UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-K
[X] Annual Report Pursuant to Section 13 or 15 (d) of the Securities Exchange
Act of 1934 [Fee Required]
For the fiscal year ended December 31, 1993
[ ] Transition Report Pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934 [No Fee Required]
Commission File Number 1-8029
THE RYLAND GROUP, INC.
----------------------
(Exact name of registrant as specified in its charter)
Maryland 52-0849948
-------- ----------
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
11000 Broken Land Parkway
Columbia, Maryland 21044
(Address of principal executive offices)
Registrant's telephone number, including area code: (410)715-7000
Securities Registered Pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
------------------- -----------------------------------------
Common Stock, (Par Value $1.00) New York Stock Exchange
Common Share Purchase Rights New York Stock Exchange
Securities Registered Pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
----- -----
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (229.405 of this chapter) is not contained herein, and will
not be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [X]
The aggregate market value of the Common Stock of The Ryland Group, Inc. held by
non-affiliates of the registrant (14,998,904 shares) as of March 7, 1993 was
$326,226,162. The number of shares of common stock of The Ryland Group, Inc.,
outstanding on March 7, 1993 was 15,365,111.
DOCUMENTS INCORPORATED BY REFERENCE
Name of Document Location in Report
---------------- ------------------
Proxy Statement for 1994 Annual
Meeting of Stockholders Parts I, III
Annual Report to Shareholders for the
year ended December 31, 1993 Parts II, IV
Form 10-K for the year ended December 31, 1989 Part IV
Form 10-Q for the quarter ended June 30, 1990 Part IV
Form 8 filed October 25, 1990 Part IV
Form 8-K filed September 12, 1989 Part IV
Registration Statement on Form S-3,
Registration 33-28692 Part IV
Form 8-K filed December 31, 1990 Part IV
Form 8-K filed August 6, 1992 Part IV
Form 10-K for the year ended December 31, 1990 Part IV
Form 10-Q for the quarter ended June 30, 1992 Part IV
Registration Statement on Form S-3,
Registration 33-48071 Part IV
Form 8-K filed October 28, 1993 Part IV
2
THE RYLAND GROUP, INC.
FORM 10-K
INDEX
Page Number
PART I.
Item 1. Business 4
Item 2. Properties 10
Item 3. Legal Proceedings 10
Item 4. Submission of Matters to a Vote of Security
Holders 10
PART II.
Item 5. Market for the Company's Common Stock
and Related Stockholder Matters 13
Item 6. Selected Financial Data 13
Item 7. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 13
Item 8. Financial Statements and Supplementary Data 13
Item 9. Changes In and Disagreements with
Accountants on Accounting and Financial
Disclosure 13
PART III.
Item 10. Directors and Executive Officers of the
Company 14
Item 11. Executive Compensation 14
Item 12. Security Ownership of Certain Beneficial
Owners and Management 14
Item 13. Certain Relationships and Related
Transactions 14
PART IV.
Item 14. Exhibits, Financial Statement Schedules,
and Reports on Form 8-K 15
SIGNATURES 22
INDEX OF EXHIBITS 23
3
PART I
ITEM 1. BUSINESS.
The Ryland Group, Inc. (the "company") is a leading national homebuilder and a
mortgage-related financial services firm. Established in 1967, the company
currently builds homes and provides mortgage services in 48 markets in 18
states. The company was the third largest single-family on-site homebuilder in
the United States in 1993 based upon homes delivered. The company's homebuilding
segment specializes in the sale and construction of single-family attached and
detached housing and condominiums. The financial services segment provides
mortgage-related products and services for retail and institutional customers
and conducts investment activities. The company facilitates the issuance of
mortgage-backed securities and mortgage-participation securities through its
limited-purpose subsidiaries.
HOMEBUILDING
MARKETS The homebuilding segment builds and sells homes that are constructed
on-site in five regions which comprise the following areas at December 31,
1993:
Region Areas Served
------ ------------
Mid-Atlantic Baltimore, Delaware Valley, Philadelphia, Washington, D.C.
Midwest Chicago, Cincinnati, Columbus, Dayton, Indianapolis
Southeast Atlanta, Charleston, Charlotte, Orlando
Southwest Austin, Dallas, Denver, Houston, San Antonio
West Los Angeles, Phoenix, Sacramento, San Diego
In January 1994, to address the distinct characteristics of the California
market and the opportunities available there, management elected to form a
California Region, comprised of the Los Angeles, Sacramento and San Diego
markets. Furthermore, the Denver and Phoenix markets were combined to create a
newly-defined West Region.
