Exhibit 99.1
M.D.C. HOLDINGS, INC.NEWS BULLETIN
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| M.D.C. HOLDINGS, INC. | | RICHMOND AMERICAN HOMES |
| | | HOMEAMERICAN MORTGAGE |
FOR IMMEDIATE RELEASE
FRIDAY, FEBRUARY 5, 2010
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| Contact: | | Robert N. Martin
Investor Relations
(720) 977-3431
bob.martin@mdch.com |
M.D.C. HOLDINGS ANNOUNCES FOURTH QUARTER 2009 RESULTS
| | • | | Income per share of $2.68 vs. loss of $1.92 in Q4 2008 |
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| | • | | Net orders increased 82% to 637 homes vs. 350 in Q4 2008 |
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| | • | | Secured control of 2,745 lots in 52 communities |
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| | • | | Home gross margin increased 590 basis points to 18.8% vs. 12.9% in Q4 2008 |
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| | • | | Closings increased 17% to 1,109 homes vs. 944 in Q4 2008 |
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| | • | | Backlog increased 55% to 826 homes at 12/31/09 vs. 533 at 12/31/08 |
DENVER, Friday, February 5, 2010 — M.D.C. Holdings, Inc. (NYSE: MDC) today reported net income for the 2009 fourth quarter of $127.2 million, or $2.68 per diluted share, compared with a net loss for the 2008 fourth quarter of $89.0 million, or $1.92 per diluted share. Full year net income for 2009 was $24.7 million, or $0.52 per diluted share, compared with a net loss for 2008 of $380.5 million, or $8.25 per diluted share.
Both fourth quarter and full year 2009 net income reflected the impact of a $142.6 million benefit from income taxes that was recognized due to recently enacted tax legislation that allowed the Company to extend the carryback period of its 2009 net operating losses from two to five years.
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M.D.C. HOLDINGS, INC. Larry A. Mizel, MDC’s chairman and chief executive officer, stated, “Although the homebuilding industry continued to face significant obstacles to recovery in the fourth quarter of 2009, we increased our home orders year-over-year for the third consecutive quarter. As a result, we ended 2009 with 826 homes in backlog, a 55% increase from a year ago.”
Mizel continued, “Throughout 2009, we put considerable effort into activities designed to help us achieve profitability in the future. In the fourth quarter, our offering of more affordable homes that we introduced earlier in the year accounted for more than 30% of our new home orders. Furthermore, we enhanced the mix of the product we have available for sale by decreasing our exposure to finished speculative homes by more than 90% in 2009 and by strategically increasing our supply of homes available for personalization by 35% during the same period.”
“Generally, we now stop construction on unsold units at the drywall stage. Once construction is restarted, these homes typically can close within 45 days, in direct competition with finished homes on the market. By holding the units at drywall, we offer our buyers the opportunity to personalize their homes at one of our Home Galleries. We believe that this policy will continue to benefit us going forward as we attempt to increase our market share in a highly competitive homebuilding environment in 2010.”
Mizel concluded, “During the fourth quarter, we increased our lot supply for the first time in 17 quarters as we secured control of more than 2,700 lots in 52 new communities. After investing a total of $100 million in land acquisitions across our markets during the quarter, we ended the year with $1.56 billion in cash and investments, up 10% from the end of 2008. Shortly after the end of the year, we issued $250 million of 10-year senior notes at a low interest rate, and we expect to receive a $143 million tax refund before the end of the 2010 first quarter. Given these enhancements to our liquidity, we are well-positioned to continue making investments in 2010 as we build our land pipeline to support future home closings.”
Net income for the 2009 fourth quarter included a pre-tax charge of $14.0 million for asset impairments, while the net loss for the 2008 fourth quarter included a pre-tax charge of $59.7 million for asset impairments and an increase in our deferred tax valuation allowance of $19.2 million. For the year ended December 31, 2009, net income included a pre-tax charge of $31.0 million for asset impairments, while net income for the year ended December 31, 2008 included a pre-tax charge of $298.2 million for asset impairments and an increase in our deferred tax valuation allowance of $134.3 million.
Total revenue for the fourth quarter of 2009 was $323.9 million, compared with revenue of $296.2 million for the same period in 2008. For 2009, total revenue was $898.3 million, compared with revenue of $1.46 billion in 2008.
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M.D.C. HOLDINGS, INC. Homebuilding Highlights
Net orders for the fourth quarter ended December 31, 2009 totaled 637 homes with an estimated sales value of $183.0 million, compared with net orders for 350 homes with an estimated sales value of $100.0 million during the same period in 2008. The improvement was driven by significant increases across all of our homebuilding segments. During the fourth quarter of 2009, the Company’s cancellation rate dropped to 30% compared with 52% during the same period in 2008, primarily due to a decrease in homebuyer mortgage-related issues and a decline in the number of prospective homebuyers with a contingency to sell an existing home. Net orders for the year ended December 31, 2009 totaled 3,306 homes with an estimated sales value of $935.0 million, compared with net orders for 3,074 homes with an estimated sales value of $885.0 million during 2008. We ended 2009 with 826 homes under contract with an estimated sales value of $265.0 million, compared with a backlog of 533 homes with an estimated sales value of $173.0 million at December 31, 2008.
