Exhibit 99.1
NEWS BULLETIN
M.D.C. HOLDINGS, INC. | RICHMOND AMERICAN HOMES | |
HOMEAMERICAN MORTGAGE |
FOR IMMEDIATE RELEASE
THURSDAY, FEBRUARY 7, 2008
THURSDAY, FEBRUARY 7, 2008
Contacts: | Paris G. Reece III | Robert N. Martin | Joëlle Lipski-Rockwood | |||
Chief Financial Officer | Investor Relations | Corporate Communications | ||||
(303) 804-7706 | (720) 977-3431 | (720) 977-3204 | ||||
greece@mdch.com | bob.martin@mdch.com | joelle.rockwood@mdch.com |
M.D.C. HOLDINGS ANNOUNCES FOURTH QUARTER
AND FULL YEAR 2007 RESULTS
AND FULL YEAR 2007 RESULTS
2007 FOURTH QUARTER
• | Cash flow from operations of $257.0 million | ||
• | Quarter-end cash of $1.00 billion; no borrowings on homebuilding line of credit | ||
• | Ending cash and available borrowing capacity of $2.25 billion | ||
• | Net loss of $281.1 million and diluted loss per share of $6.14; includes deferred tax asset valuation allowance of $160.0 million | ||
• | Pre-tax loss of $190.4 million; includes asset impairments and project cost write-offs of $183.0 million and net land sale losses of $13.8 million | ||
• | Total revenue of $784.8 million; $1.34 billion in 2006 | ||
• | Closed 2,200 homes at an average selling price of $325,100 | ||
• | Net orders for 748 homes with an estimated value of $187.0 million |
2007 FULL YEAR
• | Cash flow from operations of $592.6 million | ||
• | Net loss of $636.9 million and diluted loss per share of $13.94 | ||
• | Pre-tax loss of $756.5 million; includes asset impairments and project cost write-offs of $750.0 million and net land sale losses of $9.4 million | ||
• | Total revenue of $2.93 billion; $4.80 billion in 2006 | ||
• | Closed 8,195 homes at an average selling price of $337,500 | ||
• | Net orders for 6,504 homes with an estimated value of $2.11 billion | ||
• | 2007Form 10-K scheduled to be filed today |
DENVER, Thursday, February 7, 2008 — M.D.C. Holdings, Inc. (NYSE: MDC) today announced a net loss for the quarter ended December 31, 2007 of $281.1 million, or $6.14 per
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diluted share, which included pre-tax charges of $175.2 million for asset impairments and $7.8 million for write-offs of deposits and pre-acquisition costs associated with land option contracts the Company does not intend to pursue. The loss also included net pre-tax losses on land sales of $13.8 million and an after-tax valuation allowance of $160.0 million related to MDC’s deferred tax assets. Net loss for the fourth quarter of 2006 was $6.4 million, or $0.14 per diluted share, including pre-tax charges of $91.3 million for asset impairments and $6.7 million for write-offs of option deposits and pre-acquisition costs. Total revenue for the fourth quarter of 2007 was $784.8 million, compared with revenue of $1.34 billion for the same period in 2006.
The net loss for the year ended December 31, 2007 was $636.9 million, or $13.94 per diluted share, which included pre-tax charges of $726.6 million for asset impairments and $23.4 million for write-offs of deposits and pre-acquisition costs. The loss also included net pre-tax losses on land sales of $9.4 million and the after-tax valuation allowance of $160.0 million related to MDC’s deferred tax assets. Net income for the 2006 full year was $214.3 million, or $4.66 per diluted share, including pre-tax charges of $112.0 million for asset impairments and $29.7 million for write-offs of option deposits and pre-acquisition costs. Total revenue for the 2007 full year was $2.93 billion, compared with revenue of $4.80 billion for the same period in 2006.
Larry A. Mizel, MDC’s chairman and chief executive officer, stated, “After generating over $590 million in operating cash flow during 2007, including almost $260 million in the fourth quarter, we ended the year with more than $1.0 billion in cash on hand. With no borrowings outstanding on our $1.25 billion line of credit, we expanded our year-end cash and available borrowing capacity year-over-year by 30% to nearly $2.25 billion. Earlier this week, we further increased our cash balances when we received a $90 million tax refund from the IRS for the carryback of our 2007 net operating loss.”
Mizel continued, “Our strong financial position at the end of 2007 is a result of our high level of preparedness at the onset of this downturn, combined with our continuing efforts to improve our balance sheet. During the fourth quarter alone, we reduced our supply of lots owned by 20%, which contributed significantly to the 9,000 lot decrease we achieved during the year. Throughout 2007, we worked diligently to conserve our cash by tightening controls on land development expenditures, working with our suppliers and subcontractors to reduce the direct costs of home construction and shrinking our overhead to more closely match current levels of demand. These steps should help us to maximize cash flow going forward as we continue to look for opportunities to invest our substantial cash and make use of our available borrowing capacity.”
Homebuilding Results
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Homebuilding loss before taxes for the quarter and year ended December 31, 2007 was $195.9 million and $764.2 million, respectively, compared with a loss before taxes of $14.3 million and income before taxes of $371.4 million for the same periods in 2006. The pre-tax differences were driven in large part by the asset impairment charges and net land sale losses discussed above, as well as significant declines in home closings, average selling prices and home gross margins from the levels achieved during the same periods in 2006. These income decreases were offset partially by the impact of reduced homebuilding commissions, marketing, general and administrative expenses (“SG&A”).
