Exhibit 99.1
NEWS BULLETIN
M.D.C. HOLDINGS, INC.
FOR IMMEDIATE RELEASE
THURSDAY, AUGUST 4, 2011
| Contact: | Robert N. Martin |
Investor Relations
(720) 977-3431
bob.martin@mdch.com
M.D.C. HOLDINGS ANNOUNCES SECOND QUARTER 2011 RESULTS
| | • | | Net orders increased 5% year-over-year to 1,064 homes |
| | • | | Quarter-end backlog increased 28% year-over-year to 1,424 homes |
| | • | | Active subdivisions increased 31% to 176 |
| | • | | Net loss of $28.0 million or $0.60 per share, including asset impairments and project abandonment charges of $11.2 million |
| | • | | General and administrative expense decreased 19% year-over-year to $36.2 million; eliminated more than 100 full-time positions during the second quarter |
| | • | | Tender offer for $237 million of senior notes closed in July 2011 |
DENVER, Thursday, August 4, 2011 - M.D.C. Holdings, Inc. (NYSE: MDC) today reported a net loss for the 2011 second quarter of $28.0 million, or $0.60 per share, compared with a net loss for the 2010 second quarter of $3.7 million, or $0.08 per share.
Revenue for the 2011 second quarter decreased 34% to $215.7 million, compared with $326.3 million a year ago. Prior year results benefited from increased demand related to the federal homebuyer tax credit, which expired during the 2010 second quarter.
Management Comments
Larry A. Mizel, MDC’s chairman and chief executive officer, stated, “Over the past two years, we have focused a significant amount of time on land acquisition, which has yielded a 31% year-over-year increase in active subdivisions at the end of the second quarter, setting the stage for top-line growth in the second half of 2011. We accomplished the increase in active communities both through land purchases in our existing markets and by expanding into the Seattle market through the acquisition of assets from SDC Homes in April. However, as our economy continues to display considerable weakness, it is difficult to justify a significant number of additional land acquisitions in the near-term.”
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Mizel continued, “As we look at the communities we already own, we see a clear need to focus more closely on our gross profit margins. To start, we have changed our policy on the production of speculative homes, which have yielded margins significantly below those homes that are started with a buyer under contract. Going forward, in most of our markets, we will start very few speculative homes. As of the end of the second quarter, our supply of these homes had already decreased 44% year-over-year. With our new policy in place, we should see this number continue to decline, and the percentage of our closings attributable to homes sold with a buyer under contract should increase.”
Mizel concluded, “Given the headwinds our industry continues to face, we are also focused on reducing our expenses, as demonstrated by headcount reductions and other cost savings measures over the last year that have resulted in a 19% year-over-year decrease in general and administrative expenses. In the second quarter alone, we eliminated more than 100 positions, which should drive our general and administrative expense even lower in the coming quarters. In addition, we completed a tender offer in July on approximately $237 million of our senior notes to reduce our interest incurred. We will continue to focus on cost savings initiatives to the extent necessary to position ourselves for profitability.”
Second Quarter Highlights
Home closings in the 2011 second quarter were 709 units, with an average selling price of $290,800, compared with 1,135 units, with an average selling price of $274,300, in the second quarter of 2010.
Home gross margin in the 2011 second quarter was 13.1% as compared with 18.1% in the 2010 second quarter. This decrease reflects our focus on reducing older aged speculative inventory, and an increase in land costs as we have sought to lower our land risk by primarily purchasing finished lots in prime locations.
During the 2011 second quarter, asset impairments totaled $9.1 million, compared with no asset impairments in the same quarter last year. The impairments related primarily to six subdivisions located in California, Nevada and Utah.
General and administrative expenses decreased to $36.2 million for the 2011 second quarter, compared with $44.6 million for the same period in the prior year. The primary driver behind the decrease was a $5.0 million decline in salary related costs due to a year-over-year decrease in headcount.
Marketing costs were $9.9 million in the 2011 second quarter, compared with $11.5 million in the 2010 second quarter, primarily due to the year-over-year decrease in home closings, partially offset by an increase in our community count. Commission costs were $7.5 million as compared with $11.6 million in the same quarter last year, inline with the decrease in revenue we experienced.
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Net orders for the 2011 second quarter increased to 1,064 homes with an estimated sales value of $302 million, compared with net orders for 1,015 homes with an estimated sales value of $281 million during the same period in 2010.
We ended the 2011 second quarter with 1,424 homes under contract with an estimated sales value of $433 million, compared with a backlog of 1,114 homes with an estimated sales value of $351 million at June 30, 2010.
Our estimated home gross margin in backlog at the end of the second quarter did not change materially from the estimated home gross margin in backlog to start the quarter.
Overhead Management
During the 2011 second quarter, the Company and its subsidiaries eliminated more than 100 employees from its workforce. The Company expects to save approximately $9 million annually as a result of these reductions and incurred $1.2 million of related severance charges during the second quarter.
Tender Offer Results
On July 7, 2011, the Company completed a tender offer on approximately $237 million in aggregate principal amount of its senior notes, which will reduce our annual interest incurred by approximately $14 million, partially offset by a loss of interest income on the cash used to extinguish the debt. Also, as a result of the tender offer, the Company expects to record an $18.6 million charge associated with the extinguishment of debt during the third quarter.