Homebuilding revenue for the 2009 fourth quarter increased to $320.0 million, compared with $291.3 million in the fourth quarter of 2008. The increase in revenue was partly the result of a $14.2 million year-over-year increase in home sales revenue, driven by a 17% increase in home closings and partially offset by an 11% year-over-year decrease in average selling price. In addition, land sales revenue for the 2009 fourth quarter increased by $13.4 million year-over-year due to a significant increase in the number of lots sold as well as an increase in the average price of the lots sold. Homebuilding revenue for the year ended December 31, 2009 was $885.0 million, compared with $1.44 billion for the same period in 2008.
Home gross margin during the fourth quarter of 2009 increased to 18.8% from 12.9% in the fourth quarter of 2008, despite the reduction in average selling price, primarily due to a reduction in construction costs and interest in cost of sales, relative to the average selling price of homes closed. For the full year, home gross margin rose from 12.8% in 2008 to 17.9% in 2009.
Homebuilding SG&A decreased to $40.9 million for the quarter ended December 31, 2009, compared with $43.3 million for the same period in the prior year. The decrease in SG&A resulted from various cost saving initiatives associated with right-sizing our operations, including a 23% reduction in homebuilding headcount over the past year. Also contributing to this decrease was a reduction in marketing expenses, primarily due to a significant reduction in sales office and model home expenses. For the full year, homebuilding SG&A declined to $133.7 million in 2009, compared with $221.1 million in 2008.
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M.D.C. HOLDINGS, INC. Financial Services and Other Highlights
Income before taxes from the Company’s Financial Services and Other segment for the quarter ended December 31, 2009 was $6.1 million compared with income of $3.6 million for the same period in 2008. The increase was largely the result of a decrease in general and administrative expense for the segment, primarily due to a $3.3 million decrease in the amount booked for insurance reserves. For the full year, income before taxes for the Financial Services and Other segment fell to $6.0 million in 2009 from $11.7 million in 2008.
Corporate Highlights
Loss before taxes from the Company’s corporate segment for the quarter ended December 31, 2009 was $26.3 million, compared with a loss of $22.1 million for the same period in 2008. The higher loss primarily resulted from a $4.8 million decrease in interest income, as lower interest rates offset a higher average cash and investments balance for the quarter. Additionally, corporate interest expense increased by $1.8 million. The changes in interest income and interest expense were partially offset by a $1.7 million decrease in finance costs associated with the reduction of the commitment amount under our homebuilding line of credit. The Corporate segment loss before taxes for the year ended December 31, 2009 was $102.3 million, compared with a loss of $55.1 million for the year ended December 31, 2008.
About MDC
Since 1972, MDC’s subsidiary companies have built and financed the American dream for more than 160,000 families. MDC’s commitment to customer satisfaction, quality and value is reflected in each home its subsidiaries build. MDC is one of the largest homebuilders in the United States. Its subsidiaries have homebuilding divisions across the country, including Denver, Colorado Springs, Salt Lake City, Las Vegas, Phoenix, Tucson, California, Northern Virginia, Maryland, Philadelphia/Delaware Valley and Jacksonville. The Company’s subsidiaries also provide mortgage financing, insurance and title services, primarily for Richmond American homebuyers, through HomeAmerican Mortgage Corporation, American Home Insurance Agency, Inc. and American Home Title and Escrow Company, respectively. M.D.C. Holdings, Inc. is traded on the New York Stock Exchange under the symbol “MDC.” For more information, visit www.mdcholdings.com.
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M.D.C. HOLDINGS, INC. Forward-Looking Statements
Certain statements in this release, including statements regarding our business, financial condition, results of operation, cash flows, strategies and prospects, constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking 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 any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among other things, (1) general economic conditions, including changes in consumer confidence, inflation or deflation and employment levels; (2) changes in business conditions experienced by the Company, including cancellation rates, net home orders, home gross margins, and land and home values; (3) changes in interest rates, mortgage lending programs and the availability of credit; (4) the relative stability of debt and equity markets; (5) competition; (6) the availability and cost of land and other raw materials used by the Company in its homebuilding operations; (7) the availability and cost of performance bonds and insurance covering risks associated with our business; (8) shortages and the cost of labor; (9) weather related slowdowns; (10) slow growth initiatives; (11) building moratoria; (12) governmental regulation, including the interpretation of tax, labor and environmental laws; (13) changes in consumer confidence and preferences; (14) terrorist acts and other acts of war; and (15) other factors over which the Company has little or no control.Additional information about the risks and uncertainties applicable to the Company’s business is contained in the Company’s Form 10-K for the fiscal year ending December 31, 2009, which is scheduled to be filed with the Securities and Exchange Commission today.All forward-looking statements made in this press release are made as of the date hereof, and the risk that actual results will differ materially from expectations expressed in this press release will increase with the passage of time. The Company undertakes no duty to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. However, any further disclosures made on related subjects in our subsequent filings, releases or presentations should be consulted.
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M.D.C. HOLDINGS, INC.
Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
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| | | Three Months | | | Year Ended | |
| | | December 31, | | | December 31, | |
| | | 2009 | | | 2008 | | | 2009 | | | 2008 | |
REVENUE | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Home sales revenue | | $ | 297,702 | | | $ | 283,519 | | | $ | 837,054 | | | $ | 1,358,148 | |
| Land sales revenue | | | 16,744 | | | | 3,351 | | | | 30,730 | | | | 60,050 | |
| Other revenue | | | 9,433 | | | | 9,338 | | | | 30,519 | | | | 39,910 | |
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| Total Revenue | | | 323,879 | | | | 296,208 | | | | 898,303 | | | | 1,458,108 | |
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COSTS AND EXPENSES | | | | | | | | | | | | | | | | |
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| Home cost of sales | | | 241,815 | | | | 246,918 | | | | 686,854 | | | | 1,184,865 | |
| Land cost of sales | | | 12,764 | | | | 4,288 | | | | 25,038 | | | | 53,847 | |
| Asset impairments | | | 13,977 | | | | 59,657 | | | | 30,986 | | | | 298,155 | |
| Marketing expenses | | | 9,978 | | | | 13,532 | | | | 36,371 | | | | 71,882 | |
| Commission expenses | | | 10,883 | | | | 9,906 | | | | 31,002 | | | | 50,295 | |
| General and administrative expenses | | | 40,504 | | | | 46,454 | | | | 162,485 | | | | 191,574 | |
| Other operating expenses | | | 1,492 | | | | 1,960 | | | | 5,643 | | | | 7,115 | |
| Related party expenses | | | 1,004 | | | | 5 | | | | 1,018 | | | | 18 | |
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| Total Operating Costs and Expenses | | | 332,417 | | | | 382,720 | | | | 979,397 | | | | 1,857,751 | |
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LOSS FROM OPERATIONS | | | (8,538 | ) | | | (86,512 | ) | | | (81,094 | ) | | | (399,643 | ) |
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| Other income (expense) | | | | | | | | | | | | | | | | |
| Interest income | | | 2,394 | | | | 7,450 | | | | 12,157 | | | | 35,788 | |
| Interest expense | | | (9,244 | ) | | | (7,333 | ) | | | (38,582 | ) | | | (18,318 | ) |
| Gain on sale of other assets | | | 7 | | | | — | | | | 184 | | | | 38 | |
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LOSS BEFORE TAXES | | | (15,381 | ) | | | (86,395 | ) | | | (107,335 | ) | | | (382,135 | ) |
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| Benefit from (provision for) income taxes, net | | | 142,543 | | | | (2,633 | ) | | | 132,014 | | | | 1,590 | |
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NET INCOME (LOSS) | | $ | 127,162 | | | $ | (89,028 | ) | | $ | 24,679 | | | $ | (380,545 | ) |
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EARNINGS (LOSS) PER SHARE | | | | | | | | | | | | | | | | |
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| Basic | | $ | 2.71 | | | $ | (1.92 | ) | | $ | 0.52 | | | $ | (8.25 | ) |
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| Diluted | | $ | 2.68 | | | $ | (1.92 | ) | | $ | 0.52 | | | $ | (8.25 | ) |
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DIVIDENDS DECLARED PER SHARE | | $ | 0.25 | | | $ | 0.25 | | | $ | 1.00 | | | $ | 1.00 | |
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M.D.C. HOLDINGS, INC.
Consolidated Balance Sheets
(Dollars in thousands, except per share amounts)
(Unaudited)
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| | | December 31, | |
| | | 2009 | | | 2008 | |
ASSETS | | | | | | | | |
| Cash and cash equivalents | | $ | 1,234,252 | | | $ | 1,304,728 | |
| Marketable Securities | | | 327,944 | | | | 54,864 | |
| Unsettled trades | | | 1,645 | | | | 57,687 | |
| Restricted cash | | | 476 | | | | 670 | |
| Receivables | | | | | | | | |
| Home sales receivables | | | 10,056 | | | | 17,104 | |
| Income taxes receivable | | | 145,144 | | | | 170,753 | |
| Other receivables | | | 5,844 | | | | 16,697 | |
| Mortgage loans held-for-sale, net | | | 62,315 | | | | 68,604 | |
| Inventories, net | | | | | | | | |
| Housing completed or under construction | | | 260,324 | | | | 415,500 | |
| Land and land under development | | | 262,860 | | | | 241,571 | |
| Property and equipment, net | | | 38,421 | | | | 38,343 | |
| Deferred tax asset, net of valuation allowance | | | — | | | | — | |
| Related party assets | | | 7,856 | | | | 8,878 | |
| Prepaid expenses and other assets, net | | | 72,171 | | | | 79,539 | |
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| Total Assets | | $ | 2,429,308 | | | $ | 2,474,938 | |
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LIABILITIES | | | | | | | | |
| Accounts payable | | $ | 36,087 | | | $ | 28,793 | |
| Accrued liabilities | | | 291,969 | | | | 332,825 | |
| Related party liabilities | | | 1,000 | | | | — | |
| Mortgage repurchase facility | | | 29,115 | | | | 34,873 | |
| Senior notes, net | | | 997,991 | | | | 997,527 | |
| | | | | | | |
| Total Liabilities | | $ | 1,356,162 | | | $ | 1,394,018 | |
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COMMITMENTS AND CONTINGENCIES | | | — | | | | — | |
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STOCKHOLDERS’ EQUITY | | | | | | | | |
| Preferred stock, $0.01 par value; 25,000,000 shares authorized; none issued or outstanding | | | — | | | | — | |
| Common stock, $0.01 par value; 250,000,000 shares authorized; 47,070,000 and 47,017,000 issued and outstanding, respectively, at December 31, 2009 and 46,715,000 and 46,666,000 issued and outstanding, respectively, at December 31, 2008 | | | 471 | | | | 467 | |
| Additional paid-in-capital | | | 802,675 | | | | 788,207 | |
| Retained earnings | | | 270,659 | | | | 292,905 | |
| Accumulated other comprehensive loss | | | — | | | | — | |
| Treasury stock, at cost; 53,000 and 49,000 shares at December 31, 2009 and December 31, 2008, respectively | | | (659 | ) | | | (659 | ) |
| | | | | | | |
| Total Stockholders’ Equity | | | 1,073,146 | | | | 1,080,920 | |
| | | | | | | |
| Total Liabilities and Stockholders’ Equity | | $ | 2,429,308 | | | $ | 2,474,938 | |
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M.D.C. HOLDINGS, INC.
