS
The Corporation’s trading and share statistics for 2023 and 2022 are provided below:
Average daily trading volume
Share price ($/share)
High
Low
Close
Market capitalization at December 31,
Shares outstanding
OTHER
December 31,
2023
December 31,
2022
37,546
103,587
(66,041)
36,598
65,057
(28,459)
2023
2,844
2.50
1.95
2.30
2022
7,581
2.98
1.83
2.03
130,645
56,802,308
115,433
56,863,335
Additional information relating to the Corporation can be found on SEDAR+ at www.sedarplus.com.
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GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
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”.
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:
•
•
•
the availability of excess cash on hand and its proposed use;
the future exercise of any right to purchase;
the timing and approval of the conceptual scheme for the OMNI ASP and an
interchange to provide primary transportation access to these lands;
the anticipated number of housing units in the various communities 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 Genesis' business, including community and project 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 and other
rules that may impact home ownership in Canada;
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;
common share buybacks;
the payment of dividends; and
the ability to continue to renew or repay financial obligations and to meet
liabilities as they become due.
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
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36
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 and the strength and
growth of the Calgary economy;
the uncertainties of real estate development
and acquisition activity;
fluctuations in interest and inflation 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 laws and 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.sedarplus.com, including in this
MD&A under the heading “Risks and
Uncertainties” and the AIF under the heading
“Risk Factors”.
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
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.
52
37
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
NW CALGARY
53
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT Consolidated
FINANCIAL
STATEMENTS
DECEMBER 31, 2023 AND 2022
54
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT 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
ROB SEKHON
Chief Financial Officer
March 6, 2024
55
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT 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, 2023 and December 31, 2022, and the consolidated statements
of comprehensive income, changes in equity and cash flows for
the years then ended, and notes to the consolidated financial
statements, including material accounting policy information.
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, 2023 and
December 31, 2022, 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, 2023, approximately 78% of the Corporation’s
assets or $342.8 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 obtained reliance letters from the independent
appraisers and confirmed their professional qualifications
and their role as specialists.
• 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
56
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT Provision for Future Development Costs
As described in Notes 2n and 15, 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.
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.
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.
57
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT 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
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.
statements and our auditor’s report thereon, in the Annual
Report.
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.
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
for
is responsible
the preparation and
the consolidated financial statements
fair
Management
presentation of
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
58
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT • 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 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 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.
From the matters communicated with 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
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.
Calgary, Alberta
March 6, 2024
59
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT GENESIS LAND DEVELOPMENT CORP.
CONSOLIDATED BALANCE SHEETS
GENESIS LAND DEVELOPMENT CORP.
GENESIS LAND DEVELOPMENT CORP.
GENESIS LAND DEVELOPMENT CORP.
(In thousands of Canadian dollars)
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS
(In thousands of Canadian dollars)
(In thousands of Canadian dollars)
(In thousands of Canadian dollars)
Assets
Assets
Assets
Right-of-use assets
Right-of-use assets
Deferred tax assets
Deferred tax assets
Amounts receivable
Amounts receivable
Cash and cash equivalents
Cash and cash equivalents
Investments in land development entities
Investments in land development entities
Real estate held for development and sale
Assets
Amounts receivable
Real estate held for development and sale
Real estate held for development and sale
Real estate held for development and sale
Vendor-take-back mortgage receivable
Amounts receivable
Investments in land development entities
Investments in land development entities
Investment in joint venture
Investment in joint venture
Investment in joint venture
Investment in joint venture
Other operating assets
Other operating assets
Other operating assets
Other operating assets
Right-of-use assets
Right-of-use assets
Deferred tax assets
Deferred tax assets
Cash and cash equivalents
Cash and cash equivalents
Total assets
Total assets
Total assets
Total assets
Liabilities
Liabilities
Loan and credit facilities
Loan and credit facilities
Loan and credit facilities
Loan and credit facilities
Customer deposits
Customer deposits
Accounts payable and accrued liabilities
Accounts payable and accrued liabilities
Accounts payable related to residential lot purchases
Accounts payable related to residential lot purchases