Enterprise Resource Planning System Update
During the second quarter, we implemented our new enterprise resource planning system in one additional division. As of June 30, 2011, half of our divisions remained to be upgraded to the new system. This technology platform, when fully implemented, is expected to drive consistency in core processes across divisions, reduce operating costs and provide management with better accessibility to real-time operating data.
About MDC
Since 1972, MDC’s subsidiary companies have built and financed the American dream for more than 165,000 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 operations across the country, including the metropolitan areas of Denver, Colorado Springs, Salt Lake City, Las Vegas, Phoenix, Tucson, Riverside-San Bernardino, Los Angeles, San Francisco Bay Area, Washington D.C., Baltimore, Philadelphia, Jacksonville and Seattle. The Company’s subsidiaries also provide mortgage financing, insurance and title services, primarily for Richmond American homebuyers, through
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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) changes in the market value of the Company’s investments in marketable securities; (5) uncertainty in the mortgage lending industry, including repurchase requirements associated with HomeAmerican’s sale of mortgage loans (6) the relative stability of debt and equity markets; (7) competition; (8) the availability and cost of land and other raw materials used by the Company in its homebuilding operations; (9) the availability and cost of performance bonds and insurance covering risks associated with our business; (10) shortages and the cost of labor; (11) weather related slowdowns; (12) slow growth initiatives; (13) building moratoria; (14) governmental regulation, including the interpretation of tax, labor and environmental laws; (15) changes in consumer confidence and preferences; (16) terrorist acts and other acts of war; and (17) 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-Q for the quarter ended June 30, 2011, 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 webcasts should be consulted.
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M.D.C. HOLDINGS, INC.
Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
| | | | | | | | | | | | | | | | |
| | | Three Months
Ended June 30, | | | Six Months
Ended June 30, | |
| | | 2011 | | | 2010 | | | 2011 | | | 2010 | |
Revenue | | | | | | | | | | | | | | | | |
| | | | |
Home sales revenue | | $ | 206,163 | | | $ | 311,276 | | | $ | 369,546 | | | $ | 452,219 | |
Land sales revenue | | | 2,565 | | | | 5,699 | | | | 2,769 | | | | 5,714 | |
Other revenue | | | 6,957 | | | | 9,355 | | | | 13,117 | | | | 15,475 | |
| | | | | | | | | | | | | | | | |
Total Revenue | | | 215,685 | | | | 326,330 | | | | 385,432 | | | | 473,408 | |
| | | | | | | | | | | | | | | | |
| | | | |
Costs and expenses | | | | | | | | | | | | | | | | |
| | | | |
Home cost of sales | | | 179,097 | | | | 255,062 | | | | 320,078 | | | | 364,452 | |
Land cost of sales | | | 1,741 | | | | 4,974 | | | | 1,758 | | | | 5,165 | |
Asset impairments | | | 9,119 | | | | — | | | | 9,398 | | | | — | |
Marketing expenses | | | 9,897 | | | | 11,475 | | | | 19,730 | | | | 18,535 | |
Commission expenses | | | 7,456 | | | | 11,611 | | | | 13,223 | | | | 16,740 | |
General and administrative expenses | | | 36,237 | | | | 44,588 | | | | 72,989 | | | | 84,791 | |
Other operating (income) expenses | | | 2,447 | | | | 529 | | | | 897 | | | | 1,020 | |
Related party expenses | | | 28 | | | | — | | | | 32 | | | | 9 | |
| | | | | | | | | | | | | | | | |
Total operating costs and expenses | | | 246,022 | | | | 328,239 | | | | 438,105 | | | | 490,712 | |
| | | | | | | | | | | | | | | | |
| | | | |
Loss from operations | | | (30,337 | ) | | | (1,909 | ) | | | (52,673 | ) | | | (17,304 | ) |
| | | | | | | | | | | | | | | | |
| | | | |
Other income (expense) | | | | | | | | | | | | | | | | |
Interest income | | | 7,872 | | | | 7,541 | | | | 15,198 | | | | 11,969 | |
Interest expense | | | (7,394 | ) | | | (9,436 | ) | | | (16,124 | ) | | | (19,810 | ) |
Other | | | 56 | | | | 105 | | | | 92 | | | | 204 | |
| | | | | | | | | | | | | | | | |
| | | | |
Loss before income taxes | | | (29,803 | ) | | | (3,699 | ) | | | (53,507 | ) | | | (24,941 | ) |
| | | | | | | | | | | | | | | | |
| | | | |
Benefit from income taxes, net | | | 1,823 | | | | 15 | | | | 5,648 | | | | 384 | |
| | | | | | | | | | | | | | | | |
| | | | |
Net loss | | $ | (27,980 | ) | | $ | (3,684 | ) | | $ | (47,859 | ) | | $ | (24,557 | ) |
| | | | | | | | | | | | | | | | |
| | | | |
Loss per share | | | | | | | | | | | | | | | | |
| | | | |
Basic | | $ | (0.60 | ) | | $ | (0.08 | ) | | $ | (1.03 | ) | | $ | (0.53 | ) |
| | | | | | | | | | | | | | | | |
| | | | |
Diluted | | $ | (0.60 | ) | | $ | (0.08 | ) | | $ | (1.03 | ) | | $ | (0.53 | ) |
| | | | | | | | | | | | | | | | |
| | | | |
Dividends declared per share | | $ | 0.25 | | | $ | 0.25 | | | $ | 0.50 | | | $ | 0.50 | |
| | | | | | | | | | | | | | | | |
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M.D.C. HOLDINGS, INC.