Information on Segments
(Dollars in thousands)
(Unaudited)
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| | | Three Months Ended | | | Year Ended | |
| | | December 31, | | | December 31, | |
| | | 2009 | | | 2008 | | | 2009 | | | 2008 | |
REVENUE | | | | | | | | | | | | | | | | |
| Homebuilding | | | | | | | | | | | | | | | | |
| West | | $ | 156,638 | | | $ | 146,385 | | | $ | 407,157 | | | $ | 785,451 | |
| Mountain | | | 83,617 | | | | 67,989 | | | | 247,337 | | | | 298,441 | |
| East | | | 63,382 | | | | 52,449 | | | | 176,386 | | | | 245,245 | |
| Other Homebuilding | | | 16,377 | | | | 24,513 | | | | 54,086 | | | | 109,431 | |
| | | | | | | | | | | | | |
| Total Homebuilding | | | 320,014 | | | | 291,336 | | | | 884,966 | | | | 1,438,568 | |
| Financial Services and Other | | | 9,171 | | | | 8,340 | | | | 28,318 | | | | 33,681 | |
| Corporate | | | (40 | ) | | | 93 | | | | 10 | | | | 643 | |
| Inter-company adjustments | | | (5,266 | ) | | | (3,562 | ) | | | (14,991 | ) | | | (14,784 | ) |
| | | | | | | | | | | | | |
| Consolidated | | $ | 323,879 | | | $ | 296,207 | | | $ | 898,303 | | | $ | 1,458,108 | |
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(LOSS) INCOME BEFORE INCOME TAXES | | | | | | | | | | | | | | | | |
| Homebuilding | | | | | | | | | | | | | | | | |
| West | | $ | 13,335 | | | $ | (14,380 | ) | | $ | 19,144 | | | $ | (157,103 | ) |
| Mountain | | | (6,886 | ) | | | (31,531 | ) | | | (15,686 | ) | | | (112,251 | ) |
| East | | | (1,085 | ) | | | (18,073 | ) | | | (9,789 | ) | | | (50,596 | ) |
| Other Homebuilding | | | (459 | ) | | | (3,875 | ) | | | (4,691 | ) | | | (18,725 | ) |
| | | | | | | | | | | | | |
| Total Homebuilding | | | 4,905 | | | | (67,859 | ) | | | (11,022 | ) | | | (338,675 | ) |
| Financial Services and Other | | | 6,061 | | | | 3,559 | | | | 5,953 | | | | 11,678 | |
| Corporate | | | (26,347 | ) | | | (22,095 | ) | | | (102,266 | ) | | | (55,138 | ) |
| | | | | | | | | | | | | |
| Consolidated | | $ | (15,381 | ) | | $ | (86,395 | ) | | $ | (107,335 | ) | | $ | (382,135 | ) |
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INVENTORY IMPAIRMENTS | | | | | | | | | | | | | | | | |
| West | | $ | 2,162 | | | $ | 16,048 | | | $ | 14,955 | | | $ | 151,969 | |
| Mountain | | | 10,114 | | | | 24,021 | | | | 10,559 | | | | 83,270 | |
| East | | | — | | | | 13,176 | | | | 2,475 | | | | 36,843 | |
| Other Homebuilding | | | 234 | | | | 3,783 | | | | 1,147 | | | | 14,654 | |
| | | | | | | | | | | | | |
| Consolidated | | $ | 12,510 | | | $ | 57,028 | | | $ | 29,136 | | | $ | 286,736 | |
| | | | | | | | | | | | | |
| | | | | | | | | |
| | | December 31, | |
| | | 2009 | | | 2008 | |
TOTAL ASSETS | | | | | | | | |
| Homebuilding | | | | | | | | |
| West | | $ | 190,204 | | | $ | 255,652 | |
| Mountain | | | 237,702 | | | | 279,343 | |
| East | | | 112,964 | | | | 151,367 | |
| Other Homebuilding | | | 26,778 | | | | 38,179 | |
| | | | | | | |
| | | | | | | | | |
| Total Homebuilding | | | 567,648 | | | | 724,541 | |
| Financial Services and Other | | | 133,957 | | | | 139,569 | |
| Corporate | | | 1,773,660 | | | | 1,656,785 | |
| Inter-company adjustments | | | (45,957 | ) | | | (45,957 | ) |
| | | | | | | |
| | | | | | | | | |
| Consolidated | | $ | 2,429,308 | | | $ | 2,474,938 | |
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M.D.C. HOLDINGS, INC.
