Exhibit 99.1
M.D.C. HOLDINGS, INC.
NEWS BULLETIN
M.D.C. HOLDINGS, INC.
FOR IMMEDIATE RELEASE
THURSDAY, NOVEMBER 3, 2011
| | Vice President of Finance |
M.D.C. HOLDINGS ANNOUNCES THIRD QUARTER 2011 RESULTS
Operating and Strategic Highlights
| | • | | Net loss of $31.7 million or $0.68 per share, includingan $18.6 million charge related to the extinguishment of debt and $7.0 million of asset impairments and project abandonment charges |
| | • | | $500 million of senior note reductions completed or announced; annualized interest incurred reduced by nearly $30 million |
| | • | | Decreased general and administrative headcount by 33% year-over-year; approximately $20 million in estimated annual savings |
| | • | | Net orders decreased 25% year-over-year to 595 homes |
| | • | | Active subdivisions up 28% year-over-year to 182 |
DENVER, Thursday, November 3, 2011 - M.D.C. Holdings, Inc. (NYSE: MDC) today reported a net loss for the 2011 third quarter of $31.7 million, or $0.68 per share, including an $18.6 million charge related to the extinguishment of debt and $7.0 million of asset impairments and project abandonment charges. In the 2010 third quarter, our net loss was $10.2 million, or $0.22 per share, including $3.7 million of impairments. Revenue for the 2011 third quarter decreased 6% to $211.4 million, compared with $225.7 million a year ago.
Management Comments
Larry A. Mizel, MDC’s chairman and chief executive officer, stated, “Given increased uncertainty surrounding employment levels and consumer confidence, our goal is to return to profitability without relying on an improvement in homebuilding market conditions. Prior to the third quarter, we focused primarily on increasing our community count, giving us the opportunity to improve our market share and increase revenue. 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, and therefore we are now focusing on other strategies to drive profitability.”
M.D.C. HOLDINGS, INC.
Mizel continued, “As we look at the communities we already own, we are closely analyzing our sales process. We previously announced a change to our approach on the sale of speculative homes, and remain committed to starting very few of these homes going forward in most markets. During the third quarter, this strategy benefited our home gross margins. However, we believe it also slowed our home order absorption pace and our backlog conversion rate.”
“We are also modifying our approach to sales promotions. Over the past eighteen months, we have relied on large promotions as a critical component of our sales strategy. While these promotions were successful in producing a high level of urgency for our sales personnel and customers, we have also have experienced increased volatility in sales absorptions and cancellation rates, which complicates the management of our day-to-day operations. Therefore, we will rely less on these large promotions in the future.”
“Finally, we are working to streamline the way we sell upgrades to our homes. We will still offer our customers the opportunity to personalize their homes at our Home Galleries across the country, but we will do so in a manner that allows us to operate this aspect of our business with reduced complexity and lower overhead. All of the changes to our sales process are now being managed under new leadership. The goal of these initiatives is not only to increase absorptions and home gross margins, but also to simplify our business model, allowing us to operate more effectively with lower overhead.”
Mizel concluded, “Our efforts to reduce overhead expenses continued in the third quarter, as we reduced our headcount by eliminating more than 100 positions. As a result, our general and administrative headcount decreased by 33% year-over-year, removing approximately $20 million of overhead expense in the process. Beyond these reductions, we have identified roughly $5 million in estimated annual cost savings that should take effect no later than the first quarter of 2012. In addition, we have announced that we will retire $500 million of debt by the end of 2011, which will better align our capital structure with our current capital needs. As a result, the annualized amount of interest we incur will decrease by $30 million.”
Third Quarter Highlights
Home closings in the 2011 third quarter were 707 units, with an average selling price of $289,800, compared with 722 units, with an average selling price of $299,900, in the third quarter of 2010. Our ratio of closings to beginning backlog decreased to 50% for the 2011 third quarter, compared with 65% in the 2010 third quarter. The decrease is attributable to a year-over-year decrease in the percentage of backlog under construction at the beginning of the quarter.
Home gross margin in the 2011 third quarter was 16.8% as compared with 20.9% in the 2010 third quarter. The 2011 third quarter benefited from the settlement of a construction defect claim and the impact of recording adjustments to land budgets.
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M.D.C. HOLDINGS, INC.
Marketing costs were $10.0 million in the 2011 third quarter, compared with $11.2 million in the 2010 third quarter, primarily due to a decrease in product advertising costs. Commission costs were $7.5 million as compared with $8.1 million in the same quarter last year, inline with the decrease in revenue we experienced.
General and administrative expenses decreased to $35.6 million for the 2011 third quarter, compared with $39.3 million for the same period in the prior year. The primary driver behind the decrease was a $7.3 million decline in salary related costs due to a year-over-year decrease in headcount, partially offset by a $3.0 million increase in our estimated mortgage loan loss reserve.