The Company closed 2,200 homes and produced home gross margins of 11.7% in the 2007 fourth quarter, compared with 3,594 home closings and home gross margins of 16.6% for the same period in 2006. For the year ended December 31, 2007, the Company closed 8,195 homes and produced home gross margins of 13.9%, compared with 13,123 home closings and home gross margins of 22.2% for the year ended December 31, 2006. Average selling prices were $325,100 and $337,500, respectively, for the quarter and year ended December 31, 2007, down $35,000 and $16,900 from the same periods in 2006. Homebuilding SG&A decreased to $95.4 million and $425.5 million, respectively, for the three months and year ended December 31, 2007, compared with $141.7 million and $560.1 million for the same periods in the prior year.
Paris G. Reece III, MDC’s executive vice president and chief financial officer, said, “During the 2007 fourth quarter, we recognized $175 million in inventory impairments, including $27 million on land held for sale, with respect to almost 4,900 lots in 153 subdivisions. Land inventory was impaired by $126 million and work-in-process inventory was impaired by $49 million. The year-end book value of the impaired subdivisions after the impairments was $397 million, consisting of $126 million of land and $271 million of work-in-process. As has been the case in each of the last four quarters, the impairments this quarter primarily occurred in our West homebuilding segment, with more than 75% applicable to subdivisions in our Arizona, Nevada and California markets. Over the last six quarters, we have impaired approximately 60% of the 15,000 lots we owned at the end of our 2007 fourth quarter.”
Reece continued, “Of the $727 million impairment charge we took during 2007, $556 million related to our land inventory, which decreased by almost 65% year-over-year to $554 million at December 31, 2007. In our West segment, where 80% of the impairments in 2007 occurred, land inventory decreased by more than 75% during the year. California’s land balance alone dropped by more than 90% in 2007, and most of the remaining $35 million of land is being held for sale to third-party developers or investors.”
Reece concluded, “We were successful in reducing our general and administrative expenses year-over-year in the 2007 fourth quarter and full year by 36% and 27%, respectively, reflecting our continued efforts to right-size our homebuilding operations in view of current market conditions. We have cut our operating divisions by approximately half from their peak
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levels two years ago, and we will continue to assess the need for further adjustments as we move through 2008.”
Financial Services and Other Results
Income before taxes from the Company’s Financial Services and Other segment for the quarter and year ended December 31, 2007 was $6.3 million and $23.1 million, respectively, compared with $10.0 million and $45.2 million for the same periods in the previous year. The decreases in both 2007 periods primarily resulted from lower gains on sales of mortgage loans, as the dollar volumes of mortgage loan originations and mortgage loans sold declined in conjunction with builder home closings. The lower gains were offset partially by year-over-year reductions in financial services general and administrative expenses for both periods.
Home Orders and Backlog
MDC received orders, net of cancellations, for 748 homes with an estimated sales value of $187.0 million during the 2007 fourth quarter, compared with net orders for 1,571 homes with an estimated sales value of $515.0 million during the same period in 2006. For the year ended December 31, 2007, the Company received net orders for 6,504 homes with a sales value of $2.11 billion, compared with orders for 10,229 homes with a sales value of $3.47 billion for the year ended December 31, 2006. During the 2007 fourth quarter and full year, the Company’s order cancellation rates were 65% and 48%, respectively, compared with rates of 57% and 43% experienced during the same periods in 2006. The Company ended the fourth quarter of 2007 with a backlog of 1,947 homes with an estimated sales value of $650.0 million, compared with a backlog of 3,638 homes with an estimated sales value of $1.30 billion at December 31, 2006.
Since 1972, MDC has built and financed the American dream for more than 150,000 families. MDC’s commitment to customer satisfaction, quality and value is reflected in each home it builds. As one of the largest homebuilders in the United States, the Company has homebuilding divisions across the country, including Colorado, Salt Lake City, Las Vegas, Phoenix, Tucson, California, Chicago, Northern Virginia, Maryland, Philadelphia/Delaware Valley and Jacksonville. The Company also provides mortgage financing, insurance and title services, primarily for MDC homebuyers, through its wholly owned subsidiaries, HomeAmerican Mortgage Corporation, American Home Insurance Agency and American Home Title and Escrow, respectively. M.D.C. Holdings, Inc. is traded on the New York Stock Exchange under the symbol “MDC.” For more information, visit http://www.richmondamerican.com.