Consolidated Balance Sheets
(Dollars in thousands)
(Unaudited)
| | | | | | | | |
| | | June 30,
2011 | | | December 31,
2010 | |
Assets | | | | | | | | |
Cash and cash equivalents | | $ | 755,835 | | | $ | 572,225 | |
Marketable securities | | | 646,895 | | | | 968,729 | |
Restricted cash | | | 604 | | | | 420 | |
Receivables | | | | | | | | |
Home sales receivables | | | 7,797 | | | | 8,530 | |
Income taxes receivable | | | — | | | | 2,048 | |
Other receivables | | | 8,661 | | | | 9,432 | |
Mortgage loans held-for-sale, net | | | 39,200 | | | | 65,114 | |
Inventories, net | | | | | | | | |
Housing completed or under construction | | | 336,514 | | | | 372,422 | |
Land and land under development | | | 524,234 | | | | 415,237 | |
Property and equipment, net | | | 38,769 | | | | 40,826 | |
Deferred tax asset, net of valuation allowance of $252,209 and $231,379 at June 30, 2011 and December 31, 2010, respectively | | | — | | | | — | |
Related party assets | | | 7,393 | | | | 7,393 | |
Prepaid expenses and other assets, net | | | 54,402 | | | | 85,393 | |
| | | | | | | | |
Total Assets | | $ | 2,420,304 | | | $ | 2,547,769 | |
| | | | | | | | |
| | |
Liabilities | | | | | | | | |
Accounts payable | | $ | 29,108 | | | $ | 35,018 | |
Accrued liabilities | | | 204,890 | | | | 260,729 | |
Income taxes payable | | | 734 | | | | — | |
Related party liabilities | | | 117 | | | | 90 | |
Mortgage repurchase facility | | | 8,988 | | | | 25,434 | |
Senior notes, net | | | 1,243,273 | | | | 1,242,815 | |
| | | | | | | | |
Total Liabilities | | | 1,487,110 | | | | 1,564,086 | |
| | | | | | | | |
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; 47,530,000 and 47,474,000 issued and outstanding, respectively, at June 30, 2011 and 47,198,000 and 47,142,000 issued and outstanding, respectively, at December 31, 2010 | | | 475 | | | | 472 | |
Additional paid-in-capital | | | 839,964 | | | | 820,237 | |
Retained earnings | | | 87,198 | | | | 158,749 | |
Accumulated other comprehensive income | | | 6,216 | | | | 4,884 | |
Treasury stock, at cost; 56,000 shares at June 30, 2011 and December 31, 2010 | | | (659 | ) | | | (659 | ) |
| | | | | | | | |
Total Stockholders’ Equity | | | 933,194 | | | | 983,683 | |
| | | | | | | | |
Total Liabilities and Stockholders’ Equity | | $ | 2,420,304 | | | $ | 2,547,769 | |
| | | | | | | | |
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M.D.C. HOLDINGS, INC.
Information on Segments
(Dollars in thousands)
(Unaudited)
| | | | | | | | | | | | | | | | |
| | | Three Months
Ended June 30, | | | Six Months
Ended June 30, | |
| | | 2011 | | | 2010 | | | 2011 | | | 2010 | |
Revenue | | | | | | | | | | | | | | | | |
Homebuilding | | | | | | | | | | | | | | | | |
West | | $ | 69,401 | | | $ | 123,193 | | | $ | 111,884 | | | $ | 180,330 | |
Mountain | | | 78,702 | | | | 110,112 | | | | 149,826 | | | | 156,794 | |
East | | | 51,076 | | | | 72,657 | | | | 94,168 | | | | 104,162 | |
Other Homebuilding | | | 10,949 | | | | 16,757 | | | | 20,808 | | | | 25,793 | |
| | | | | | | | | | | | | | | | |
| | | | |
Total Homebuilding | | | 210,128 | | | | 322,719 | | | | 376,686 | | | | 467,079 | |
| | | | |
Financial Services and Other | | | 6,731 | | | | 9,143 | | | | 12,434 | | | | 14,764 | |
Corporate | | | — | | | | — | | | | — | | | | — | |
Intercompany adjustments | | | (1,174 | ) | | | (5,532 | ) | | | (3,688 | ) | | | (8,435 | ) |
| | | | | | | | | | | | | | | | |
| | | | |
Consolidated | | $ | 215,685 | | | $ | 326,330 | | | $ | 385,432 | | | $ | 473,408 | |
| | | | | | | | | | | | | | | | |
| | |
| | | Three Months
Ended June 30, | | | Six Months
Ended June 30, | |
| | | 2011 | | | 2010 | | | 2011 | | | 2010 | |
(Loss)/Income Before Income Taxes | | | | | | | | | | | | | | | | |
Homebuilding | | | | | | | | | | | | | | | | |
West | | $ | (11,837 | ) | | $ | 6,357 | | | $ | (16,397 | ) | | $ | 8,711 | |
Mountain | | | (1,204 | ) | | | 4,962 | | | | (2,436 | ) | | | 6,132 | |
East | | | (2,345 | ) | | | 1,455 | | | | (4,301 | ) | | | (64 | ) |
Other Homebuilding | | | (916 | ) | | | 295 | | | | (1,692 | ) | | | (224 | ) |
| | | | | | | | | | | | | | | | |
| | | | |
Total Homebuilding | | | (16,302 | ) | | | 13,069 | | | | (24,826 | ) | | | 14,555 | |
| | | | |
Financial Services and Other | | | 3,089 | | | | 4,089 | | | | 4,869 | | | | 5,935 | |
Corporate | | | (16,590 | ) | | | (20,857 | ) | | | (33,550 | ) | | | (45,431 | ) |
| | | | | | | | | | | | | | | | |