During the 2011 third quarter, asset impairments totaled $4.7 million, compared with $3.7 million in the same quarter last year. The largest impairment related to an asset located in Chicago, where we are no longer selling homes. We also incurred $2.3 million of expense related to write-offs of land option deposits and pre-acquisition costs associated with lot option contracts that we elected not to exercise during the 2011 third quarter.
Net orders for the 2011 third quarter decreased to 595 homes with an estimated sales value of $175 million, compared with net orders for 796 homes with an estimated sales value of $231 million during the same period in 2010. The decrease in home orders was driven primarily by an increase in the number of cancellations received during the quarter, with many of the cancellations originating from a nationwide sales promotion that occurred late in the second quarter. In addition, gross orders during the 2010 third quarter were positively influenced by the Company’s use of sizeable incentives to drive a higher sales velocity for older speculative homes.
We ended the 2011 third quarter with 1,312 homes under contract with an estimated sales value of $405 million, compared with a backlog of 1,188 homes with an estimated sales value of $368 million at September 30, 2010. Our estimated home gross margin in backlog at the end of the third quarter increased from the estimated home gross margin in backlog to start the quarter.
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M.D.C. HOLDINGS, INC.
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 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 September 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 September 30, | | | Nine Months
Ended September 30, | |
| | | 2011 | | | 2010 | | | 2011 | | | 2010 | |
Revenue | | | | | | | | | | | | | | | | |
Home sales revenue | | $ | 204,886 | | | $ | 216,501 | | | $ | 574,432 | | | $ | 668,720 | |
Land sales revenue | | | 730 | | | | 904 | | | | 3,499 | | | | 6,618 | |
Other revenue | | | 5,744 | | | | 8,276 | | | | 18,861 | | | | 23,751 | |
| | | | | | | | | | | | | | | | |
Total revenue | | | 211,360 | | | | 225,681 | | | | 596,792 | | | | 699,089 | |
| | | | | | | | | | | | | | | | |
Costs and expenses | | | | | | | | | | | | | | | | |
Home cost of sales | | | 170,443 | | | | 171,199 | | | | 490,521 | | | | 535,651 | |
Land cost of sales | | | 724 | | | | 818 | | | | 2,482 | | | | 5,983 | |
Asset impairments | | | 4,692 | | | | 3,718 | | | | 14,090 | | | | 3,718 | |
Marketing expenses | | | 10,002 | | | | 11,191 | | | | 29,732 | | | | 29,726 | |
Commission expenses | | | 7,476 | | | | 8,078 | | | | 20,699 | | | | 24,818 | |
General and administrative expenses | | | 35,580 | | | | 39,269 | | | | 108,569 | | | | 124,060 | |
Other operating expenses | | | 2,414 | | | | 817 | | | | 3,343 | | | | 1,846 | |
| | | | | | | | | | | | | | | | |
Total operating costs and expenses | | | 231,331 | | | | 235,090 | | | | 669,436 | | | | 725,802 | |
| | | | | | | | | | | | | | | | |
Loss from operations | | | (19,971 | ) | | | (9,409 | ) | | | (72,644 | ) | | | (26,713 | ) |
| | | | | | | | | | | | | | | | |
Other income (expense) | | | | | | | | | | | | | | | | |
Interest income | | | 6,745 | | | | 7,544 | | | | 21,943 | | | | 19,513 | |
Interest expense | | | (3,695 | ) | | | (9,000 | ) | | | (19,819 | ) | | | (28,810 | ) |
Extinguishment of senior notes and other | | | (17,268 | ) | | | 271 | | | | (17,176 | ) | | | 475 | |
| | | | | | | | | | | | | | | | |
Loss before income taxes | | | (34,189 | ) | | | (10,594 | ) | | | (87,696 | ) | | | (35,535 | ) |
| | | | | | | | | | | | | | | | |
Benefit from income taxes, net | | | 2,479 | | | | 355 | | | | 8,127 | | | | 739 | |
| | | | | | | | | | | | | | | | |
Net loss | | $ | (31,710 | ) | | $ | (10,239 | ) | | $ | (79,569 | ) | | $ | (34,796 | ) |