Lease liabilities
Lease liabilities
Income tax payable
Income tax payable
Provision for future development costs
Provision for future development costs
Total liabilities
Total liabilities
Commitments and contingencies
Accounts payable related to residential lot purchases
Accounts payable related to residential lot purchases
Accounts payable and accrued liabilities
Accounts payable and accrued liabilities
Provision for future development costs
Provision for future development costs
Income tax payable
Income tax payable
Customer deposits
Customer deposits
Total liabilities
Total liabilities
Lease liabilities
Lease liabilities
Liabilities
Liabilities
Commitments and contingencies
Commitments and contingencies
Commitments and contingencies
Subsequent events
Subsequent events
Subsequent events
Subsequent events
Equity
Equity
Equity
Share capital
Equity
Share capital
Share capital
Contributed surplus
Contributed surplus
Contributed surplus
Share capital
Retained earnings
Contributed surplus
Shareholders’ equity
Retained earnings
Non-controlling interest
Shareholders’ equity
Shareholders’ equity
Shareholders’ equity
Total equity
Non-controlling interest
Non-controlling interest
Non-controlling interest
Retained earnings
Retained earnings
Notes
Notes
Notes
Notes
5
December 31, 2023
December 31, 2022
December 31, 2022
December 31, 2022
December 31, 2022
342,791
December 31, 2021
December 31, 2021
December 31, 2021
265,683
6
5
7
6
8
7
9
8
10
9
11
10
12
11
5
5
6
6
7
7
8
8
9
9
10
10
11
11
265,683
265,683
22,165
22,165
6,730
6,730
3,588
3,588
28,156
265,683
1,976
22,165
7,160
6,730
3,581
3,588
10,907
20,679
482
562
7,484
8,135
37,546
36,598
440,083
364,140
562
562
8,135
8,135
20,679
20,679
36,598
36,598
364,140
364,140
218,855
218,855
13,632
13,632
6,170
6,170
22,165
218,855
-
13,632
6,730
6,170
3,588
-
-
-
20,679
14,738
562
655
655
655
8,135
6,904
36,598
63,975
364,140
324,929
6,904
6,904
63,975
63,975
324,929
324,929
14,738
14,738
12
12
13
13
13
12
14
13
22a
21a
22a
21a
21a
15
14
14
14
21
20
20
20
13a, 17b
12a, 16b,
12a, 16b,
12a, 16b,
25
25
25
16
15
15
15
16c
16c
16c
17,944
17,944
65,057
65,057
15,753
15,753
12,470
12,470
103,587
65,057
17,470
15,753
22,579
12,470
32,319
17,944
712
841
1,706
704
704
704
20,569
24,034
198,942
136,803
841
841
24,034
24,034
136,803
136,803
9,600
9,600
32,668
32,668
9,002
9,002
16,808
16,808
65,057
32,668
15,753
9,002
12,470
16,808
17,944
9,600
841
842
704
2,092
24,034
17,979
136,803
88,991
842
842
17,979
17,979
88,991
88,991
2,092
2,092
82,293
82,383
82,383
82,383
1,063
82,383
147,786
1,063
1,063
1,063
231,142
141,186
9,999
224,632
241,141
2,705
2,705
2,705
141,186
141,186
224,632
224,632
82,383
82,383
1,063
82,383
141,186
1,045
1,045
1,045
224,632
145,196
2,705
228,624
227,337
7,314
7,314
7,314
145,196
145,196
228,624
228,624
Total equity
Total equity
Total equity
Total liabilities and equity
227,337
227,337
227,337
440,083
235,938
235,938
235,938
364,140
Total liabilities and equity
Total liabilities and equity
See accompanying notes to the consolidated financial statements.
Total liabilities and equity
364,140
364,140
364,140
324,929
324,929
324,929
See accompanying notes to the consolidated financial statements.
See accompanying notes to the consolidated financial statements.
See accompanying notes to the consolidated financial statements.
ON BEHALF OF THE BOARD:
ON BEHALF OF THE BOARD:
ON BEHALF OF THE BOARD:
ON BEHALF OF THE BOARD:
/s/ Stephen J. Griggs
Director and Chair
/s/ Stephen J. Griggs
/s/ Stephen J. Griggs
/s/ Stephen J. Griggs
Director and Chair
Director and Chair
Director and Chair
/s/ Steven Glover
Director and Chair of the Audit Committee
/s/ Steven Glover
/s/ Steven Glover
/s/ Steven Glover
Director and Chair of the Audit Committee
Director and Chair of the Audit Committee
Director and Chair of the Audit Committee
60
8
8
8
8
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
GENESIS LAND DEVELOPMENT CORP.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the years ended December 31, 2023 and 2022
(In thousands of Canadian dollars except per share amounts)
Revenues
Sales revenue
Other revenue
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
General and administrative
Selling and marketing
Earnings from operations
Finance income
Finance expense
Earnings before income taxes
Income tax expense
Net earnings being comprehensive earnings
Attributable to non-controlling interest
Attributable to equity shareholders
Net earnings per share - basic and diluted
See accompanying notes to the consolidated financial statements.
Year ended December 31,
Notes
2023
2022
203,202
110
203,312
(157,481)
700
140,241
116
140,357
(114,285)
1,086
(156,781)
(113,199)
46,531
1,106
(18,098)
(8,484)
(25,476)
21,055
1,543
(4,373)
18,225
(4,162)
14,063
(449)
14,512
0.26
27,158
560
(14,786)
(5,815)
(20,041)
7,117
512
(1,612)
6,017
(1,628)
4,389
(131)
4,520
0.08
23
5
8
18
19
20
12
24, 26
16b
9
61
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
GENESIS LAND DEVELOPMENT CORP.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
For the years ended December 31, 2023 and 2022
(In thousands of Canadian dollars except number of shares)
Notes
17c
16d
At December 31, 2021
Share-based payments
Dividends
Distributions and other
Net earnings (loss) being
comprehensive earnings
(loss)
At December 31, 2022
Equity attributable to Corporation’s shareholders
Common shares - Issued
Number of
Shares
56,863,335
Amount
82,383
Contributed
Surplus
Retained
Earnings
Total
Shareholders’
Equity
Non-
Controlling
Interest
Total
Equity
1,045
145,196
228,624
7,314
235,938
-
-
-
-
-
-
-
-
18
-
18
(8,530)
(8,530)
-
-
18
(8,530)
-
-
(4,478)
(4,478)
4,520
4,520
(131)
4,389
-
-
-
56,863,335
82,383
1,063
141,186
224,632
2,705
227,337
At December 31, 2022
56,863,335
82,383
1,063
141,186
224,632
2,705
227,337
16d
16c
24
Dividends
Normal course issuer bid
Distributions
Changes of ownership
interest / Contribution
Net earnings (loss) being
comprehensive earnings
(loss)
At December 31, 2023
-
(61,027)
-
-
-
-
(90)
-
-
-
-
-
-
-
-
(9,663)
(45)
-
(9,663)
(135)
-
-
(9,663)
(135)
-
(1,398)
(1,398)
1,796
1,796
9,141
10,937
14,512
14,512
(449)
14,063
56,802,308
82,293
1,063
147,786
231,142
9,999
241,141
See accompanying notes to the consolidated financial statements.