Forward-Looking Statements
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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 and business conditions, including changes in cancellation rates, net home orders, home gross margins, and land and home values; (2) changes in interest rates, mortgage lending programs and the availability of credit; (3) the relative stability of debt and equity markets; (4) competition; (5) the availability and cost of land and other raw materials used by the Company in its homebuilding operations; (6) the availability and cost of performance bonds and insurance covering risks associated with our business; (7) shortages and the cost of labor; (8) weather related slowdowns; (9) slow growth initiatives; (10) building moratoria; (11) governmental regulation, including the interpretation of tax, labor and environmental laws; (12) changes in consumer confidence and preferences; (13) terrorist acts and other acts of war; and (14) 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 Annual Report on Form 10-K for the year ended December 31, 2007, 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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Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended | Year Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||||
REVENUE | ||||||||||||||||
Home sales revenue | $ | 715,244 | $ | 1,294,140 | $ | 2,765,981 | $ | 4,650,556 | ||||||||
Land sales revenue | 37,979 | 15,799 | 50,130 | 34,611 | ||||||||||||
Other revenue | 31,533 | 33,474 | 117,138 | 116,575 | ||||||||||||
Total Revenue | 784,756 | 1,343,413 | 2,933,249 | 4,801,742 | ||||||||||||
COSTS AND EXPENSES | ||||||||||||||||
Home cost of sales | 631,262 | 1,079,275 | 2,380,427 | 3,619,656 | ||||||||||||
Land cost of sales | 51,789 | 15,367 | 59,529 | 33,491 | ||||||||||||
Asset impairments | 175,199 | 91,252 | 726,621 | 112,027 | ||||||||||||
Marketing expenses | 29,944 | 36,957 | 117,088 | 128,856 | ||||||||||||
Commission expenses | 26,421 | 44,481 | 97,951 | 151,108 | ||||||||||||
General and administrative expenses | 59,486 | 92,284 | 306,715 | 418,879 | ||||||||||||
Related party expenses | 1,096 | 1,796 | 1,382 | 4,588 | ||||||||||||
Total Costs and Expenses | 975,197 | 1,361,412 | 3,689,713 | 4,468,605 | ||||||||||||
(Loss) income before income taxes | (190,441 | ) | (17,999 | ) | (756,464 | ) | 333,137 | |||||||||
(Provision for) benefit from income taxes | (90,651 | ) | 11,634 | 119,524 | (118,884 | ) | ||||||||||
NET (LOSS) INCOME | $ | (281,092 | ) | $ | (6,365 | ) | $ | (636,940 | ) | $ | 214,253 | |||||
(LOSS) EARNINGS PER SHARE | ||||||||||||||||
Basic | $ | (6.14 | ) | $ | (0.14 | ) | $ | (13.94 | ) | $ | 4.77 | |||||
Diluted | $ | (6.14 | ) | $ | (0.14 | ) | $ | (13.94 | ) | $ | 4.66 | |||||
WEIGHTED-AVERAGE SHARES | ||||||||||||||||
Basic | 45,772 | 45,073 | 45,687 | 44,952 | ||||||||||||
Diluted | 45,772 | 45,073 | 45,687 | 45,971 | ||||||||||||
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)
Consolidated Balance Sheets
(Dollars in thousands, except per share amounts)
(Unaudited)
December 31, | December 31, | |||||||
2007 | 2006 | |||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 1,004,763 | $ | 507,947 | ||||
Restricted cash | 1,898 | 2,641 | ||||||
Receivables | ||||||||
Home sales receivables | 33,647 | 128,614 | ||||||
Income taxes receivable, net | 36,988 | — | ||||||
Other receivables | 16,796 | 15,322 | ||||||
Mortgage loans held in inventory, net | 100,144 | 212,903 | ||||||
Inventories | ||||||||
Housing completed or under construction | 902,221 | 1,178,671 | ||||||
Land and land under development | 554,336 | 1,575,158 | ||||||
Property and equipment, net | 44,368 | 44,606 | ||||||
Deferred income taxes, net | 160,565 | 124,880 | ||||||
Related party assets | 28,627 | — | ||||||
Prepaid expenses and other assets, net | 71,884 | 119,133 | ||||||
Total Assets | $ | 2,956,237 | $ | 3,909,875 | ||||
LIABILITIES | ||||||||
Accounts payable | $ | 71,932 | $ | 171,005 | ||||
Accrued liabilities | 339,353 | 418,953 | ||||||
Income taxes payable | — | 28,485 | ||||||
Related party liabilities | 1,701 | 2,401 | ||||||
Homebuilding line of credit | — | — | ||||||
Mortgage line of credit | 70,147 | 130,467 | ||||||
Senior notes, net | 997,091 | 996,682 | ||||||
Total Liabilities | 1,480,224 | 1,747,993 | ||||||
COMMITMENTS AND CONTINGENCIES | — | — | ||||||
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; 46,084,000 and 46,053,000 issued and outstanding, respectively, at December 31, 2007 and 45,179,000 and 45,165,000 issued and outstanding, respectively, at December 31, 2006 | 461 | 452 | ||||||
Additional paid-in capital | 757,039 | 760,831 | ||||||
Retained earnings | 719,841 | 1,402,261 | ||||||
Accumulated other comprehensive loss | (669 | ) | (1,003 | ) | ||||
Treasury stock, at cost; 31,000 and 14,000 shares, respectively, at December 31, 2007 and December 31, 2006 | (659 | ) | (659 | ) | ||||
Total Stockholders’ Equity | 1,476,013 | 2,161,882 | ||||||
Total Liabilities and Stockholders’ Equity | $ | 2,956,237 | $ | 3,909,875 | ||||
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Information on Segments
(Dollars in thousands)
(Unaudited)
Information on Segments
(Dollars in thousands)
(Unaudited)
Three Months Ended | Year Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||||
REVENUE | ||||||||||||||||
Homebuilding | ||||||||||||||||
West | $ | 448,754 | $ | 809,332 | $ | 1,725,766 | $ | 2,871,040 | ||||||||
Mountain | 131,471 | 211,382 | 549,771 | 730,489 | ||||||||||||