Consolidated | | $ | (29,803 | ) | | $ | (3,699 | ) | | $ | (53,507 | ) | | $ | (24,941 | ) |
| | | | | | | | | | | | | | | | |
| | | |
| | | June 30,
2011 | | | December 31,
2010 | | | | |
Total Assets | | | | | | | | | |
Homebuilding | | | | | | | | | |
West | | $ | 360,939 | | | $ | 300,652 | | |
Mountain | | | 308,805 | | | | 311,833 | | |
East | | | 214,246 | | | | 188,693 | | |
Other Homebuilding | | | 37,146 | | | | 40,554 | | |
| | | | | | | | | |
Total Homebuilding | | | 921,136 | | | | 841,732 | | |
Financial Services and Other | | | 112,113 | | | | 135,286 | | |
Corporate | | | 1,390,811 | | | | 1,573,408 | | |
Intercompany adjustments | | | (3,756 | ) | | | (2,657 | ) | |
| | | | | | | | | |
Consolidated | | $ | 2,420,304 | | | $ | 2,547,769 | | |
| | | | | | | | | |
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M.D.C. HOLDINGS, INC.
Selected Financial Data
(Dollars in thousands)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months
Ended June 30, | | | Change | | | Six Months
Ended June 30, | | | Change | |
| | | 2011 | | | 2010 | | | Amount | | | % | | | 2011 | | | 2010 | | | Amount | | | % | |
Selected Fincial Data | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
General and Administrative Expenses | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Homebuilding | | $ | 15,822 | | | $ | 20,489 | | | $ | (4,667 | ) | | | -23 | % | | $ | 30,781 | | | $ | 38,215 | | | $ | (7,434 | ) | | | -19 | % |
Financial Services and Other | | | 4,432 | | | | 5,658 | | | | (1,226 | ) | | | -22 | % | | | 9,131 | | | | 9,746 | | | | (615 | ) | | | -6 | % |
Corporate | | | 15,983 | | | | 18,441 | | | | (2,458 | ) | | | -13 | % | | | 33,077 | | | | 36,830 | | | | (3,753 | ) | | | -10 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 36,237 | | | $ | 44,588 | | | $ | (8,351 | ) | | | -19 | % | | $ | 72,989 | | | $ | 84,791 | | | $ | (11,802 | ) | | | -14 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
SG&A as a % of Home Sales Revenue | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Homebuilding Segments | | | 16.1 | % | | | 14.0 | % | | | 2.1 | % | | | | | | | 17.2 | % | | | 16.3 | % | | | 0.9 | % | | | | |
Corporate Segment | | | 7.8 | % | | | 5.9 | % | | | 1.9 | % | | | | | | | 9.0 | % | | | 8.1 | % | | | 0.9 | % | | | | |
| | | | | | | | |
Depreciation and Amortization(1) | | $ | 4,338 | | | $ | 5,169 | | | $ | (831 | ) | | | -16 | % | | $ | 8,067 | | | $ | 8,101 | | | $ | (34 | ) | | | 0 | % |
| | | | | | | | |
Home Gross Margins (2) | | | 13.1 | % | | | 18.1 | % | | | -5.0 | % | | | | | | | 13.4 | % | | | 19.4 | % | | | -6.0 | % | | | | |
| | | | | | | | |
Interest in Home Cost of Sales as a % of Home Sales Revenue | | | 2.6 | % | | | 2.6 | % | | | 0.0 | % | | | | | | | 2.6 | % | | | 2.5 | % | | | 0.1 | % | | | | |
| | | | | | | | |
Cash Provided by (Used in) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Operating Activities | | $ | (11,556 | ) | | $ | (190,450 | ) | | $ | 178,894 | | | | | | | $ | (69,257 | ) | | $ | (178,934 | ) | | $ | 109,677 | | | | | |
Investing Activities | | $ | 187,918 | | | $ | (116,380 | ) | | $ | 304,298 | | | | | | | $ | 292,959 | | | $ | (618,147 | ) | | $ | 911,106 | | | | | |
Financing Activities | | $ | (9,570 | ) | | $ | 48,823 | | | $ | (58,393 | ) | | | | | | $ | (40,092 | ) | | $ | 254,961 | | | $ | (295,053 | ) | | | | |
| | | | | | | | |
Total Interest Capitalized | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest capitalized, beginning of period | | $ | 43,762 | | | $ | 31,773 | | | $ | 11,989 | | | | 38 | % | | $ | 38,446 | | | $ | 28,339 | | | $ | 10,107 | | | | 36 | % |
Interest capitalized, net of interest expense | | | 10,750 | | | | 8,849 | | | | 1,901 | | | | 21 | % | | | 20,269 | | | | 15,485 | | | | 4,784 | | | | 31 | % |
Previously capitalized interest included in home cost of sales | | | (5,454 | ) | | | (8,202 | ) | | | 2,748 | | | | -34 | % | | | (9,657 | ) | | | (11,404 | ) | | | 1,747 | | | | -15 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest capitalized, end of period | | $ | 49,058 | | | $ | 32,420 | | | $ | 16,638 | | | | 51 | % | | $ | 49,058 | | | $ | 32,420 | | | $ | 16,638 | | | | 51 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (1) | Includes depreciation and amortization of long-lived assets and amortization of deferred marketing costs. |
| (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. |
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M.D.C. HOLDINGS, INC.