62
10
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
GENESIS LAND DEVELOPMENT CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended December 31, 2023 and 2022
(In thousands of Canadian dollars)
Notes
Year ended December 31,
2023
2022
Operating activities - inflows (outflows)
Residential home sales
Residential lot sales
Development land sales
Sale of ownership interest in Lewiston Lands Limited Partnership (“LLLP”)
24
Interest
Residential home construction
Land development
Lots and land acquisitions
Suppliers and employees
Income tax
Other
Cash flows used in operating activities
Investing activities
Investment in joint venture
Acquisition of equipment
Change in restricted cash
Distribution received from joint venture
Cash flows from (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
Cancellation of shares under NCIB
Dividends paid
Cash flows from financing activities
Change in cash and cash equivalents
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year
9
8
13
16c
16d
167,673
16,948
14,237
11,760
1,543
(104,662)
(68,146)
(19,590)
(24,056)
(3,332)
(174)
(7,799)
-
(663)
1,325
676
1,338
82,887
(59,450)
-
(5,244)
(986)
(135)
(9,663)
7,409
948
36,598
37,546
104,049
16,742
15,991
-
512
(84,478)
(33,820)
(39,245)
(19,572)
(4,246)
311
(43,756)
(3,589)
(607)
2,093
-
(2,103)
84,151
(42,389)
(9,312)
(2,452)
(2,986)
-
(8,530)
18,482
(27,377)
63,975
36,598
See accompanying notes to the consolidated financial statements.
11
63
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
GENESIS LAND DEVELOPMENT CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(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 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.
The consolidated financial statements of Genesis were approved for issuance by the Board of Directors on March 6, 2024.
2.
MATERIAL 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.
64
12
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
GENESIS LAND DEVELOPMENT CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(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 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.
13
65
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
GENESIS LAND DEVELOPMENT CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(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, often multi-year 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:
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
66
14
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
GENESIS LAND DEVELOPMENT CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(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 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 26) 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.
15
67
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
GENESIS LAND DEVELOPMENT CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(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.
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. 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.
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.
Financial liabilities are derecognized when the contractual obligations are discharged, cancelled or expire.
68
16
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
GENESIS LAND DEVELOPMENT CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(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:
Amounts receivable
Vendor-take-back mortgage receivable
Investments in land development entities
Restricted cash
Cash
Cash equivalents
Deposits
Accounts payable and accrued liabilities
Cash settled deferred share units
Loan and credit facilities
m) Earnings per share
Amortized cost
Amortized cost
FVTPL
FVTPL
FVTPL
Amortized cost
Amortized cost
Amortized cost
Amortized cost
FVTPL
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.
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
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.
17
69
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
GENESIS LAND DEVELOPMENT CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(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 end on a mark-to-
market basis. The accrued liability is reduced on the cash payout of any DSU.
p)
Interest in joint venture
The Corporation has an interest in a joint venture, Sage Hill Estates Apartments LP, (“SHEA LP” or the “JV”) which is a jointly
controlled entity. The Corporation recognizes its interest in the JV using the equity method of accounting.
q)
Changes in ownership interests
During the year ended December 31, 2022, 100% of Lewiston Lands Limited Partnership was owned by the Corporation.
During the year ended December 31, 2023, the Corporation sold 40% of its ownership stake in LLLP to two Calgary based
third party home builders (note 24). This transaction resulted in a change in ownership interest while still retaining control and
is accounted for as a transaction with equity holders. As a result, no gain or loss was recognized in profit or loss; instead, it
was recognized in equity. The interests of the parent and non-controlling interest (“NCI”) in the subsidiary have been adjusted
to reflect the relative change in the interest in the subsidiary’s equity. The amount by which the NCI is adjusted, and the fair
value of the consideration paid or received is recognized directly in retained earnings in shareholders’ equity and attributed to
the owners of the parent.
r)
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.
70
18
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
GENESIS LAND DEVELOPMENT CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(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)
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.
(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 obtained from 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 and lot sales 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 or from external third-party appraisals.
19
71
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
GENESIS LAND DEVELOPMENT CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(All tabular amounts and amounts in footnotes to tables are in thousands of Canadian dollars except number of shares)
3.
STANDARDS AND AMENDMENTS TO EXISTING STANDARDS DURING 2023
The Corporation adopted no new IFRSs and interpretations during 2023.
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 2023 and 2024.
72
20
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
GENESIS LAND DEVELOPMENT CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(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
Net book value
As at December 31, 2021
Development activities
Transfer
Acquisitions
Sold
(Write-down) / reversal of write-down of real estate
held for development and sale
As at December 31, 2022
Development activities
Transfer
Acquisitions
Sold
Reversal of write-down of real estate held for
development and sale
As at December 31, 2023
Lots, Multi-family &
Commercial
Parcels
37,490
3,180
39,950
-
(37,700)
(112)
42,808
6,847
29,831
-
(42,758)
700
37,428
Land Held for
Development
Home Building
28,870
53,727
-
22,188
(56,279)
-
48,506
81,437
-
40,679
(82,308)
Total
218,855
88,383
-
51,338
(93,979)
1,086
265,683
137,500
-
63,974
(125,066)
152,495
31,476
(39,950)
29,150
-
1,198
174,369
49,216
(29,831)
23,295
-
-
-
700
217,049
88,314
342,791
Acquisitions amounts during the year ended December 31, 2023 in the table above include $40,679 related to the purchase of
residential lots and $23,295 related to the purchase of future residential development land (2022 - $22,188 and $29,150 respectively).
These amounts include:
a) The Corporation entered into binding agreements to acquire 253 residential lots in the Calgary Metropolitan Area for
$40,679. The Corporation paid non-refundable deposits of $11,526 with the balance of $29,153, due on closing which is
scheduled between February 2024 and June 2026.
b) The Corporation closed the acquisition of 460 acres of future residential development land in the southeast sector of the
City of Calgary for $25,842 (note 13b).
During the year ended December 31, 2023, the Corporation closed the sales of four parcels of land for $16,200 (2022 - five parcels
for $15,991).
