Exhibit 99.1
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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, OCTOBER 31, 2008
FRIDAY, OCTOBER 31, 2008
Contact: | Robert N. Martin | |
Investor Relations | ||
(720) 977-3431 | ||
bob.martin@mdch.com |
M.D.C. HOLDINGS ANNOUNCES THIRD QUARTER 2008 RESULTS
• | Cash flow from operations of $106.0 million | ||
• | Quarter-end cash and investments of $1.37 billion | ||
• | No borrowings on homebuilding line of credit | ||
• | Pre-tax loss of $117.0 million; includes asset impairments of $95.4 million | ||
• | Net loss of $118.0 million vs. $155.4 million in 2007 | ||
• | Diluted loss per share of $2.55 vs. $3.40 in 2007 | ||
• | Total revenue of $361.2 million vs. $686.7 million in 2007 | ||
• | G&A expenses of $51.6 million vs. $76.6 million in 2007, down 33% | ||
• | Closed 1,116 homes at an average selling price of $301,700 | ||
• | Net orders for 667 homes with an estimated value of $182.0 million |
�� DENVER, Friday, October 31, 2008 — M.D.C. Holdings, Inc. (NYSE: MDC) today announced a net loss for the quarter ended September 30, 2008 of $118.0 million, or $2.55 per diluted share, which included pre-tax charges of $95.4 million for asset impairments. This 2008 third quarter net loss also was impacted adversely by a $61.1 million increase in our deferred tax asset valuation allowance, which contributed to the recognition of a provision for income taxes during the quarter. The net loss for the third quarter of 2007 was $155.4 million, or $3.40 per diluted share, including pre-tax charges of $249.0 million for asset impairments. Total revenue
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M.D.C. HOLDINGS, INC.
for the third quarter of 2008 was $361.2 million, compared with revenue of $686.7 million for the same period in 2007.
Net loss for the nine months ended September 30, 2008 was $291.5 million, or $6.32 per diluted share, which included pre-tax charges of $238.5 million for asset impairments. This net loss for the first nine months of 2008 also was impacted adversely by a $115.1 million increase in our deferred tax asset valuation allowance, which reduced our benefit from income taxes. The net loss for the first nine months of 2007 was $355.8 million, or $7.79 per diluted share, including pre-tax charges of $551.4 million for asset impairments. Total revenue for the first nine months of 2008 was $1.18 billion, compared with revenue of $2.15 billion for the same period in 2007.
Larry A. Mizel, MDC’s chairman and chief executive officer, stated, “As national economic conditions continued to deteriorate during the third quarter of 2008, we generated in excess of $100 million in operating cash flow, largely through our efforts to reduce inventory balances and overhead expenses. As a result, we ended the quarter with $1.37 billion in cash and investments. Though many businesses across the country have struggled in the wake of tightening credit markets and overall market volatility, we believe that our capital structure currently provides us with adequate resources to pursue opportunistic land investments, given that our quarter-end cash and investments exceeded our total debt by more than $300 million and that our next debt maturity does not occur until 2012.”
Homebuilding Results
Homebuilding loss before taxes for the quarter and nine months ended September 30, 2008 improved to $99.1 million and $270.8 million, respectively, compared with $258.0 million and $568.3 million for the same periods in 2007. The loss in 2008 narrowed in large part due to declines in asset impairment charges of 62% and 57%, respectively, for the third quarter and first nine months of 2008, and declines in homebuilding commissions, marketing and general and administrative expenses (“SG&A”) of 44% and 45%, respectively, from the comparative 2007 periods. These decreases in expenses and charges were offset partially by the impact of reductions in home closings and average selling prices from the levels achieved during the same periods in 2007.
The Company closed 1,116 homes and produced home gross margins of 15.3% in the 2008 third quarter, compared with 1,963 home closings and home gross margins of 14.1% for the same period in 2007. For the nine months ended September 30, 2008, the Company closed 3,544 homes and produced home gross margins of 12.7%, compared with 5,995 home closings and 14.7% home gross margins for the nine months ended September 30, 2007. Average selling prices were $301,700 and $303,200, respectively, for the quarter and nine months ended September 30, 2008, down $30,000 and $38,900, respectively, from the same periods in 2007. Homebuilding SG&A decreased to $59.3 million and $183.0 million, respectively, for the three
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M.D.C. HOLDINGS, INC.
and nine months ended September 30, 2008, compared with $105.2 million and $330.1 million for the same periods in the prior year.
Christopher M. Anderson, MDC’s senior vice president and chief financial officer, said, “We recognized $95 million of asset impairments charges during the quarter, including $91 million of inventory impairment charges. We impaired our land inventory by $70 million and our work-in-process inventory by $21 million, impacting approximately 3,500 lots in 150 subdivisions. The quarter-end book value of the impaired subdivisions after the impairments was $213 million, consisting of $55 million of land and $158 million of work-in-process. As was the case in the prior quarter, impairments in the West and Mountain segments accounted for more than 80% of all inventory impairments recorded in the 2008 third quarter.”