| | | | | | | | | | | | | | | | |
Loss per share | | | | | | | | | | | | | | | | |
Basic | | $ | (0.68 | ) | | $ | (0.22 | ) | | $ | (1.72 | ) | | $ | (0.75 | ) |
| | | | | | | | | | | | | | | | |
Diluted | | $ | (0.68 | ) | | $ | (0.22 | ) | | $ | (1.72 | ) | | $ | (0.75 | ) |
| | | | | | | | | | | | | | | | |
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)
(Unaudited)
| | | | | | | | |
| | | September 30,
2011 | | | December 31,
2010 | |
Assets | | | | | | | | |
Cash and cash equivalents | | $ | 567,501 | | | $ | 572,225 | |
Marketable securities | | | 535,494 | | | | 968,729 | |
Receivables | | | 19,414 | | | | 20,010 | |
Mortgage loans held-for-sale, net | | | 42,301 | | | | 65,114 | |
Inventories, net | | | | | | | | |
Housing completed or under construction | | | 333,350 | | | | 372,422 | |
Land and land under development | | | 517,337 | | | | 415,237 | |
Deferred tax asset, net of valuation allowance of $274,380 and $231,379 at September 30, 2011 and December 31, 2010, respectively | | | — | | | | — | |
Other Assets | | | 99,572 | | | | 134,032 | |
| | | | | | | | |
Total Assets | | $ | 2,114,969 | | | $ | 2,547,769 | |
| | | | | | | | |
Liabilities | | | | | | | | |
Accounts payable | | $ | 27,295 | | | $ | 35,018 | |
Accrued liabilities and other | | | 190,100 | | | | 260,819 | |
Mortgage repurchase facility | | | 10,708 | | | | 25,434 | |
Senior notes, net | | | 1,006,656 | | | | 1,242,815 | |
| | | | | | | | |
Total Liabilities | | | 1,234,759 | | | | 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 September 30, 2011 and 47,198,000 and 47,142,000 issued and outstanding, respectively, at December 31, 2010 | | | 475 | | | | 472 | |
Additional paid-in-capital | | | 850,795 | | | | 820,237 | |
Retained earnings | | | 43,620 | | | | 158,749 | |
Accumulated other comprehensive (loss) income | | | (14,021 | ) | | | 4,884 | |
Treasury stock, at cost; 56,000 shares at September 30, 2011 and December 31, 2010 | | | (659 | ) | | | (659 | ) |
| | | | | | | | |
Total Stockholders’ Equity | | | 880,210 | | | | 983,683 | |
| | | | | | | | |
Total Liabilities and Stockholders’ Equity | | $ | 2,114,969 | | | $ | 2,547,769 | |
| | | | | | | | |
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M.D.C. HOLDINGS, INC.
Information on Segments
(Dollars in thousands)
(Unaudited)
| | | | | | | | | | | | | | | | |
| | | Three Months
Ended September 30, | | | Nine Months
Ended September 30, | |
| | | 2011 | | | 2010 | | | 2011 | | | 2010 | |
Revenue | | | | | | | | | | | | | | | | |
Homebuilding | | | | | | | | | | | | | | | | |
West | | $ | 71,292 | | | $ | 66,233 | | | $ | 183,176 | | | $ | 246,563 | |
Mountain | | | 82,637 | | | | 89,111 | | | | 232,463 | | | | 245,905 | |
East | | | 36,610 | | | | 58,304 | | | | 130,778 | | | | 162,466 | |
Other Homebuilding | | | 16,678 | | | | 7,344 | | | | 37,486 | | | | 33,137 | |
| | | | | | | | | | | | | | | | |
Total Homebuilding | | | 207,217 | | | | 220,992 | | | | 583,903 | | | | 688,071 | |
Financial Services and Other | | | 5,540 | | | | 7,932 | | | | 17,974 | | | | 22,696 | |
Corporate | | | — | | | | — | | | | — | | | | — | |
Intercompany adjustments | | | (1,397 | ) | | | (3,243 | ) | | | (5,085 | ) | | | (11,678 | ) |
| | | | | | | | | | | | | | | | |
Consolidated | | $ | 211,360 | | | $ | 225,681 | | | $ | 596,792 | | | $ | 699,089 | |
| | | | | | | | | | | | | | | | |
Income/(Loss) Before Income Taxes | | | | | | | | | | | | | | | | |
Homebuilding | | | | | | | | | | | | | | | | |
West | | $ | (2,584 | ) | | $ | 4,900 | | | $ | (18,981 | ) | | $ | 13,611 | |
Mountain | | | 2,988 | | | | 520 | | | | 552 | | | | 6,652 | |
East | | | (2,518 | ) | | | 2,021 | | | | (6,819 | ) | | | 1,957 | |
Other Homebuilding | | | (1,514 | ) | | | (1,673 | ) | | | (3,206 | ) | | | (1,897 | ) |
| | | | | | | | | | | | | | | | |
Total Homebuilding | | | (3,628 | ) | | | 5,768 | | | | (28,454 | ) | | | 20,323 | |
