Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2021 | Oct. 26, 2021 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 1-8951 | |
Entity Registrant Name | M.D.C. HOLDINGS, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 84-0622967 | |
Entity Address, Address Line One | 4350 South Monaco Street, Suite 500 | |
Entity Address, Postal Zip Code | 80237 | |
Entity Address, City or Town | Denver | |
Entity Address, State or Province | CO | |
City Area Code | 303 | |
Local Phone Number | 773-1100 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 70,679,388 | |
Entity Central Index Key | 0000773141 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2021 | |
Common Stock | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Common Stock, $.01 par value | |
Trading Symbol | 552676108 | |
Security Exchange Name | NYSE | |
6% Senior Notes due January 2043 | ||
Document Information [Line Items] | ||
Title of 12(b) Security | 6% Senior Notes due January 2043 | |
Trading Symbol | 552676AQ1 | |
Security Exchange Name | NYSE |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Inventories: | ||
Housing completed or under construction | $ 1,948,211 | $ 1,486,587 |
Land and land under development | 1,464,603 | 1,345,643 |
Total inventories | 3,412,814 | 2,832,230 |
Total Assets | 4,874,404 | 3,864,920 |
LIABILITIES AND EQUITY | ||
Total Liabilities | 2,416,420 | 1,745,008 |
Stockholders' Equity | ||
Preferred stock, $0.01 par value; 25,000,000 shares authorized; none issued or outstanding | 0 | 0 |
Common stock, $0.01 par value; 250,000,000 shares authorized; 70,679,612 and 64,851,126 issued and outstanding at September 30, 2021 and December 31, 2020, respectively | 707 | 649 |
Additional paid-in-capital | 1,697,435 | 1,407,597 |
Retained earnings | 759,842 | 711,666 |
Total Stockholders' Equity | 2,457,984 | 2,119,912 |
Total Liabilities and Stockholders' Equity | 4,874,404 | 3,864,920 |
Homebuilding: | ||
ASSETS | ||
Cash and cash equivalents | 761,715 | 411,362 |
Restricted cash | 12,047 | 15,343 |
Trade and other receivables | 125,556 | 72,466 |
Inventories: | ||
Housing completed or under construction | 1,948,211 | 1,486,587 |
Land and land under development | 1,464,603 | 1,345,643 |
Total inventories | 3,412,814 | 2,832,230 |
Property and equipment, net | 61,590 | 61,880 |
Deferred tax asset, net | 16,301 | 11,454 |
Prepaids and other assets | 105,860 | 101,685 |
Other assets | 96 | 492 |
Total Assets | 4,495,883 | 3,506,420 |
LIABILITIES AND EQUITY | ||
Accounts payable | 154,376 | 98,862 |
Accrued and other liabilities | 334,712 | 300,735 |
Revolving credit facility | 10,000 | 10,000 |
Senior notes, net | 1,607,658 | 1,037,391 |
Total Liabilities | 2,106,746 | 1,446,988 |
Financial Services: | ||
ASSETS | ||
Cash and cash equivalents | 93,884 | 77,267 |
Inventories: | ||
Mortgage loans held-for-sale, net | 248,921 | 232,556 |
Other assets | 35,716 | 48,677 |
Total Assets | 378,521 | 358,500 |
LIABILITIES AND EQUITY | ||
Accounts payable and accrued liabilities | 93,880 | 95,630 |
Mortgage repurchase facility | 215,794 | 202,390 |
Total Liabilities | $ 309,674 | $ 298,020 |
Consolidated Balance Sheets (Cu
Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - $ / shares | Sep. 30, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Preferred stock par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 25,000,000 | 25,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 250,000,000 | 250,000,000 |
Common stock, shares issued (in shares) | 70,679,612 | 64,851,126 |
Common stock, shares outstanding (in shares) | 70,679,612 | 64,851,126 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Loss on debt retirement | $ (12,150) | $ 0 | $ (12,150) | $ 0 |
Income before income taxes | 192,692 | 126,018 | 542,546 | 286,218 |
Provision for income taxes | (46,738) | (27,080) | (131,550) | (66,124) |
Net income | 145,954 | 98,938 | 410,996 | 220,094 |
Comprehensive income | $ 145,954 | $ 98,938 | $ 410,996 | $ 220,094 |
Earnings per share: | ||||
Basic (in dollars per share) | $ 2.07 | $ 1.42 | $ 5.83 | $ 3.21 |
Diluted (in dollars per share) | $ 1.99 | $ 1.38 | $ 5.62 | $ 3.12 |
Weighted average common shares outstanding: | ||||
Basic (in shares) | 70,301,085 | 68,977,965 | 70,130,853 | 68,179,403 |
Diluted (in shares) | 72,800,011 | 71,090,903 | 72,770,432 | 70,167,443 |
Dividends declared per share (in dollars per share) | $ 0.40 | $ 0.31 | $ 1.17 | $ 0.92 |
Homebuilding: | ||||
Total financial services revenues | $ 1,257,701 | $ 1,000,549 | $ 3,667,332 | $ 2,584,392 |
Home cost of sales | (962,078) | (795,172) | (2,827,147) | (2,061,608) |
Gross profit | 295,623 | 205,377 | 840,185 | 522,784 |
Selling, general and administrative expenses | (120,116) | (103,632) | (363,970) | (285,269) |
Loss on debt retirement | (12,150) | |||
Interest and other income | 3,149 | 756 | 4,984 | 3,365 |
Other income (expense), net | (1,354) | (851) | (2,881) | (4,640) |
Income before income taxes | 165,152 | 101,650 | 466,168 | 236,240 |
Financial Services: | ||||
Total financial services revenues | 43,104 | 36,803 | 121,445 | 91,653 |
Expenses | (16,377) | (13,294) | (47,922) | (36,401) |
Other income (expense), net | 813 | 859 | 2,855 | (5,274) |
Income before income taxes | $ 27,540 | $ 24,368 | $ 76,378 | $ 49,978 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Cumulative effect of newly adopted accounting standards | Cumulative Effect, Period of Adoption, Adjusted Balance | Common Stock | Common StockCumulative Effect, Period of Adoption, Adjusted Balance | Additional Paid-in Capital | Additional Paid-in CapitalCumulative Effect, Period of Adoption, Adjusted Balance | Retained Earnings | Retained EarningsCumulative effect of newly adopted accounting standards | Retained EarningsCumulative Effect, Period of Adoption, Adjusted Balance |
Beginning balance (in shares) at Dec. 31, 2019 | 62,574,961 | 62,574,961 | ||||||||
Beginning balance at Dec. 31, 2019 | $ 1,782,485 | $ (34) | $ 1,782,451 | $ 626 | $ 626 | $ 1,348,733 | $ 1,348,733 | $ 433,126 | $ (34) | $ 433,092 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net Income | 36,760 | 36,760 | ||||||||
Shares issued under stock-based compensation programs, net (in shares) | 477,582 | |||||||||
Shares issued under stock-based compensation programs, net | 8,194 | $ 5 | 8,189 | |||||||
Cash dividends declared | (20,768) | (20,768) | ||||||||
Stock-based compensation expense | 4,440 | 4,440 | ||||||||
Forfeiture of restricted stock (in shares) | (48) | |||||||||
Ending balance (in shares) at Mar. 31, 2020 | 63,052,495 | |||||||||
Ending balance at Mar. 31, 2020 | 1,811,077 | $ 631 | 1,361,362 | 449,084 | ||||||
Beginning balance (in shares) at Dec. 31, 2019 | 62,574,961 | 62,574,961 | ||||||||
Beginning balance at Dec. 31, 2019 | 1,782,485 | $ (34) | $ 1,782,451 | $ 626 | $ 626 | 1,348,733 | $ 1,348,733 | 433,126 | $ (34) | $ 433,092 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net Income | 220,094 | |||||||||
Ending balance (in shares) at Sep. 30, 2020 | 64,865,577 | |||||||||
Ending balance at Sep. 30, 2020 | 1,987,999 | $ 649 | 1,397,220 | 590,130 | ||||||
Beginning balance (in shares) at Mar. 31, 2020 | 63,052,495 | |||||||||
Beginning balance at Mar. 31, 2020 | 1,811,077 | $ 631 | 1,361,362 | 449,084 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net Income | 84,396 | 84,396 | ||||||||
Shares issued under stock-based compensation programs, net (in shares) | 334,178 | |||||||||
Shares issued under stock-based compensation programs, net | (6,862) | $ 3 | (6,865) | |||||||
Cash dividends declared | (20,914) | (20,914) | ||||||||
Stock-based compensation expense | 5,488 | 5,488 | ||||||||
Forfeiture of restricted stock (in shares) | (1,807) | |||||||||
Ending balance (in shares) at Jun. 30, 2020 | 63,384,866 | |||||||||
Ending balance at Jun. 30, 2020 | 1,873,185 | $ 634 | 1,359,985 | 512,566 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net Income | 98,938 | 98,938 | ||||||||
Shares issued under stock-based compensation programs, net (in shares) | 1,480,711 | |||||||||
Shares issued under stock-based compensation programs, net | 28,642 | $ 15 | 28,627 | |||||||
Cash dividends declared | (21,374) | (21,374) | ||||||||
Stock-based compensation expense | 8,608 | 8,608 | ||||||||
Ending balance (in shares) at Sep. 30, 2020 | 64,865,577 | |||||||||
Ending balance at Sep. 30, 2020 | $ 1,987,999 | $ 649 | 1,397,220 | 590,130 | ||||||
Beginning balance (in shares) at Dec. 31, 2020 | 64,851,126 | 64,851,126 | ||||||||
Beginning balance at Dec. 31, 2020 | $ 2,119,912 | $ 649 | 1,407,597 | 711,666 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net Income | 110,690 | 110,690 | ||||||||
Shares issued under stock-based compensation programs, net (in shares) | 221,303 | |||||||||
Shares issued under stock-based compensation programs, net | 1,009 | $ 2 | 1,007 | |||||||
Cash dividends declared | (25,978) | (25,978) | ||||||||
Stock dividend declared (in shares) | 5,192,776 | |||||||||
Stock dividend declared | (687) | $ 52 | 279,579 | (280,318) | ||||||
Stock-based compensation expense | 9,926 | 9,926 | ||||||||
Ending balance (in shares) at Mar. 31, 2021 | 70,265,205 | |||||||||
Ending balance at Mar. 31, 2021 | $ 2,214,872 | $ 703 | 1,698,109 | 516,060 | ||||||
Beginning balance (in shares) at Dec. 31, 2020 | 64,851,126 | 64,851,126 | ||||||||
Beginning balance at Dec. 31, 2020 | $ 2,119,912 | $ 649 | 1,407,597 | 711,666 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net Income | $ 410,996 | |||||||||
Ending balance (in shares) at Sep. 30, 2021 | 70,679,612 | 70,679,612 | ||||||||
Ending balance at Sep. 30, 2021 | $ 2,457,984 | $ 707 | 1,697,435 | 759,842 | ||||||
Beginning balance (in shares) at Mar. 31, 2021 | 70,265,205 | |||||||||
Beginning balance at Mar. 31, 2021 | 2,214,872 | $ 703 | 1,698,109 | 516,060 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net Income | 154,352 | 154,352 | ||||||||
Shares issued under stock-based compensation programs, net (in shares) | 358,993 | |||||||||
Shares issued under stock-based compensation programs, net | (16,543) | $ 3 | (16,546) | |||||||
Cash dividends declared | (28,248) | (28,248) | ||||||||
Stock-based compensation expense | 8,126 | 8,126 | ||||||||
Forfeiture of restricted stock (in shares) | (4,560) | |||||||||
Ending balance (in shares) at Jun. 30, 2021 | 70,619,638 | |||||||||
Ending balance at Jun. 30, 2021 | 2,332,559 | $ 706 | 1,689,689 | 642,164 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net Income | 145,954 | 145,954 | ||||||||
Shares issued under stock-based compensation programs, net (in shares) | 69,512 | |||||||||
Shares issued under stock-based compensation programs, net | (19) | $ 1 | (20) | |||||||
Cash dividends declared | (28,276) | (28,276) | ||||||||
Stock-based compensation expense | $ 7,766 | 7,766 | ||||||||
Forfeiture of restricted stock (in shares) | (9,538) | |||||||||
Ending balance (in shares) at Sep. 30, 2021 | 70,679,612 | 70,679,612 | ||||||||
Ending balance at Sep. 30, 2021 | $ 2,457,984 | $ 707 | $ 1,697,435 | $ 759,842 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Operating Activities: | ||||
Net income | $ 145,954 | $ 98,938 | $ 410,996 | $ 220,094 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Stock-based compensation expense | 26,832 | 18,536 | ||
Depreciation and amortization | 23,930 | 18,881 | ||
Net loss on marketable equity securities | 0 | 0 | 0 | 8,285 |
Gain on sale of other assets | (2,014) | 0 | ||
Loss on debt retirement | 12,150 | 0 | 12,150 | 0 |
Deferred income tax expense | (4,847) | 8,493 | ||
Net changes in assets and liabilities: | ||||
Trade and other receivables | (55,529) | (17,512) | ||
Mortgage loans held-for-sale, net | (16,365) | 36,515 | ||
Prepaids and other assets | 9,919 | (20,314) | ||
Accounts payable and accrued and other liabilities | 88,273 | 35,023 | ||
Net cash provided by (used in) operating activities | (86,522) | 29,442 | ||
Investing Activities: | ||||
Purchases of marketable securities | 0 | (10,804) | ||
Sales of marketable securities | 0 | 59,266 | ||
Proceeds from sale of other assets | 2,014 | 0 | ||
Purchases of property and equipment | (23,028) | (20,885) | ||
Net cash provided by (used in) investing activities | (21,014) | 27,577 | ||
Financing Activities: | ||||
Payments on mortgage repurchase facility, net | 13,404 | (18,755) | ||
Repayment of senior notes | (136,394) | (250,000) | ||
Proceeds from issuance of senior notes | 694,662 | 298,050 | ||
Dividend payments | (83,189) | (63,056) | ||
Payments of deferred financing costs | (1,720) | 0 | ||
Issuance of shares under stock-based compensation programs, net | (15,553) | 29,974 | ||
Net cash provided by (used in) financing activities | 471,210 | (8,787) | ||
Net increase in cash, cash equivalents and restricted cash | 363,674 | 48,232 | ||
Cash, cash equivalents and restricted cash: | ||||
Beginning of period | 503,972 | 474,212 | ||
End of period | 867,646 | 522,444 | 867,646 | 522,444 |
Reconciliation of cash, cash equivalents and restricted cash: | ||||
Total cash, cash equivalents and restricted cash | 867,646 | 522,444 | 867,646 | 522,444 |
Payments on homebuilding line of credit, net | ||||
Financing Activities: | ||||
Payments on homebuilding line of credit, net | 0 | (5,000) | ||
Housing completed or under construction | ||||
Net changes in assets and liabilities: | ||||
Housing completed or under construction and land under development | (461,105) | (387,269) | ||
Land and land under development | ||||
Net changes in assets and liabilities: | ||||
Housing completed or under construction and land under development | (118,762) | 108,710 | ||
Homebuilding: | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Loss on debt retirement | 12,150 | |||
Reconciliation of cash, cash equivalents and restricted cash: | ||||
Cash and cash equivalents | 761,715 | 432,277 | 761,715 | 432,277 |