East | 113,200 | 183,743 | 318,723 | 628,508 | ||||||||||||
Other Homebuilding | 69,432 | 119,329 | 253,627 | 493,628 | ||||||||||||
Total Homebuilding | 762,857 | 1,323,786 | 2,847,887 | 4,723,665 | ||||||||||||
Financial Services and Other | 15,672 | 29,085 | 63,508 | 103,243 | ||||||||||||
Corporate | 11,329 | 1,113 | 41,839 | 1,788 | ||||||||||||
Inter-company Adjustments | (5,102 | ) | (10,571 | ) | (19,985 | ) | (26,954 | ) | ||||||||
Consolidated | $ | 784,756 | $ | 1,343,413 | $ | 2,933,249 | $ | 4,801,742 | ||||||||
(LOSS) INCOME BEFORE INCOME TAXES | ||||||||||||||||
Homebuilding | ||||||||||||||||
West | $ | (159,227 | ) | $ | (38,688 | ) | $ | (621,774 | ) | $ | 235,954 | |||||
Mountain | (14,613 | ) | 18,307 | (11,395 | ) | 43,490 | ||||||||||
East | (11,580 | ) | 19,015 | (38,748 | ) | 104,706 | ||||||||||
Other Homebuilding | (10,475 | ) | (12,946 | ) | (92,251 | ) | (12,709 | ) | ||||||||
Total Homebuilding | (195,895 | ) | (14,312 | ) | (764,168 | ) | 371,441 | |||||||||
Financial Services and Other | 6,286 | 10,025 | 23,062 | 45,186 | ||||||||||||
Corporate | (832 | ) | (13,712 | ) | (15,358 | ) | (83,490 | ) | ||||||||
Consolidated | $ | (190,441 | ) | $ | (17,999 | ) | $ | (756,464 | ) | $ | 333,137 | |||||
ASSET IMPAIRMENTS | ||||||||||||||||
West | $ | 136,372 | $ | 75,561 | $ | 581,494 | $ | 90,804 | ||||||||
Mountain | 13,397 | 1,265 | 30,106 | 1,892 | ||||||||||||
East | 17,386 | 6,879 | 42,055 | 8,236 | ||||||||||||
Other Homebuilding | 8,044 | 7,547 | 72,966 | 11,095 | ||||||||||||
Total Homebuilding | $ | 175,199 | $ | 91,252 | $ | 726,621 | $ | 112,027 | ||||||||
December 31, | December 31, | |||||||||||||||
2007 | 2006 | |||||||||||||||
TOTAL ASSETS | ||||||||||||||||
West | $ | 747,835 | $ | 1,869,442 | ||||||||||||
Mountain | 474,203 | 535,554 | ||||||||||||||
East | 250,658 | 333,902 | ||||||||||||||
Other Homebuilding | 125,003 | 266,326 | ||||||||||||||
Total Homebuilding | 1,597,699 | 3,005,224 | ||||||||||||||
Financial Services and Other | 174,617 | 284,791 | ||||||||||||||
Corporate | 1,229,178 | 657,917 | ||||||||||||||
Inter-company | (45,257 | ) | (38,057 | ) | ||||||||||||
Consolidated | $ | 2,956,237 | $ | 3,909,875 | ||||||||||||
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Selected Financial Data
(Dollars in thousands)
(Unaudited)
Selected Financial Data
(Dollars in thousands)
(Unaudited)
Three Months Ended | Year Ended | |||||||||||||||||||||||||||||||
December 31, | Change | December 31, | Change | |||||||||||||||||||||||||||||
2007 | 2006 | Amount | % | 2007 | 2006 | Amount | % | |||||||||||||||||||||||||
SELECTED FINANCIAL DATA | ||||||||||||||||||||||||||||||||
General and Administrative Expenses | ||||||||||||||||||||||||||||||||
Homebuilding Operations | $ | 39,036 | $ | 60,309 | $ | (21,273 | ) | -35 | % | $ | 210,455 | $ | 280,128 | $ | (69,673 | ) | -25 | % | ||||||||||||||
Financial Services and Other Operations | $ | 9,385 | $ | 19,018 | $ | (9,633 | ) | -51 | % | $ | 40,445 | $ | 58,059 | $ | (17,614 | ) | -30 | % | ||||||||||||||
Corporate (1) | $ | 12,161 | $ | 14,753 | $ | (2,592 | ) | -18 | % | $ | 57,197 | $ | 85,279 | $ | (28,082 | ) | -33 | % | ||||||||||||||
SG&A as a % of Home Sales Revenue | ||||||||||||||||||||||||||||||||
Homebuilding Operations | 13.3 | % | 10.9 | % | 2.4 | % | 15.4 | % | 12.0 | % | 3.4 | % | ||||||||||||||||||||
Corporate (1) | 1.7 | % | 1.1 | % | 0.6 | % | 2.1 | % | 1.8 | % | 0.3 | % | ||||||||||||||||||||
Depreciation and Amortization . | $ | 13,348 | $ | 17,493 | $ | (4,145 | ) | -24 | % | $ | 47,342 | $ | 59,030 | $ | (11,688 | ) | -20 | % | ||||||||||||||
Home Gross Margins (2) | 11.7 | % | 16.6 | % | -4.9 | % | 13.9 | % | 22.2 | % | -8.3 | % | ||||||||||||||||||||
Cash Provided by Operating Activities . | $ | 257,015 | $ | 404,391 | $ | (147,376 | ) | $ | 592,583 | $ | 363,048 | $ | 229,535 | |||||||||||||||||||
Cash Provided by (Used in) Investing Activities . | $ | 6,915 | $ | (2,997 | ) | $ | 9,912 | $ | (1,447 | ) | $ | (10,221 | ) | $ | 8,774 | |||||||||||||||||
Cash Provided by (Used in) Financing Activities . | $ | 11,354 | $ | (26,291 | ) | $ | 37,645 | $ | (94,320 | ) | $ | (59,411 | ) | $ | (34,909 | ) | ||||||||||||||||
Ending Unrestricted Cash and Available Borrowing Capacity | $ | 2,246,696 | $ | 1,736,054 | $ | 510,642 | 29 | % | ||||||||||||||||||||||||
Corporate and Homebuilding Interest | ||||||||||||||||||||||||||||||||
Interest Capitalized During the Period | $ | 14,471 | $ | 14,148 | $ | 323 | 2 | % | $ | 57,791 | $ | 58,141 | $ | (350 | ) | -1 | % | |||||||||||||||
Interest Included in Home Cost of Sales for the Period | $ | 14,988 | $ | 13,638 | $ | 1,350 | 10 | % | $ | 54,959 | $ | 49,485 | $ | 5,474 | 11 | % | ||||||||||||||||
Interest in Home Cost of Sales as a % of Home Sales Revenue | 2.1 | % | 1.1 | % | 1.0 | % | 2.0 | % | 1.1 | % | 0.9 | % | ||||||||||||||||||||
Interest Capitalized in Inventories at End of Period | $ | 53,487 | $ | 50,655 | $ | 2,832 | 6 | % |
(1) | Includes related party expenses. | |
(2) | 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 and twelve months ended December 31, 2007, we closed homes on lots for which we had previously recorded $65.0 million and $121.6 million, respectively, of asset impairments. During both the three and twelve months ended December 31, 2006, we closed homes on lots for which we had previously recorded $2.9 million of asset impairments. |
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M.D.C. HOLDINGS, INC.