The homebuilding segment sells under the name of Larchmont Homes in Northern
California, Brock Homes in Southern California, Scott Felder Homes in certain
Texas markets and Ryland Homes in all other areas.
The company's operations in each of its homebuilding markets differ based on a
number of market-specific factors. These factors include regional economic
conditions and job growth, land availability and the local land development
process, consumer tastes, competition from other builders of new homes and home
resale activity. The company considers each of these factors when entering into
new markets or determining the extent of its operations in existing markets. In
1993, the company entered into the Austin and San Antonio, Texas markets
through its acquisition of an interest in a joint venture with Scott Felder
Homes. Furthermore, the Company entered into the Chicago market during the
year.
4
The company offers a range of different home styles in each of its geographic
regions which are tailored to the styles and consumer tastes of the particular
region. Optional interior and exterior features allow the customer to enhance
the basic styles. The company's homes vary in size and price range, but are
generally marketed to customers purchasing their first home or their first move-
up home. The company's average settlement price was $148,400 in 1993.
LAND PURCHASES. The company must, in the ordinary course of its business,
continuously seek and make acquisitions of land for replacement and expansion
of land inventory within its current markets and for expansion into new
markets. Where possible, options or contracts with cash deposit requirements
are used to acquire rights to developed lots that the company intends to use
for the sale and construction of homes. Generally, the company will complete
the purchase of the lots under such option agreements as sales contracts are
executed by home buyers; however, under certain circumstances, developed lots
are acquired before sales contracts are executed by home buyers. The company
also purchases developed land and land for development into finished lots. As
of December 31, 1993, the company had deposits and letters of credit
outstanding of $26.0 million for options and commitments to purchase land.
These options and commitments expire at various dates through 1997.
MATERIALS COSTS Substantially all materials used in the construction of homes
are available from a number of sources, but may fluctuate in price due to
various factors. To increase purchasing efficiencies, the company uses
standardized building materials and products in its homes. In addition, the
company operates plants in Maryland, North Carolina, Ohio, and Texas that
produce and ship rough lumber packages and trim materials to building sites. The
company utilizes these plants to control production, improve on-site building
times and control the cost and quality of materials.
SUPPLIERS AND SUBCONTRACTORS Substantially all on-site construction work is
performed by subcontractors monitored by the company's production supervisors.
The company has, on occasion, experienced shortages of building materials and of
skilled labor in certain markets. Such shortages in the future could result in
longer construction times and higher costs than those experienced in the past.
MARKETING Homes are sold by employees and independent real estate brokers
showing furnished model homes. The company reports a sale when a customer's
sales contract is approved, and records revenue from a sale upon settlement of
the new home. The company normally commences construction of homes when a
customer has selected a lot and model and has received preliminary mortgage
approval. However, construction of homes may begin prior to a sale to satisfy
market demand for completed homes and to ease construction scheduling.
5
FINANCIAL SERVICES
Through its financial services segment, the company provides various mortgage-
related products and services for retail and institutional customers and
conducts investment activities. Retail operations include mortgage origination
and settlement of residential loans for approximately 72% of the customers of
the company's homebuilding segment. The company's financial services segment
also has a growing spot and wholesale loan business and is engaged in loan
administration, title and escrow services. Institutional operations include
securities administration and securities issuance activities. The investment
operation holds certain assets related to the company's operations, primarily
mortgage-backed securities held for sale that were previously issued by the
company's limited-purpose subsidiaries.
RETAIL OPERATIONS
The retail operations provide loan production, loan servicing and title and
escrow services for retail customers.
LOAN PRODUCTION. The company's mortgage origination operations have a
centralized management structure, with 31 retail loan processing offices which
process the company's builder and spot loans, and eight wholesale offices. For
the twelve months ended December 31, 1993, the company originated 27,872
mortgage loans totaling $3.6 billion, of which 80 percent were for buyers of
homes other than those built by the company and those seeking refinancing of
existing mortgage loans.
The company's mortgage loan originations can be split into three segments:
builder loans, spot loans (together, retail loans), and wholesale loans. Builder
loans are loans that the company originates in connection with its home sales.
Spot loans are mortgage loans that are originated primarily by loan officers
through contacts with realtors and home owners. Spot loans are not related to
the financing of homes built by the company. Wholesale loans are originated by
outside brokers but underwritten and closed by the company. The wholesale
offices work with a network of loan brokers and lenders to source loans.