Restricted cash | 12,047 | 19,732 | 12,047 | 19,732 |
Financial Services: | ||||
Reconciliation of cash, cash equivalents and restricted cash: | ||||
Cash and cash equivalents | $ 93,884 | $ 70,435 | $ 93,884 | $ 70,435 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The Unaudited Consolidated Financial Statements of M.D.C. Holdings, Inc. ("MDC," “the Company," “we,” “us,” or “our,” which refers to M.D.C. Holdings, Inc. and its subsidiaries) have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"). Accordingly, they do not include all information and footnotes required by U.S. generally accepted accounting principles (“GAAP”) for complete financial statements. These statements reflect all normal and recurring adjustments which, in the opinion of management, are necessary to present fairly the financial position, results of operations and cash flows of MDC at September 30, 2021 and for all periods presented. These statements should be read in conjunction with MDC’s Consolidated Financial Statements and Notes thereto included in MDC’s Annual Report on Form 10-K for the year ended December 31, 2020. On January 25, 2021, MDC's board of directors declared an 8% stock dividend that was distributed on March 17, 2021 to shareholders of record on March 3, 2021. In accordance with Accounting Standards Codification ("ASC") Topic 260, Earnings Per Share ("ASC 260"), basic and diluted earnings per share amounts, share amounts and dividends declared per share have been restated for any period or dates prior to the stock dividend record date. Included in these footnotes are certain statements that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements regarding our business, financial condition, results of operations, cash flows, strategies and prospects. These forward-looking statements may be identified by terminology such as “likely,” “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue,” or the negative of such terms and other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements contained in this section are reasonable, we cannot guarantee future results. These statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from those expressed or implied by the forward-looking statements. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. However, any further disclosures made on related subjects in subsequent reports on Forms 10-K, 10-Q and 8-K should be considered. Where necessary, reclassifications have been made to our prior period financial information to conform to the current year presentation. |
Recently Issued Accounting Stan
Recently Issued Accounting Standards | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Recently Issued Accounting Standards | Recently Issued Accounting Standards Adoption of New Accounting Standards In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-13, Financial Instruments—Credit Losses (Topic 326 ): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which requires measurement and recognition of expected credit losses for financial assets held. The amendments in ASU 2016-13 |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract] | |
Segment Reporting | Segment Reporting An operating segment is defined as a component of an enterprise for which discrete financial information is available and is reviewed regularly by the Chief Operating Decision Maker (“CODM”), or decision-making group, to evaluate performance and make operating decisions. We have identified our CODM as two key executives—the Executive Chairman and the Chief Executive Officer (“CEO”). We have identified each homebuilding division as an operating segment. Our homebuilding operating segments have been aggregated into the reportable segments noted below because they are similar in the following regards: (1) economic characteristics; (2) housing products; (3) class of homebuyer; (4) regulatory environments; and (5) methods used to construct and sell homes. Our homebuilding reportable segments are as follows: • West (Arizona, California, Nevada, New Mexico, Oregon, Texas and Washington) • Mountain (Colorado, Idaho and Utah) • East (mid-Atlantic, which includes Maryland and Virginia, Florida and Tennessee) Our financial services business consists of the operations of the following operating segments: (1) HomeAmerican Mortgage Corporation (“HomeAmerican”); (2) Allegiant Insurance Company, Inc., A Risk Retention Group (“Allegiant”); (3) StarAmerican Insurance Ltd. (“StarAmerican”); (4) American Home Insurance Agency, Inc.; and (5) American Home Title and Escrow Company. Due to its contributions to consolidated pretax income, we consider HomeAmerican to be a reportable segment (“mortgage operations”). The remaining operating segments have been aggregated into one reportable segment (“other”) because they do not individually exceed 10 percent of: (1) consolidated revenue; (2) the greater of (a) the combined reported profit of all operating segments that did not report a loss or (b) the positive value of the combined reported loss of all operating segments that reported losses; or (3) consolidated assets. Corporate is a non-operating segment that develops and implements strategic initiatives and supports our operating divisions by centralizing key administrative functions such as finance, treasury, information technology, insurance, risk management, litigation and human resources. Corporate also provides the necessary administrative functions to support MDC as a publicly traded company. A portion of the expenses incurred by Corporate are allocated to the homebuilding operating segments based on their respective percentages of assets, and to a lesser degree, a portion of Corporate expenses are allocated to the financial services segments. A majority of Corporate’s personnel and resources are primarily dedicated to activities relating to the homebuilding segments, and, therefore, the balance of any unallocated Corporate expenses is included in the homebuilding operations section of our consolidated statements of operations and comprehensive income. The following table summarizes revenues for our homebuilding and financial services operations: Three Months Ended Nine Months Ended 2021 2020 2021 2020 (Dollars in thousands) Homebuilding West $ 729,777 $ 552,319 $ 2,194,071 $ 1,447,934 Mountain 379,041 347,095 1,104,391 886,619 East 148,883 101,135 368,870 249,839 Total homebuilding revenues $ 1,257,701 $ 1,000,549 $ 3,667,332 $ 2,584,392 Financial Services Mortgage operations $ 31,122 $ 28,548 $ 89,608 $ 67,536 Other 11,982 8,255 31,837 24,117 Total financial services revenues $ 43,104 $ 36,803 $ 121,445 $ 91,653 The following table summarizes pretax income (loss) for our homebuilding and financial services operations: Three Months Ended Nine Months Ended 2021 2020 2021 2020 (Dollars in thousands) Homebuilding West $ 120,284 $ 59,120 $ 330,390 $ 144,441 Mountain 55,386 48,053 165,296 111,372 East 15,410 6,020 34,091 9,993 Corporate (25,928) (11,543) (63,609) (29,566) Total homebuilding pretax income $ 165,152 $ 101,650 $ 466,168 $ 236,240 Financial Services Mortgage operations $ 21,214 $ 20,809 $ 61,341 $ 46,558 Other 6,326 3,559 15,037 3,420 Total financial services pretax income $ 27,540 $ 24,368 $ 76,378 $ 49,978 Total pretax income $ 192,692 $ 126,018 $ 542,546 $ 286,218 The following table summarizes total assets for our homebuilding and financial services operations. The assets in our West, Mountain and East segments consist primarily of inventory while the assets in our Corporate segment primarily include our cash and cash equivalents and deferred tax assets. The assets in our financial services segment consist mostly of cash and cash equivalents and mortgage loans held-for-sale. September 30, December 31, (Dollars in thousands) Homebuilding assets West $ 2,229,687 $ 1,855,567 Mountain 1,030,407 905,007 East 419,212 274,937 Corporate 816,577 470,909 Total homebuilding assets $ 4,495,883 $ 3,506,420 Financial services assets Mortgage operations $ 279,938 $ 279,649 Other 98,583 78,851 Total financial services assets $ 378,521 $ 358,500 Total assets $ 4,874,404 $ 3,864,920 |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Accounting Standards Codification ("ASC") Topic 260, Earnings per Share ("ASC 260") requires a company that has participating security holders (for example, holders of unvested restricted stock that have non-forfeitable dividend rights) to utilize the two-class method for calculating earnings per share (“EPS”) unless the treasury stock method results in lower EPS. The two-class method is an allocation of earnings/(loss) between the holders of common stock and a company’s participating security holders. Under the two-class method, earnings/(loss) for the reporting period are allocated between common shareholders and other security holders based on their respective rights to receive distributed earnings (i.e., dividends) and undistributed earnings (i.e., net income/(loss)). Our common shares outstanding are comprised of shareholder owned common stock and shares of unvested restricted stock held by participating security holders. Basic EPS is calculated by dividing income or loss attributable to common stockholders by the weighted average number of shares of common stock outstanding, excluding participating shares in accordance with ASC 260. To calculate diluted EPS, basic EPS is adjusted to include the effect of potentially dilutive stock options outstanding and contingently issuable equity awards. The table below shows our basic and diluted EPS calculations. Three Months Ended Nine Months Ended 2021 2020 2021 2020 (Dollars in thousands, except per share amounts) Numerator Net income $ 145,954 $ 98,938 $ 410,996 $ 220,094 Less: distributed earnings allocated to participating securities (155) (148) (446) (404) Less: undistributed earnings allocated to participating securities (602) (502) (1,668) (952) Net income attributable to common stockholders (numerator for basic earnings per share) 145,197 98,288 408,882 218,738 Add back: undistributed earnings allocated to participating securities 602 502 1,668 952 Less: undistributed earnings reallocated to participating securities (584) (488) (1,615) (929) Numerator for diluted earnings per share under two class method $ 145,215 $ 98,302 $ 408,935 $ 218,761 Denominator Weighted-average common shares outstanding 70,301,085 68,977,965 70,130,853 68,179,403 Add: dilutive effect of stock options 2,202,045 1,955,474 2,330,667 1,727,700 Add: dilutive effect of contingently issuable equity awards 296,881 157,464 308,912 260,340 Denominator for diluted earnings per share under two class method 72,800,011 71,090,903 72,770,432 70,167,443 Basic Earnings Per Common Share $ 2.07 $ 1.42 $ 5.83 $ 3.21 Diluted Earnings Per Common Share $ 1.99 $ 1.38 $ 5.62 $ 3.12 Diluted EPS for both the three and nine months ended September 30, 2021 excluded options to purchase 15,000 shares, respectively, because the effect of their inclusion would be anti-dilutive. Their were zero and 800,000 anti-dilutive options for the three and nine months ended September 30, 2020, respectively. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements ASC Topic 820, Fair Value Measurements (“ASC 820”), defines fair value, establishes guidelines for measuring fair value and expands disclosures regarding fair value measurements. ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs, other than quoted prices in active markets, that are either directly or indirectly observable; and Level 3, defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions. The following table sets forth the fair values and methods used for measuring the fair values of financial instruments on a recurring basis: Fair Value Financial Instrument Hierarchy September 30, December 31, (Dollars in thousands) Mortgage loans held-for-sale, net Level 2 $ 248,921 $ 232,556 The following methods and assumptions were used to estimate the fair value of each class of financial instruments as of September 30, 2021 and December 31, 2020. Cash and cash equivalents (excluding debt securities with an original maturity of three months or less), restricted cash, trade and other receivables, prepaids and other assets, accounts payable, accrued and other liabilities and borrowings on our revolving credit facility. Fair value approximates carrying value. Equity securities . Our equity securities consisted of holdings in common stock and exchange traded funds and were recorded at fair value with all changes in fair value recorded to other income (expense), net in the financial services section of our consolidated statements of operations and comprehensive income. The following table reconciles the net gain (loss) recognized during the three and nine months ended September 30, 2021 and 2020 on equity securities to the unrealized gain recognized during the periods on equity securities still held at the reporting date. Three Months Ended Nine Months Ended 2021 2020 2021 2020 (Dollars in thousands) Net gain (loss) recognized during the period on equity securities $ — $ — $ — $ (8,285) Less: Net gain (loss) recognized during the period on equity securities sold during the period — — — (8,285) Unrealized gain (loss) loss recognized during the reporting period on equity securities still held at the reporting date $ — $ — $ — $ — Mortgage loans held-for-sale, net. Our mortgage loans held-for-sale, which are measured at fair value on a recurring basis, include (1) mortgage loans held-for-sale that are under commitments to sell and (2) mortgage loans held-for-sale that are not under commitments to sell. At September 30, 2021 and December 31, 2020, we had $142.2 million and $137.3 million, respectively, of mortgage loans held-for-sale under commitments to sell. The fair value for those loans was based on quoted market prices for those mortgage loans, which are Level 2 fair value inputs. At September 30, 2021 and December 31, 2020, we had $106.7 million and $95.3 million, respectively, of mortgage loans held-for-sale that were not under commitments to sell. The fair value for those loans was primarily based upon the estimated market price received from an outside party, which is a Level 2 fair value input. Gains on sales of mortgage loans, net, are included as a component of revenues in the financial services section of our consolidated statements of operations and comprehensive income. For the three and nine months ended September 30, 2021, we recorded net gains on the sales of mortgage loans of $23.6 million and $73.5 million, respectively, compared to $26.8 million and $64.3 million for the same periods in the prior year, respectively. Mortgage Repurchase Facility. The debt associated with our mortgage repurchase facility (see Note 18 for further discussion) is at floating rates that approximate current market rates and have relatively short-term maturities, generally within 30 days. The fair value approximates carrying value and is based on Level 2 inputs. Senior Notes . The estimated values of the senior notes in the following table are based on Level 2 inputs, which primarily reflect estimated prices for our senior notes that were provided by multiple sources. September 30, 2021 December 31, 2020 Carrying Fair Value Carrying Fair Value (Dollars in thousands) $250 million 5.500% Senior Notes due January 2024, net $ 126,071 $ 137,109 $ 249,233 $ 275,463 $300 million 3.850% Senior Notes due January 2030, net 297,638 322,680 297,458 331,384 $350 million 2.500% Senior Notes due January 2031, net 347,055 341,457 — — $500 million 6.000% Senior Notes due January 2043, net 490,851 625,275 490,700 667,288 $350 million 3.966% Senior Notes due August 2061, net 346,043 334,664 — — Total $ 1,607,658 $ 1,761,185 $ 1,037,391 $ 1,274,135 During the three months ended September 30, 2021, we accelerated the retirement of $123.6 million of our 5.500% senior notes scheduled to mature in January 2024 through a cash tender offer. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories The following table sets forth, by reportable segment, information relating to our homebuilding inventories: September 30, December 31, (Dollars in thousands) Housing completed or under construction: West $ 1,077,320 $ 902,842 Mountain 636,090 464,501 East 234,801 119,244 Subtotal 1,948,211 1,486,587 Land and land under development: West 974,380 822,504 Mountain 340,702 391,054 East 149,521 132,085 Subtotal 1,464,603 1,345,643 Total inventories $ 3,412,814 $ 2,832,230 Our inventories are primarily associated with communities where we intend to construct and sell homes, including models. Costs capitalized to land and land under development primarily include: (1) land costs; (2) land development costs; (3) entitlement costs; (4) capitalized interest; (5) engineering fees; and (6) title insurance, real property taxes and closing costs directly related to the purchase of the land parcel. Components of housing completed or under construction primarily include: (1) land costs transferred from land and land under development; (2) direct construction costs associated with a house; (3) real property taxes, engineering fees, permits and other fees; (4) capitalized interest; and (5) indirect construction costs, which include field construction management salaries and benefits, utilities and other construction related costs. Land costs are transferred from land and land under development to housing completed or under construction at the point in time that construction of a home on an owned lot begins. In accordance with ASC Topic 360, Property, Plant, and Equipment (“ASC 360”), homebuilding inventories, excluding those classified as held for sale, are carried at cost unless events and circumstances indicate that the carrying value of the underlying subdivision may not be recoverable. We evaluate inventories for impairment at each quarter end on a subdivision level basis as each such subdivision represents the lowest level of identifiable cash flows. In making this determination, we review, among other things, the following for each subdivision: • actual and trending “Homebuilding Margin” (which is defined as home sale revenues less home cost of sales and all incremental costs associated directly with the subdivision, including sales commissions and marketing costs); • forecasted Homebuilding Margin for homes in backlog; • actual and trending net home orders; • homes available for sale; • market information for each sub-market, including competition levels, home foreclosure levels, the size and style of homes currently being offered for sale and lot size; and • known or probable events indicating that the carrying value may not be recoverable. If events or circumstances indicate that the carrying value of our inventory may not be recoverable, assets are reviewed for impairment by comparing the undiscounted estimated future cash flows from an individual subdivision (including capitalized interest) to its carrying value. If the undiscounted future cash flows are less than the subdivision’s carrying value, the carrying value of the subdivision is written down to its then estimated fair value. We generally determine the estimated fair value of each subdivision by determining the present value of the estimated future cash flows at discount rates, which are Level 3 inputs, that are commensurate with the risk of the subdivision under evaluation. The evaluation for the recoverability of the carrying value of the assets for each individual subdivision can be impacted significantly by our estimates of future home sale revenues, home construction costs, and development costs per home, all of which are Level 3 inputs. If land is classified as held for sale, we measure it in accordance with ASC 360 at the lower of the carrying value or fair value less estimated costs to sell. In determining fair value, we primarily rely upon the most recent negotiated price, which is a Level 2 input. If a negotiated price is not available, we will consider several factors including, but not limited to, current market conditions, recent comparable sales transactions and market analysis studies, which are considered Level 3 inputs. If the fair value less estimated costs to sell is lower than the current carrying value, the land is impaired down to its estimated fair value less costs to sell. |
Capitalization of Interest
Capitalization of Interest | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Capitalization of Interest | Capitalization of Interest We capitalize interest to inventories during the period of development in accordance with ASC Topic 835, Interest (“ASC 835”). Homebuilding interest capitalized as a cost of inventories is included in cost of sales during the period that related units or lots are delivered. To the extent our homebuilding debt exceeds our qualified assets as defined in ASC 835, we expense a portion of the interest incurred. Qualified homebuilding assets consist of all lots and homes, excluding finished unsold homes or finished models, within projects that are actively selling or under development. The table set forth below summarizes homebuilding interest activity. For all periods presented below, our qualified assets exceeded our homebuilding debt and as such, all interest incurred has been capitalized. Three Months Ended Nine Months Ended 2021 2020 2021 2020 (Dollars in thousands) Homebuilding interest incurred $ 19,108 $ 14,799 $ 53,849 $ 46,427 Less: Interest capitalized (19,108) (14,799) (53,849) (46,427) Homebuilding interest expensed $ — $ — $ — $ — Interest capitalized, beginning of period $ 54,351 $ 56,929 $ 52,777 $ 55,310 Plus: Interest capitalized during period 19,108 14,799 53,849 46,427 Less: Previously capitalized interest included in home cost of sales (16,024) (16,511) (49,191) (46,520) Interest capitalized, end of period $ 57,435 $ 55,217 $ 57,435 $ 55,217 |
Leases
Leases | 9 Months Ended |
Sep. 30, 2021 | |
Leases [Abstract] | |
Leases | Leases We lease certain property, land and equipment, the majority of which comprise property related leases to provide office space where we operate our business. Leases with an initial term of 12 months or less are not recorded on the balance sheet. We recognize lease expense for these leases on a straight-line basis over the lease term. Our property related leases typically have terms of between three The property related lease for the Company’s headquarters in Denver, Colorado is ten years in length with an expiration date of October 31, 2026 and contains a ten year option to extend the term of the lease through 2036. This option has been excluded from our calculation of the right-of-use asset and lease liability as it is not currently considered reasonably certain that the option will be exercised. Operating lease expense is included as a component of selling, general and administrative expenses in the homebuilding and expenses in the financial services sections of our consolidated statements of operations and comprehensive income, respectively. Components of operating lease expense were as follows: Three Months Ended Nine Months Ended 2021 2020 2021 2020 (Dollars in thousands) Operating lease cost 1 $ 2,018 $ 2,083 $ 5,990 $ 6,249 Less: Sublease income (Note 19) (39) (38) (117) (114) Net lease cost $ 1,979 $ 2,045 $ 5,873 $ 6,135 1 Includes variable lease costs, which are immaterial. Supplemental cash flow information related to leases was as follows: Three Months Ended Nine Months Ended 2021 2020 2021 2020 (Dollars in thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 1,900 $ 1,792 $ 5,645 $ 5,439 Leased assets obtained in exchange for new operating lease liabilities $ — $ — $ 830 $ 4,050 Weighted-average remaining lease term and discount rate for operating leases were as follows: September 30, 2021 Weighted-average remaining lease term (in years) 4.7 Weighted-average discount rate 5.5 % Maturities of operating lease liabilities were as follows: Year Ended December 31, (Dollars in thousands) 2021 (excluding the nine months ended September 30, 2021) $ 1,269 2022 7,430 2023 6,416 2024 5,717 2025 5,493 Thereafter 4,869 Total operating lease payments 1 $ 31,194 Less: Interest 3,760 Present value of operating lease liabilities 2 $ 27,434 _______________________________________________________________ 1 Operating lease payments exclude $2.5 million of legally binding lease payments for leases signed but not yet commenced. 2 Homebuilding and financial services operating lease liabilities of $27.1 million and $0.4 million, respectively, are included as a component of accrued and other liabilities and accounts payable and accrued liabilities, respectively, in the homebuilding and financial services section of our consolidated balance sheet at September 30, 2021. |
Homebuilding Prepaids and Other
Homebuilding Prepaids and Other Assets | 9 Months Ended |
Sep. 30, 2021 | |
Prepaid Expense and Other Assets [Abstract] | |
Homebuilding Prepaids and Other Assets | Homebuilding Prepaids and Other Assets The following table sets forth the components of homebuilding prepaids and other assets: September 30, December 31, (Dollars in thousands) Land option deposits $ 47,194 $ 29,987 Operating lease right-of-use asset 26,058 29,226 Prepaids 18,884 26,929 Deferred debt issuance costs on revolving credit facility, net 7,620 9,043 Goodwill 6,008 6,008 Other 96 492 Total prepaids and other assets $ 105,860 $ 101,685 |
Homebuilding Accrued and Other
Homebuilding Accrued and Other Liabilities and Financial Services Accounts Payable and Accrued Liabilities | 9 Months Ended |
Sep. 30, 2021 | |
Accounts Payable and Accrued Liabilities [Abstract] | |
Homebuilding Accrued and Other Liabilities and Financial Services Accounts Payable and Accrued Liabilities | Homebuilding Accrued and Other Liabilities and Financial Services Accounts Payable and Accrued Liabilities The following table sets forth information relating to homebuilding accrued and other liabilities: September 30, December 31, (Dollars in thousands) Customer and escrow deposits $ 88,441 $ 67,022 Accrued compensation and related expenses 67,079 56,682 Warranty accrual (Note 11) 36,120 33,664 Lease liability (Note 8) 27,052 30,221 Accrued interest 16,626 27,650 Land development and home construction accruals 15,469 10,824 Construction defect claim reserves (Note 12) 8,596 8,479 Income taxes payable 1,771 8,285 Other accrued liabilities 73,558 57,908 Total accrued and other liabilities $ 334,712 $ 300,735 The following table sets forth information relating to financial services accounts payable and accrued liabilities: September 30, December 31, (Dollars in thousands) Insurance reserves (Note 12) $ 70,403 $ 61,575 Accounts payable and other accrued liabilities 23,477 34,055 Total accounts payable and accrued liabilities $ 93,880 $ 95,630 |
Warranty Accrual
Warranty Accrual | 9 Months Ended |
Sep. 30, 2021 | |
Product Warranties Disclosures [Abstract] | |
Warranty Accrual | Warranty Accrual Our homes are sold with limited third-party warranties and, under our agreement with the issuer of the third-party warranties, we are responsible for performing all of the work for the first two years of the warranty coverage and paying for substantially all of the work required to be performed during years three ten Our warranty accrual is included in accrued and other liabilities in the homebuilding section of our consolidated balance sheets and adjustments to our warranty accrual are recorded as an increase or reduction to home cost of sales in the homebuilding section of our consolidated statements of operations and comprehensive income. The table set forth below summarizes accrual, adjustment and payment activity related to our warranty accrual for the three and nine months ended September 30, 2021 and 2020. The warranty accrual increased due to the increase in the number of home closings. Three Months Ended Nine Months Ended 2021 2020 2021 2020 (Dollars in thousands) Balance at beginning of period $ 35,017 $ 30,458 $ 33,664 $ 31,386 Expense provisions 5,618 4,493 15,706 11,595 Cash payments (4,834) (2,683) (13,569) (8,713) Adjustments 319 (171) 319 (2,171) Balance at end of period $ 36,120 $ 32,097 $ 36,120 $ 32,097 |