Financial Services and Other | | | (450 | ) | | | 4,326 | | | | 4,419 | | | | 10,261 | |
Corporate | | | (30,111 | ) | | | (20,688 | ) | | | (63,661 | ) | | | (66,119 | ) |
| | | | | | | | | | | | | | | | |
Consolidated | | $ | (34,189 | ) | | $ | (10,594 | ) | | $ | (87,696 | ) | | $ | (35,535 | ) |
| | | | | | | | | | | | | | | | |
| | | | |
| | | September 30,
2011 | | | December 31,
2010 | | | | | | | |
Total Assets | | | | | | | | | | | | | | | | |
Homebuilding | | | | | | | | | | | | | | | | |
West | | $ | 365,759 | | | $ | 300,652 | | | | | | | | | |
Mountain | | | 289,828 | | | | 311,833 | | | | | | | | | |
East | | | 224,497 | | | | 188,693 | | | | | | | | | |
Other Homebuilding | | | 30,331 | | | | 40,554 | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Total Homebuilding | | | 910,415 | | | | 841,732 | | | | | | | | | |
Financial Services and Other | | | 115,176 | | | | 135,286 | | | | | | | | | |
Corporate | | | 1,093,523 | | | | 1,573,408 | | | | | | | | | |
Intercompany adjustments | | | (4,145 | ) | | | (2,657 | ) | | | | | | | | |
| | | | | | | | | | | | | | | | |
Consolidated | | $ | 2,114,969 | | | $ | 2,547,769 | | | | | | | | | |
| | | | | | | | | | | | | | | | |
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M.D.C. HOLDINGS, INC.
Selected Financial Data
(Dollars in thousands)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months
Ended September 30, | | | Change | | | Nine Months
Ended September 30, | | | Change | |
| | | 2011 | | | 2010 | | | Amount | | | % | | | 2011 | | | 2010 | | | Amount | | | % | |
Selected Financial Data | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
General and Administrative Expenses | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Homebuilding | | $ | 13,766 | | | $ | 16,111 | | | $ | (2,345 | ) | | | -15 | % | | $ | 44,547 | | | $ | 54,326 | | | $ | (9,779 | ) | | | -18 | % |
Financial Services and Other | | | 6,701 | | | | 4,521 | | | | 2,180 | | | | 48 | % | | | 15,832 | | | | 14,267 | | | | 1,565 | | | | 11 | % |
Corporate | | | 15,113 | | | | 18,637 | | | | (3,524 | ) | | | -19 | % | | | 48,190 | | | | 55,467 | | | | (7,277 | ) | | | -13 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 35,580 | | | $ | 39,269 | | | $ | (3,689 | ) | | | -9 | % | | $ | 108,569 | | | $ | 124,060 | | | $ | (15,491 | ) | | | -12 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
SG&A as a % of Home Sales Revenue | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Homebuilding Segments | | | 15.2 | % | | | 16.3 | % | | | -1.1 | % | | | | | | | 16.5 | % | | | 16.3 | % | | | 0.2 | % | | | | |
Corporate Segment | | | 7.4 | % | | | 8.6 | % | | | -1.2 | % | | | | | | | 8.4 | % | | | 8.3 | % | | | 0.1 | % | | | | |
Depreciation and Amortization(1) | | $ | 4,031 | | | $ | 3,705 | | | $ | 326 | | | | 9 | % | | $ | 12,098 | | | $ | 11,806 | | | $ | 292 | | | | 2 | % |
Home Gross Margins (2) | | | 16.8 | % | | | 20.9 | % | | | -4.1 | % | | | | | | | 14.6 | % | | | 19.9 | % | | | -5.3 | % | | | | |
Interest in Home Cost of Sales as a % of Home Sales Revenue | | | 2.5 | % | | | 2.6 | % | | | -0.1 | % | | | | | | | 2.6 | % | | | 2.5 | % | | | 0.1 | % | | | | |
Cash Provided by (Used in) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Operating activities | | $ | (11,486 | ) | | $ | 41,343 | | | $ | (52,829 | ) | | | | | | $ | (80,743 | ) | | $ | (137,591 | ) | | $ | 56,848 | | | | | |
Investing activities | | $ | 88,203 | | | $ | 21,021 | | | $ | 67,182 | | | | | | | $ | 381,162 | | | $ | (597,126 | ) | | $ | 978,288 | | | | | |
Financing activities | | $ | (265,051 | ) | | $ | (65,935 | ) | | $ | (199,116 | ) | | | | | | $ | (305,143 | ) | | $ | 189,026 | | | $ | (494,169 | ) | | | | |
Total Interest Capitalized | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest capitalized, beginning of period | | $ | 49,058 | | | $ | 32,420 | | | $ | 16,638 | | | | 51 | % | | $ | 38,446 | | | $ | 28,339 | | | $ | 10,107 | | | | 36 | % |