Anderson continued, “In the interest of preserving value for our shareholders, we continued to evaluate strategies for reducing our overhead during the quarter, and as a part of that process we made the decision to exit the Illinois market. We continue to build on or sell the lots we control in this market but currently have no plans to evaluate any new land investments.”
Anderson concluded, “We also made adjustments to our operating structure in most of our other markets and, as a result, our employee headcount decreased by more than 10% in the third quarter alone. Unfortunately, these difficult steps are necessary to return our Company to profitability. However, even as we right-size our organization, we continue to search for opportunities to make new investments to capitalize on current market conditions.”
Financial Services and Other and Corporate Results
Income before taxes from the Company’s Financial Services and Other segment for the quarter and nine months ended September 30, 2008 was $3.4 million and $8.1 million, respectively, compared with $5.0 million and $16.8 million for the same periods in the previous year. The decreases in the 2008 periods primarily resulted from lower insurance revenue due to lower insurance premiums collected from our homebuilding subcontractors as a result of the decline in home construction levels. The Company also realized 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, which were offset by reductions in general and administrative expenses for our mortgage operations.
Loss before taxes from the Company’s Corporate segment for the quarter and nine months ended September 30, 2008 was $21.3 million and $33.0 million, respectively, compared with income before taxes of $1.7 million and loss before taxes of $14.5 million for the same periods in 2007. The decline for both periods primarily resulted from reduced supervisory fees charged to other segments, an increase in interest expense related to incurred amounts that could no longer be capitalized to inventory and the impact of recording an $8.0 million gain on the sale of an aircraft during the 2007 third quarter.
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M.D.C. HOLDINGS, INC.
Home Orders and Backlog
MDC received orders, net of cancellations, for 667 homes with an estimated sales value of $182.0 million during the 2008 third quarter, compared with net orders for 1,228 homes with an estimated sales value of $365.0 million during the same period in 2007. For the nine months ended September 30, 2008, the Company received net orders for 2,724 homes with a sales value of $786 million, compared with 5,756 homes with a sales value of $1.92 billion for the nine months ended September 30, 2007. During the third quarter and first nine months of 2008, the Company’s approximate order cancellation rate was 46% and 43%, respectively, compared with rates of 57% and 44% experienced during the same periods in 2007. The Company ended the third quarter of 2008 with a backlog of 1,127 homes with an estimated sales value of $364.0 million, compared with a backlog of 3,399 homes with an estimated sales value of $1.21 billion at September 30, 2007.
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 its subsidiaries build. As one of the largest homebuilders in the United States, the Company has 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 also provides mortgage financing, insurance and title services, primarily for MDC homebuyers, through its wholly owned subsidiaries, 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.
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
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M.D.C. HOLDINGS, INC.
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 Annual Report on Form 10-K for the year ended December 31, 2007, which has been filed with the Securities and Exchange Commission (“SEC”), and the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2008, which is scheduled to be filed with the SEC 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)
Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
Three Months | Nine Months | |||||||||||||||
Ended September 30, | Ended September 30, | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
REVENUE | ||||||||||||||||
Home sales revenue | $ | 336,744 | $ | 651,124 | $ | 1,074,629 | $ | 2,050,737 | ||||||||
Land sales revenue | 15,850 | 2,700 | 56,699 | 12,151 | ||||||||||||
Other revenue | 8,655 | 32,837 | 47,964 | 85,605 | ||||||||||||
Total Revenue | 361,249 | 686,661 | 1,179,292 | 2,148,493 | ||||||||||||
COSTS AND EXPENSES | ||||||||||||||||
Home cost of sales | 285,367 | 559,402 | 937,947 | 1,749,165 | ||||||||||||
Land cost of sales | 14,775 | 452 | 49,559 | 7,740 | ||||||||||||
Asset impairments | 95,388 | 248,950 | 238,498 | 551,422 | ||||||||||||
Marketing expenses | 18,797 | 28,694 | 58,350 | 87,144 | ||||||||||||
Commission expenses | 12,297 | 23,900 | 40,389 | 71,530 | ||||||||||||
General and administrative expenses | 51,596 | 76,482 | 150,276 | 247,229 | ||||||||||||
Related party expenses | 3 | 95 | 13 | 286 | ||||||||||||
Total Costs and Expenses | 478,223 | 937,975 | 1,475,032 | 2,714,516 | ||||||||||||
Loss before income taxes | (116,974 | ) | (251,314 | ) | (295,740 | ) | (566,023 | ) | ||||||||
(Provision for) benefit from income taxes | (997 | ) | 95,936 | 4,223 | 210,175 | |||||||||||
NET LOSS | $ | (117,971 | ) | $ | (155,378 | ) | $ | (291,517 | ) | $ | (355,848 | ) | ||||
LOSS PER SHARE | ||||||||||||||||
Basic | $ | (2.55 | ) | $ | (3.40 | ) | $ | (6.32 | ) | $ | (7.79 | ) | ||||
Diluted | $ | (2.55 | ) | $ | (3.40 | ) | $ | (6.32 | ) | $ | (7.79 | ) | ||||
WEIGHTED-AVERAGE SHARES OUTSTANDING | ||||||||||||||||
Basic | 46,219 | 45,751 | 46,094 | 45,659 | ||||||||||||
Diluted | 46,219 | 45,751 | 46,094 | 45,659 | ||||||||||||
DIVIDENDS DECLARED PER SHARE | $ | 0.25 | $ | 0.25 | $ | 0.75 | $ | 0.75 | ||||||||
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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)
September 30, | December 31, | |||||||
2008 | 2007 | |||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 1,160,868 | $ | 1,004,763 | ||||
Short-term investments | 94,767 | — | ||||||
Restricted cash | 979 | 1,898 | ||||||
Unsettled trades | 115,135 | — | ||||||
Receivables | ||||||||
Home sales receivables | 25,489 | 33,647 | ||||||
Income taxes receivable, net | 99,290 | 36,988 | ||||||
Other receivables | 18,053 | 16,796 | ||||||
Mortgage loans held-for-sale, net | 60,925 | 100,144 | ||||||
Inventories, net | ||||||||
Housing completed or under construction | 541,866 | 902,221 | ||||||
Land and land under development | 254,360 | 554,336 | ||||||
Property and equipment, net | 37,701 | 44,368 | ||||||
Deferred income taxes, net | 13,505 | 160,565 | ||||||
Related party assets | 28,627 | 28,627 | ||||||
Prepaid expenses and other assets, net | 80,275 | 71,884 | ||||||
Total Assets | $ | 2,531,840 | $ | 2,956,237 | ||||
LIABILITIES | ||||||||
Accounts payable | $ | 42,304 | $ | 71,932 | ||||
Accrued liabilities | 288,343 | 339,353 | ||||||
Related party liabilities | — | 1,701 | ||||||
Mortgage line of credit | 30,534 | 70,147 | ||||||
Senior notes, net | 997,416 | 997,091 | ||||||
Total Liabilities | 1,358,597 | 1,480,224 | ||||||
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; 46,598,000 and 46,549,000 issued and outstanding, respectively, at September 30, 2008, and 46,084,000 and 46,053,000 issued and outstanding, respectively, at December 31, 2007 | 466 | 461 | ||||||
Additional paid-in-capital | 779,847 | 757,039 | ||||||
Retained earnings | 393,589 | 719,841 | ||||||
Accumulated other comprehensive loss | — | (669 | ) | |||||
Treasury stock, at cost; 49,000 and 31,000 shares at September 30, 2008 and December 31, 2007, respectively | (659 | ) | (659 | ) | ||||
Total Stockholders’ Equity | 1,173,243 | 1,476,013 | ||||||
Total Liabilities and Stockholders’ Equity | $ | 2,531,840 | $ | 2,956,237 | ||||
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M.D.C. HOLDINGS, INC.
Information on Segments
(Dollars in thousands)
(Unaudited)
Information on Segments