Insurance and Construction Defe
Insurance and Construction Defect Claim Reserves | 9 Months Ended |
Sep. 30, 2021 | |
Insurance [Abstract] | |
Insurance and Construction Defect Claim Reserves | Insurance and Construction Defect Claim Reserves The establishment of reserves for estimated losses associated with insurance policies issued by Allegiant and re-insurance agreements issued by StarAmerican are based on actuarial studies that include known facts and interpretations of circumstances, including our experience with similar cases and historical trends involving claim payment patterns, pending levels of unpaid claims, product mix or concentration, claim severity, frequency patterns depending on the business conducted, and changing regulatory and legal environments. It is possible that changes in the insurance payment experience used in estimating our ultimate insurance losses could have a material impact on our insurance reserves. The establishment of reserves for estimated losses to be incurred by our homebuilding subsidiaries associated with: (1) the self-insured retention (“SIR”) portion of construction defect claims that are expected to be covered under insurance policies with Allegiant and (2) the entire cost of any construction defect claims that are not expected to be covered by insurance policies with Allegiant, are based on actuarial studies that include known facts similar to those for our insurance reserves. It is possible that changes in the payment experience used in estimating our ultimate losses for construction defect claims could have a material impact on our reserves. The table set forth below summarizes our insurance and construction defect claim reserves activity for the three and nine months ended September 30, 2021 and 2020. These reserves are included as a component of accounts payable and accrued liabilities and accrued and other liabilities in the financial services and homebuilding sections, respectively, of the consolidated balance sheets. Three Months Ended Nine Months Ended 2021 2020 2021 2020 (Dollars in thousands) Balance at beginning of period $ 76,286 $ 63,881 $ 70,054 $ 60,415 Expense provisions 4,776 4,058 14,447 10,562 Cash payments, net of recoveries (2,063) (859) (5,502) (3,897) Balance at end of period $ 78,999 $ 67,080 $ 78,999 $ 67,080 In the ordinary course of business, we make payments from our insurance and construction defect claim reserves to settle litigation claims arising from our homebuilding activities. These payments are irregular in both their timing and their magnitude. As a result, the cash payments, net of recoveries shown for the three and nine months ended September 30, 2021 and 2020 are not necessarily indicative of what future cash payments will be for subsequent periods. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income TaxesOur overall effective income tax rates were 24.3% and 24.2% for the three and nine months ended September 30, 2021 and 21.5% and 23.1% for the three and nine months ended September 30, 2020, respectively. The rates for the three and nine months ended September 30, 2021 resulted in income tax expense of $46.7 million and $131.5 million, respectively, compared to income tax expense of $27.1 million and $66.1 million for the three and nine months ended September 30, 2020, respectively. The year-over-year increase in our effective tax rate for the three and nine months ended September 30, 2021, is primarily due to a decrease in tax windfalls recognized upon the vesting and exercise of equity awards, which is partially offset by a year-over-year increase in home energy credits. |
Senior Notes
Senior Notes | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Senior Notes | Senior Notes The carrying values of our senior notes as of September 30, 2021 and December 31, 2020, net of any unamortized debt issuance costs or discount, were as follows: September 30, December 31, (Dollars in thousands) 5.500% Senior Notes due January 2024, net $ 126,071 $ 249,233 3.850% Senior Notes due January 2030, net 297,638 297,458 2.500% Senior Notes due January 2031, net 347,055 — 6.000% Senior Notes due January 2043, net 490,851 490,700 3.966% Senior Notes due August 2061, net 346,043 — Total $ 1,607,658 $ 1,037,391 Our senior notes are not secured and, while the senior note indentures contain some restrictions on secured debt and other transactions, they do not contain financial covenants. Our senior notes are fully and unconditionally guaranteed on an unsecured basis, jointly and severally, by most of our homebuilding segment subsidiaries. In January 2021, the Company issued $350.0 million of 2.500% senior notes due January 2031 at 100% of par. In August 2021, the Company issued $350.0 million of 3.966% senior notes due August 2061 at 100% of par. We used the net proceeds for general corporate purposes, which included the cash tender offer discussed below. In September 2021, we accelerated the retirement of $123.6 million of our 5.500% senior notes scheduled to mature in January 2024 through a cash tender offer. The retirement resulted in a loss of $12.2 million, which included the write-off of debt issuance costs and transaction fees. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Stock-based Compensation | Stock-Based Compensation The following table sets forth share-based award expense activity for the three and nine months ended September 30, 2021 and 2020, which is included as a component of selling, general and administrative expenses and expenses in the homebuilding and financial services sections of our consolidated statements of operations and comprehensive income, respectively: Three Months Ended Nine Months Ended 2021 2020 2021 2020 (Dollars in thousands) Stock option grants expense $ 600 $ 814 $ 2,189 $ 2,026 Restricted stock awards expense 3,026 2,271 6,947 4,841 Performance share units expense 4,293 5,523 17,728 11,669 Total stock-based compensation $ 7,919 $ 8,608 $ 26,864 $ 18,536 Additional detail on the performance share units ("PSUs") expense is included below: 2018 PSU Grant s. The 2018 PSU awards vested on April 29, 2021. For the nine months ended September 30, 2021, the Company recorded share-based award expense of $1.3 million related to these awards. For the three and nine months ended September 30, 2020, the Company recorded share-based award expense of $1.3 million and $6.0 million, respectively, related to these awards. 2019 PSU Grant s. As of September 30, 2021, the Company recorded the required share-based award expense related to the awards of $1.8 million and $5.5 million for the three and nine months ended September 30, 2021, based on its assessment of the probability for achievement of the performance targets. For each of the three and nine months ended September 30, 2020, the Company recorded share-based award expense of $4.2 million, respectively, related to these awards. 2020 PSU Grant s. As of September 30, 2021, the Company recorded the required share-based award expense related to the awards of $2.5 million and $10.9 million for the three and nine months ended September 30, 2021, based on its assessment of the probability for achievement of the performance targets. 2021 PSU Grants. The 2021 PSUs were granted on July 14, 2021 and included a target number of share units of 397,500. The grant date fair value was $44.35 per share unit. As of September 30, 2021, the Company concluded that achievement of any of the performance metrics had not met the level of probability required to record compensation expense and as such, no expense related to these awards was recognized. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Surety Bonds and Letters of Credit. We are required to obtain surety bonds and letters of credit in support of our obligations for land development and subdivision improvements, homeowner association dues, warranty work, contractor license fees and earnest money deposits. At September 30, 2021, we had outstanding surety bonds and letters of credit totaling $330.9 million and $169.7 million, respectively, including $130.0 million in letters of credit issued by HomeAmerican. The estimated cost to complete obligations related to these bonds and letters of credit were approximately $159.0 million and $113.9 million, respectively. All letters of credit as of September 30, 2021, excluding those issued by HomeAmerican, were issued under our unsecured revolving credit facility (see Note 18 for further discussion of the revolving credit facility). We expect that the obligations secured by these performance bonds and letters of credit generally will be performed in the ordinary course of business and in accordance with the applicable contractual terms. To the extent that the obligations are performed, the related performance bonds and letters of credit should be released and we should not have any continuing obligations. However, in the event any such performance bonds or letters of credit are called, our indemnity obligations could require us to reimburse the issuer of the performance bond or letter of credit. We have made no material guarantees with respect to third-party obligations. Litigation. Due to the nature of the homebuilding business, we have been named as defendants in various claims, complaints and other legal actions arising in the ordinary course of business, including product liability claims and claims associated with the sale and financing of homes. In the opinion of management, the outcome of these ordinary course matters will not have a material adverse effect upon our financial condition, results of operations or cash flows. Lot Option Contracts . In the ordinary course of business, we enter into lot option purchase contracts (“Option Contracts”), generally through a deposit of cash or a letter of credit, for the right to purchase land or lots at a future point in time with predetermined terms. The use of such land option and other contracts generally allow us to reduce the risks associated with direct land ownership and development, reduces our capital and financial commitments, and minimizes the amount of land inventories on our consolidated balance sheets. In certain cases, these contracts will be settled shortly following the end of the period. Our obligation with respect to Option Contracts is generally limited to forfeiture of the related deposits. At September 30, 2021, we had cash deposits and letters of credit totaling $40.6 million and $14.5 million, respectively, at risk associated with the option to purchase 12,375 lots. Coronavirus/COVID-19 Pandemic. In response to the pandemic, many state and local governments instituted restrictions that substantially limited the operations of non-essential businesses and the activities of individuals. While many of these restrictions have been or are in the process of being eased, there is still significant uncertainty as a result of the pandemic and its potential to continue to negatively impact the U.S. economy and consumer confidence. We continue to construct, market and sell homes in all markets in which we operate, but increased restrictions could have a negative impact on traffic at our sales centers and model homes, cancellation rates and our ability to physically construct homes. While the extent to which the pandemic will impact our financial results in the coming periods depends on future developments, including whether there are additional outbreaks of COVID-19 and the actions taken to contain or address the virus, the pandemic and its associated impact on the U.S. economy and consumer confidence could have a material impact to the Company’s future results of operations, financial condition and cash flows. |
Derivative Financial Instrument
Derivative Financial Instruments | 9 Months Ended |
Sep. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Derivative Financial Instruments The derivative instruments we utilize in the normal course of business are interest rate lock commitments and forward sales of mortgage-backed securities, both of which typically are short-term in nature. Forward sales of mortgage-backed securities are utilized to hedge changes in fair value of our interest rate lock commitments as well as mortgage loans held-for-sale not under commitments to sell. For forward sales of mortgage-backed securities, as well as interest rate lock commitments that are still outstanding at the end of a reporting period, we record the changes in fair value of the derivatives in revenues in the financial services section of our consolidated statements of operations and comprehensive income with an offset to other assets or accounts payable and accrued liabilities in the financial services section of our consolidated balance sheets, depending on the nature of the change. At September 30, 2021, we had interest rate lock commitments with an aggregate principal balance of $305.2 million. Additionally, we had $103.0 million of mortgage loans held-for-sale at September 30, 2021 that had not yet been committed to a mortgage purchaser. In order to hedge the changes in fair value of our interest rate lock commitments and mortgage loans held-for-sale that had not yet been committed to a mortgage purchaser, we had forward sales of securities totaling $264.5 million at September 30, 2021. For the three and nine months ended September 30, 2021, we recorded net gain (loss) on derivatives of $0.6 million and $1.6 million, respectively, in revenues in the financial services section of our consolidated statements of operations and comprehensive income, compared to net gains of $1.6 million and $4.9 million for the same periods in 2020. |