During the year ended December 31, 2023, interest of $1,124 (2022 - $822) was capitalized as a component of development
activities.
During the year ended December 31, 2023, the Corporation recorded a reversal of write-down of $700 related to write-downs
previously taken on real estate held for development and sale. The reversal of the write-down was taken to reflect the estimated
returns realizable on completion of development and sale of these lands (2022 - $1,086).
21
73
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
GENESIS LAND DEVELOPMENT CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(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
2023
26,623
1,533
28,156
2022
21,207
958
22,165
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 22a). Certain agreements receivable and mortgages receivable, if any, are interest bearing.
7.
VENDOR-TAKE-BACK MORTGAGE RECEIVABLE
Vendor-take-back mortgage receivable
2023
1,976
2022
-
The Corporation closed the sale of a 2.91-acre parcel of development land on December 1, 2023 for $3,929, comprised of a cash
consideration of $1,965 and the remainder as a vendor-take-back mortgage receivable of $1,964 bearing an annual interest at the
prime rate. The principal and interest on the vendor-take-back mortgage receivable is due on or before March 15, 2024.
8.
INVESTMENTS IN LAND DEVELOPMENT ENTITIES
As at December 31, 2021
Gain in fair value
As at December 31, 2022
Distribution received
Gain in fair value
As at December 31, 2023
Investment in land development
limited partnership - 5% interest
Investment in land development
joint venture - 8% interest
1,890
340
2,230
(676)
396
1,950
4,280
220
4,500
-
710
5,210
Total
6,170
560
6,730
(676)
1,106
7,160
The fair value of investments in land development entities is based on the market approach method. Fair values were obtained from
external third-party appraisals. This method uses prices and other relevant information that have been generated by market
transactions involving comparable assets. During the year ended December 31, 2023, the Corporation recorded $1,106 as a gain in
investment in land development entities (2022 - $560).
74
22
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
GENESIS LAND DEVELOPMENT CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(All tabular amounts and amounts in footnotes to tables are in thousands of Canadian dollars except number of shares)
9.
JOINT VENTURE
The Corporation and a private company entered into a limited partnership agreement in 2021 to form Sage Hill Estates Apartments
LP (“SHEA LP”), for the purpose of acquiring, developing and renting certain real estate. The Corporation sold a 3.22-acre multi-
family site for $3,589 to SHEA LP and used the gross sale proceeds to purchase 50% of the units in SHEA LP by way of a capital
contribution of $3,589 in 2022. The private company will contribute cash equity until it is equal with Genesis’s contribution after which
all future contributions will be 50/50.
SHEA LP is accounted for using the equity method with the Corporation’s share of net assets being $3,581 at December 31, 2023
(December 31, 2022 - $3,588). During the year ended December 31, 2023, there were minimal transactions in SHEA LP.
10.
OTHER OPERATING ASSETS
Deposits
Restricted Cash
Prepayments
Property, equipment and other
2023
6,728
1,551
1,046
1,582
10,907
2022
11,122
6,849
1,118
1,590
20,679
Deposits include amounts paid by the Corporation towards the purchase of lots and land as well as amounts paid to development
authorities as security to guarantee the completion of construction projects under development. Restricted cash includes funds held
in trust related to acquisition and sale of development land and lots. The Corporation also provides letters of credit and surety bonds
as security to guarantee the completion of certain construction projects (see note 21a for additional information).
23
75
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
GENESIS LAND DEVELOPMENT CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(All tabular amounts and amounts in footnotes to tables are in thousands of Canadian dollars except number of shares)
11.
LEASES
Right-of-Use Assets
As at January 1, 2023
Additions
Depreciation charge for the year (2)
As at December 31, 2023
As at December 31, 2022
Lease Liabilities
As at January 1, 2023
Additions
Lease payments
Interest for the year (2)
As at December 31, 2023
As at December 31, 2022
Lease Liabilities - undiscounted cash flows
January 1, 2024 to December 31, 2024
January 1, 2025 to November 30, 2027
As at December 31, 2023
As at December 31, 2022
Office Building
Other (1)
426
-
(102)
324
426
136
168
(146)
158
136
Office Building
Other (1)
670
-
(178)
29
521
670
171
204
(195)
11
191
171
Office Building
Other (1)
178
385
563
741
171
30
201
178
Amounts recognized in statements of comprehensive income
Office Building
Other (1)
Interest on lease liabilities
Total for the year ended December 31, 2023
Total for the year ended December 31, 2022
Amounts recognized in the statement of cash flows (3)
Interest paid
Payment of lease liabilities
Total for the year ended December 31, 2023
Total for the year ended December 31, 2022
(1) Includes showhomes leaseback, photocopiers and trucks.
(2) Discount rate used ranged between 4.04% and 8.22%.
29
29
34
11
11
8
Office Building
Other (1)
29
149
178
63
11
184
195
206
(3) These amounts are included in the line item “paid to suppliers and employees” in the consolidated statements of cash flows.