(Dollars in thousands)
(Unaudited)
Three Months | Nine Months | |||||||||||||||
Ended September 30, | Ended September 30, | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
REVENUE | ||||||||||||||||
Homebuilding | ||||||||||||||||
West | $ | 195,073 | $ | 389,309 | $ | 639,623 | $ | 1,277,012 | ||||||||
Mountain | 72,572 | 138,439 | 230,503 | 418,300 | ||||||||||||
East | 52,420 | 72,368 | 161,939 | 205,523 | ||||||||||||
Other Homebuilding | 38,411 | 60,364 | 115,916 | 184,195 | ||||||||||||
Total Homebuilding | 358,476 | 660,480 | 1,147,981 | 2,085,030 | ||||||||||||
Financial Services and Other | 9,545 | 14,652 | 28,318 | 47,836 | ||||||||||||
Corporate | (2,709 | ) | 16,048 | 14,215 | 30,510 | |||||||||||
Inter-company adjustments | (4,063 | ) | (4,519 | ) | (11,222 | ) | (14,883 | ) | ||||||||
Consolidated | $ | 361,249 | $ | 686,661 | $ | 1,179,292 | $ | 2,148,493 | ||||||||
(LOSS) INCOME BEFORE INCOME TAXES | ||||||||||||||||
Homebuilding | ||||||||||||||||
West | $ | (47,741 | ) | $ | (197,917 | ) | $ | (142,723 | ) | $ | (462,547 | ) | ||||
Mountain | (30,085 | ) | (925 | ) | (80,720 | ) | 3,218 | |||||||||
East | (14,854 | ) | (15,998 | ) | (27,502 | ) | (27,168 | ) | ||||||||
Other Homebuilding | (6,388 | ) | (43,158 | ) | (19,871 | ) | (81,776 | ) | ||||||||
Total Homebuilding | (99,068 | ) | (257,998 | ) | (270,816 | ) | (568,273 | ) | ||||||||
Financial Services and Other | 3,414 | 5,018 | 8,119 | 16,776 | ||||||||||||
Corporate | (21,320 | ) | 1,666 | (33,043 | ) | (14,526 | ) | |||||||||
Consolidated | $ | (116,974 | ) | $ | (251,314 | ) | $ | (295,740 | ) | $ | (566,023 | ) | ||||
INVENTORY IMPAIRMENTS | ||||||||||||||||
West | $ | 49,258 | $ | 190,490 | $ | 135,921 | $ | 445,124 | ||||||||
Mountain | 25,195 | 6,930 | 59,249 | 16,707 | ||||||||||||
East | 12,551 | 16,237 | 22,298 | 24,669 | ||||||||||||
Other Homebuilding | 3,816 | 35,293 | 12,240 | 64,922 | ||||||||||||
Consolidated | $ | 90,820 | $ | 248,950 | $ | 229,708 | $ | 551,422 | ||||||||
September 30, | December 31, | September 30, | December 31, | |||||||||||||
2008 | 2007 | 2007 | 2006 | |||||||||||||
TOTAL ASSETS | ||||||||||||||||
Homebuilding | ||||||||||||||||
West | $ | 383,540 | $ | 747,835 | $ | 1,157,760 | $ | 1,869,442 | ||||||||
Mountain | 381,435 | 474,203 | 535,568 | 535,554 | ||||||||||||
East | 163,492 | 250,658 | 308,070 | 333,902 | ||||||||||||
Other Homebuilding | 86,790 | 125,003 | 168,990 | 266,326 | ||||||||||||
Total Homebuilding | 1,015,257 | 1,597,699 | 2,170,388 | 3,005,224 | ||||||||||||
Financial Services and Other | 129,587 | 174,617 | 142,456 | 284,791 | ||||||||||||
Corporate | 1,432,853 | 1,229,178 | 1,091,566 | 657,917 | ||||||||||||
Inter-company adjustments | (45,857 | ) | (45,257 | ) | (43,157 | ) | (38,057 | ) | ||||||||
Consolidated | $ | 2,531,840 | $ | 2,956,237 | $ | 3,361,253 | $ | 3,909,875 | ||||||||
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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 | Nine Months | |||||||||||||||||||||||||||||||
Ended September 30, | Change | Ended September 30, | Change | |||||||||||||||||||||||||||||
2008 | 2007 | Amount | % | 2008 | 2007 | Amount | % | |||||||||||||||||||||||||
SELECTED FINANCIAL DATA | ||||||||||||||||||||||||||||||||
General and Administrative Expenses Homebuilding Segments | $ | 28,240 | $ | 52,561 | $ | (24,321 | ) | -46 | % | $ | 84,215 | $ | 171,419 | $ | (87,204 | ) | -51 | % | ||||||||||||||
Financial Services and Other Segment | 6,131 | 9,635 | (3,504 | ) | -36 | % | 20,199 | 31,060 | (10,861 | ) | -35 | % | ||||||||||||||||||||
Corporate Segment(1) | 17,228 | 14,381 | 2,847 | 20 | % | 45,875 | 45,036 | 839 | 2 | % | ||||||||||||||||||||||
Total | $ | 51,599 | $ | 76,577 | $ | (24,978 | ) | -33 | % | $ | 150,289 | $ | 247,515 | $ | (97,226 | ) | -39 | % | ||||||||||||||
SG&A as a % of Home Sales Revenue Homebuilding Segments | 17.6 | % | 16.1 | % | 1.5 | % | 17.0 | % | 16.1 | % | 0.9 | % | ||||||||||||||||||||
Corporate Segment(1) | 5.1 | % | 2.2 | % | 2.9 | % | 4.3 | % | 2.2 | % | 2.1 | % | ||||||||||||||||||||