Interest capitalized, net of interest expense | | | 10,833 | | | | 9,370 | | | | 1,463 | | | | 16 | % | | | 31,102 | | | | 24,855 | | | | 6,247 | | | | 25 | % |
Previously capitalized interest included in home cost of sales | | | (5,140 | ) | | | (5,581 | ) | | | 441 | | | | -8 | % | | | (14,797 | ) | | | (16,985 | ) | | | 2,188 | | | | -13 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest capitalized, end of period | | $ | 54,751 | | | $ | 36,209 | | | $ | 18,542 | | | | 51 | % | | $ | 54,751 | | | $ | 36,209 | | | $ | 18,542 | | | | 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 September 30, | | | Change | | | Nine Months
Ended September 30, | | | Change | |
| | | 2011 | | | 2010 | | | Amount | | | % | | | 2011 | | | 2010 | | | Amount | | | % | |
Principal amount of mortgage loans originated | | $ | 129,005 | | | $ | 158,337 | | | $ | (29,332 | ) | | | -19 | % | | $ | 390,660 | | | $ | 507,120 | | | $ | (116,460 | ) | | | -23 | % |
Principal amount of mortgage loans brokered | | $ | 1,622 | | | $ | 370 | | | $ | 1,252 | | | | 338 | % | | $ | 4,518 | | | $ | 5,883 | | | $ | (1,365 | ) | | | -23 | % |
Capture Rate | | | 66 | % | | | 79 | % | | | -13 | % | | | | | | | 72 | % | | | 81 | % | | | -9 | % | | | | |
Including brokered loans | | | 67 | % | | | 79 | % | | | -12 | % | | | | | | | 73 | % | | | 82 | % | | | -9 | % | | | | |
Mortgage products (% of mortgage loans originated) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Fixed rate | | | 96 | % | | | 97 | % | | | -1 | % | | | | | | | 96 | % | | | 96 | % | | | 0 | % | | | | |
Adjustable rate - other | | | 4 | % | | | 3 | % | | | 1 | % | | | | | | | 4 | % | | | 4 | % | | | 0 | % | | | | |
Prime loans(3) | | | 38 | % | | | 32 | % | | | 6 | % | | | | | | | 33 | % | | | 27 | % | | | 6 | % | | | | |
Government loans(4) | | | 62 | % | | | 68 | % | | | -6 | % | | | | | | | 67 | % | | | 73 | % | | | -6 | % | | | | |
| (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)
| | | | | | | | | | | | |
| | | September 30,
2011 | | | December 31,
2010 | | | September 30,
2010 | |
Homes Completed or Under Construction | | | | | | | | | | | | |
Unsold Home Under Construction—Final | | | 85 | | | | 119 | | | | 56 | |
Unsold Home Under Construction—Frame | | | 314 | | | | 722 | | | | 725 | |
Unsold Home Under Construction—Foundation | | | 85 | | | | 103 | | | | 104 | |
| | | | | | | | | | | | |
Total Unsold Homes Under Construction | | | 484 | | | | 944 | | | | 885 | |
Sold Homes Under Construction | | | 871 | | | | 609 | | | | 955 | |
Model Homes | | | 220 | | | | 242 | | | | 246 | |
| | | | | | | | | | | | |
Homes Completed or Under Construction | | | 1,575 | | | | 1,795 | | | | 2,086 | |
| | | | | | | | | | | | |
Lots Owned (excluding homes completed or under construction) | | | | | | | | | | | | |
Arizona | | | 981 | | | | 1,257 | | | | 1,290 | |
California | | | 1,306 | | | | 1,201 | | | | 1,095 | |
Nevada | | | 1,091 | | | | 991 | | | | 632 | |
Washington | | | 312 | | | | — | | | | — | |
| | | | | | | | | | | | |
West | | | 3,690 | | | | 3,449 | | | | 3,017 | |
| | | | | | | | | | | | |
Colorado | | | 3,103 | | | | 2,919 | | | | 2,762 | |
Utah | | | 545 | | | | 594 | | | | 494 | |
| | | | | | | | | | | | |
Mountain | | | 3,648 | | | | 3,513 | | | | 3,256 | |
| | | | | | | | | �� | | | |
Maryland | | | 446 | | | | 319 | | | | 207 | |
Virginia | | | 566 | | | | 414 | | | | 380 | |
| | | | | | | | | | | | |
East | | | 1,012 | | | | 733 | | | | 587 | |
| | | | | | | | | | | | |
Florida | | | 233 | | | | 210 | | | | 204 | |
Illinois | | | 123 | | | | 130 | | | | 130 | |
| | | | | | | | | | | | |
Other Homebuilding | | | 356 | | | | 340 | | | | 334 | |
| | | | | | | | | | | | |
Total | | | 8,706 | | | | 8,035 | | | | 7,194 | |
| | | | | | | | | | | | |
10
M.D.C. HOLDINGS, INC.