Selected Financial Data
(Dollars in thousands)
(Unaudited)
Selected Financial Data
(Dollars in thousands)
(Unaudited)
Three Months Ended | Year Ended | |||||||||||||||||||||||||||||||
December 31, | Change | December 31, | Change | |||||||||||||||||||||||||||||
2007 | 2006 | Amount | % | 2007 | 2006 | Amount | % | |||||||||||||||||||||||||
HOMEAMERICAN OPERATING ACTIVITIES | ||||||||||||||||||||||||||||||||
Principal Amount of Mortgage Loans Originated | $ | 303,179 | $ | 691,810 | $ | (388,631 | ) | -56 | % | $ | 1,233,948 | $ | 2,363,906 | $ | (1,129,958 | ) | -48 | % | ||||||||||||||
Principal Amount of Mortgage Loans Brokered | $ | 146,993 | $ | 162,783 | $ | (15,790 | ) | -10 | % | $ | 511,806 | $ | 701,498 | $ | (189,692 | ) | -27 | % | ||||||||||||||
Capture Rate | 54 | % | 62 | % | -8 | % | 55 | % | 59 | % | -4 | % | ||||||||||||||||||||
Including Brokered Loans | 75 | % | 80 | % | -5 | % | 74 | % | 76 | % | -2 | % | ||||||||||||||||||||
Mortgage Products (% of Loans Originated) | ||||||||||||||||||||||||||||||||
Fixed Rate | 94 | % | 63 | % | 31 | % | 82 | % | 53 | % | 29 | % | ||||||||||||||||||||
Adjustable Rate — Interest Only | 4 | % | 35 | % | -31 | % | 16 | % | 40 | % | -24 | % | ||||||||||||||||||||
Adjustable Rate — Other | 2 | % | 2 | % | 0 | % | �� | 2 | % | 7 | % | -5 | % | |||||||||||||||||||
Prime Loans (3) | 79 | % | 49 | % | 30 | % | 78 | % | 57 | % | 21 | % | ||||||||||||||||||||
Alt-A Loans (4) | 0 | % | 46 | % | -46 | % | 10 | % | 37 | % | -27 | % | ||||||||||||||||||||
Government Loans (5) | 21 | % | 4 | % | 17 | % | 12 | % | 4 | % | 8 | % | ||||||||||||||||||||
Sub-Prime Loans (6) | 0 | % | 1 | % | -1 | % | 0 | % | 2 | % | -2 | % |
(3) | Prime loans are defined as loans with Fair, Isaac and Company (“FICO”) scores greater than 620 and that comply in all ways with the documentation standards of the government sponsored enterprise guidelines. | |
(4) | Alt-A loans are defined as loans that would otherwise qualify as prime loans except that they do not comply in all ways with 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. | |
(6) | Sub-prime loans are loans that have FICO scores of less than or equal to 620. |
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M.D.C. HOLDINGS, INC.