Lines of Credit
Lines of Credit | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Lines of Credit | Lines of Credit Revolving Credit Facility. We have an unsecured revolving credit agreement (“Revolving Credit Facility”) with a group of lenders which may be used for general corporate purposes. This agreement was amended on December 28, 2020 to (1) increase the aggregate commitment from $1.0 billion to $1.2 billion (the “Commitment”), (2) extend the Revolving Credit Facility maturity of $1.125 billion of the Commitments to December 18, 2025 with the remaining Commitment continuing to terminate on December 18, 2023 and (3) provide that the aggregate amount of the commitments may increase to an amount not to exceed $1.7 billion upon our request, subject to receipt of additional commitments from existing or additional lenders and, in the case of additional lenders, the consent of the co-administrative agents. As defined in the Revolving Credit Facility, interest rates on base rate borrowings are equal to the highest of (1) 0.0%, (2) a prime rate, (3) a federal funds effective rate plus 1.50%, and (4) a specified eurocurrency rate plus 1.00% and, in each case, plus a margin that is determined based on our credit ratings and leverage ratio. Interest rates on eurocurrency borrowings are equal to a specified eurocurrency rate plus a margin that is determined based on our credit ratings and leverage ratio. At any time at which our leverage ratio, as of the last day of the most recent calendar quarter, exceeds 55%, the aggregate principal amount of all consolidated senior debt borrowings outstanding may not exceed the borrowing base. There is no borrowing base requirement if our leverage ratio, as of the last day of the most recent calendar quarter, is 55% or less. The Revolving Credit Facility is fully and unconditionally guaranteed, jointly and severally, by most of our homebuilding segment subsidiaries. The facility contains various representations, warranties and covenants that we believe are customary for agreements of this type. The financial covenants include a consolidated tangible net worth test and a leverage test, along with a consolidated tangible net worth covenant, all as defined in the Revolving Credit Facility. A failure to satisfy the foregoing tests does not constitute an event of default, but can trigger a “term-out” of the facility. A breach of the consolidated tangible net worth covenant (but not the consolidated tangible net worth test) or a violation of anti-corruption or sanctions laws would result in an event of default. The Revolving Credit Facility is subject to acceleration upon certain specified events of default, including breach of the consolidated tangible net worth covenant, a violation of anti-corruption or sanctions laws, failure to make timely payments, breaches of certain representations or covenants, failure to pay other material indebtedness, or another person becoming beneficial owner of 50% or more of our outstanding common stock. We believe we were in compliance with the representations, warranties and covenants included in the Revolving Credit Facility as of September 30, 2021. We incur costs associated with unused commitment fees pursuant to the terms of the Revolving Credit Facility. At September 30, 2021 and December 31, 2020, there were $39.7 million and $25.1 million, respectively, in letters of credit outstanding, which reduced the amounts available to be borrowed under the Revolving Credit Facility. At September 30, 2021 and December 31, 2020, we had $10.0 million and $10.0 million, respectively, outstanding under the Revolving Credit Facility. As of September 30, 2021, availability under the Revolving Credit Facility was approximately $1.15 billion. Mortgage Repurchase Facility. HomeAmerican has a Master Repurchase Agreement (the “Mortgage Repurchase Facility”) with U.S. Bank National Association (“USBNA”). The Mortgage Repurchase Facility provides liquidity to HomeAmerican by providing for the sale of up to an aggregate of $75 million (subject to increase by up to $75 million under certain conditions) of eligible mortgage loans to USBNA with an agreement by HomeAmerican to repurchase the mortgage loans at a future date. Until such mortgage loans are transferred back to HomeAmerican, the documents relating to such loans are held by USBNA, as custodian, pursuant to the Custody Agreement (“Custody Agreement”), dated as of November 12, 2008, by and between HomeAmerican and USBNA. In the event that an eligible mortgage loan becomes ineligible, as defined under the Mortgage Repurchase Facility, HomeAmerican may be required to repurchase the ineligible mortgage loan immediately. The Mortgage Repurchase Facility was amended on September 24, 2020, March 25, 2021 and May 20, 2021 to adjust the commitments to purchase for specific time periods. As part of the amendments, the commitments to purchase (subject to increase by up to $75 million under certain conditions) were increased as follows: (1) $200 million for the periods December 22, 2020 through February 4, 2021 and December 21, 2021 through February 3, 2022, (2) $175 million for the periods March 25, 2021 through April 22, 2021, June 23, 2021 through July 22, 2021 and September 22, 2021 through October 21, 2021 and (3) $150 million for the period March 23, 2022 through April 21, 2022. The Mortgage Repurchase Facility terminates on May 19, 2022. The maximum aggregate commitment of the Mortgage Repurchase Facility was temporarily increased by $75 million on September 27, 2021 effective through October 21, 2021. The maximum aggregate commitment of the Mortgage Repurchase Facility was temporarily increased by $50 million on December 28, 2020 effective through January 27, 2021. At September 30, 2021 and December 31, 2020, HomeAmerican had $215.8 million and $202.4 million, respectively, of mortgage loans that HomeAmerican was obligated to repurchase under the Mortgage Repurchase Facility. Mortgage loans that HomeAmerican is obligated to repurchase under the Mortgage Repurchase Facility are accounted for as a debt financing arrangement and are reported as mortgage repurchase facility in the consolidated balance sheets. Advances under the Mortgage Repurchase Facility carry a price range that is based on a LIBOR rate or successor benchmark rate. The Mortgage Repurchase Facility contains various representations, warranties and affirmative and negative covenants that we believe are customary for agreements of this type. The negative covenants include, among others, (i) a minimum Adjusted Tangible Net Worth requirement, (ii) a maximum Adjusted Tangible Net Worth ratio, (iii) a minimum adjusted net income requirement, and (iv) a minimum Liquidity requirement. The foregoing capitalized terms are defined in the Mortgage Repurchase Facility. We believe HomeAmerican was in compliance with the representations, warranties and covenants included in the Mortgage Repurchase Facility as of September 30, 2021. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party TransactionsThe Company has a sublease agreement with CVentures, Inc. Larry A. Mizel, the Executive Chairman of the Company, is the President of CVentures, Inc. The sublease is for office space that CVentures, Inc. has continuously leased from the Company since 2005. The current sublease term commenced November 1, 2016 and will continue through October 31, 2026. The sublease agreement is for approximately 5,437 rentable square feet at a base rent that increases over the term from $26.50 to $31.67 per rentable square foot per year. The sublease rent is an allocation of the rent under the master lease agreement based on the sublease square footage. |
Supplemental Guarantor Informat
Supplemental Guarantor Information | 9 Months Ended |
Sep. 30, 2021 | |
Condensed Financial Information Disclosure [Abstract] | |
Supplemental Guarantor Information | Supplemental Guarantor Information Our senior notes are fully and unconditionally guaranteed on an unsecured basis, jointly and severally, by the following subsidiaries (collectively, the "Guarantor Subsidiaries"), which are 100%-owned subsidiaries of the Company: • M.D.C. Land Corporation • RAH of Florida, Inc. • Richmond American Construction, Inc. • Richmond American Construction NM, Inc. (formerly known as Richmond American Homes Five, Inc.) • Richmond American Homes of Arizona, Inc. • Richmond American Homes of Colorado, Inc. • Richmond American Homes of Florida, LP • Richmond American Homes of Idaho, Inc. (formerly known as Richmond American Homes of Illinois, Inc.) • Richmond American Homes of Maryland, Inc. • Richmond American Homes of Nevada, Inc. • Richmond American Homes of New Mexico, Inc. (formerly known as Richmond American Homes Three, Inc.) • Richmond American Homes of Oregon, Inc. • Richmond American Homes of Pennsylvania, Inc. • Richmond American Homes of Tennessee, Inc. (formerly known as Richmond American Homes of New Jersey, Inc.) • Richmond American Homes of Texas, Inc. (formerly known as Richmond American Homes Four, Inc.) • Richmond American Homes of Utah, Inc. • Richmond American Homes of Virginia, Inc. • Richmond American Homes of Washington, Inc. The senior note indentures do not provide for a suspension of the guarantees. Other than for the senior notes due 2061, the senior note indentures, provide that any Guarantor may be released from its guarantee so long as (1) no default or event of default exists or would result from release of such guarantee, (2) the Guarantor being released has consolidated net worth of less than 5% of the Company’s consolidated net worth as of the end of the most recent fiscal quarter, (3) the Guarantors released from their guarantees in any year-end period comprise in the aggregate less than 10% (or 15% if and to the extent necessary to permit the cure of a default) of the Company’s consolidated net worth as of the end of the most recent fiscal quarter, (4) such release would not have a material adverse effect on the homebuilding business of the Company and its subsidiaries and (5) the Guarantor is released from its guarantee(s) under all Specified Indebtedness (other than by reason of payment under its guarantee of Specified Indebtedness). The indenture for the senior notes due 2061 provides that, if a Guarantor is released under its guarantees of our credit facilities or other publicly traded debt securities, the Guarantor will also be released under its guarantee of the senior notes due 2061. Upon delivery of an officers’ certificate and an opinion of counsel stating that all conditions precedent provided for in the indenture relating to such transactions have been complied with and the release is authorized, the guarantee will be automatically and unconditionally released. “Specified Indebtedness” means indebtedness under the senior notes, the Company’s Indenture dated as of December 3, 2002, the Revolving Credit Facility, and any refinancing, extension, renewal or replacement of any of the foregoing. As the combined assets, liabilities and results of operations of M.D.C. Holdings, Inc. and the Guarantor Subsidiaries (the “Obligor Group”) are not materially different from those in the homebuilding section of our consolidated balance sheets and consolidated statements of operations and comprehensive income, separate summarized financial information of the Obligor Group has not been included. As of September 30, 2021 and December 31, 2020, amounts due to non-guarantor subsidiaries from the Obligor Group totaled $61.0 million and $65.8 million, respectively. |
Recently Issued Accounting St_2
Recently Issued Accounting Standards (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Adoption of New Accounting Standards | Adoption of New Accounting Standards In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-13, Financial Instruments—Credit Losses (Topic 326 ): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which requires measurement and recognition of expected credit losses for financial assets held. The amendments in ASU 2016-13 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract] | |
Reconciliation of Revenue from Segments to Consolidated | The following table summarizes revenues for our homebuilding and financial services operations: Three Months Ended Nine Months Ended 2021 2020 2021 2020 (Dollars in thousands) Homebuilding West $ 729,777 $ 552,319 $ 2,194,071 $ 1,447,934 Mountain 379,041 347,095 1,104,391 886,619 East 148,883 101,135 368,870 249,839 Total homebuilding revenues $ 1,257,701 $ 1,000,549 $ 3,667,332 $ 2,584,392 Financial Services Mortgage operations $ 31,122 $ 28,548 $ 89,608 $ 67,536 Other 11,982 8,255 31,837 24,117 Total financial services revenues $ 43,104 $ 36,803 $ 121,445 $ 91,653 |
Reconciliation of Operating Profit (Loss) from Segments to Consolidated | The following table summarizes pretax income (loss) for our homebuilding and financial services operations: Three Months Ended Nine Months Ended 2021 2020 2021 2020 (Dollars in thousands) Homebuilding West $ 120,284 $ 59,120 $ 330,390 $ 144,441 Mountain 55,386 48,053 165,296 111,372 East 15,410 6,020 34,091 9,993 Corporate (25,928) (11,543) (63,609) (29,566) Total homebuilding pretax income $ 165,152 $ 101,650 $ 466,168 $ 236,240 Financial Services Mortgage operations $ 21,214 $ 20,809 $ 61,341 $ 46,558 Other 6,326 3,559 15,037 3,420 Total financial services pretax income $ 27,540 $ 24,368 $ 76,378 $ 49,978 Total pretax income $ 192,692 $ 126,018 $ 542,546 $ 286,218 |