Total
562
168
(248)
482
562
Total
841
204
(373)
40
712
841
Total
349
415
764
919
Total
40
40
42
Total
40
333
373
269
76
24
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
GENESIS LAND DEVELOPMENT CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(All tabular amounts and amounts in footnotes to tables are in thousands of Canadian dollars except number of shares)
12.
a)
INCOME TAXES
Income tax was recognized in the consolidated statements of comprehensive income as follows:
Current income tax expense
Deferred income tax expense (recovery)
Income tax expense
2023
3,732
430
4,162
2022
2,859
(1,231)
1,628
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% (2022 - 23.00%) to earnings before income taxes. The difference resulted from the
following:
Earnings before income taxes
Statutory tax rate
Expected income tax expense
Utilization of previously unrecognized tax losses
True-up of current tax liability
Share-based compensation
Other
Non-controlling interest
Tax expense for the year
c)
The deferred tax assets of the Corporation were as follows:
Deferred tax assets
Deferred tax liabilities
Net deferred tax assets
d)
The components of the net deferred tax assets were as follows:
Real estate held for development and sale
Reserves from land sales
Unamortized financing costs
Other temporary differences
Net deferred tax assets
2023
18,225
23.00%
4,192
(241)
(190)
248
78
75
4,162
2023
8,613
(1,129)
7,484
2023
5,308
(804)
2,632
348
7,484
2022
6,017
23.00%
1,384
-
(21)
235
(6)
36
1,628
2022
9,033
(898)
8,135
2022
5,756
(612)
2,780
211
8,135
25
77
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
GENESIS LAND DEVELOPMENT CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(All tabular amounts and amounts in footnotes to tables are in thousands of Canadian dollars except number of shares)
13.
LOAN AND CREDIT FACILITIES
Secured by specific dedicated lands and a general corporate charge on all assets of the
Corporation
a) Corporate revolving credit facility up to $50,000 with a major Canadian financial institution at
an interest rate per annum of prime +1.90%. Subsequent to December 31, 2023, the facility was
extended and matures on February 1, 2027. In addition, the interest rate per annum has been
reduced to prime +1.65%.
Secured by agreements receivable and real estate held for development and sale
(b) Vendor-take-back loan (“VTB”) at 0% per annum is measured at amortized cost and whose
fair value is based on discounted future cash flows, using an 8% discount rate. The $18,088 VTB
was entered into on November 30, 2023 in partial payment for the purchase of southeast Calgary
lands and is secured by these lands which have a carrying value of $22,700. The VTB is to be
paid in four annual installments of $4,522 each, commencing November 20, 2024 and ending
November 20, 2027 (note 5).
Unamortized portion of the discount on the VTB.
c) Demand land project servicing facilities 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 $12,814. Loan amounts are due
between May 12, 2024, and March 19, 2025.
d) Demand land project servicing facility up to $35,428 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 $59,206. The facility
matures on July 31, 2026.
e) Demand operating credit facility up to $21,500 from a major Canadian chartered bank, bearing
interest at prime +0.50% per annum, secured by real estate held for development and sale with
a carrying value of $59,206. Loan amount is due on October 27, 2025.
f) Demand operating credit facility up to $16,000 from a major Canadian chartered bank, bearing
interest at prime +0.25% per annum, secured by real estate held for development and sale with
a carrying value of $33,436. Loan amount is due on November 30, 2026.
Secured by housing projects under development and a corporate guarantee
g) Demand operating credit facility up to $25,000 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. The facility does not have a specified maturity date.
Deferred fees on loan and credit facilities
2023
2022
12,800
25,626
18,088
(3,010)
-
-
12,729
12,522
13,455
-
21,500
20,198
15,098
-
13,664
7,364
104,324
(737)
103,587
65,710
(653)
65,057
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 7.90% (December 31, 2022 - 7.52%) based on
December 31, 2023 balances.
78
26
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
GENESIS LAND DEVELOPMENT CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(All tabular amounts and amounts in footnotes to tables are in thousands of Canadian dollars except number of shares)
13.
LOAN AND CREDIT FACILITIES (continued)
During the year ended December 31, 2023, the Corporation received advances of $82,887 (2022 - $84,151) and made repayments
of $59,450 (2022 - $42,389) relating to various loan facilities. These loan facilities bear interest ranging from prime +0.25% to prime
+1.90% per annum, with maturity dates ranging from May 12, 2024 to November 30, 2026. During the year ended December 31,
2023, the Corporation incurred interest expense of $5,004 directly related to these loans (2022 - $2,027).
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, 2023 and 2022, the Corporation and its subsidiaries were in compliance with all loan covenants.
Based on the contractual terms, the Corporation’s loan and credit facilities are to be repaid within the following time periods (excluding
deferred fees on loan and credit facilities and unamortized portion of the discount on the VTB):
January 1, 2024 to December 31, 2024
January 1, 2025 to December 31, 2025
January 1, 2026 to December 31, 2026
January 1, 2027 to December 31, 2027
26,916
30,022
45,875
4,521
107,334
27
79
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
GENESIS LAND DEVELOPMENT CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(All tabular amounts and amounts in footnotes to tables are in thousands of Canadian dollars except number of shares)
14.
CUSTOMER DEPOSITS
Customer deposits on residential home sales
Customer deposits on residential lot and development land sales
2023
13,426
4,044
17,470
2022
9,194
6,559
15,753
Customer deposits are amounts received upon signing of contracts for purchases of residential homes, lots and development land
on which revenue recognition criteria have not yet been met.
15.
PROVISION FOR FUTURE DEVELOPMENT COSTS
The movement in the provision for future development costs is as follows:
As at December 31, 2021
Additions
Changes to estimates
Development activities
As at December 31, 2022
Additions
Changes to estimates
Development activities
As at December 31, 2023
Land Development
Home Building
15,096
9,927
(297)
(4,621)
20,105
10,774
(935)
(14,045)
15,899
2,883
12,607
113
(11,674)
3,929
27,363
(371)
(26,251)
4,670
Total
17,979
22,534
(184)
(16,295)
24,034
38,137
(1,306)
(40,296)
20,569
80
28
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
GENESIS LAND DEVELOPMENT CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(All tabular amounts and amounts in footnotes to tables are in thousands of Canadian dollars except number of shares)
16.