Homebuilding Operational Data
(Dollars in thousands)
(unaudited)
Homebuilding Operational Data
(Dollars in thousands)
(unaudited)
December 31, | December 31, | December 31, | ||||||||||
2007 | 2006 | 2005 | ||||||||||
HOMES COMPLETED OR UNDER CONSTRUCTION | ||||||||||||
Unsold Homes Under Construction — Final | 515 | 476 | 258 | |||||||||
Unsold Homes Under Construction — Frame | 656 | 573 | 520 | |||||||||
Unsold Homes Under Construction — Foundation | 229 | 400 | 353 | |||||||||
Total Unsold Homes Under Construction | 1,400 | 1,449 | 1,131 | |||||||||
Sold Homes Under Construction | 1,350 | 2,430 | 5,093 | |||||||||
Model Homes | 730 | 757 | 667 | |||||||||
Homes Completed or Under Construction | 3,480 | 4,636 | 6,891 | |||||||||
LOTS OWNED(excluding homes completed or under construction) | ||||||||||||
Arizona | 2,969 | 6,368 | 7,385 | |||||||||
California | 1,491 | 2,802 | 3,367 | |||||||||
Nevada | 1,549 | 2,747 | 4,055 | |||||||||
West | 6,009 | 11,917 | 14,807 | |||||||||
Colorado | 2,992 | 3,479 | 3,639 | |||||||||
Utah | 863 | 1,185 | 964 | |||||||||
Mountain | 3,855 | 4,664 | 4,603 | |||||||||
Maryland | 302 | 528 | 679 | |||||||||
Virginia | 369 | 643 | 783 | |||||||||
East | 671 | 1,171 | 1,462 | |||||||||
Delaware Valley | 151 | 265 | 471 | |||||||||
Florida | 638 | 1,093 | 1,201 | |||||||||
Illinois | 191 | 287 | 430 | |||||||||
Texas | — | 13 | 471 | |||||||||
Other Homebuilding | 980 | 1,658 | 2,573 | |||||||||
Total | 11,515 | 19,410 | 23,445 | |||||||||
LOTS UNDER OPTION | ||||||||||||
Arizona | 512 | 744 | 3,650 | |||||||||
California | 157 | 387 | 2,005 | |||||||||
Nevada | 4 | 250 | 1,400 | |||||||||
West | 673 | 1,381 | 7,055 | |||||||||
Colorado | 262 | 801 | 2,198 | |||||||||
Utah | — | 91 | 418 | |||||||||
Mountain | 262 | 892 | 2,616 | |||||||||
Maryland | 558 | 960 | 1,173 | |||||||||
Virginia | 1,311 | 2,381 | 3,224 | |||||||||
East | 1,869 | 3,341 | 4,397 | |||||||||
Delaware Valley | 327 | 683 | 1,283 | |||||||||
Florida | 484 | 1,800 | 3,202 | |||||||||
Illinois | — | — | 186 | |||||||||
Texas | — | — | 80 | |||||||||
Other Homebuilding | 811 | 2,483 | 4,751 | |||||||||
Total | 3,615 | 8,097 | 18,819 | |||||||||
Non-Refundable Option Deposits | ||||||||||||
Cash | $ | 6,292 | $ | 20,228 | $ | 48,157 | ||||||
Letters of Credit | 6,547 | 14,224 | 23,142 | |||||||||
Total Non-Refundable Option Deposits | $ | 12,839 | $ | 34,452 | $ | 71,299 | ||||||
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M.D.C. HOLDINGS, INC.
Homebuilding Operational Data
(Dollars in thousands)
(Unaudited)
Homebuilding Operational Data
(Dollars in thousands)
(Unaudited)
Three Months Ended | Year Ended | |||||||||||||||||||||||||||||||
December 31, | Change | December 31, | Change | |||||||||||||||||||||||||||||
2007 | 2006 | Amount | % | 2007 | 2006 | Amount | % | |||||||||||||||||||||||||
HOMES CLOSED (UNITS) | ||||||||||||||||||||||||||||||||
Arizona | 804 | 1,016 | (212 | ) | -21 | % | 2,801 | 3,353 | (552 | ) | -16 | % | ||||||||||||||||||||
California | 305 | 536 | (231 | ) | -43 | % | 1,136 | 1,788 | (652 | ) | -36 | % | ||||||||||||||||||||
Nevada | 262 | 647 | (385 | ) | -60 | % | 1,290 | 2,756 | (1,466 | ) | -53 | % | ||||||||||||||||||||
West | 1,371 | 2,199 | (828 | ) | -38 | % | 5,227 | 7,897 | (2,670 | ) | -34 | % | ||||||||||||||||||||
Colorado | 235 | 309 | (74 | ) | -24 | % | 818 | 1,463 | (645 | ) | -44 | % | ||||||||||||||||||||
Utah | 145 | 342 | (197 | ) | -58 | % | 713 | 922 | (209 | ) | -23 | % | ||||||||||||||||||||
Mountain | 380 | 651 | (271 | ) | -42 | % | 1,531 | 2,385 | (854 | ) | -36 | % | ||||||||||||||||||||
Maryland | 107 | 154 | (47 | ) | -31 | % | 288 | 444 | (156 | ) | -35 | % | ||||||||||||||||||||
Virginia | 128 | 209 | (81 | ) | -39 | % | 344 | 707 | (363 | ) | -51 | % | ||||||||||||||||||||
East | 235 | 363 | (128 | ) | -35 | % | 632 | 1,151 | (519 | ) | -45 | % | ||||||||||||||||||||
Delaware Valley | 62 | 78 | (16 | ) | -21 | % | 178 | 200 | (22 | ) | -11 | % | ||||||||||||||||||||
Florida | 115 | 219 | (104 | ) | -47 | % | 496 | 921 | (425 | ) | -46 | % | ||||||||||||||||||||
Illinois | 37 | 55 | (18 | ) | -33 | % | 105 | 174 | (69 | ) | -40 | % | ||||||||||||||||||||