Depreciation and Amortization(2) | $ | 8,902 | $ | 11,777 | $ | (2,875 | ) | -24 | % | $ | 26,860 | $ | 33,994 | $ | (7,134 | ) | -21 | % | ||||||||||||||
Home Gross Margins(3) | 15.3 | % | 14.1 | % | 1.2 | % | 12.7 | % | 14.7 | % | -2.0 | % | ||||||||||||||||||||
Interest in Home Cost of Sales as a % of Home Sales Revenue | 2.9 | % | 2.2 | % | 0.7 | % | 3.9 | % | 1.9 | % | 2.0 | % | ||||||||||||||||||||
Cash Provided by Operating Activities | $ | 106,046 | $ | 136,246 | $ | (30,200 | ) | -22 | % | $ | 428,349 | $ | 335,568 | $ | 92,781 | 28 | % | |||||||||||||||
Cash Used in Investing Activities | $ | (210,199 | ) | $ | (6,307 | ) | $ | (203,892 | ) | N/A | $ | (210,315 | ) | $ | (8,362 | ) | $ | (201,953 | ) | N/A | ||||||||||||
Cash Used in Financing Activities | $ | (31,796 | ) | $ | (68,839 | ) | $ | 37,043 | -54 | % | $ | (61,929 | ) | $ | (105,674 | ) | $ | 43,745 | -41 | % | ||||||||||||
Corporate and Homebuilding Interest Interest capitalized during the period | $ | 3,749 | $ | 14,444 | $ | (10,695 | ) | -74 | % | $ | 32,666 | $ | 43,320 | $ | (10,654 | ) | -25 | % | ||||||||||||||
Previously capitalized interest included in home cost of sales during the period | $ | (9,689 | ) | $ | (14,428 | ) | $ | 4,739 | -33 | % | $ | (42,419 | ) | $ | (39,971 | ) | $ | (2,448 | ) | 6 | % | |||||||||||
Interest Capitalized in Inventories at End of Period | $ | 43,734 | $ | 54,004 | $ | (10,270 | ) | -19 | % | $ | 43,734 | $ | 54,004 | $ | (10,270 | ) | -19 | % |
(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 and nine months ended September 30, 2008, we closed homes on lots for which we had previously recorded $68.5 million and $182.1 million, respectively, of asset impairments. During the three and nine months ended September 30, 2007, we closed homes on lots for which we had previously recorded $28.6 million and $56.6 million, respectively, 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 | Nine Months | |||||||||||||||||||||||||||||||
Ended September 30, | Change | Ended September 30, | Change | |||||||||||||||||||||||||||||
2008 | 2007 | Amount | % | 2008 | 2007 | Amount | % | |||||||||||||||||||||||||
HOMEAMERICAN OPERATING ACTIVITIES | ||||||||||||||||||||||||||||||||
Principal amount of mortgage loans originated | $ | 198,780 | $ | 286,192 | $ | (87,412 | ) | -31 | % | $ | 576,565 | $ | 930,769 | $ | (354,204 | ) | -38 | % | ||||||||||||||
Principal amount of mortgage loans brokered | $ | 34,977 | $ | 118,580 | $ | (83,603 | ) | -71 | % | $ | 141,147 | $ | 364,813 | $ | (223,666 | ) | -61 | % | ||||||||||||||
Capture Rate | 71 | % | 54 | % | 17 | % | 65 | % | 55 | % | 10 | % | ||||||||||||||||||||
Including brokered loans | 82 | % | 73 | % | 9 | % | 78 | % | 74 | % | 4 | % | ||||||||||||||||||||
Mortgage products (% of mortgage loans originated) | ||||||||||||||||||||||||||||||||
Fixed rate | 97 | % | 86 | % | 11 | % | 97 | % | 78 | % | 19 | % | ||||||||||||||||||||
Adjustable rate — interest only | 0 | % | 11 | % | -11 | % | 1 | % | 20 | % | -19 | % | ||||||||||||||||||||
Adjustable rate — other | 3 | % | 3 | % | 0 | % | 2 | % | 2 | % | 0 | % | ||||||||||||||||||||
Prime loans(4) | 46 | % | 86 | % | -40 | % | 51 | % | 77 | % | -26 | % | ||||||||||||||||||||
Alt A loans(5) | 0 | % | 0 | % | 0 | % | 0 | % | 14 | % | -14 | % | ||||||||||||||||||||
Government loans(6) | 54 | % | 14 | % | 40 | % | 49 | % | 9 | % | 40 | % | ||||||||||||||||||||
Sub-prime loans(7) | 0 | % | 0 | % | 0 | % | 0 | % | 0 | % | 0 | % |
(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) | Alt-A loans are defined as loans that would otherwise qualify as prime loans except that they do not comply with the documentation standards of the government sponsored enterprise guidelines. | |
(6) | Government loans are loans either insured by the Federal Housing Administration or guaranteed by the Department of Veteran Affairs. | |
(7) | Sub-prime loans generally are defined as loans that have FICO scores of less than or equal to 620. |
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10
M.D.C. HOLDINGS, INC.