Selected Financial Data
(Dollars in thousands)
(Unaudited)
| | | | | | | | | | | | | | | | |
| | | Three Months
Ended June 30, | | | Change | |
| | | 2011 | | | 2010 | | | Amount | | | % | |
Principal amount of mortgage loans originated | | $ | 146,275 | | | $ | 240,693 | | | $ | (94,418 | ) | | | -39 | % |
Principal amount of mortgage loans brokered | | $ | 2,177 | | | $ | 2,660 | | | $ | (483 | ) | | | -18 | % |
Capture Rate | | | 75 | % | | | 83 | % | | | -8 | % | | | | |
Including brokered loans | | | 76 | % | | | 84 | % | | | -8 | % | | | | |
Mortgage products (% of mortgage loans originated) | | | | | | | | | | | | | | | | |
Fixed rate | | | 96 | % | | | 97 | % | | | -1 | % | | | | |
Adjustable rate - other | | | 4 | % | | | 3 | % | | | 1 | % | | | | |
| | | | |
Prime loans(3) | | | 27 | % | | | 26 | % | | | 1 | % | | | | |
Government loans(4) | | | 73 | % | | | 74 | % | | | -1 | % | | | | |
| | |
| | | Six Months
Ended June 30, | | | Change | |
| | | 2011 | | | 2010 | | | Amount | | | % | |
Principal amount of mortgage loans originated | | $ | 261,655 | | | $ | 348,783 | | | $ | (87,128 | ) | | | -25 | % |
Principal amount of mortgage loans brokered | | $ | 2,896 | | | $ | 5,516 | | | $ | (2,620 | ) | | | -47 | % |
Capture Rate | | | 75 | % | | | 82 | % | | | -7 | % | | | | |
Including brokered loans | | | 76 | % | | | 83 | % | | | -7 | % | | | | |
Mortgage products (% of mortgage loans originated) | | | | | | | | | | | | | | | | |
Fixed rate | | | 96 | % | | | 96 | % | | | 0 | % | | | | |
Adjustable rate - other | | | 4 | % | | | 4 | % | | | 0 | % | | | | |
| | | | |
Prime loans(3) | | | 29 | % | | | 25 | % | | | 4 | % | | | | |
Government loans(4) | | | 71 | % | | | 75 | % | | | -4 | % | | | | |
| (3) | 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. |
| (4) | Government loans are loans either insured by the Federal Housing Administration or guaranteed by the Department of Veteran Affairs. |
9
M.D.C. HOLDINGS, INC.
Homebuilding Operational Data
(Dollars in thousands)
(Unaudited)
| | | | | | | | | | | | |
| | | June 30,
2011 | | | December 31,
2010 | | | June 30,
2010 | |
Homes Completed or Under Construction | | | | | | | | | | | | |
Unsold Home Under Construction - Final | | | 42 | | | | 119 | | | | 47 | |
Unsold Home Under Construction - Frame | | | 353 | | | | 722 | | | | 720 | |
Unsold Home Under Construction - Foundation | | | 101 | | | | 103 | | | | 124 | |
| | | | | | | | | | | | |
Total Unsold Homes Under Construction | | | 496 | | | | 944 | | | | 891 | |
Sold Homes Under Construction | | | 843 | | | | 609 | | | | 865 | |
Model Homes | | | 231 | | | | 242 | | | | 226 | |
| | | | | | | | | | | | |
Homes Completed or Under Construction | | | 1,570 | | | | 1,795 | | | | 1,982 | |
| | | | | | | | | | | | |
| | | |
Lots Owned (excluding homes completed or under construction) | | | | | | | | | | | | |
Arizona | | | 1,064 | | | | 1,257 | | | | 1,165 | |
California | | | 1,376 | | | | 1,201 | | | | 1,130 | |
Nevada | | | 1,184 | | | | 991 | | | | 681 | |
Washington | | | 232 | | | | — | | | | — | |
| | | | | | | | | | | | |
West | | | 3,856 | | | | 3,449 | | | | 2,976 | |
| | | | | | | | | | | | |
| | | |
Colorado | | | 3,240 | | | | 2,919 | | | | 2,893 | |
Utah | | | 579 | | | | 594 | | | | 569 | |
| | | | | | | | | | | | |
Mountain | | | 3,819 | | | | 3,513 | | | | 3,462 | |
| | | | | | | | | | | | |
| | | |
Maryland | | | 380 | | | | 319 | | | | 199 | |
Virginia | | | 589 | | | | 414 | | | | 371 | |
| | | | | | | | | | | | |
East | | | 969 | | | | 733 | | | | 570 | |
| | | | | | | | | | | | |
| | | |
Florida | | | 269 | | | | 210 | | | | 184 | |
Illinois | | | 123 | | | | 130 | | | | 134 | |
| | | | | | | | | | | | |
Other Homebuilding | | | 392 | | | | 340 | | | | 318 | |
| | | | | | | | | | | | |
| | | |
Total | | | 9,036 | | | | 8,035 | | | | 7,326 | |
| | | | | | | | | | | | |
10
M.D.C. HOLDINGS, INC.