Selected Financial Data
(Dollars in thousands)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | | | | | | | | | Year Ended | | | | | | | |
| | | December 31, | | | Change | | | December 31, | | | Change | |
| | | 2009 | | | 2008 | | | Amount | | | % | | | 2009 | | | 2008 | | | Amount | | | % | |
SELECTED FINANCIAL DATA | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| General and Administrative Expenses | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Homebuilding | | $ | 20,020 | | | $ | 19,852 | | | $ | 168 | | | | 1 | % | | $ | 66,284 | | | $ | 98,911 | | | $ | (32,627 | ) | | | -33 | % |
| Financial Services and Other | | | 3,561 | | | | 5,591 | | | | (2,030 | ) | | | -36 | % | | | 24,207 | | | | 25,790 | | | | (1,583 | ) | | | -6 | % |
Corporate (1) | | | 17,927 | | | | 21,016 | | | | (3,089 | ) | | | -15 | % | | | 73,012 | | | | 66,891 | | | | 6,121 | | | | 9 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total | | $ | 41,508 | | | $ | 46,459 | | | $ | (4,951 | ) | | | -11 | % | | $ | 163,503 | | | $ | 191,592 | | | $ | (28,089 | ) | | | -15 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| SG&A as a % of Home Sales Revenue | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Homebuilding Segments | | | 13.7 | % | | | 15.3 | % | | | -1.6 | % | | | | | | | 16.0 | % | | | 16.3 | % | | | -0.3 | % | | | | |
Corporate Segment (1) | | | 6.0 | % | | | 7.4 | % | | | -1.4 | % | | | | | | | 8.7 | % | | | 4.9 | % | | | 3.8 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Depreciation and Amortization(2) | | $ | 4,329 | | | $ | 5,850 | | | $ | (1,521 | ) | | | -26 | % | | $ | 14,457 | | | $ | 32,710 | | | $ | (18,253 | ) | | | -56 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Home Gross Margins (3) | | | 18.8 | % | | | 12.9 | % | | | 5.9 | % | | | | | | | 17.9 | % | | | 12.8 | % | | | 5.1 | % | | | | |
| Interest in Home Cost of Sales as a % of Home Sales Revenue | | | 2.3 | % | | | 4.1 | % | | | -1.8 | % | | | | | | | 3.7 | % | | | 4.0 | % | | | -0.3 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Cash Provided by (Used in) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Operating Activities | | $ | (42,052 | ) | | $ | 51,162 | | | $ | (93,214 | ) | | | -182 | % | | $ | 202,454 | | | $ | 479,511 | | | $ | (277,057 | ) | | | -58 | % |
| Investing Activities | | $ | (178,054 | ) | | $ | 96,876 | | | $ | (274,930 | ) | | | -284 | % | | $ | (224,992 | ) | | $ | (113,439 | ) | | $ | (111,553 | ) | | | -98 | % |
| Financing Activities | | $ | 5,483 | | | $ | (4,178 | ) | | $ | 9,661 | | | | 231 | % | | $ | (47,938 | ) | | $ | (66,107 | ) | | $ | 18,169 | | | | 27 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Corporate and Homebuilding Interest | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest capitalized, net of interest expense | | $ | 5,456 | | | $ | 7,186 | | | $ | (1,730 | ) | | | -24 | % | | $ | 19,810 | | | $ | 39,852 | | | $ | (20,042 | ) | | | -50 | % |
| Previously capitalized interest included in home cost of sales | | $ | (6,874 | ) | | $ | (11,681 | ) | | $ | 4,807 | | | | -41 | % | | $ | (30,710 | ) | | $ | (54,100 | ) | | $ | 23,390 | | | | -43 | % |
| Interest capitalized in homebuilding inventory, end of year | | $ | 28,339 | | | $ | 39,239 | | | $ | (10,900 | ) | | | -28 | % | | $ | 28,339 | | | $ | 39,239 | | | $ | (10,900 | ) | | | -28 | % |
| | |
| (1) | | Includes related party expenses. |
| |
| (2) | | Includes depreciation and amortization of long-lived assets and amortization of deferred marketing costs. |
| |
| (3) | | Home sales revenue less home cost of sales (excluding commissions, amortization of deferred marketing, project cost write offs and asset impairments) as a percent of home sales revenue. During the three months ended December 31, 2009 and December 31, 2008, we closed homes on lots for which we had previously recorded $74.9 million and $67.4 million, respectively, of asset impairments. During the twelve months ended December 31, 2009 and December 31, 2008, we closed homes on lots for which we had previously recorded $211.3 million and $249.5 million, respectively, of asset impairments. |
9
M.D.C. HOLDINGS, INC.
Selected Financial Data
(Dollars in thousands)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | | | | | | | | Year Ended | | |
| | | December 31, | | Change | | December 31, | | Change |
| | | 2009 | | 2008 | | Amount | | % | | 2009 | | 2008 | | Amount | | % |
HOMEAMERICAN OPERATING ACTIVITIES | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Principal amount of mortgage loans originated | | $ | 226,483 | | | $ | 172,745 | | | $ | 53,738 | | | | 31 | % | | $ | 633,171 | | | $ | 749,310 | | | $ | (116,139 | ) | | | -15 | % |
| Principal amount of mortgage loans brokered | | $ | 8,021 | | | $ | 29,751 | | | $ | (21,730 | ) | | | -73 | % | | $ | 33,152 | | | $ | 170,898 | | | $ | (137,746 | ) | | | -81 | % |
| Capture Rate | | | 86 | % | | | 71 | % | | | 15 | % | | | | | | | 85 | % | | | 66 | % | | | 19 | % | | | | |
| Including brokered loans | | | 88 | % | | | 81 | % | | | 7 | % | | | | | | | 89 | % | | | 79 | % | | | 10 | % | | | | |
| Mortgage products (% of mortgage loans originated) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Fixed rate | | | 99 | % | | | 100 | % | | | -1 | % | | | | | | | 99 | % | | | 97 | % | | | 2 | % | | | | |
| Adjustable rate — interest only | | | 0 | % | | | 0 | % | | | 0 | % | | | | | | | 0 | % | | | 1 | % | | | -1 | % | | | | |
| Adjustable rate — other | | | 1 | % | | | 0 | % | | | 1 | % | | | | | | | 1 | % | | | 2 | % | | | -1 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Prime loans (4) | | | 24 | % | | | 40 | % | | | -16 | % | | | | | | | 29 | % | | | 48 | % | | | -19 | % | | | | |
| Government loans (5) | | | 76 | % | | | 60 | % | | | 16 | % | | | | | | | 71 | % | | | 52 | % | | | 19 | % | | | | |
| | |
| (4) | | Prime loans generally are defined as loans with Fair, Isaac and Company (“FICO”) scores greater than 620 and that comply with the documentation standards of the government sponsored enterprise guidelines. |
| |
| (5) | | Government loans are loans either insured by the Federal Housing Administration or guaranteed by the Department of Veteran Affairs. |
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10
M.D.C. HOLDINGS, INC.