Homebuilding Operational Data
(Dollars in thousands)
(unaudited)
Homebuilding Operational Data
(Dollars in thousands)
(unaudited)
September 30, | December 31, | September 30, | ||||||||||
2008 | 2007 | 2007 | ||||||||||
HOMES COMPLETED OR UNDER CONSTRUCTION | ||||||||||||
Unsold Home Under Construction — Final | 364 | 515 | 493 | |||||||||
Unsold Home Under Construction — Frame | 495 | 656 | 862 | |||||||||
Unsold Home Under Construction — Foundation | 123 | 229 | 196 | |||||||||
Total Unsold Homes Under Construction | 982 | 1,400 | 1,551 | |||||||||
Sold Homes Under Construction | 852 | 1,350 | 2,791 | |||||||||
Model Homes | 428 | 730 | 758 | |||||||||
Homes Completed or Under Construction | 2,262 | 3,480 | 5,100 | |||||||||
LOTS OWNED(excluding homes completed or under construction) | ||||||||||||
Arizona | 1,612 | 2,969 | 3,962 | |||||||||
California | 873 | 1,491 | 1,867 | |||||||||
Nevada | 934 | 1,549 | 1,879 | |||||||||
West | 3,419 | 6,009 | 7,708 | |||||||||
Colorado | 2,638 | 2,992 | 2,904 | |||||||||
Utah | 731 | 863 | 900 | |||||||||
Mountain | 3,369 | 3,855 | 3,804 | |||||||||
Maryland | 192 | 302 | 307 | |||||||||
Virginia | 256 | 369 | 417 | |||||||||
East | 448 | 671 | 724 | |||||||||
Delaware Valley | 117 | 151 | 141 | |||||||||
Florida | 254 | 638 | 849 | |||||||||
Illinois | 155 | 191 | 201 | |||||||||
Other Homebuilding | 526 | 980 | 1,191 | |||||||||
Total | 7,762 | 11,515 | 13,427 | |||||||||
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11
M.D.C. HOLDINGS, INC.
Homebuilding Operational Data
(Dollars in thousands)
(unaudited)
Homebuilding Operational Data
(Dollars in thousands)
(unaudited)
September 30, | December 31, | September 30, | ||||||||||
2008 | 2007 | 2007 | ||||||||||
LOTS CONTROLLED UNDER OPTION | ||||||||||||
Arizona | 431 | 512 | 388 | |||||||||
California | 149 | 157 | 157 | |||||||||
Nevada | 101 | 4 | 4 | |||||||||
West | 681 | 673 | 549 | |||||||||
Colorado | 183 | 262 | 258 | |||||||||
Utah | — | — | — | |||||||||
Mountain | 183 | 262 | 258 | |||||||||
Maryland | 349 | 558 | 605 | |||||||||
Virginia | 1,050 | 1,311 | 1,769 | |||||||||
East | 1,399 | 1,869 | 2,374 | |||||||||
Delaware Valley | 82 | 327 | 315 | |||||||||
Florida | 407 | 484 | 497 | |||||||||
Illinois | — | — | — | |||||||||
Other Homebuilding | 489 | 811 | 812 | |||||||||
Total | 2,752 | 3,615 | 3,993 | |||||||||
NON-REFUNDABLE OPTION DEPOSITS | ||||||||||||
Cash | $ | 5,004 | $ | 6,292 | $ | 8,093 | ||||||
Letters of Credit | 4,913 | 6,547 | 8,287 | |||||||||
Total Non-Refundable Option Deposits | $ | 9,917 | $ | 12,839 | $ | 16,380 | ||||||
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12
M.D.C. HOLDINGS, INC.
Homebuilding Operational Data
(Dollars in thousands)
(Unaudited)
Homebuilding Operational Data
(Dollars in thousands)
(Unaudited)
Three Months | Nine Months | |||||||||||||||||||||||||||||||
Ended September 30, | Change | Ended September 30, | Change | |||||||||||||||||||||||||||||
2008 | 2007 | Amount | % | 2008 | 2007 | Amount | % | |||||||||||||||||||||||||
HOMES CLOSED (UNITS) | ||||||||||||||||||||||||||||||||