Texas | — | 29 | (29 | ) | -100 | % | 26 | 395 | (369 | ) | -93 | % | ||||||||||||||||||||
Other Homebuilding | 214 | 381 | (167 | ) | -44 | % | 805 | 1,690 | (885 | ) | -52 | % | ||||||||||||||||||||
Total | 2,200 | 3,594 | (1,394 | ) | -39 | % | 8,195 | 13,123 | (4,928 | ) | -38 | % | ||||||||||||||||||||
AVERAGE SELLING PRICES PER HOME CLOSED | ||||||||||||||||||||||||||||||||
Arizona | $ | 230.1 | $ | 273.9 | $ | (43.8 | ) | -16 | % | $ | 247.4 | $ | 294.6 | $ | (47.2 | ) | -16 | % | ||||||||||||||
California | 494.1 | 596.0 | (101.9 | ) | -17 | % | 516.5 | 558.7 | (42.2 | ) | -8 | % | ||||||||||||||||||||
Colorado | 348.3 | 332.7 | 15.6 | 5 | % | 346.3 | 308.7 | 37.6 | 12 | % | ||||||||||||||||||||||
Delaware Valley | 441.4 | 420.1 | 21.3 | 5 | % | 448.8 | 405.7 | 43.1 | 11 | % | ||||||||||||||||||||||
Florida | 249.4 | 267.7 | (18.3 | ) | -7 | % | 261.5 | 284.8 | (23.3 | ) | -8 | % | ||||||||||||||||||||
Illinois | 355.2 | 367.3 | (12.1 | ) | -3 | % | 372.4 | 367.5 | 4.9 | 1 | % | |||||||||||||||||||||
Maryland | 504.8 | 528.3 | (23.5 | ) | -4 | % | 515.2 | 558.0 | (42.8 | ) | -8 | % | ||||||||||||||||||||
Nevada | 275.5 | 307.6 | (32.1 | ) | -10 | % | 296.2 | 317.5 | (21.3 | ) | -7 | % | ||||||||||||||||||||
Texas | N/A | 151.0 | N/A | N/A | 129.6 | 165.9 | (36.3 | ) | -22 | % | ||||||||||||||||||||||
Utah | 338.6 | 320.8 | 17.8 | 6 | % | 355.5 | 303.3 | 52.2 | 17 | % | ||||||||||||||||||||||
Virginia | 461.7 | 491.2 | (29.5 | ) | -6 | % | 480.4 | 536.3 | (55.9 | ) | -10 | % | ||||||||||||||||||||
Company Average | $ | 325.1 | $ | 360.1 | $ | (35.0 | ) | -10 | % | $ | 337.5 | $ | 354.4 | $ | (16.9 | ) | -5 | % |
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M.D.C. HOLDINGS, INC.
Homebuilding Operational Data
(Dollars in thousands)
(Unaudited)
Homebuilding Operational Data
(Dollars in thousands)
(Unaudited)
Three Months Ended | Year Ended | |||||||||||||||||||||||||||||||
December 31, | Change | December 31, | Change | |||||||||||||||||||||||||||||
2007 | 2006 | Amount | % | 2007 | 2006 | Amount | % | |||||||||||||||||||||||||
ORDERS FOR HOMES, NET (UNITS) | ||||||||||||||||||||||||||||||||
Arizona | 139 | 480 | (341 | ) | -71 | % | 1,889 | 2,758 | (869 | ) | -32 | % | ||||||||||||||||||||
California | 63 | 241 | (178 | ) | -74 | % | 912 | 1,450 | (538 | ) | -37 | % | ||||||||||||||||||||
Nevada | 298 | 314 | (16 | ) | -5 | % | 1,282 | 2,048 | (766 | ) | -37 | % | ||||||||||||||||||||
West | 500 | 1,035 | (535 | ) | -52 | % | 4,083 | 6,256 | (2,173 | ) | -35 | % | ||||||||||||||||||||
Colorado | 101 | 201 | (100 | ) | -50 | % | 778 | 1,139 | (361 | ) | -32 | % | ||||||||||||||||||||
Utah | 36 | 133 | (97 | ) | -73 | % | 426 | 1,049 | (623 | ) | -59 | % | ||||||||||||||||||||
Mountain | 137 | 334 | (197 | ) | -59 | % | 1,204 | 2,188 | (984 | ) | -45 | % | ||||||||||||||||||||
Maryland | — | 60 | (60 | ) | -100 | % | 227 | 380 | (153 | ) | -40 | % | ||||||||||||||||||||
Virginia | 33 | 79 | (46 | ) | -58 | % | 308 | 462 | (154 | ) | -33 | % | ||||||||||||||||||||
East | 33 | 139 | (106 | ) | -76 | % | 535 | 842 | (307 | ) | -36 | % | ||||||||||||||||||||
Delaware Valley | 12 | 28 | (16 | ) | -57 | % | 116 | 138 | (22 | ) | -16 | % | ||||||||||||||||||||
Florida | 47 | (11 | ) | 58 | N/A | 424 | 519 | (95 | ) | -18 | % | |||||||||||||||||||||
Illinois | 19 | 35 | (16 | ) | -46 | % | 128 | 117 | 11 | 9 | % | |||||||||||||||||||||
Texas | — | 11 | (11 | ) | -100 | % | 14 | 169 | (155 | ) | -92 | % | ||||||||||||||||||||
Other Homebuilding | 78 | 63 | 15 | 24 | % | 682 | 943 | (261 | ) | -28 | % | |||||||||||||||||||||
Total | 748 | 1,571 | (823 | ) | -52 | % | 6,504 | 10,229 | (3,725 | ) | -36 | % | ||||||||||||||||||||
Estimated Value of Orders for Homes, net | $ | 187,000 | $ | 515,000 | $ | (328,000 | ) | -64 | % | $ | 2,107,000 | $ | 3,467,000 | $ | (1,360,000 | ) | -39 | % | ||||||||||||||
Estimated Average Selling Price of Orders for Homes, net | $ | 250.0 | $ | 327.8 | $ | (77.8 | ) | -24 | % | $ | 324.0 | $ | 338.9 | $ | (14.9 | ) | -4 | % | ||||||||||||||
Cancellation Rate (7) | 65 | % | 57 | % | 8 | % | 48 | % | 43 | % | 5 | % | ||||||||||||||||||||
(7) | 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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M.D.C. HOLDINGS, INC.