Homebuilding Operational Data
(Dollars in thousands)
(Unaudited)
| | | | | | | | | |
| | | December 31, | | | December 31, | |
| | | 2009 | | | 2008 | |
HOMES COMPLETED OR UNDER CONSTRUCTION | | | | | | | | |
| Unsold Home Under Construction — Final | | | 41 | | | | 451 | |
| Unsold Home Under Construction — Frame | | | 389 | | | | 329 | |
| Unsold Home Under Construction — Foundation | | | 109 | | | | 41 | |
| | | | | | | |
| Total Unsold Homes Under Construction | | | 539 | | | | 821 | |
| Sold Homes Under Construction | | | 570 | | | | 409 | |
| Model Homes | | | 212 | | | | 387 | |
| | | | | | | |
| Homes Completed or Under Construction | | | 1,321 | | | | 1,617 | |
| | | | | | | |
| | | | | | | | | |
LOTS OWNED(excluding homes completed or under construction) | | | | | | | | |
| |
| Arizona | | | 1,075 | | | | 1,458 | |
| California | | | 581 | | | | 839 | |
| Nevada | | | 966 | | | | 1,111 | |
| | | | | | | |
| West | | | 2,622 | | | | 3,408 | |
| | | | | | | |
| | | | | | | | | |
| Colorado | | | 2,514 | | | | 2,597 | |
| Utah | | | 545 | | | | 642 | |
| | | | | | | |
| Mountain | | | 3,059 | | | | 3,239 | |
| | | | | | | |
| | | | | | | | | |
| Delaware Valley | | | 82 | | | | 115 | |
| Maryland | | | 100 | | | | 176 | |
| Virginia | | | 241 | | | | 241 | |
| | | | | | | |
| East | | | 423 | | | | 532 | |
| | | | | | | |
| | | | | | | | | |
| Florida | | | 138 | | | | 257 | |
| Illinois | | | 141 | | | | 141 | |
| | | | | | | |
| Other Homebuilding | | | 279 | | | | 398 | |
| | | | | | | |
| | | | | | | | | |
| Total | | | 6,383 | | | | 7,577 | |
| | | | | | | |
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11
M.D.C. HOLDINGS, INC.
Homebuilding Operational Data
(Dollars in thousands)
(Unaudited)
| | | | | | | | | |
| | | December 31, | | | December 31, | |
| | | 2009 | | | 2008 | |
LOTS CONTROLLED UNDER OPTION | | | | | | | | |
| Arizona | | | 328 | | | | 472 | |
| California | | | 113 | | | | 149 | |
| Nevada | | | 222 | | | | 95 | |
| | | | | | | |
| West | | | 663 | | | | 716 | |
| | | | | | | |
| | | | | | | | | |
| Colorado | | | 537 | | | | 184 | |
| Utah | | | 117 | | | | — | |
| | | | | | | |
| Mountain | | | 654 | | | | 184 | |
| | | | | | | |
| | | | | | | | | |
| Delaware Valley | | | — | | | | 40 | |
| Maryland | | | 575 | | | | 355 | |
| Virginia | | | 192 | | | | 592 | |
| | | | | | | |
| East | | | 767 | | | | 987 | |
| | | | | | | |
| | | | | | | | | |
| Florida | | | 500 | | | | 471 | |
| Illinois | | | — | | | | — | |
| | | | | | | |
| Other Homebuilding | | | 500 | | | | 471 | |
| | | | | | | |
| | | | | | | | | |
| Total | | | 2,584 | | | | 2,358 | |
| | | | | | | |
| | | | | | | | | |
| Total Lots Owned and Controlled | | | 8,967 | | | | 9,935 | |
| | | | | | | |
| | | | | | | | | |
NON-REFUNDABLE OPTION DEPOSITS | | | | | | | | |
| Cash | | $ | 7,654 | | | $ | 5,145 | |
| Letters of Credit | | | 2,134 | | | | 4,358 | |
| | | | | | | |
| Total Non-Refundable Option Deposits | | $ | 9,788 | | | $ | 9,503 | |
| | | | | | | |
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12
M.D.C. HOLDINGS, INC.