SHARE CAPITAL
a)
Authorized
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, 2023
and 2022:
Basic and diluted weighted average number of common shares
2023
2022
56,849,817
56,863,335
In calculating the diluted earnings per share for the years ended December 31, 2023 and 2022, the Corporation excluded all options
as they were cancelled effective May 25, 2022.
c)
Normal course issuer bid (“NCIB”)
The Corporation renewed its NCIB on December 13, 2023. The renewed NCIB commenced on December 18, 2023 and will terminate
on the earlier of: (i) December 17, 2024; and (ii) the date on which the maximum number of common shares are purchased pursuant
to the bid. The Corporation may purchase for cancellation up to 2,840,528 common shares under the NCIB.
The prior NCIB, which expired on December 15, 2023, allowed the Corporation to purchase for cancellation up to 2,843,166 common
shares.
The following table sets forth the number of common shares repurchased and cancelled during the year ended December 31, 2023
and 2022 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
2023
61,027
90
45
135
2.20
2022
-
-
-
-
-
Cash dividends of $9,663 ($0.17 per share) were declared and paid during the year ended December 31, 2023. Cash dividends of
$8,530 ($0.15 per share) were declared and paid during the year ended December 31, 2022.
29
81
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
GENESIS LAND DEVELOPMENT CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(All tabular amounts and amounts in footnotes to tables are in thousands of Canadian dollars except number of shares)
17.
SHARE-BASED COMPENSATION
a)
Stock option plan
During the year ended December 31, 2022, all 855,000 stock options with a weighted average exercise price of $3.31 were cancelled.
b)
Deferred share unit (“DSU”) plan
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, ranging from immediate vesting up to four years. Details of outstanding DSUs are as follows:
DSUs outstanding - beginning of year
DSUs granted
DSUs redeemed / cancelled
DSUs outstanding - end of year
DSUs vested - end of year
2023
1,065,060
374,918
(86,534)
1,353,444
912,258
2022
573,743
491,317
-
1,065,060
641,043
The outstanding liability related to cash settled DSUs as at December 31, 2023 was $2,863 (December 31, 2022 - $1,950) 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. The 2023 expense recorded in General and Administrative (note 18) amounted to $1,077 (2022 - $1,003)
Subsequent to December 31, 2023, the Corporation granted 190,351 DSUs at $2.28 each.
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
2023
-
1,077
1,077
2022
18
1,003
1,021
82
30
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
GENESIS LAND DEVELOPMENT CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(All tabular amounts and amounts in footnotes to tables are in thousands of Canadian dollars except number of shares)
18.
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
2023
12,286
1,077
3,247
1,488
18,098
2022
9,499
1,021
2,930
1,336
14,786
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
19.
SELLING AND MARKETING
Selling and marketing expenses of the Corporation consisted of the following:
Advertising and marketing
Sales commissions
20.
FINANCE EXPENSE
Finance expense of the Corporation consisted of the following:
Interest incurred
Interest relating to VTBs
Financing fees amortized
Interest and financing fees capitalized (note 5)
2023
2,672
1,077
3,749
2023
3,632
4,852
8,484
2023
4,912
199
386
(1,124)
4,373
2022
2,423
1,021
3,444
2022
3,452
2,363
5,815
2022
1,989
105
340
(822)
1,612
31
83
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
GENESIS LAND DEVELOPMENT CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(All tabular amounts and amounts in footnotes to tables are in thousands of Canadian dollars except number of shares)
21. COMMITMENTS AND CONTINGENCIES
a)
b)
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, 2023, these amounted
to $7,103 (December 31, 2022 - $5,414).
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, 2024 to December 31, 2024
January 1, 2025 to December 31, 2025
January 1, 2026 to December 31, 2026
8,516
5,050
4,428
17,994
c)
The Corporation has contracted to acquire 186 residential lots in the Calgary Metropolitan Area for $33,655 from third-party
land developers and LLLP, a limited partnership in which Genesis owns a 60% interest (refer to note 24). The Corporation has
paid deposits totaling $2,670 with the remainder being payable as follows:
January 1, 2024 to December 31, 2024
January 1, 2025 to December 31, 2025
January 1, 2026 to December 31, 2026
Third-party land
developers
3,087
13,857
3,785
20,729
LLLP
9,070
1,186
-
10,256
Total
12,157
15,043
3,785
30,985
d)
The Corporation entered into an agreement to acquire approximately 160 acres of future residential development land in the
southeast sector of the City of Calgary for $30,000. The Corporation has paid a non-refundable deposit of $3,300 with the
balance due on closing which is scheduled for January 31, 2025.
84
32
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
GENESIS LAND DEVELOPMENT CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(All tabular amounts and amounts in footnotes to tables are in thousands of Canadian dollars except number of shares)
22.
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 loan 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, 2023 and December 31, 2022 are
presented in the following table:
Carrying Value
Fair Value
Fair Value
Hierarchy
Measurement
Basis
As at
Dec. 31, 2023
As at
Dec. 31, 2022
As at
Dec. 31, 2023
As at
Dec. 31, 2022
Financial Assets
Cash
Investments in land development
entities
Restricted cash (1)
Financial Liabilities
Cash settled DSUs
(1) Included in other operating assets.
Level 1
Level 3
Level 1
FVTPL
FVTPL
FVTPL
Level 1
FVTPL
37,546
7,160
1,551
2,863
36,598
6,730
6,849
1,950
37,546
7,160
1,551
2,863
36,598
6,730
6,849
1,950
During the year ended December 31, 2023 and 2022, no transfers were made between the levels in the fair value hierarchy.
33
85
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
GENESIS LAND DEVELOPMENT CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(All tabular amounts and amounts in footnotes to tables are in thousands of Canadian dollars except number of shares)
22.
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, 2023, which comprise greater than 10% of total amounts receivable, totaled $26,623 from two customers
(December 31, 2022 - $21,207 from two customers).
Aging of amounts receivable, none of which are past due, was as follows:
Due on sold lots
Other receivables
2023
26,623
1,533
28,156
2022
21,207
958
22,165
86
34
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
GENESIS LAND DEVELOPMENT CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(All tabular amounts and amounts in footnotes to tables are in thousands of Canadian dollars except number of shares)
22.