Homebuilding Operational Data
(Dollars in thousands)
(Unaudited)
| | | | | | | | | | | | |
| | | June 30,
2011 | | | December 31,
2010 | | | June 30,
2010 | |
Lots Controlled Under Option | | | | | | | | | | | | |
| | | |
Arizona | | | 108 | | | | 408 | | | | 499 | |
California | | | — | | | | 222 | | | | 152 | |
Nevada | | | 398 | | | | 838 | | | | 570 | |
Washington | | | 42 | | | | — | | | | — | |
| | | | | | | | | | | | |
West | | | 548 | | | | 1,468 | | | | 1,221 | |
| | | | | | | | | | | | |
| | | |
Colorado | | | 602 | | | | 688 | | | | 644 | |
Utah | | | 298 | | | | 393 | | | | 156 | |
| | | | | | | | | | | | |
Mountain | | | 900 | | | | 1,081 | | | | 800 | |
| | | | | | | | | | | | |
| | | |
Maryland | | | 795 | | | | 745 | | | | 655 | |
Virginia | | | 234 | | | | 132 | | | | 272 | |
| | | | | | | | | | | | |
East | | | 1,029 | | | | 877 | | | | 927 | |
| | | | | | | | | | | | |
| | | |
Florida | | | 480 | | | | 733 | | | | 658 | |
Illinois | | | — | | | | — | | | | — | |
| | | | | | | | | | | | |
Other Homebuilding | | | 480 | | | | 733 | | | | 658 | |
| | | | | | | | | | | | |
| | | |
Total | | | 2,957 | | | | 4,159 | | | | 3,606 | |
| | | | | | | | | | | | |
| | | |
At Risk Option Deposits | | | | | | | | | | | | |
Cash | | $ | 10,534 | | | $ | 9,019 | | | $ | 7,933 | |
Letters of Credit | | | 6,716 | | | | 4,467 | | | | 2,727 | |
| | | | | | | | | | | | |
Total At Risk Option Deposits | | $ | 17,250 | | | $ | 13,486 | | | $ | 10,660 | |
| | | | | | | | | | | | |
11
M.D.C. HOLDINGS, INC.
Homebuilding Operational Data
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months
Ended June 30, | | | Change | | | Six Months
Ended June 30, | | | Change | |
| Closed Homes (Units) | | 2011 | | | 2010 | | | Amount | | | % | | | 2011 | | | 2010 | | | Amount | | | % | |
Arizona | | | 98 | | | | 242 | | | | (144 | ) | | | -60 | % | | | 175 | | | | 350 | | | | (175 | ) | | | -50 | % |
California | | | 62 | | | | 68 | | | | (6 | ) | | | -9 | % | | | 110 | | | | 114 | | | | (4 | ) | | | -4 | % |
Nevada | | | 80 | | | | 221 | | | | (141 | ) | | | -64 | % | | | 146 | | | | 319 | | | | (173 | ) | | | -54 | % |
Washington | | | 51 | | | | — | | | | 51 | | | | N/M | | | | 51 | | | | — | | | | 51 | | | | N/M | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
West | | | 291 | | | | 531 | | | | (240 | ) | | | -45 | % | | | 482 | | | | 783 | | | | (301 | ) | | | -38 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
Colorado | | | 182 | | | | 230 | | | | (48 | ) | | | -21 | % | | | 348 | | | | 338 | | | | 10 | | | | 3 | % |
Utah | | | 66 | | | | 147 | | | | (81 | ) | | | -55 | % | | | 120 | | | | 199 | | | | (79 | ) | | | -40 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Mountain | | | 248 | | | | 377 | | | | (129 | ) | | | -34 | % | | | 468 | | | | 537 | | | | (69 | ) | | | -13 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
Maryland | | | 49 | | | | 87 | | | | (38 | ) | | | -44 | % | | | 106 | | | | 117 | | | | (11 | ) | | | -9 | % |
Virginia | | | 72 | | | | 68 | | | | 4 | | | | 6 | % | | | 115 | | | | 108 | | | | 7 | | | | 6 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
East | | | 121 | | | | 155 | | | | (34 | ) | | | -22 | % | | | 221 | | | | 225 | | | | (4 | ) | | | -2 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
Florida | | | 48 | | | | 72 | | | | (24 | ) | | | -33 | % | | | 91 | | | | 113 | | | | (22 | ) | | | -19 | % |
Illinois | | | 1 | | | | — | | | | 1 | | | | 0 | % | | | 1 | | | | — | | | | 1 | | | | 0 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Other Homebuilding | | | 49 | | | | 72 | | | | (23 | ) | | | -32 | % | | | 92 | | | | 113 | | | | (21 | ) | | | -19 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | | 709 | | | | 1,135 | | | | (426 | ) | | | -38 | % | | | 1,263 | | | | 1,658 | | | | (395 | ) | | | -24 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
12
M.D.C. HOLDINGS, INC.