Homebuilding Operational Data
(Dollars in thousands)
(Unaudited)
| | | | | | | | | | | | |
| | | September 30,
2011 | | | December 31,
2010 | | | September 30,
2010 | |
Lots Controlled Under Option | | | | | | | | | | | | |
Arizona | | | 96 | | | | 408 | | | | 453 | |
California | | | — | | | | 222 | | | | 45 | |
Nevada | | | 75 | | | | 838 | | | | 1,018 | |
Washington | | | 182 | | | | — | | | | — | |
| | | | | | | | | | | | |
West | | | 353 | | | | 1,468 | | | | 1,516 | |
| | | | | | | | | | | | |
Colorado | | | 464 | | | | 688 | | | | 616 | |
Utah | | | 273 | | | | 393 | | | | 581 | |
| | | | | | | | | | | | |
Mountain | | | 737 | | | | 1,081 | | | | 1,197 | |
| | | | | | | | | | | | |
Maryland | | | 730 | | | | 745 | | | | 906 | |
Virginia | | | 192 | | | | 132 | | | | 220 | |
| | | | | | | | | | | | |
East | | | 922 | | | | 877 | | | | 1,126 | |
| | | | | | | | | | | | |
Florida | | | 373 | | | | 733 | | | | 906 | |
Illinois | | | — | | | | — | | | | — | |
| | | | | | | | | | | | |
Other Homebuilding | | | 373 | | | | 733 | | | | 906 | |
| | | | | | | | | | | | |
Total | | | 2,385 | | | | 4,159 | | | | 4,745 | |
| | | | | | | | | | | | |
At Risk Option Deposits | | | | | | | | | | | | |
Cash | | $ | 8,932 | | | $ | 9,019 | | | $ | 9,314 | |
Letters of Credit | | | 5,139 | | | | 4,467 | | | | 3,086 | |
| | | | | | | | | | | | |
Total At Risk Option Deposits | | $ | 14,071 | | | $ | 13,486 | | | $ | 12,400 | |
| | | | | | | | | | | | |
11
M.D.C. HOLDINGS, INC.
Homebuilding Operational Data
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months
Ended September 30, | | | Change | | | Nine Months
Ended September 30, | | | Change | |
| | | 2011 | | | 2010 | | | Amount | | | % | | | 2011 | | | 2010 | | | Amount | | | % | |
Closed Homes (Units) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Arizona | | | 126 | | | | 111 | | | | 15 | | | | 14 | % | | | 301 | | | | 461 | | | | (160 | ) | | | -35 | % |
California | | | 58 | | | | 62 | | | | (4 | ) | | | -6 | % | | | 168 | | | | 176 | | | | (8 | ) | | | -5 | % |
Nevada | | | 77 | | | | 108 | | | | (31 | ) | | | -29 | % | | | 223 | | | | 427 | | | | (204 | ) | | | -48 | % |
Washington | | | 49 | | | | — | | | | 49 | | | | N/M | | | | 100 | | | | — | | | | 100 | | | | N/M | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
West | | | 310 | | | | 281 | | | | 29 | | | | 10 | % | | | 792 | | | | 1,064 | | | | (272 | ) | | | -26 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Colorado | | | 189 | | | | 208 | | | | (19 | ) | | | -9 | % | | | 537 | | | | 546 | | | | (9 | ) | | | -2 | % |
Utah | | | 58 | | | | 78 | | | | (20 | ) | | | -26 | % | | | 178 | | | | 277 | | | | (99 | ) | | | -36 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Mountain | | | 247 | | | | 286 | | | | (39 | ) | | | -14 | % | | | 715 | | | | 823 | | | | (108 | ) | | | -13 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Maryland | | | 47 | | | | 68 | | | | (21 | ) | | | -31 | % | | | 153 | | | | 185 | | | | (32 | ) | | | -17 | % |
Virginia | | | 36 | | | | 58 | | | | (22 | ) | | | -38 | % | | | 151 | | | | 166 | | | | (15 | ) | | | -9 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
East | | | 83 | | | | 126 | | | | (43 | ) | | | -34 | % | | | 304 | | | | 351 | | | | (47 | ) | | | -13 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Florida | | | 63 | | | | 29 | | | | 34 | | | | 117 | % | | | 154 | | | | 142 | | | | 12 | | | | 8 | % |
Illinois | | | 4 | | | | — | | | | 4 | | | | 0 | % | | | 5 | | | | — | | | | 5 | | | | 0 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Other Homebuilding | | | 67 | | | | 29 | | | | 38 | | | | 131 | % | | | 159 | | | | 142 | | | | 17 | | | | 12 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | | 707 | | | | 722 | | | | (15 | ) | | | -2 | % | | | 1,970 | | | | 2,380 | | | | (410 | ) | | | -17 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
12
M.D.C. HOLDINGS, INC.