FINANCIAL INSTRUMENTS (continued)
(ii) Liquidity risk
The contractual maturities of financial liabilities and other commitments as at December 31, 2023 were as follows:
<1 Year
>1 Year
Total
Financial liabilities
Accounts payable and accrued liabilities
Accounts payable related to residential lot purchases
Loan and credit facilities excl. deferred fees on loan and credit facilities and
unamortized portion of the discount on the VTB (note 13)
Commitments
Lease obligations (including variable operating costs)
Land purchase contract (note 21d)
Lot purchase contracts (note 21c)
Levies and municipal fees (note 21b)
22,579
24,131
26,916
73,626
585
-
12,158
8,516
21,259
94,885
-
8,188
80,418
88,606
929
26,700
18,827
9,478
55,934
22,579
32,319
107,334
162,232
1,514
26,700
30,985
17,994
77,193
144,540
239,425
As at December 31, 2023, the Corporation had obligations due within the next 12 months of $94,885 (December 31, 2022 - $48,824).
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, 2023, the Corporation’s operating line of credit facility was increased from $10,000 to $25,000 (note13g) and the
corporate revolving line of credit was extended until February 2027 with the interest rate per annum reduced to prime +1.65% (note
13a). LLLP put in place a demand land servicing credit facility of $35,428 (note 13d) and Huxley Lands Limited Partnership also put
in place a demand operating credit facility of $16,000 (note 13f).
(iii) Market risk
The Corporation is exposed to interest rate risk to the extent that certain agreements receivable and certain loan 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 $892
annually on floating rate facilities (2022 - $657).
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:
Loan and credit facilities (note 13)
Shareholders’ equity
2023
103,587
231,142
334,729
2022
65,057
224,632
289,689
35
87
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
GENESIS LAND DEVELOPMENT CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(All tabular amounts and amounts in footnotes to tables are in thousands of Canadian dollars except number of shares)
23.
SEGMENTED INFORMATION
The income producing business units of the Corporation reported the following activities for the year ended December 31, 2023 and
2022:
Year ended December 31, 2023
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
(Loss) earnings before income
taxes and non-controlling interest
Segmented assets as at
December 31, 2023
Segmented liabilities as at
December 31, 2023 (1), (2)
Segmented net assets as at
December 31, 2023 (1), (2)
Genesis
45,847
16,200
(52,655)
700
10,092
1,106
1,253
(935)
-
334
-
(11,474)
(80)
Land Development Segment
Intrasegment
Elimination
-
LP
16
Total
45,863
Home
Building
Segment
167,126
Intersegment
Elimination
(25,877)
(1,253)
16,200
-
-
Total
187,112
16,200
935
(52,655)
(130,703)
25,877
(157,481)
-
700
-
(318)
10,108
36,423
-
-
1,106
-
(11,554)
(17,858)
-
-
-
-
-
700
46,531
1,106
(29,412)
18,225
(276)
254
(318)
(340)
18,565
320,723
2,209
(4,987)
317,945
111,979
10,159
440,083
114,081
648
(539)
114,190
74,593
10,159
198,942
206,642
1,561
(4,448)
203,755
37,386
-
241,141
Year ended December 31, 2022
Revenues
Revenues - development lands
Genesis
40,564
15,991
Land Development Segment
Intrasegment
Elimination
-
LP
75
Total
40,639
Home
Building
Segment
100,680
Intersegment
Elimination
(16,953)
6,699
(6,699)
15,991
-
-
Total
124,366
15,991
Direct cost of sales
(47,489)
(6,763)
6,763
(47,489)
(83,749)
16,953
(114,285)
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 (loss) before income
taxes and non-controlling interest
Segmented assets as at
December 31, 2022
Segmented liabilities as at
December 31, 2022 (1), (2)
Segmented net assets as at
December 31, 2022 (1), (2)
1,086
10,152
560
-
11
-
(8,919)
(142)
-
1,086
-
64
10,227
16,931
-
-
560
-
(9,061)
(12,640)
1,793
(131)
64
1,726
4,291
-
-
-
-
-
1,086
27,158
560
(21,701)
6,017
302,477
3,701
(4,495)
301,683
64,777
(2,320)
364,140
95,658
996
(365)
96,289
42,834
(2,320)
136,803
206,819
2,705
(4,130)
205,394
21,943
-
227,337
(1) Segmented liabilities under the Genesis land development segment include $12,588 due to the home building segment (December 31, 2022 - $61 due from the
home building segment to the land development segment).
(2) Segmented liabilities under the LP segment is comprised of accounts payable and accrued liabilities and includes $539 (December 31, 2022 - $365) due to
Genesis.
88
36
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
GENESIS LAND DEVELOPMENT CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(All tabular amounts and amounts in footnotes to tables are in thousands of Canadian dollars except number of shares)
24.
LEWISTON LANDS LIMITED PARTNERSHIP
In December 2022, the Corporation entered into binding agreements to sell a 20% ownership stake in LLLP to each of two Calgary
based third party home builders. LLLP owns 130 acres of residential development land located in north Calgary in the Keystone Area
Structure Plan. The transaction closed on January 16, 2023, for a consideration for each 20% ownership stake of $5,880 (net of
assumption of debt of $4,000 each) resulting in gross proceeds for the sale of a 40% ownership interest of $11,760 (net of assumption
of debt of $8,000). LLLP accounts for $8,438 of the NCI on the consolidated balance sheets (December 31, 2022 - $Nil) and ($703)
on the consolidated statements of comprehensive income (December 31, 2022 - $Nil).
25.