Homebuilding Operational Data
(Dollars in thousands)
(Unaudited)
| | | | | | | | | | | | | | | | |
| | | Three Months
Ended June 30, | | | Change | |
| Average Selling Price of Closed Homes | | 2011 | | | 2010 | | | Amount | | | % | |
Arizona | | $ | 188.1 | | | $ | 190.7 | | | $ | (2.6 | ) | | | -1 | % |
California | | | 320.4 | | | | 444.7 | | | | (124.3 | ) | | | -28 | % |
Colorado | | | 332.0 | | | | 303.0 | | | | 29.0 | | | | 10 | % |
Florida | | | 221.4 | | | | 227.3 | | | | (5.9 | ) | | | -3 | % |
Illinois | | | 293.0 | | | | N/A | | | | N/M | | | | N/M | |
Maryland | | | 414.9 | | | | 462.5 | | | | (47.6 | ) | | | -10 | % |
Nevada | | | 185.8 | | | | 187.2 | | | | (1.4 | ) | | | -1 | % |
Utah | | | 272.5 | | | | 274.7 | | | | (2.2 | ) | | | -1 | % |
Virginia | | | 426.7 | | | | 476.2 | | | | (49.5 | ) | | | -10 | % |
Washington | | | 270.3 | | | | N/A | | | | N/M | | | | N/M | |
Average | | $ | 290.8 | | | $ | 274.3 | | | $ | 16.5 | | | | 6 | % |
| | |
| | | Six Months
Ended June 30, | | | Change | |
| | | 2011 | | | 2010 | | | Amount | | | % | |
Arizona | | $ | 184.6 | | | $ | 194.7 | | | $ | (10.1 | ) | | | -5 | % |
California | | | 319.0 | | | | 407.3 | | | | (88.3 | ) | | | -22 | % |
Colorado | | | 334.3 | | | | 302.0 | | | | 32.3 | | | | 11 | % |
Florida | | | 225.0 | | | | 224.8 | | | | 0.2 | | | | 0 | % |
Illinois | | | 293.0 | | | | N/A | | | | N/M | | | | N/M | |
Maryland | | | 422.1 | | | | 449.7 | | | | (27.6 | ) | | | -6 | % |
Nevada | | | 192.9 | | | | 187.8 | | | | 5.1 | | | | 3 | % |
Utah | | | 273.6 | | | | 274.4 | | | | (0.8 | ) | | | 0 | % |
Virginia | | | 427.9 | | | | 476.8 | | | | (48.9 | ) | | | -10 | % |
Washington | | | 270.3 | | | | N/A | | | | N/M | | | | N/M | |
Average | | $ | 292.6 | | | $ | 272.7 | | | $ | 19.9 | | | | 7 | % |
13
M.D.C. HOLDINGS, INC.
Homebuilding Operational Data
(Dollars in thousands)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months
Ended June 30, | | | Change | | | Six Months
Ended June 30, | | | Change | |
| | | 2011 | | | 2010 | | | Amount | | | % | | | 2011 | | | 2010 | | | Amount | | | % | |
Orders For Homes, net (units) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Arizona | | | 164 | | | | 184 | | | | (20 | ) | | | -11 | % | | | 286 | | | | 352 | | | | (66 | ) | | | -19 | % |
California | | | 117 | | | | 109 | | | | 8 | | | | 7 | % | | | 194 | | | | 135 | | | | 59 | | | | 44 | % |
Nevada | | | 154 | | | | 195 | | | | (41 | ) | | | -21 | % | | | 242 | | | | 365 | | | | (123 | ) | | | -34 | % |
Washington | | | 26 | | | | — | | | | 26 | | | | N/M | | | | 26 | | | | — | | | | 26 | | | | N/M | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
West | | | 461 | | | | 488 | | | | (27 | ) | | | -6 | % | | | 748 | | | | 852 | | | | (104 | ) | | | -12 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
Colorado | | | 232 | | | | 232 | | | | — | | | | 0 | % | | | 413 | | | | 502 | | | | (89 | ) | | | -18 | % |
Utah | | | 109 | | | | 110 | | | | (1 | ) | | | -1 | % | | | 176 | | | | 235 | | | | (59 | ) | | | -25 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Mountain | | | 341 | | | | 342 | | | | (1 | ) | | | 0 | % | | | 589 | | | | 737 | | | | (148 | ) | | | -20 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
Maryland | | | 74 | | | | 62 | | | | 12 | | | | 19 | % | | | 120 | | | | 109 | | | | 11 | | | | 10 | % |
Virginia | | | 95 | | | | 76 | | | | 19 | | | | 25 | % | | | 163 | | | | 142 | | | | 21 | | | | 15 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
East | | | 169 | | | | 138 | | | | 31 | | | | 22 | % | | | 283 | | | | 251 | | | | 32 | | | | 13 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