Reconciliation of Assets from Segment to Consolidated | The following table summarizes total assets for our homebuilding and financial services operations. The assets in our West, Mountain and East segments consist primarily of inventory while the assets in our Corporate segment primarily include our cash and cash equivalents and deferred tax assets. The assets in our financial services segment consist mostly of cash and cash equivalents and mortgage loans held-for-sale. September 30, December 31, (Dollars in thousands) Homebuilding assets West $ 2,229,687 $ 1,855,567 Mountain 1,030,407 905,007 East 419,212 274,937 Corporate 816,577 470,909 Total homebuilding assets $ 4,495,883 $ 3,506,420 Financial services assets Mortgage operations $ 279,938 $ 279,649 Other 98,583 78,851 Total financial services assets $ 378,521 $ 358,500 Total assets $ 4,874,404 $ 3,864,920 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | To calculate diluted EPS, basic EPS is adjusted to include the effect of potentially dilutive stock options outstanding and contingently issuable equity awards. The table below shows our basic and diluted EPS calculations. Three Months Ended Nine Months Ended 2021 2020 2021 2020 (Dollars in thousands, except per share amounts) Numerator Net income $ 145,954 $ 98,938 $ 410,996 $ 220,094 Less: distributed earnings allocated to participating securities (155) (148) (446) (404) Less: undistributed earnings allocated to participating securities (602) (502) (1,668) (952) Net income attributable to common stockholders (numerator for basic earnings per share) 145,197 98,288 408,882 218,738 Add back: undistributed earnings allocated to participating securities 602 502 1,668 952 Less: undistributed earnings reallocated to participating securities (584) (488) (1,615) (929) Numerator for diluted earnings per share under two class method $ 145,215 $ 98,302 $ 408,935 $ 218,761 Denominator Weighted-average common shares outstanding 70,301,085 68,977,965 70,130,853 68,179,403 Add: dilutive effect of stock options 2,202,045 1,955,474 2,330,667 1,727,700 Add: dilutive effect of contingently issuable equity awards 296,881 157,464 308,912 260,340 Denominator for diluted earnings per share under two class method 72,800,011 71,090,903 72,770,432 70,167,443 Basic Earnings Per Common Share $ 2.07 $ 1.42 $ 5.83 $ 3.21 Diluted Earnings Per Common Share $ 1.99 $ 1.38 $ 5.62 $ 3.12 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Assets Measured on Recurring Basis | The following table sets forth the fair values and methods used for measuring the fair values of financial instruments on a recurring basis: Fair Value Financial Instrument Hierarchy September 30, December 31, (Dollars in thousands) Mortgage loans held-for-sale, net Level 2 $ 248,921 $ 232,556 |
Gain on Securities | The following table reconciles the net gain (loss) recognized during the three and nine months ended September 30, 2021 and 2020 on equity securities to the unrealized gain recognized during the periods on equity securities still held at the reporting date. Three Months Ended Nine Months Ended 2021 2020 2021 2020 (Dollars in thousands) Net gain (loss) recognized during the period on equity securities $ — $ — $ — $ (8,285) Less: Net gain (loss) recognized during the period on equity securities sold during the period — — — (8,285) Unrealized gain (loss) loss recognized during the reporting period on equity securities still held at the reporting date $ — $ — $ — $ — |
Fair Value of Senior Notes | The estimated values of the senior notes in the following table are based on Level 2 inputs, which primarily reflect estimated prices for our senior notes that were provided by multiple sources. September 30, 2021 December 31, 2020 Carrying Fair Value Carrying Fair Value (Dollars in thousands) $250 million 5.500% Senior Notes due January 2024, net $ 126,071 $ 137,109 $ 249,233 $ 275,463 $300 million 3.850% Senior Notes due January 2030, net 297,638 322,680 297,458 331,384 $350 million 2.500% Senior Notes due January 2031, net 347,055 341,457 — — $500 million 6.000% Senior Notes due January 2043, net 490,851 625,275 490,700 667,288 $350 million 3.966% Senior Notes due August 2061, net 346,043 334,664 — — Total $ 1,607,658 $ 1,761,185 $ 1,037,391 $ 1,274,135 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | The following table sets forth, by reportable segment, information relating to our homebuilding inventories: September 30, December 31, (Dollars in thousands) Housing completed or under construction: West $ 1,077,320 $ 902,842 Mountain 636,090 464,501 East 234,801 119,244 Subtotal 1,948,211 1,486,587 Land and land under development: West 974,380 822,504 Mountain 340,702 391,054 East 149,521 132,085 Subtotal 1,464,603 1,345,643 Total inventories $ 3,412,814 $ 2,832,230 |
Capitalization of Interest (Tab
Capitalization of Interest (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Capitalization of Interest | For all periods presented below, our qualified assets exceeded our homebuilding debt and as such, all interest incurred has been capitalized. Three Months Ended Nine Months Ended 2021 2020 2021 2020 (Dollars in thousands) Homebuilding interest incurred $ 19,108 $ 14,799 $ 53,849 $ 46,427 Less: Interest capitalized (19,108) (14,799) (53,849) (46,427) Homebuilding interest expensed $ — $ — $ — $ — Interest capitalized, beginning of period $ 54,351 $ 56,929 $ 52,777 $ 55,310 Plus: Interest capitalized during period 19,108 14,799 53,849 46,427 Less: Previously capitalized interest included in home cost of sales (16,024) (16,511) (49,191) (46,520) Interest capitalized, end of period $ 57,435 $ 55,217 $ 57,435 $ 55,217 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Leases [Abstract] | |
Lease, Cost | Components of operating lease expense were as follows: Three Months Ended Nine Months Ended 2021 2020 2021 2020 (Dollars in thousands) Operating lease cost 1 $ 2,018 $ 2,083 $ 5,990 $ 6,249 Less: Sublease income (Note 19) (39) (38) (117) (114) Net lease cost $ 1,979 $ 2,045 $ 5,873 $ 6,135 1 Includes variable lease costs, which are immaterial. |
Schedule of Lease Cash Flow Information | Supplemental cash flow information related to leases was as follows: Three Months Ended Nine Months Ended 2021 2020 2021 2020 (Dollars in thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 1,900 $ 1,792 $ 5,645 $ 5,439 Leased assets obtained in exchange for new operating lease liabilities $ — $ — $ 830 $ 4,050 |
Schedule of Lease Terms and Discount Rates | Weighted-average remaining lease term and discount rate for operating leases were as follows: September 30, 2021 Weighted-average remaining lease term (in years) 4.7 Weighted-average discount rate 5.5 % |
Lessee, Operating Lease, Liability, Maturity | Maturities of operating lease liabilities were as follows: Year Ended December 31, (Dollars in thousands) 2021 (excluding the nine months ended September 30, 2021) $ 1,269 2022 7,430 2023 6,416 2024 5,717 2025 5,493 Thereafter 4,869 Total operating lease payments 1 $ 31,194 Less: Interest 3,760 Present value of operating lease liabilities 2 $ 27,434 _______________________________________________________________ 1 Operating lease payments exclude $2.5 million of legally binding lease payments for leases signed but not yet commenced. 2 Homebuilding and financial services operating lease liabilities of $27.1 million and $0.4 million, respectively, are included as a component of accrued and other liabilities and accounts payable and accrued liabilities, respectively, in the homebuilding and financial services section of our consolidated balance sheet at September 30, 2021. |
Homebuilding Prepaids and Oth_2
Homebuilding Prepaids and Other Assets (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Prepaid Expense and Other Assets [Abstract] | |
Schedule of Other Assets | The following table sets forth the components of homebuilding prepaids and other assets: September 30, December 31, (Dollars in thousands) Land option deposits $ 47,194 $ 29,987 Operating lease right-of-use asset 26,058 29,226 Prepaids 18,884 26,929 Deferred debt issuance costs on revolving credit facility, net 7,620 9,043 Goodwill 6,008 6,008 Other 96 492 Total prepaids and other assets $ 105,860 $ 101,685 |
Homebuilding Accrued and Othe_2
Homebuilding Accrued and Other Liabilities and Financial Services Accounts Payable and Accrued Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Accounts Payable and Accrued Liabilities [Abstract] | |
Schedule of Accrued Liabilities | The following table sets forth information relating to homebuilding accrued and other liabilities: September 30, December 31, (Dollars in thousands) Customer and escrow deposits $ 88,441 $ 67,022 Accrued compensation and related expenses 67,079 56,682 Warranty accrual (Note 11) 36,120 33,664 Lease liability (Note 8) 27,052 30,221 Accrued interest 16,626 27,650 Land development and home construction accruals 15,469 10,824 Construction defect claim reserves (Note 12) 8,596 8,479 Income taxes payable 1,771 8,285 Other accrued liabilities 73,558 57,908 Total accrued and other liabilities $ 334,712 $ 300,735 |
Schedule of Accounts Payable and Accrued Liabilities | The following table sets forth information relating to financial services accounts payable and accrued liabilities: September 30, December 31, (Dollars in thousands) Insurance reserves (Note 12) $ 70,403 $ 61,575 Accounts payable and other accrued liabilities 23,477 34,055 Total accounts payable and accrued liabilities $ 93,880 $ 95,630 |
Warranty Accrual (Tables)
Warranty Accrual (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Product Warranties Disclosures [Abstract] | |
Schedule of Product Warranty Liability | The table set forth below summarizes accrual, adjustment and payment activity related to our warranty accrual for the three and nine months ended September 30, 2021 and 2020. The warranty accrual increased due to the increase in the number of home closings. Three Months Ended Nine Months Ended 2021 2020 2021 2020 (Dollars in thousands) Balance at beginning of period $ 35,017 $ 30,458 $ 33,664 $ 31,386 Expense provisions 5,618 4,493 15,706 11,595 Cash payments (4,834) (2,683) (13,569) (8,713) Adjustments 319 (171) 319 (2,171) Balance at end of period $ 36,120 $ 32,097 $ 36,120 $ 32,097 |
Insurance and Construction De_2
Insurance and Construction Defect Claim Reserves (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Insurance [Abstract] | |
Schedule of Liability for Unpaid Claims and Claims Adjustment Expense | The table set forth below summarizes our insurance and construction defect claim reserves activity for the three and nine months ended September 30, 2021 and 2020. These reserves are included as a component of accounts payable and accrued liabilities and accrued and other liabilities in the financial services and homebuilding sections, respectively, of the consolidated balance sheets. Three Months Ended Nine Months Ended 2021 2020 2021 2020 (Dollars in thousands) Balance at beginning of period $ 76,286 $ 63,881 $ 70,054 $ 60,415 Expense provisions 4,776 4,058 14,447 10,562 Cash payments, net of recoveries (2,063) (859) (5,502) (3,897) Balance at end of period $ 78,999 $ 67,080 $ 78,999 $ 67,080 |
Senior Notes (Tables)
Senior Notes (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The carrying values of our senior notes as of September 30, 2021 and December 31, 2020, net of any unamortized debt issuance costs or discount, were as follows: September 30, December 31, (Dollars in thousands) 5.500% Senior Notes due January 2024, net $ 126,071 $ 249,233 3.850% Senior Notes due January 2030, net 297,638 297,458 2.500% Senior Notes due January 2031, net 347,055 — 6.000% Senior Notes due January 2043, net 490,851 490,700 3.966% Senior Notes due August 2061, net 346,043 — Total $ 1,607,658 $ 1,037,391 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Share-based Payment Arrangement, Activity | The following table sets forth share-based award expense activity for the three and nine months ended September 30, 2021 and 2020, which is included as a component of selling, general and administrative expenses and expenses in the homebuilding and financial services sections of our consolidated statements of operations and comprehensive income, respectively: Three Months Ended Nine Months Ended 2021 2020 2021 2020 (Dollars in thousands) Stock option grants expense $ 600 $ 814 $ 2,189 $ 2,026 Restricted stock awards expense 3,026 2,271 6,947 4,841 Performance share units expense 4,293 5,523 17,728 11,669 Total stock-based compensation $ 7,919 $ 8,608 $ 26,864 $ 18,536 |
Basis of Presentation (Details)
Basis of Presentation (Details) | Jan. 25, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Stock dividend rate, percent | 8.00% |
Recently Issued Accounting St_3
Recently Issued Accounting Standards (Details Textual) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2021 | Dec. 31, 2020 | Jan. 01, 2020 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Retained earnings adjustment (less than) | $ 759,842 | $ 711,666 | |
Accounting Standards Update [Extensible List] | Accounting Standards Update 2016-13 [Member] | ||
Cumulative effect of newly adopted accounting standards | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Retained earnings adjustment (less than) | $ 100 |
Segment Reporting (Details Text
Segment Reporting (Details Textual) | 9 Months Ended |
Sep. 30, 2021segment | |
Other | |
Segment Reporting Information [Line Items] | |
Number of reportable segments | 1 |
Segment Reporting - Reconciliat
Segment Reporting - Reconciliation of Revenue From Segments to Consolidated (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Homebuilding: | ||||
Segment Reporting Information [Line Items] | ||||
Total financial services revenues | $ 1,257,701 | $ 1,000,549 | $ 3,667,332 | $ 2,584,392 |
Homebuilding: | West | ||||
Segment Reporting Information [Line Items] | ||||
Total financial services revenues | 729,777 | 552,319 | 2,194,071 | 1,447,934 |
Homebuilding: | Mountain | ||||
Segment Reporting Information [Line Items] | ||||
Total financial services revenues | 379,041 | 347,095 | 1,104,391 | 886,619 |
Homebuilding: | East | ||||