Arizona | 307 | 700 | (393 | ) | -56 | % | 1,038 | 1,997 | (959 | ) | -48 | % | ||||||||||||||||||||
California | 155 | 237 | (82 | ) | -35 | % | 472 | 831 | (359 | ) | -43 | % | ||||||||||||||||||||
Nevada | 210 | 310 | (100 | ) | -32 | % | 639 | 1,028 | (389 | ) | -38 | % | ||||||||||||||||||||
West | 672 | 1,247 | (575 | ) | -46 | % | 2,149 | 3,856 | (1,707 | ) | -44 | % | ||||||||||||||||||||
Colorado | 155 | 219 | (64 | ) | -29 | % | 443 | 583 | (140 | ) | -24 | % | ||||||||||||||||||||
Utah | 54 | 162 | (108 | ) | -67 | % | 214 | 568 | (354 | ) | -62 | % | ||||||||||||||||||||
Mountain | 209 | 381 | (172 | ) | -45 | % | 657 | 1,151 | (494 | ) | -43 | % | ||||||||||||||||||||
Maryland | 55 | 71 | (16 | ) | -23 | % | 150 | 181 | (31 | ) | -17 | % | ||||||||||||||||||||
Virginia | 60 | 72 | (12 | ) | -17 | % | 199 | 216 | (17 | ) | -8 | % | ||||||||||||||||||||
East | 115 | 143 | (28 | ) | -20 | % | 349 | 397 | (48 | ) | -12 | % | ||||||||||||||||||||
Delaware Valley | 24 | 35 | (11 | ) | -31 | % | 75 | 116 | (41 | ) | -35 | % | ||||||||||||||||||||
Florida | 70 | 115 | (45 | ) | -39 | % | 254 | 381 | (127 | ) | -33 | % | ||||||||||||||||||||
Illinois | 26 | 41 | (15 | ) | -37 | % | 60 | 68 | (8 | ) | -12 | % | ||||||||||||||||||||
Texas | — | 1 | (1 | ) | N/A | — | 26 | (26 | ) | N/A | ||||||||||||||||||||||
Other Homebuilding | 120 | 192 | (72 | ) | -38 | % | 389 | 591 | (202 | ) | -34 | % | ||||||||||||||||||||
Total | 1,116 | 1,963 | (847 | ) | -43 | % | 3,544 | 5,995 | (2,451 | ) | -41 | % | ||||||||||||||||||||
AVERAGE SELLING PRICES PER HOME CLOSED | ||||||||||||||||||||||||||||||||
West | ||||||||||||||||||||||||||||||||
Arizona | $ | 206.2 | $ | 247.9 | $ | (41.7 | ) | -17 | % | $ | 220.2 | $ | 254.4 | $ | (34.2 | ) | -13 | % | ||||||||||||||
California | 435.5 | 492.4 | (56.9 | ) | -12 | % | 422.4 | 524.7 | (102.3 | ) | -19 | % | ||||||||||||||||||||
Nevada | 243.3 | 294.2 | (50.9 | ) | -17 | % | 246.2 | 301.5 | (55.3 | ) | -18 | % | ||||||||||||||||||||
Mountain | ||||||||||||||||||||||||||||||||
Colorado | 346.4 | 357.7 | (11.3 | ) | -3 | % | 348.6 | 345.5 | 3.1 | 1 | % | |||||||||||||||||||||
Utah | 331.4 | 363.3 | (31.9 | ) | -9 | % | 336.4 | 359.8 | (23.4 | ) | -7 | % | ||||||||||||||||||||
East | ||||||||||||||||||||||||||||||||
Maryland | 442.0 | 521.4 | (79.4 | ) | -15 | % | 459.3 | 521.3 | (62.0 | ) | -12 | % | ||||||||||||||||||||
Virginia | 458.5 | 484.1 | (25.6 | ) | -5 | % | 459.5 | 491.4 | (31.9 | ) | -6 | % | ||||||||||||||||||||
Other Homebuilding | ||||||||||||||||||||||||||||||||
Delaware Valley | 395.5 | 417.2 | (21.7 | ) | -5 | % | 409.3 | 452.7 | (43.4 | ) | -10 | % | ||||||||||||||||||||
Florida | 240.1 | 253.8 | (13.7 | ) | -5 | % | 240.4 | 265.2 | (24.8 | ) | -9 | % | ||||||||||||||||||||
Illinois | 351.7 | 396.1 | (44.4 | ) | -11 | % | 347.8 | 381.7 | (33.9 | ) | -9 | % | ||||||||||||||||||||
Texas | — | 110.0 | N/A | N/A | — | 129.6 | N/A | N/A | ||||||||||||||||||||||||
Company Average | $ | 301.7 | $ | 331.7 | $ | (30.0 | ) | -9 | % | $ | 303.2 | $ | 342.1 | $ | (38.9 | ) | -11 | % |
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13
M.D.C. HOLDINGS, INC.