Florida | | | 91 | | | | 47 | | | | 44 | | | | 94 | % | | | 142 | | | | 106 | | | | 36 | | | | 34 | % |
Illinois | | | 2 | | | | — | | | | 2 | | | | N/M | | | | 7 | | | | — | | | | 7 | | | | N/M | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Other Homebuilding | | | 93 | | | | 47 | | | | 46 | | | | 98 | % | | | 149 | | | | 106 | | | | 43 | | | | 41 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | | 1,064 | | | | 1,015 | | | | 49 | | | | 5 | % | | | 1,769 | | | | 1,946 | | | | (177 | ) | | | -9 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
Estimated Value of Orders for Homes, net | | $ | 302,000 | | | $ | 281,000 | | | $ | 21,000 | | | | 7 | % | | $ | 507,000 | | | $ | 539,000 | | | $ | (32,000 | ) | | | -6 | % |
Estimated Average Selling Price of Orders for Homes, net | | $ | 283.8 | | | $ | 276.8 | | | $ | 7.0 | | | | 3 | % | | $ | 286.6 | | | $ | 277.0 | | | $ | 9.6 | | | | 3 | % |
| | | | | | | | |
Cancellation Rate(5) | | | 29 | % | | | 25 | % | | | 4 | % | | | | | | | 31 | % | | | 24 | % | | | 7 | % | | | | |
| (5) | 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. |
14
M.D.C. HOLDINGS, INC.
Homebuilding Operational Data
(Dollars in thousands)
(Unaudited)
| | | | | | | | | | | | |
| | | June 30,
2011 | | | December 31,
2010 | | | June 30,
2010 | |
Backlog (units) | | | | | | | | | | | | |
Arizona | | | 195 | | | | 84 | | | | 105 | |
California | | | 163 | | | | 79 | | | | 97 | |
Nevada | | | 172 | | | | 76 | | | | 134 | |
Washington | | | 51 | | | | — | | | | — | |
| | | | | | | | | | | | |
West | | | 581 | | | | 239 | | | | 336 | |
| | | | | | | | | | | | |
| | | |
Colorado | | | 338 | | | | 273 | | | | 371 | |
Utah | | | 125 | | | | 69 | | | | 130 | |
| | | | | | | | | | | | |
Mountain | | | 463 | | | | 342 | | | | 501 | |
| | | | | | | | | | | | |
| | | |
Maryland | | | 140 | | | | 126 | | | | 118 | |
Virginia | | | 118 | | | | 70 | | | | 107 | |
| | | | | | | | | | | | |
East | | | 258 | | | | 196 | | | | 225 | |
| | | | | | | | | | | | |
| | | |
Florida | | | 115 | | | | 64 | | | | 52 | |
Illinois | | | 7 | | | | 1 | | | | — | |
| | | | | | | | | | | | |
Other Homebuilding | | | 122 | | | | 65 | | | | 52 | |
| | | | | | | | | | | | |
| | | |
Total | | | 1,424 | | | | 842 | | | | 1,114 | |
| | | | | | | | | | | | |
| | | |
Backlog Estimated Sales Value | | $ | 433,000 | | | $ | 269,000 | | | $ | 351,000 | |
| | | | | | | | | | | | |
Estimated Average Selling Price of Homes in Backlog | | $ | 304.1 | | | $ | 319.5 | | | $ | 315.1 | |
| | | | | | | | | | | | |
| | | |
| | | June 30,
2011 | | | December 31,
2010 | | | June 30,
2010 | |
Active Subdivisions | | | | | | | | | | | | |
Arizona | | | 30 | | | | 26 | | | | 26 | |
California | | | 16 | | | | 13 | | | | 6 | |
Nevada | | | 17 | | | | 18 | | | | 15 | |
Washington | | | 9 | | | | — | | | | — | |
| | | | | | | | | | | | |
West | | | 72 | | | | 57 | | | | 47 | |
| | | | | | | | | | | | |
| | | |
Colorado | | | 40 | | | | 39 | | | | 41 | |
Utah | | | 21 | | | | 19 | | | | 18 | |
| | | | | | | | | | | | |
Mountain | | | 61 | | | | 58 | | | | 59 | |
| | | | | | | | | | | | |
| | | |
Maryland | | | 13 | | | | 14 | | | | 10 | |
Virginia | | | 12 | | | | 8 | | | | 9 | |
| | | | | | | | | | | | |
East | | | 25 | | | | 22 | | | | 19 | |
| | | | | | | | | | | | |
| | | |
Florida | | | 17 | | | | 11 | | | | 9 | |
Illinois | | | 1 | | | | — | | | | — | |
| | | | | | | | | | | | |
Other Homebuilding | | | 18 | | | | 11 | | | | 9 | |
| | | | | | | | | | | | |
| | | |
Total | | | 176 | | | | 148 | | | | 134 | |
| | | | | | | | | | | | |
15