Homebuilding Operational Data
(Dollars in thousands)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months
Ended September 30, | | | Change | | | Nine Months
Ended September 30, | | | Change | |
| | | 2011 | | | 2010 | | | Amount | | | % | | | 2011 | | | 2010 | | | Amount | | | % | |
Average Selling Price of Closed Homes | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Arizona | | $ | 202.2 | | | $ | 200.7 | | | $ | 1.5 | | | | 1 | % | | $ | 192.0 | | | $ | 196.1 | | | $ | (4.1 | ) | | | -2 | % |
California | | | 310.6 | | | | 375.2 | | | | (64.6 | ) | | | -17 | % | | | 316.1 | | | | 396.0 | | | | (79.9 | ) | | | -20 | % |
Colorado | | | 347.7 | | | | 322.6 | | | | 25.1 | | | | 8 | % | | | 339.0 | | | | 309.8 | | | | 29.2 | | | | 9 | % |
Florida | | | 232.7 | | | | 253.2 | | | | (20.5 | ) | | | -8 | % | | | 228.1 | | | | 230.6 | | | | (2.5 | ) | | | -1 | % |
Illinois | | | 320.2 | | | | N/A | | | | N/M | | | | N/M | | | | 314.7 | | | | N/A | | | | N/M | | | | N/M | |
Maryland | | | 448.2 | | | | 443.3 | | | | 4.9 | | | | 1 | % | | | 430.2 | | | | 447.3 | | | | (17.1 | ) | | | -4 | % |
Nevada | | | 189.5 | | | | 190.2 | | | | (0.7 | ) | | | 0 | % | | | 191.7 | | | | 188.4 | | | | 3.3 | | | | 2 | % |
Utah | | | 289.9 | | | | 268.9 | | | | 21.0 | | | | 8 | % | | | 278.9 | | | | 272.8 | | | | 6.1 | | | | 2 | % |
Virginia | | | 430.5 | | | | 484.5 | | | | (54.0 | ) | | | -11 | % | | | 428.6 | | | | 479.5 | | | | (50.9 | ) | | | -11 | % |
Washington | | | 268.5 | | | | N/A | | | | N/M | | | | N/M | | | | 269.4 | | | | N/A | | | | N/M | | | | N/M | |
Average | | $ | 289.8 | | | $ | 299.9 | | | $ | (10.1 | ) | | | -3 | % | | $ | 291.6 | | | $ | 281.0 | | | $ | 10.6 | | | | 4 | % |
13
M.D.C. HOLDINGS, INC.
Homebuilding Operational Data
(Dollars in thousands)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months
Ended September 30, | | | Change | | | Nine Months
Ended September 30, | | | Change | |
| | | 2011 | | | 2010 | | | Amount | | | % | | | 2011 | | | 2010 | | | Amount | | | % | |
Orders For Homes, net (units) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Arizona | | | 104 | | | | 119 | | | | (15 | ) | | | -13 | % | | | 390 | | | | 471 | | | | (81 | ) | | | -17 | % |
California | | | 53 | | | | 101 | | | | (48 | ) | | | -48 | % | | | 247 | | | | 236 | | | | 11 | | | | 5 | % |
Nevada | | | 107 | | | | 106 | | | | 1 | | | | 1 | % | | | 349 | | | | 471 | | | | (122 | ) | | | -26 | % |
Washington | | | 42 | | | | — | | | | 42 | | | | N/M | | | | 68 | | | | — | | | | 68 | | | | N/M | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
West | | | 306 | | | | 326 | | | | (20 | ) | | | -6 | % | | | 1,054 | | | | 1,178 | | | | (124 | ) | | | -11 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Colorado | | | 147 | | | | 220 | | | | (73 | ) | | | -33 | % | | | 560 | | | | 722 | | | | (162 | ) | | | -22 | % |
Utah | | | 38 | | | | 73 | | | | (35 | ) | | | -48 | % | | | 214 | | | | 308 | | | | (94 | ) | | | -31 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Mountain | | | 185 | | | | 293 | | | | (108 | ) | | | -37 | % | | | 774 | | | | 1,030 | | | | (256 | ) | | | -25 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Maryland | | | 48 | | | | 67 | | | | (19 | ) | | | -28 | % | | | 168 | | | | 176 | | | | (8 | ) | | | -5 | % |
Virginia | | | 42 | | | | 60 | | | | (18 | ) | | | -30 | % | | | 205 | | | | 202 | | | | 3 | | | | 1 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