Homebuilding Operational Data
(Dollars in thousands)
(Unaudited)
Homebuilding Operational Data
(Dollars in thousands)
(Unaudited)
Three Months | Nine Months | |||||||||||||||||||||||||||||||
Ended September 30, | Change | Ended September 30, | Change | |||||||||||||||||||||||||||||
2008 | 2007 | Amount | % | 2008 | 2007 | Amount | % | |||||||||||||||||||||||||
ORDERS FOR HOMES, NET (UNITS) | ||||||||||||||||||||||||||||||||
Arizona | 216 | 385 | (169 | ) | -44 | % | 792 | 1,750 | (958 | ) | -55 | % | ||||||||||||||||||||
California | 87 | 152 | (65 | ) | -43 | % | 394 | 849 | (455 | ) | -54 | % | ||||||||||||||||||||
Nevada | 111 | 239 | (128 | ) | -54 | % | 487 | 984 | (497 | ) | -51 | % | ||||||||||||||||||||
West | 414 | 776 | (362 | ) | -47 | % | 1,673 | 3,583 | (1,910 | ) | -53 | % | ||||||||||||||||||||
Colorado | 105 | 153 | (48 | ) | -31 | % | 385 | 677 | (292 | ) | -43 | % | ||||||||||||||||||||
Utah | 17 | 41 | (24 | ) | -59 | % | 105 | 390 | (285 | ) | -73 | % | ||||||||||||||||||||
Mountain | 122 | 194 | (72 | ) | -37 | % | 490 | 1,067 | (577 | ) | -54 | % | ||||||||||||||||||||
Maryland | 25 | 36 | (11 | ) | -31 | % | 112 | 227 | (115 | ) | -51 | % | ||||||||||||||||||||
Virginia | 40 | 81 | (41 | ) | -51 | % | 152 | 275 | (123 | ) | -45 | % | ||||||||||||||||||||
East | 65 | 117 | (52 | ) | -44 | % | 264 | 502 | (238 | ) | -47 | % | ||||||||||||||||||||
Delaware Valley | 20 | 23 | (3 | ) | -13 | % | 56 | 104 | (48 | ) | -46 | % | ||||||||||||||||||||
Florida | 33 | 81 | (48 | ) | -59 | % | 215 | 377 | (162 | ) | -43 | % | ||||||||||||||||||||
Illinois | 13 | 37 | (24 | ) | -65 | % | 26 | 109 | (83 | ) | -76 | % | ||||||||||||||||||||
Texas | — | — | — | N/A | — | 14 | (14 | ) | N/A | |||||||||||||||||||||||
Other Homebuilding | 66 | 141 | (75 | ) | -53 | % | 297 | 604 | (307 | ) | -51 | % | ||||||||||||||||||||
Total | 667 | 1,228 | (561 | ) | -46 | % | 2,724 | 5,756 | (3,032 | ) | -53 | % | ||||||||||||||||||||
Estimated Value of Orders for Homes, net | $ | 182,000 | $ | 365,000 | (183,000 | ) | -50 | % | $ | 786,000 | $ | 1,920,000 | (1,134,000 | ) | -59 | % | ||||||||||||||||
Estimated Average Selling Price of Orders for Homes, net | $ | 272.9 | $ | 297.2 | (24.3 | ) | -8 | % | $ | 288.5 | $ | 333.6 | (45.1 | ) | -14 | % | ||||||||||||||||
Cancellation Rate(8) | 46 | % | 57 | % | -11 | % | 43 | % | 44 | % | -1 | % |
(8) | 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)
Homebuilding Operational Data
(Dollars in thousands)
(Unaudited)
September 30, | December 31, | September 30, | ||||||||||
2008 | 2007 | 2007 | ||||||||||
BACKLOG (UNITS) | ||||||||||||
Arizona | 346 | 592 | 1,257 | |||||||||
California | 125 | 203 | 445 | |||||||||
Nevada | 155 | 307 | 271 | |||||||||
West | 626 | 1,102 | 1,973 | |||||||||
Colorado | 155 | 213 | 347 | |||||||||
Utah | 69 | 178 | 287 | |||||||||
Mountain | 224 | 391 | 634 | |||||||||
Maryland | 88 | 126 | 233 | |||||||||
Virginia | 53 | 100 | 195 | |||||||||
East | 141 | 226 | 428 | |||||||||
Delaware Valley | 38 | 57 | 107 | |||||||||
Florida | 86 | 125 | 193 | |||||||||
Illinois | 12 | 46 | 64 | |||||||||
Texas | — | — | — | |||||||||
Other Homebuilding | 136 | 228 | 364 | |||||||||
Total | 1,127 | 1,947 | 3,399 | |||||||||
Backlog Estimated Sales Value | $ | 364,000 | $ | 650,000 | $ | 1,210,000 | ||||||
Estimated Average Selling Price of Homes in Backlog | $ | 323.0 | $ | 333.8 | $ | 356.0 | ||||||
ACTIVE SUBDIVISIONS | ||||||||||||
Arizona | 52 | 66 | 67 | |||||||||
California | 17 | 41 | 41 | |||||||||
Nevada | 25 | 39 | 41 | |||||||||
West | 94 | 146 | 149 | |||||||||
Colorado | 49 | 47 | 52 | |||||||||
Utah | 24 | 23 | 25 | |||||||||
Mountain | 73 | 70 | 77 | |||||||||
Maryland | 12 | 15 | 16 | |||||||||
Virginia | 16 | 18 | 21 | |||||||||
East | 28 | 33 | 37 | |||||||||
Delaware Valley | 2 | 4 | 4 | |||||||||
Florida | 12 | 20 | 23 | |||||||||
Illinois | 2 | 5 | 7 | |||||||||
Other Homebuilding | 16 | 29 | 34 | |||||||||
Total | 211 | 278 | 297 | |||||||||
Average for quarter ended | 220 | 287 | 303 | |||||||||
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15