Homebuilding Operational Data
(Dollars in thousands)
(Unaudited)
Homebuilding Operational Data
(Dollars in thousands)
(Unaudited)
December 31, | December 31, | December 31, | ||||||||||
2007 | 2006 | 2005 | ||||||||||
BACKLOG (UNITS) | ||||||||||||
Arizona | 592 | 1,504 | 2,099 | |||||||||
California | 203 | 427 | 765 | |||||||||
Nevada | 307 | 315 | 1,023 | |||||||||
West | 1,102 | 2,246 | 3,887 | |||||||||
Colorado | 213 | 253 | 577 | |||||||||
Utah | 178 | 465 | 338 | |||||||||
Mountain | 391 | 718 | 915 | |||||||||
Maryland | 126 | 187 | 251 | |||||||||
Virginia | 100 | 136 | 381 | |||||||||
East | 226 | 323 | 632 | |||||||||
Delaware Valley | 57 | 119 | 181 | |||||||||
Florida | 125 | 197 | 599 | |||||||||
Illinois | 46 | 23 | 80 | |||||||||
Texas | — | 12 | 238 | |||||||||
Other Homebuilding | 228 | 351 | 1,098 | |||||||||
Total | 1,947 | 3,638 | 6,532 | |||||||||
Backlog Estimated Sales Value | $ | 650,000 | $ | 1,300,000 | $ | 2,440,000 | ||||||
Estimated Average Selling Price of Homes in Backlog | $ | 333.8 | $ | 357.3 | $ | 373.5 | ||||||
ACTIVE SUBDIVISIONS | ||||||||||||
Arizona | 66 | 67 | 54 | |||||||||
California | 41 | 45 | 34 | |||||||||
Nevada | 39 | 41 | 43 | |||||||||
West | 146 | 153 | 131 | |||||||||
Colorado | 47 | 47 | 57 | |||||||||
Utah | 23 | 22 | 18 | |||||||||
Mountain | 70 | 69 | 75 | |||||||||
Maryland | 15 | 19 | 11 | |||||||||
Virginia | 18 | 19 | 20 | |||||||||
East | 33 | 38 | 31 | |||||||||
Delaware Valley | 4 | 8 | 7 | |||||||||
Florida | 20 | 30 | 19 | |||||||||
Illinois | 5 | 6 | 8 | |||||||||
Texas | — | 2 | 21 | |||||||||
Other Homebuilding | 29 | 46 | 55 | |||||||||
Total | 278 | 306 | 292 | |||||||||
Average for Quarter Ended | 287 | 299 | 287 | |||||||||
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M.D.C. HOLDINGS, INC.
Reconciliation of Non-GAAP Financial Measures
(Dollars in thousands)
(Unaudited)
Reconciliation of Non-GAAP Financial Measures
(Dollars in thousands)
(Unaudited)
December 31, | December 31, | December 31, | ||||||||||
2007 | 2006 | 2005 | ||||||||||
CORPORATE AND HOMEBUILDING DEBT-TO-CAPITAL, NET OF CASH | ||||||||||||
Total Debt | $ | 1,067,238 | $ | 1,127,149 | $ | 1,152,829 | ||||||
Less Mortgage Line of Credit | (70,147 | ) | (130,467 | ) | (156,532 | ) | ||||||
Total Corporate and Homebuilding Debt | 997,091 | 996,682 | 996,297 | |||||||||
Less Cash (Including Restricted Cash) | (1,006,661 | ) | (510,588 | ) | (221,273 | ) | ||||||
Total Corporate and Homebuilding Debt, Net of Cash | (9,570 | ) | 486,094 | 775,024 | ||||||||
Stockholders’ Equity | 1,476,013 | 2,161,882 | 1,952,109 | |||||||||
Total Corporate and Homebuilding Capital, Net of Cash | $ | 1,466,443 | $ | 2,647,976 | $ | 2,727,133 | ||||||
Ratio of Corporate and Homebuilding Debt to Capital, Net of Cash | (0.01 | ) | 0.18 | 0.28 |
NOTE: From time to time, MDC discloses selected non-GAAP financial measures. While non-GAAP financial measures are not a substitute for the comparable GAAP measures, we believe that certain non-GAAP information is useful to investors and management in comparing current results to historical periods and to competitor results, and that it provides additional information on the performance of MDC’s businesses. The above is a presentation of and reconciliation of a selected non-GAAP measure with the most directly comparable GAAP financial measure.
“Ratio of corporate and homebuilding debt to capital, net of cash” is a non-GAAP financial measure. MDC’s management and investors use this ratio to help assess the risk associated with debt in the Company’s capital structure. It excludes debt incurred under MDC’s mortgage line of credit from both the numerator and denominator, as this debt is directly collateralized by mortgage loans held in inventory, which are typically liquidated within 60 days of origination, thereby reducing the risk associated with this type of debt. The ratio’s numerator and denominator are also reduced by MDC’s cash position, as this balance could be used to reduce MDC’s exposure to debt outstanding.
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