Segment Reporting Information [Line Items] | ||||
Total financial services revenues | 148,883 | 101,135 | 368,870 | 249,839 |
Financial Services: | ||||
Segment Reporting Information [Line Items] | ||||
Total financial services revenues | 43,104 | 36,803 | 121,445 | 91,653 |
Financial Services: | West | ||||
Segment Reporting Information [Line Items] | ||||
Total financial services revenues | 43,104 | 36,803 | 121,445 | 91,653 |
Financial Services: | Mortgage operations | ||||
Segment Reporting Information [Line Items] | ||||
Total financial services revenues | 31,122 | 28,548 | 89,608 | 67,536 |
Financial Services: | Other | ||||
Segment Reporting Information [Line Items] | ||||
Total financial services revenues | $ 11,982 | $ 8,255 | $ 31,837 | $ 24,117 |
Segment Reporting - Reconcili_2
Segment Reporting - Reconciliation of Pretax Operating Income From Segments to Consolidated (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Segment Reporting Information [Line Items] | ||||
Income before income taxes | $ 192,692 | $ 126,018 | $ 542,546 | $ 286,218 |
Homebuilding: | ||||
Segment Reporting Information [Line Items] | ||||
Income before income taxes | 165,152 | 101,650 | 466,168 | 236,240 |
Financial Services: | ||||
Segment Reporting Information [Line Items] | ||||
Income before income taxes | 27,540 | 24,368 | 76,378 | 49,978 |
Operating Segments | Homebuilding: | West | ||||
Segment Reporting Information [Line Items] | ||||
Income before income taxes | 120,284 | 59,120 | 330,390 | 144,441 |
Operating Segments | Homebuilding: | Mountain | ||||
Segment Reporting Information [Line Items] | ||||
Income before income taxes | 55,386 | 48,053 | 165,296 | 111,372 |
Operating Segments | Homebuilding: | East | ||||
Segment Reporting Information [Line Items] | ||||
Income before income taxes | 15,410 | 6,020 | 34,091 | 9,993 |
Operating Segments | Financial Services: | Mortgage operations | ||||
Segment Reporting Information [Line Items] | ||||
Income before income taxes | 21,214 | 20,809 | 61,341 | 46,558 |
Operating Segments | Financial Services: | Other | ||||
Segment Reporting Information [Line Items] | ||||
Income before income taxes | 6,326 | 3,559 | 15,037 | 3,420 |
Corporate | Homebuilding: | ||||
Segment Reporting Information [Line Items] | ||||
Income before income taxes | $ (25,928) | $ (11,543) | $ (63,609) | $ (29,566) |
Segment Reporting - Total Asset
Segment Reporting - Total Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Segment Reporting Information [Line Items] | ||
Total Assets | $ 4,874,404 | $ 3,864,920 |
Homebuilding: | ||
Segment Reporting Information [Line Items] | ||
Total Assets | 4,495,883 | 3,506,420 |
Financial Services: | ||
Segment Reporting Information [Line Items] | ||
Total Assets | 378,521 | 358,500 |
Operating Segments | Homebuilding: | West | ||
Segment Reporting Information [Line Items] | ||
Total Assets | 2,229,687 | 1,855,567 |
Operating Segments | Homebuilding: | Mountain | ||
Segment Reporting Information [Line Items] | ||
Total Assets | 1,030,407 | 905,007 |
Operating Segments | Homebuilding: | East | ||
Segment Reporting Information [Line Items] | ||
Total Assets | 419,212 | 274,937 |
Operating Segments | Financial Services: | Mortgage operations | ||
Segment Reporting Information [Line Items] | ||
Total Assets | 279,938 | 279,649 |
Operating Segments | Financial Services: | Other | ||
Segment Reporting Information [Line Items] | ||
Total Assets | 98,583 | 78,851 |
Corporate | Homebuilding: | ||
Segment Reporting Information [Line Items] | ||
Total Assets | $ 816,577 | $ 470,909 |
Earnings Per Share - Basic and
Earnings Per Share - Basic and Diluted Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||||||
Net income | $ 145,954 | $ 154,352 | $ 110,690 | $ 98,938 | $ 84,396 | $ 36,760 | $ 410,996 | $ 220,094 |
Less: distributed earnings allocated to participating securities | (155) | (148) | (446) | (404) | ||||
Less: undistributed earnings allocated to participating securities | (602) | (502) | (1,668) | (952) | ||||
Net income attributable to common stockholders (numerator for basic earnings per share) | 145,197 | 98,288 | 408,882 | 218,738 | ||||
Add back: undistributed earnings allocated to participating securities | 602 | 502 | 1,668 | 952 | ||||
Less: undistributed earnings reallocated to participating securities | (584) | (488) | (1,615) | (929) | ||||
Numerator for diluted earnings per share under two class method | $ 145,215 | $ 98,302 | $ 408,935 | $ 218,761 | ||||
Weighted-average common shares outstanding (in shares) | 70,301,085 | 68,977,965 | 70,130,853 | 68,179,403 | ||||
Denominator for diluted earnings per share under two class method (in shares) | 72,800,011 | 71,090,903 | 72,770,432 | 70,167,443 | ||||
Basic Earnings Per Common Share (in dollars per share) | $ 2.07 | $ 1.42 | $ 5.83 | $ 3.21 | ||||
Diluted Earnings Per Common Share (in dollars per share) | $ 1.99 | $ 1.38 | $ 5.62 | $ 3.12 | ||||
Add: dilutive effect of stock options | ||||||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||||||
Weighted-average common shares outstanding, dilutive effect of stock options and performance share units (in shares) | 2,202,045 | 1,955,474 | 2,330,667 | 1,727,700 | ||||
Add: dilutive effect of contingently issuable equity awards | ||||||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||||||
Weighted-average common shares outstanding, dilutive effect of stock options and performance share units (in shares) | 296,881 | 157,464 | 308,912 | 260,340 |
Earnings Per Share (Details Tex
Earnings Per Share (Details Textual) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Earnings Per Share [Abstract] | ||||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 15 | 0 | 15 | 800 |
Fair Value Measurements (Detail
Fair Value Measurements (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
$250 million 5.500% Senior Notes due January 2024, net | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Early repayment of senior debt | $ 123,600 | ||||
Minimum | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Short term borrowings maturity period | 30 days | ||||
Financial Services: | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Mortgage loans held-for-sale, net | 248,921 | $ 248,921 | $ 232,556 | ||
Gain (Loss) on sale of mortgage loans | 23,600 | $ 26,800 | 73,500 | $ 64,300 | |
Fair Value, Inputs, Level 2 | Under Commitment to Sell | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Mortgage loans held-for-sale, net | 142,200 | 142,200 | 137,300 | ||
Fair Value, Inputs, Level 2 | Not Under Commitment to Sell | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Mortgage loans held-for-sale, net | $ 106,700 | $ 106,700 | $ 95,300 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value Methods Used for Measuring Fair Values of Financial Instruments on Recurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Fair Value, Inputs, Level 2 | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Mortgage loans held-for-sale, net | $ 248,921 | $ 232,556 |
Fair Value Measurements - Recon
Fair Value Measurements - Reconciles Net Loss to Unrealized Loss on Equity Securities (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | ||||
Net gain (loss) recognized during the period on equity securities | $ 0 | $ 0 | $ 0 | $ (8,285) |
Less: Net gain (loss) recognized during the period on equity securities sold during the period | 0 | 0 | 0 | (8,285) |
Unrealized gain (loss) loss recognized during the reporting period on equity securities still held at the reporting date | $ 0 | $ 0 | $ 0 | $ 0 |
Fair Value Measurements - Estim
Fair Value Measurements - Estimated Fair Value of Senior Notes (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Carrying Amount | $ 1,607,658,000 | $ 1,037,391,000 |
Carrying Amount | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Carrying Amount | 1,607,658,000 | 1,037,391,000 |
Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 1,761,185,000 | 1,274,135,000 |
$250 million 5.500% Senior Notes due January 2024, net | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt instrument, face amount | $ 250,000,000 | |
Interest rate, stated percentage | 5.50% | |
Carrying Amount | $ 126,071,000 | 249,233,000 |
$250 million 5.500% Senior Notes due January 2024, net | Carrying Amount | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Carrying Amount | 126,071,000 | 249,233,000 |
$250 million 5.500% Senior Notes due January 2024, net | Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 137,109,000 | 275,463,000 |
$300 million 3.850% Senior Notes due January 2030, net | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt instrument, face amount | $ 300,000,000 | |
Interest rate, stated percentage | 3.85% | |
Carrying Amount | $ 297,638,000 | 297,458,000 |
$300 million 3.850% Senior Notes due January 2030, net | Carrying Amount | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Carrying Amount | 297,638,000 | 297,458,000 |
$300 million 3.850% Senior Notes due January 2030, net | Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 322,680,000 | 331,384,000 |
$350 million 2.500% Senior Notes due January 2031, net | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt instrument, face amount | $ 350,000,000 | |
Interest rate, stated percentage | 2.50% | |
Carrying Amount | $ 347,055,000 | 0 |
$350 million 2.500% Senior Notes due January 2031, net | Carrying Amount | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Carrying Amount | 347,055,000 | 0 |
$350 million 2.500% Senior Notes due January 2031, net | Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 341,457,000 | 0 |
$500 million 6.000% Senior Notes due January 2043, net | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt instrument, face amount | $ 500,000,000 | |
Interest rate, stated percentage | 6.00% | |
Carrying Amount | $ 490,851,000 | 490,700,000 |
$500 million 6.000% Senior Notes due January 2043, net | Carrying Amount | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Carrying Amount | 490,851,000 | 490,700,000 |
$500 million 6.000% Senior Notes due January 2043, net | Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 625,275,000 | 667,288,000 |
$350 million 3.966% Senior Notes due August 2061, net | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt instrument, face amount | $ 350,000,000 | |
Interest rate, stated percentage | 3.966% | |
Carrying Amount | $ 346,043,000 | 0 |
$350 million 3.966% Senior Notes due August 2061, net | Carrying Amount | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Carrying Amount | 346,043,000 | 0 |
$350 million 3.966% Senior Notes due August 2061, net | Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | $ 334,664,000 | $ 0 |
Inventories - Summary of Invent
Inventories - Summary of Inventory (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Inventory [Line Items] | ||
Housing completed or under construction | $ 1,948,211 | $ 1,486,587 |
Land and land under development | 1,464,603 | 1,345,643 |
Total inventories | 3,412,814 | 2,832,230 |
Homebuilding: | ||
Inventory [Line Items] | ||
Housing completed or under construction | 1,948,211 | 1,486,587 |
Land and land under development | 1,464,603 | 1,345,643 |
Total inventories | 3,412,814 | 2,832,230 |
Homebuilding: | West | ||
Inventory [Line Items] | ||
Housing completed or under construction | 1,077,320 | 902,842 |
Land and land under development | 974,380 | 822,504 |
Homebuilding: | Mountain | ||
Inventory [Line Items] | ||
Housing completed or under construction | 636,090 | 464,501 |
Land and land under development | 340,702 | 391,054 |
Homebuilding: | East | ||
Inventory [Line Items] | ||
Housing completed or under construction | 234,801 | 119,244 |
Land and land under development | $ 149,521 | $ 132,085 |
Capitalization of Interest - In
Capitalization of Interest - Interest Activity (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Debt Disclosure [Abstract] | ||||
Homebuilding interest incurred | $ 19,108 | $ 14,799 | $ 53,849 | $ 46,427 |
Less: Interest capitalized | (19,108) | (14,799) | (53,849) | (46,427) |
Homebuilding interest expensed | 0 | 0 | 0 | 0 |
Real Estate Inventory, Capitalized Interest Costs [Roll Forward] | ||||
Interest capitalized, beginning of period | 54,351 | 56,929 | 52,777 | 55,310 |
Plus: Interest capitalized during period | 19,108 | 14,799 | 53,849 | 46,427 |
Less: Previously capitalized interest included in home cost of sales | (16,024) | (16,511) | (49,191) | (46,520) |
Interest capitalized, end of period | $ 57,435 | $ 55,217 | $ 57,435 | $ 55,217 |
Leases (Details Textual)
Leases (Details Textual) | Sep. 30, 2021 |
Company Headquarters | |
Lessee, Lease, Description [Line Items] | |
Term of contract | 10 years |
Renewal term | 10 years |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Term of contract | 3 years |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Term of contract | 5 years |
Leases - Components of Operatin
Leases - Components of Operating Lease Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Leases [Abstract] | ||||
Operating lease cost | $ 2,018 | $ 2,083 | $ 5,990 | $ 6,249 |
Less: Sublease income | (39) | (38) | (117) | (114) |
Net lease cost | $ 1,979 | $ 2,045 | $ 5,873 | $ 6,135 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information Related to Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||||
Operating cash flows from operating leases | $ 1,900 | $ 1,792 | $ 5,645 | $ 5,439 |
Leased assets obtained in exchange for new operating lease liabilities | $ 0 | $ 0 | $ 830 | $ 4,050 |
Leases - Weighted Average Remai
Leases - Weighted Average Remaining Lease Term and Discount Rate (Details) | Sep. 30, 2021 |
Leases [Abstract] | |
Weighted-average remaining lease term (in years) | 4 years 8 months 12 days |
Weighted-average discount rate | 5.50% |
Leases - Maturities of Operatin
Leases - Maturities of Operating Lease Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 |