RELATED PARTY TRANSACTIONS
Transactions occurred with the following related parties:
In 2005, the Corporation sold a 49% undivided interest in approximately 610 acres to Genesis Limited Partnership #4 and GLP5 NE
Calgary Development Inc. (collectively, “LP4/5 group”) for $7,670. In July 2022, the Corporation repurchased from LP4/5 group their
49% undivided interest in 456 acres of land for $6,699 with LP4/5 group still owning a 49% undivided interest in the remaining 154
acres of land. Cash proceeds of LP4/5 group were $5,038 with the remainder of $1,661 being applied against debt owed to the
Corporation by LP4/5 group. In February 2023, the Corporation paid $1,253 to GLP5 NE Calgary Development Inc. to acquire an
additional 25 acres in the OMNI project in North Conrich. This results in Genesis holding a 100% interest in 456 acres of land and a
73% interest (previously 59%) in the 185-acre OMNI project, with the remaining 27% being held by Genesis Limited Partnership #4.
26.
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 (with the exception of LLLP and Huxley Lands Limited Partnership);
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.
37
89
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
GENESIS LAND DEVELOPMENT CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(All tabular amounts and amounts in footnotes to tables are in thousands of Canadian dollars except number of shares)
26.
CONSOLIDATED ENTITIES (continued)
All entities are incorporated in Canada and are listed in the following table:
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.
Siseneg Holding Inc.
GLDC Management Inc.
Lewiston Lands Limited Partnership (note 24)
Lewiston Lands GP Inc.
Huxley Lands Limited Partnership
Huxley Lands GP Inc.
GP GLP8 Inc.
GP LPLP 2007 Inc.
Home Building
Genesis Builders Group Inc.
The Breeze Inc.
Joint Venture
Sage Hill Estates Apartments LP
Sage Hill Estates Apartments GP Inc.
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.
LPLP 2007 Group
Limited Partnership Land Pool (2007)
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.
90
38
% equity interest as at
December 31, 2023
December 31, 2022
100%
100%
0.0002%
99.9998%
100%
100%
0.0002%
99.9998%
-
-
100%
100%
100%
100%
100%
60%
100%
100%
100%
100%
100%
100%
-
49%
2%
50%
0.001%
0%
100%
-
-
-
-
100%
100%
100%
100%
100%
100%
100%
100%
100%
-
-
100%
100%
100%
100%
49%
2%
50%
0.001%
0%
100%
0.023%
0%
0%
0%
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
GENESIS LAND DEVELOPMENT CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(All tabular amounts and amounts in footnotes to tables are in thousands of Canadian dollars except number of shares)
26.
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
Real estate held for development and sale
Other operating assets including restricted
cash
Total assets
Liabilities
Accounts payable and accrued liabilities
Due to related parties
Total liabilities
Net assets
Non-controlling interest (%)
Assets
Real estate held for development and sale
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 (%)
LP 4/5
2,204
5
2,209
109
539
648
1,561
100%
LP 4/5
3,109
22
-
3,131
98
328
426
2,705
100%
December 31, 2023
LPLP 2007
-
-
-
-
-
-
-
0%
December 31, 2022
LPLP 2007
-
532
38
570
533
37
570
-
100%
Total
2,204
5
2,209
109
539
648
1,561
100%
Total
3,109
554
38
3,701
631
365
996
2,705
39
91
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
GENESIS LAND DEVELOPMENT CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(All tabular amounts and amounts in footnotes to tables are in thousands of Canadian dollars except number of shares)
26.
CONSOLIDATED ENTITIES (continued)
SUMMARIZED STATEMENTS OF COMPREHENSIVE INCOME
Revenues
Net income
Non-controlling interest (%)
Revenues
Net (loss)
Non-controlling interest (%)
SUMMARIZED STATEMENT OF CASH FLOWS
Cash flows from operating activities
Net decrease in cash and cash equivalents
Cash flows from operating activities
Net increase in cash and cash equivalents
LP 4/5
1,269
254
100%
LP 4/5
6,713
(131)
100%
LP 4/5
-
-
LP 4/5
-
-
Year ended December 31, 2023
LPLP 2007
-
-
n/a
Year ended December 31, 2022
LPLP 2007
61
-
100%
Year ended December 31, 2023
LPLP 2007
-
(38)
Year ended December 31, 2022
LPLP 2007
7
7
Total
1,269
254
Total
6,774
(131)
Total
-
(38)
Total
7
7
92
40
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT
Genesis
CONTACTS
OFFICERS
IAIN STEWART
President and CEO
ROB SEKHON
Chief Financial Officer
PARVESHINDERA SIDHU
President, Genesis Builders Group
Inc. and Senior Vice-President,
Home Building of Genesis Land
Development Corp.
BRIAN WHITWELL
Senior Vice-President,
Asset Management
WAYNE KING
Senior Vice-President, Information
Systems & Special Projects
ARNIE STEFANIUK
Vice-President, Regional Planning
BRENDAN McCASHIN
Vice-President, Land Development
DIRECTORS
STEPHEN J. GRIGGS
Chair
STEVEN GLOVER
Lead Director
MARK W. MITCHELL
Director
IAIN STEWART
Director
CALVIN YOUNGER
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
CORPORATE OFFICE
GENESIS LAND
DEVELOPMENT CORP.
6240, 333 - 96 Avenue NE
Calgary, AB T3K 0S3
MAIN 403 265 8079
EMAIL info@genesisland.com
www.genesisland.com
93
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT Logan Landing
SE CALGARY
94
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT Logan Landing
SE CALGARY
95
GENESIS LAND DEVELOPMENT CORP. | 2023 ANNUAL REPORT GENESIS LAND DEVELOPMENT CORP. 6240, 333 – 96 Avenue NECalgary, AB T3K 0S3MAIN 403 265 8079EMAIL info@genesisland.comwww.genesisland.com