East | | | 90 | | | | 127 | | | | (37 | ) | | | -29 | % | | | 373 | | | | 378 | | | | (5 | ) | | | -1 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Florida | | | 16 | | | | 50 | | | | (34 | ) | | | -68 | % | | | 158 | | | | 156 | | | | 2 | | | | 1 | % |
Illinois | | | (2 | ) | | | — | | | | (2 | ) | | | N/M | | | | 5 | | | | — | | | | 5 | | | | N/M | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Other Homebuilding | | | 14 | | | | 50 | | | | (36 | ) | | | -72 | % | | | 163 | | | | 156 | | | | 7 | | | | 4 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | | 595 | | | | 796 | | | | (201 | ) | | | -25 | % | | | 2,364 | | | | 2,742 | | | | (378 | ) | | | -14 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Estimated Value of Orders for Homes, net | | $ | 175,000 | | | $ | 231,000 | | | $ | (56,000 | ) | | | -24 | % | | $ | 682,000 | | | $ | 770,000 | | | $ | (88,000 | ) | | | -11 | % |
Estimated Average Selling Price of Orders for Homes, net | | $ | 294.1 | | | $ | 290.2 | | | $ | 3.9 | | | | 1 | % | | $ | 288.5 | | | $ | 280.8 | | | $ | 7.7 | | | | 3 | % |
Cancellation Rate(5) | | | 44 | % | | | 30 | % | | | 14 | % | | | | | | | 35 | % | | | 26 | % | | | 9 | % | | | | |
| (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)
| | | | | | | | | | | | |
| | | September 30,
2011 | | | December 31,
2010 | | | September 30,
2010 | |
Backlog (units) | | | | | | | | | | | | |
Arizona | | | 173 | | | | 84 | | | | 113 | |
California | | | 158 | | | | 79 | | | | 136 | |
Nevada | | | 202 | | | | 76 | | | | 132 | |
Washington | | | 44 | | | | — | | | | — | |
| | | | | | | | | | | | |
West | | | 577 | | | | 239 | | | | 381 | |
| | | | | | | | | | | | |
Colorado | | | 296 | | | | 273 | | | | 383 | |
Utah | | | 105 | | | | 69 | | | | 125 | |
| | | | | | | | | | | | |
Mountain | | | 401 | | | | 342 | | | | 508 | |
| | | | | | | | | | | | |
Maryland | | | 141 | | | | 126 | | | | 117 | |
Virginia | | | 124 | | | | 70 | | | | 109 | |
| | | | | | | | | | | | |
East | | | 265 | | | | 196 | | | | 226 | |
| | | | | | | | | | | | |
Florida | | | 68 | | | | 64 | | | | 73 | |
Illinois | | | 1 | | | | 1 | | | | — | |
| | | | | | | | | | | | |
Other Homebuilding | | | 69 | | | | 65 | | | | 73 | |
| | | | | | | | | | | | |
Total | | | 1,312 | | | | 842 | | | | 1,188 | |
| | | | | | | | | | | | |
Backlog Estimated Sales Value | | $ | 405,000 | | | $ | 269,000 | | | $ | 368,000 | |
| | | | | | | | | | | | |
Estimated Average Selling Price of Homes in Backlog | | $ | 308.7 | | | $ | 319.5 | | | $ | 309.8 | |
| | | | | | | | | | | | |
| | | |
| | | September 30,
2011 | | | December 31,
2010 | | | September 30,
2010 | |
Active Subdivisions | | | | | | | | | | | | |
Arizona | | | 26 | | | | 26 | | | | 28 | |
California | | | 16 | | | | 13 | | | | 10 | |
Nevada | | | 20 | | | | 18 | | | | 19 | |
Washington | | | 10 | | | | — | | | | — | |
| | | | | | | | | | | | |
West | | | 72 | | | | 57 | | | | 57 | |
| | | | | | | | | | | | |
Colorado | | | 47 | | | | 39 | | | | 39 | |
Utah | | | 21 | | | | 19 | | | | 19 | |
| | | | | | | | | | | | |
Mountain | | | 68 | | | | 58 | | | | 58 | |
| | | | | | | | | | | | |
Maryland | | | 14 | | | | 14 | | | | 9 | |
Virginia | | | 13 | | | | 8 | | | | 7 | |
| | | | | | | | | | | | |
East | | | 27 | | | | 22 | | | | 16 | |
| | | | | | | | | | | | |
Florida | | | 15 | | | | 11 | | | | 11 | |
Illinois | | | — | | | | — | | | | — | |
| | | | | | | | | | | | |
Other Homebuilding | | | 15 | | | | 11 | | | | 11 | |
| | | | | | | | | | | | |
Total | | | 182 | | | | 148 | | | | 142 | |
| | | | | | | | | | | | |
15
