Company: SDHC
Filing Date: 2025-08-06
Form Type: 10-Q
Source: 0001982518-25-000064
Chunk: 31

Company: Smith Douglas Homes Corp.
Filing Date: 2025-08-06
Form: 10-Q
Item: Part I, Item 1
Chunk 31
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 records the remaining purchase price of the associated land parcel(s) in inventory in its consolidated balance sheets with a corresponding financing obligation if the Company determines that it is effectively compelled to exercise the option to purchase the land parcel(s). In making this determination with respect to land option contracts, the Company considers the non‑refundable deposit(s), any capitalized pre‑acquisition costs and additional costs associated with abandoning the contract. As a result of such evaluations of lot option contracts, no lot option contracts were determined to be financing arrangements for which the remaining purchase price should be recorded as a financing obligation in the accompanying unaudited condensed consolidated balance sheets.

During the three and six months ended June 30, 2025, the Company recognized a lot option contract abandonment charge of $0.0 million and $0.7 million, respectively, in the Central reporting segment, which is included within other (income) expense, net in the accompanying unaudited condensed consolidated statements of income. No lot option contract abandonment charges were recognized during the six months ended June 30, 2024. 

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Note 4 ‑ Investments in unconsolidated entities:

The Company has non‑controlling equity interests in various entities for which the Company applies the equity method of accounting. As of June 30, 2025, the Company had equity method investments in two entities engaged in the development and sale of lots, one entity engaged in providing mortgage broker services to our homebuyers, and one entity engaged in providing title insurance services to our homebuyers. The Company’s proportionate share of the entities’ income was approximately $0.6 million and $0.8 million during the three and six months ended June 30, 2025, respectively, and $0.2 million and $0.4 million during the three and six months ended June 30, 2024, respectively. The entities distributed approximately $0.4 million and $0.7 million during the three and six months ended June 30, 2025, respectively, and $0.2 million and $0.4 million to the Company during the three and six months ended June 30, 2024, respectively. The Company contributed approximately $0.0 million and $1.1 million during the three and six months ended June 30, 2025, respectively, and $0.6 million during the three and six months ended June 30, 2024. Investments in unconsolidated entities totaled approximately $2.