Homebuilding Operational Data
(Dollars in thousands)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | | | | | | | | | Year Ended | | | | |
| | | December 31, | | | Change | | | December 31, | | | Change | |
| | | 2009 | | | 2008 | | | Amount | | | % | | | 2009 | | | 2008 | | | Amount | | | % | |
HOMES CLOSED (UNITS) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Arizona | | | 273 | | | | 275 | | | | (2 | ) | | | -1 | % | | | 778 | | | | 1,313 | | | | (535 | ) | | | -41 | % |
| California | | | 102 | | | | 118 | | | | (16 | ) | | | -14 | % | | | 293 | | | | 590 | | | | (297 | ) | | | -50 | % |
| Nevada | | | 227 | | | | 152 | | | | 75 | | | | 49 | % | | | 521 | | | | 791 | | | | (270 | ) | | | -34 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| West | | | 602 | | | | 545 | | | | 57 | | | | 10 | % | | | 1,592 | | | | 2,694 | | | | (1,102 | ) | | | -41 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Colorado | | | 202 | | | | 133 | | | | 69 | | | | 52 | % | | | 565 | | | | 576 | | | | (11 | ) | | | -2 | % |
| Utah | | | 94 | | | | 54 | | | | 40 | | | | 74 | % | | | 230 | | | | 268 | | | | (38 | ) | | | -14 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Mountain | | | 296 | | | | 187 | | | | 109 | | | | 58 | % | | | 795 | | | | 844 | | | | (49 | ) | | | -6 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Delaware Valley | | | 18 | | | | 16 | | | | 2 | | | | 13 | % | | | 60 | | | | 91 | | | | (31 | ) | | | -34 | % |
| Maryland | | | 50 | | | | 42 | | | | 8 | | | | 19 | % | | | 140 | | | | 192 | | | | (52 | ) | | | -27 | % |
| Virginia | | | 70 | | | | 58 | | | | 12 | | | | 21 | % | | | 190 | | | | 257 | | | | (67 | ) | | | -26 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| East | | | 138 | | | | 116 | | | | 22 | | | | 19 | % | | | 390 | | | | 540 | | | | (150 | ) | | | -28 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Florida | | | 73 | | | | 82 | | | | (9 | ) | | | -11 | % | | | 214 | | | | 336 | | | | (122 | ) | | | -36 | % |
| Illinois | | | — | | | | 14 | | | | (14 | ) | | | -100 | % | | | 22 | | | | 74 | | | | (52 | ) | | | -70 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Other Homebuilding | | | 73 | | | | 96 | | | | (23 | ) | | | -24 | % | | | 236 | | | | 410 | | | | (174 | ) | | | -42 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total | | | 1,109 | | | | 944 | | | | 165 | | | | 17 | % | | | 3,013 | | | | 4,488 | | | | (1,475 | ) | | | -33 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
AVERAGE SELLING PRICES PER CLOSED HOME | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| |
West | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Arizona | | $ | 193.5 | | | $ | 201.1 | | | $ | (7.6 | ) | | | -4 | % | | $ | 194.3 | | | $ | 216.2 | | | $ | (21.9 | ) | | | -10 | % |
| California | | | 430.9 | | | | 455.3 | | | | (24.4 | ) | | | -5 | % | | | 417.5 | | | | 429.0 | | | | (11.5 | ) | | | -3 | % |
| Nevada | | | 194.5 | | | | 237.5 | | | | (43.0 | ) | | | -18 | % | | | 201.2 | | | | 244.6 | | | | (43.4 | ) | | | -18 | % |
Mountain | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Colorado | | | 285.7 | | | | 363.7 | | | | (78.0 | ) | | | -21 | % | | | 316.5 | | | | 352.1 | | | | (35.6 | ) | | | -10 | % |
| Utah | | | 275.4 | | | | 319.4 | | | | (44.0 | ) | | | -14 | % | | | 287.1 | | | | 333.0 | | | | (45.9 | ) | | | -14 | % |
East | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Delaware Valley | | | 411.6 | | | | 392.9 | | | | 18.7 | | | | 5 | % | | | 416.1 | | | | 406.4 | | | | 9.7 | | | | 2 | % |
| Maryland | | | 460.5 | | | | 489.9 | | | | (29.4 | ) | | | -6 | % | | | 425.0 | | | | 466.0 | | | | (41.0 | ) | | | -9 | % |
| Virginia | | | 469.3 | | | | 436.3 | | | | 33.0 | | | | 8 | % | | | 482.8 | | | | 454.3 | | | | 28.5 | | | | 6 | % |
Other Homebuilding | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Florida | | | 207.8 | | | | 232.7 | | | | (24.9 | ) | | | -11 | % | | | 214.5 | | | | 238.5 | | | | (24.0 | ) | | | -10 | % |
| Illinois | | | N/A | | | | 348.0 | | | | N/A | | | | N/A | | | | 313.0 | | | | 347.9 | | | | (34.9 | ) | | | -10 | % |
| Company Average | | $ | 268.4 | | | $ | 300.3 | | | $ | (32.0 | ) | | | -11 | % | | $ | 277.8 | | | $ | 302.6 | | | $ | (24.8 | ) | | | -8 | % |
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13
M.D.C. HOLDINGS, INC.