Lessee, Lease, Description [Line Items] | |||
2021 (excluding the nine months ended September 30, 2021 | $ 1,269 | ||
2022 | 7,430 | ||
2023 | 6,416 | ||
2024 | 5,717 | ||
2025 | 5,493 | ||
Thereafter | 4,869 | ||
Total operating lease payments 1 | 31,194 | ||
Less: Interest | 3,760 | ||
Lease liability | $ 27,434 | ||
Operating lease liability, leases not yet commenced | $ 2,500 | ||
Homebuilding: | |||
Lessee, Lease, Description [Line Items] | |||
Lease liability | 27,052 | $ 30,221 | |
Financial Services: | |||
Lessee, Lease, Description [Line Items] | |||
Lease liability | $ 400 |
Homebuilding Prepaids and Oth_3
Homebuilding Prepaids and Other Assets - Summary of Homebuilding Prepaid and Other Assets (Details) - Homebuilding: - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Schedule of Prepaid Expenses and Other Assets [Line Items] | ||
Land option deposits | $ 47,194 | $ 29,987 |
Operating lease right-of-use asset | 26,058 | 29,226 |
Prepaids | 18,884 | 26,929 |
Deferred debt issuance costs on revolving credit facility, net | 7,620 | 9,043 |
Goodwill | 6,008 | 6,008 |
Other | 96 | 492 |
Total prepaids and other assets | $ 105,860 | $ 101,685 |
Homebuilding Accrued and Othe_3
Homebuilding Accrued and Other Liabilities and Financial Services Accounts Payable and Accrued Liabilities - Homebuilding Accrued Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 |
Segment Reporting Information [Line Items] | ||||||
Warranty accrual | $ 36,120 | $ 35,017 | $ 33,664 | $ 32,097 | $ 30,458 | $ 31,386 |
Lease liability | $ 27,434 | |||||
Homebuilding: | ||||||
Segment Reporting Information [Line Items] | ||||||
Customer and escrow deposits | 88,441 | 67,022 | ||||
Accrued compensation and related expenses | 67,079 | 56,682 | ||||
Warranty accrual | 36,120 | 33,664 | ||||
Lease liability | 27,052 | 30,221 | ||||
Accrued interest | 16,626 | 27,650 | ||||
Land development and home construction accruals | 15,469 | 10,824 | ||||
Construction defect claim reserves | 8,596 | 8,479 | ||||
Income taxes payable | 1,771 | 8,285 | ||||
Other accrued liabilities | 73,558 | 57,908 | ||||
Accrued and other liabilities | $ 334,712 | $ 300,735 |
Homebuilding Accrued and Othe_4
Homebuilding Accrued and Other Liabilities and Financial Services Accounts Payable and Accrued Liabilities - Financial Services Accounts Payable and Accrued Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 |
Segment Reporting Information [Line Items] | ||||||
Insurance reserves | $ 78,999 | $ 76,286 | $ 70,054 | $ 67,080 | $ 63,881 | $ 60,415 |
Financial Services: | ||||||
Segment Reporting Information [Line Items] | ||||||
Insurance reserves | 70,403 | 61,575 | ||||
Accounts payable and other accrued liabilities | 23,477 | 34,055 | ||||
Total accounts payable and accrued liabilities | $ 93,880 | $ 95,630 |
Warranty Accrual - Narrative (D
Warranty Accrual - Narrative (Details) | 9 Months Ended |
Sep. 30, 2021 | |
Product Warranty Liability [Line Items] | |
Period responsible for performing all warranty work (in years) | 2 years |
Minimum | |
Product Warranty Liability [Line Items] | |
Period responsible for paying for substantially all warranty work required (in years) | 3 years |
Maximum | |
Product Warranty Liability [Line Items] | |
Period responsible for paying for substantially all warranty work required (in years) | 10 years |
Warranty Accrual - Warranty Acc
Warranty Accrual - Warranty Accrual and Payment Activity (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Movement in Standard and Extended Product Warranty Accrual, Increase (Decrease) [Roll Forward] | ||||
Balance at beginning of period | $ 35,017 | $ 30,458 | $ 33,664 | $ 31,386 |
Expense provisions | 5,618 | 4,493 | 15,706 | 11,595 |
Cash payments | (4,834) | (2,683) | (13,569) | (8,713) |
Adjustments | 319 | (171) | 319 | (2,171) |
Balance at end of period | $ 36,120 | $ 32,097 | $ 36,120 | $ 32,097 |
Insurance and Construction De_3
Insurance and Construction Defect Claim Reserves - Summary of Insurance and Defect Claim Reserves Activity (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Movement in Liability for Future Policy Benefits [Roll Forward] | ||||
Balance at beginning of period | $ 76,286 | $ 63,881 | $ 70,054 | $ 60,415 |
Expense provisions | 4,776 | 4,058 | 14,447 | 10,562 |
Cash payments, net of recoveries | (2,063) | (859) | (5,502) | (3,897) |
Balance at end of period | $ 78,999 | $ 67,080 | $ 78,999 | $ 67,080 |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate reconciliation, percent | 24.30% | 21.50% | 24.20% | 23.10% |
Income tax expense | $ 46,738 | $ 27,080 | $ 131,550 | $ 66,124 |
Senior Notes - Carrying Amount
Senior Notes - Carrying Amount of Senior Notes (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Aug. 31, 2021 | Jan. 31, 2021 | Dec. 31, 2020 | |
Debt Instrument [Line Items] | |||||||
Carrying Amount | $ 1,607,658,000 | $ 1,607,658,000 | $ 1,037,391,000 | ||||
Loss on debt retirement | 12,150,000 | $ 0 | $ 12,150,000 | $ 0 | |||
Senior Notes | |||||||
Debt Instrument [Line Items] | |||||||
Loss on debt retirement | $ 12,200,000 | ||||||
5.500% Senior Notes due January 2024, net | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate, stated percentage | 5.50% | 5.50% | |||||
Carrying Amount | $ 126,071,000 | $ 126,071,000 | 249,233,000 | ||||
Debt instrument, face amount | 250,000,000 | $ 250,000,000 | |||||
Early repayment of senior debt | $ 123,600,000 | ||||||
5.500% Senior Notes due January 2024, net | Senior Notes | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate, stated percentage | 5.50% | 5.50% | |||||
Early repayment of senior debt | $ 123,600,000 | ||||||
3.850% Senior Notes due January 2030, net | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate, stated percentage | 3.85% | 3.85% | |||||
Carrying Amount | $ 297,638,000 | $ 297,638,000 | 297,458,000 | ||||
Debt instrument, face amount | $ 300,000,000 | $ 300,000,000 | |||||
2.500% Senior Notes due January 2031, net | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate, stated percentage | 2.50% | 2.50% | |||||
Carrying Amount | $ 347,055,000 | $ 347,055,000 | 0 | ||||
Debt instrument, face amount | $ 350,000,000 | $ 350,000,000 | |||||
2.500% Senior Notes due January 2031, net | Senior Notes | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate, stated percentage | 2.50% | ||||||
Debt instrument, face amount | $ 350,000,000 | ||||||
Par price percentage | 100.00% | ||||||
6.000% Senior Notes due January 2043, net | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate, stated percentage | 6.00% | 6.00% | |||||
Carrying Amount | $ 490,851,000 | $ 490,851,000 | 490,700,000 | ||||
Debt instrument, face amount | $ 500,000,000 | $ 500,000,000 | |||||
3.966% Senior Notes due August 2061, net | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate, stated percentage | 3.966% | 3.966% | |||||
Carrying Amount | $ 346,043,000 | $ 346,043,000 | $ 0 | ||||
Debt instrument, face amount | $ 350,000,000 | $ 350,000,000 | |||||
3.966% Senior Notes due August 2061, net | Senior Notes | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate, stated percentage | 3.966% | ||||||
Debt instrument, face amount | $ 350,000,000 | ||||||
Par price percentage | 100.00% |
Stock-Based Compensation - Shar
Stock-Based Compensation - Share-based Award Expense Activity (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based payment arrangement, expense | $ 7,919 | $ 8,608 | $ 26,864 | $ 18,536 |
Stock option grants expense | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based payment arrangement, expense | 600 | 814 | 2,189 | 2,026 |
Restricted stock awards expense | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based payment arrangement, expense | 3,026 | 2,271 | 6,947 | 4,841 |
Performance share units expense | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based payment arrangement, expense | $ 4,293 | $ 5,523 | $ 17,728 | $ 11,669 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details Textual) - USD ($) $ / shares in Units, $ in Thousands | Jul. 14, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based payment arrangement, expense | $ 7,919 | $ 8,608 | $ 26,864 | $ 18,536 | |
Performance share units expense | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based payment arrangement, expense | 4,293 | 5,523 | 17,728 | 11,669 | |
Performance share units expense | Equity Incentive Plan 2011 | Granted in 2018 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based payment arrangement, expense | 1,300 | 1,300 | 6,000 | ||
Performance share units expense | Equity Incentive Plan 2011 | Granted in 2019 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based payment arrangement, expense | 1,800 | $ 4,200 | 5,500 | $ 4,200 | |
Performance share units expense | Equity Incentive Plan 2011 | Granted in 2020 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based payment arrangement, expense | 2,500 | 10,900 | |||
Performance share units expense | Equity Incentive Plan 2011 | Granted in 2021 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based payment arrangement, expense | $ 0 | $ 0 | |||
Target goal, PSUs (in shares) | 397,500 | ||||
Fair Value per Share (in dollars per share) | $ 44.35 |
Commitments and Contingencies (
Commitments and Contingencies (Details Textual) $ in Millions | 9 Months Ended |
Sep. 30, 2021USD ($)lot | |
Loss Contingencies [Line Items] | |
Surety bonds, outstanding, amount | $ 330.9 |
Letters of credit outstanding, amount | 169.7 |
Estimated cost related to letters of credit | 159 |
Estimated cost related to bonds | $ 113.9 |
Number of lots | lot | 12,375 |
Option Contracts | |
Loss Contingencies [Line Items] | |
Letters of credit outstanding, amount | $ 14.5 |
Deposits | 40.6 |
HomeAmerican | |
Loss Contingencies [Line Items] | |
Surety bonds, outstanding, amount | $ 130 |
Derivative Financial Instrume_2
Derivative Financial Instruments (Details Textual) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Derivatives, Fair Value [Line Items] | ||||
Net gains on derivatives | $ 0.6 | $ 1.6 | $ 1.6 | $ 4.9 |
Commitment to Originate Mortgage Loans | ||||
Derivatives, Fair Value [Line Items] | ||||
Interest rate lock agreements, aggregate principal balance | 305.2 | 305.2 | ||
No Commitment to Originate Mortgage Loans | ||||
Derivatives, Fair Value [Line Items] | ||||
Mortgage loans held-for-sale, net | 103 | 103 | ||
Forward Sales of Mortgage Backed Securities | ||||
Derivatives, Fair Value [Line Items] | ||||
Interest rate lock agreements, aggregate principal balance | $ 264.5 | $ 264.5 |
Lines of Credit (Details Textua
Lines of Credit (Details Textual) - USD ($) | Dec. 28, 2020 | Apr. 21, 2022 | Sep. 30, 2021 | Sep. 27, 2021 | Apr. 22, 2021 | Feb. 04, 2021 | Dec. 31, 2020 | Dec. 27, 2018 | Aug. 09, 2018 |
Line of Credit Facility [Line Items] | |||||||||
Letters of credit outstanding, amount | $ 169,700,000 | ||||||||
Financial Services: | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Warehouse agreement borrowings | $ 215,794,000 | $ 202,390,000 | |||||||
Maximum | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Borrowing base required leverage ratio | 55.00% | ||||||||
Revolving Credit Facility | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Maximum borrowing capacity | $ 1,200,000,000 | $ 1,000,000,000 | |||||||
Extended maturity amount | 1,125,000,000 | ||||||||
Potential maximum borrowing capacity, subject to additional commitments | $ 1,700,000,000 | ||||||||
Interest rate, stated percentage | 0.00% | ||||||||
Maximum leverage ratio | 55.00% | ||||||||
Minimum common stock outstanding ownership, percentage | 50.00% | ||||||||
Letters of credit outstanding, amount | $ 39,700,000 | 25,100,000 | |||||||
Revolving credit facility | 10,000,000 | $ 10,000,000 | |||||||
Remaining borrowing capacity | 1,150,000,000 | ||||||||
Revolving Credit Facility | Fed Funds Effective Rate Overnight Index Swap Rate | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Basis spread on variable rate | 1.50% | ||||||||
Revolving Credit Facility | Specified Eurocurrency Rate | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Basis spread on variable rate | 1.00% | ||||||||
Mortgage Repurchase Facility | Warehouse Agreement Borrowings | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Maximum borrowing capacity | $ 75,000,000 | ||||||||
Maximum increase to borrowing capacity | $ 50,000,000 | $ 75,000,000 | $ 175,000,000 | $ 200,000,000 | $ 75,000,000 | ||||
Mortgage Repurchase Facility | Forecast | Warehouse Agreement Borrowings | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Maximum increase to borrowing capacity | $ 150,000,000 |
Related Party Transactions (Det
Related Party Transactions (Details Textual) - CVentures, Inc. | Oct. 31, 2026$ / ft² | Nov. 01, 2016ft²$ / ft² |
Related Party Transaction [Line Items] | ||
Area of real estate property | ft² | 5,437 | |
Minimum | ||
Related Party Transaction [Line Items] | ||
Yearly rental rate per rentable square foot | 26.50 | |
Maximum | Forecast | ||
Related Party Transaction [Line Items] | ||
Yearly rental rate per rentable square foot | 31.67 |
Supplemental Guarantor Inform_2
Supplemental Guarantor Information (Details Textual) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | |
Guarantor Obligations [Line Items] | ||
Maximum percentage of consolidated net worth of guarantor for suspension of guarantee | 5.00% | |
Maximum aggregate percentage of consolidated net worth of all guarantors for suspension of guarantee | 10.00% | |
Maximum aggregate percentage of consolidated net worth of all guarantors for suspension of guarantee to permit cure of default | 15.00% | |
Non-Guarantor Subsidiaries | ||
Guarantor Obligations [Line Items] | ||
Due to non-guarantor subsidiaries | $ 61 | $ 65.8 |
All Guarantor Subsidiaries | ||
Guarantor Obligations [Line Items] | ||
Ownership interest | 100.00% |