Homebuilding Operational Data
(Dollars in thousands)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months | | | | | | | | | | | Year Ended | | | | |
| | | Ended December 31, | | | Change | | | December 31, | | | Change | |
| | | 2009 | | | 2008 | | | Amount | | | % | | | 2009 | | | 2008 | | | Amount | | | % | |
ORDERS FOR HOMES, NET (UNITS) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Arizona | | | 124 | | | | 87 | | | | 37 | | | | 43 | % | | | 723 | | | | 879 | | | | (156 | ) | | | -18 | % |
| California | | | 58 | | | | 42 | | | | 16 | | | | 38 | % | | | 320 | | �� | | 436 | | | | (116 | ) | | | -27 | % |
| Nevada | | | 94 | | | | 50 | | | | 44 | | | | 88 | % | | | 556 | | | | 537 | | | | 19 | | | | 4 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| West | | | 276 | | | | 179 | | | | 97 | | | | 54 | % | | | 1,599 | | | | 1,852 | | | | (253 | ) | | | -14 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Colorado | | | 163 | | | | 50 | | | | 113 | | | | 226 | % | | | 700 | | | | 435 | | | | 265 | | | | 61 | % |
| Utah | | | 53 | | | | 27 | | | | 26 | | | | 96 | % | | | 282 | | | | 132 | | | | 150 | | | | 114 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Mountain | | | 216 | | | | 77 | | | | 139 | | | | 181 | % | | | 982 | | | | 567 | | | | 415 | | | | 73 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Delaware Valley | | | 10 | | | | 5 | | | | 5 | | | | 100 | % | | | 56 | | | | 61 | | | | (5 | ) | | | -8 | % |
| Maryland | | | 41 | | | | 12 | | | | 29 | | | | 242 | % | | | 185 | | | | 124 | | | | 61 | | | | 49 | % |
| Virginia | | | 49 | | | | 41 | | | | 8 | | | | 20 | % | | | 227 | | | | 193 | | | | 34 | | | | 18 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| East | | | 100 | | | | 58 | | | | 42 | | | | 72 | % | | | 468 | | | | 378 | | | | 90 | | | | 24 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Florida | | | 45 | | | | 31 | | | | 14 | | | | 45 | % | | | 238 | | | | 246 | | | | (8 | ) | | | -3 | % |
| Illinois | | | — | | | | 5 | | | | (5 | ) | | | -100 | % | | | 19 | | | | 31 | | | | (12 | ) | | | -39 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Other Homebuilding | | | 45 | | | | 36 | | | | 9 | | | | 25 | % | | | 257 | | | | 277 | | | | (20 | ) | | | -7 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total | | | 637 | | | | 350 | | | | 287 | | | | 82 | % | | | 3,306 | | | | 3,074 | | | | 232 | | | | 8 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Estimated Value of Orders for Homes, net | | $ | 183,000 | | | $ | 100,000 | | | | 83,000 | | | | 83 | % | | $ | 935,000 | | | $ | 885,000 | | | | 50,000 | | | | 6 | % |
| Estimated Average Selling Price of Orders for Homes, net | | $ | 287.3 | | | $ | 285.7 | | | | 1.6 | | | | 1 | % | | $ | 282.8 | | | $ | 287.9 | | | | (5.1 | ) | | | -2 | % |
| Cancellation Rate(6) | | | 30 | % | | | 52 | % | | | -22 | % | | | | | | | 24 | % | | | 45 | % | | | -21 | % | | | | |
| | |
| (6) | | We define “Cancellation Rate” as the approximate number of cancelled home order contracts during a reporting period as a percent of total home orders received during such reporting period. |
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14
M.D.C. HOLDINGS, INC.
Homebuilding Operational Data
(Dollars in thousands)
(Unaudited)
| | | | | | | | | |
| | | December 31, | | | December 31, | |
| | | 2009 | | | 2008 | |
BACKLOG (UNITS) | | | | | | | | |
| Arizona | | | 103 | | | | 158 | |
| California | | | 76 | | | | 49 | |
| Nevada | | | 88 | | | | 53 | |
| | | | | | | |
| West | | | 267 | | | | 260 | |
| | | | | | | |
| Colorado | | | 207 | | | | 72 | |
| Utah | | | 94 | | | | 42 | |
| | | | | | | |
| Mountain | | | 301 | | | | 114 | |
| | | | | | | |
| Delaware Valley | | | 23 | | | | 27 | |
| Maryland | | | 103 | | | | 58 | |
| Virginia | | | 73 | | | | 36 | |
| | | | | | | |
| East | | | 199 | | | | 121 | |
| | | | | | | |
| Florida | | | 59 | | | | 35 | |
| Illinois | | | — | | | | 3 | |
| | | | | | | |
| Other Homebuilding | | | 59 | | | | 38 | |
| | | | | | | |
| Total | | | 826 | | | | 533 | |
| | | | | | | |
| Backlog Estimated Sales Value | | $ | 265,000 | | | $ | 173,000 | |
| | | | | | | |
| Estimated Average Selling Price of Homes in Backlog | | $ | 320.8 | | | $ | 324.6 | |
| | | | | | | |
| | | | | | | | | |
ACTIVE SUBDIVISIONS | | | | | | | | |
| Arizona | | | 28 | | | | 44 | |
| California | | | 3 | | | | 18 | |
| Nevada | | | 18 | | | | 24 | |
| | | | | | | |
| West | | | 49 | | | | 86 | |
| | | | | | | |
| Colorado | | | 42 | | | | 49 | |
| Utah | | | 16 | | | | 22 | |
| | | | | | | |
| Mountain | | | 58 | | | | 71 | |
| | | | | | | |
| Delaware Valley | | | 1 | | | | 3 | |
| Maryland | | | 8 | | | | 11 | |
| Virginia | | | 7 | | | | 12 | |
| | | | | | | |
| East | | | 16 | | | | 26 | |
| | | | | | | |
| Florida | | | 10 | | | | 7 | |
| Illinois | | | — | | | | 1 | |
| | | | | | | |
| Other Homebuilding | | | 10 | | | | 8 | |
| | | | | | | |
| Total | | | 133 | | | | 191 | |
| | | | | | | |
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15