The company arranges various types of mortgage financing including conventional,
Federal Housing Administration and Veterans Administration mortgages with
various fixed- and adjustable-rate structures. The company's mortgage
operations are approved by Federal Home Loan Mortgage Corporation, Federal
National Mortgage Association and Government National Mortgage Association. The
mortgage origination operation has loan production offices in Arizona,
California, Colorado, Florida, Georgia, Illinois, Indiana, Maryland, New Jersey,
North Carolina, Ohio, Pennsylvania, South Carolina, Texas, Virginia and
Washington.
6
LOAN SERVICING The company services loans that it originates as well as loans
originated by others. As of December 31, 1993, the company's loan servicing
portfolio was $9.8 billion. The company services loans in all 50 states, with
the highest concentrations in Alabama, Arizona, California, Florida, Georgia,
Maryland, North Carolina, Texas, Virginia and Washington.
TITLE AND ESCROW SERVICES The company entered the title business in 1989
through the formation of Cornerstone Title Company for the initial purpose of
providing title services to the company's customers. As of December 31, 1993
Cornerstone had two offices in Maryland and one office each in Florida, Indiana,
Texas and Delaware. The company also operates two escrow companies in
California that perform the escrow and loan closing functions primarily on homes
built by the company.
INSTITUTIONAL OPERATIONS
Institutional financial services consist of securities issuance and securities
administration. The company began issuing and administering securities in 1982
through wholly-owned subsidiaries. These services have expanded to include
builder and multi-builder bonds, multi-class CMO and REMIC structures and pass-
through securities.
SECURITIES ISSUANCE. In 1982, the company began to provide access to capital
markets for itself and other homebuilders, mortgage bankers and thrifts to
support loan production. Through various limited-purpose subsidiaries and shelf
registration statements, the company has the ability to issue securities in
either debt or pass-through form. The company's expertise includes structures
utilizing subordination, mezzanine classes, pool insurance, modified pool
insurance, reserve funds, limited guarantees and full guarantees from
third-party bond guarantors as well as various combinations of these features.
Eligible collateral includes single-family and multi-family mortgage loans,
manufactured housing contracts, agency certificates and private label mortgage
securities.
SECURITIES ADMINISTRATION. The securities administration business includes
trustee monitoring and reporting, financial and compliance reporting, tax
administration and master servicing. The company has been able to capitalize on
the growth in the securities industry by the establishment of the administration
business for third party issuers. At December 31, 1993, the company provided
administration services for nearly 50 different issuers which have created
approximately 500 series of securities aggregating over $123 billion in issuance
balances.
7
INVESTMENT OPERATIONS
The company's investment operations hold certain assets, primarily mortgage-
backed securities held for sale, which were obtained as a result of the early
redemption of various mortgage-backed bonds previously issued by the limited-
purpose subsidiaries of the company. The limited-purpose subsidiaries were
formed to facilitate the long-term financing of mortgage loans through the
issuance and sale of mortgage-backed bonds.
The company earns an interest spread on the portfolio equal to the difference
between the interest rate on the called mortgage collateral and the related
borrowing rate. The company may periodically realize gains from the sale of
mortgage-backed securities from the portfolio.
LIMITED-PURPOSE SUBSIDIARIES
The company's limited-purpose subsidiaries facilitate the financing of long-term
mortgage loans and securities through the issuance of mortgage-backed bonds.
These bond series represent obligations solely of the limited-purpose
subsidiaries and are not guaranteed or insured by The Ryland Group, Inc. Under
the provisions of applicable trust indentures, the bonds are fully
collateralized by mortgage loans, mortgage-backed securities, notes receivable
and certain funds held by trustees.
The company's limited-purpose subsidiaries were established to provide conduits
for the issuance and sale of mortgage-backed securities and mortgage
participation certificates in the secondary market. Although the limited-purpose
subsidiaries may continue to issue securities on behalf of others, due to
changes in the tax laws the number of new securities in which the company has
retained a residual interest has decreased substantially in recent years, and
since 1991 no residual interests have been retained by the company.
ECONOMIC CONDITIONS
The company's business is affected by general economic conditions in the United
States and by the level of interest rates and consumer confidence in the
economy. The company cannot predict whether interest rates will be at levels
attractive to prospective home buyers. In addition, the company's business is
affected by local economic conditions, such as unemployment rates and housing
demand in the markets in which it builds homes.
The company's financial services operations are affected by changes in interest
rates which may affect the level of origination activity, mortgage-backed
security issuance activity, and prepayments. Prepayments reduce the value of
loan servicing rights and securities administration rights.
8
COMPETITION
The company competes with other homebuilders in its markets. Competition ranges
from local custom builders who may build only a few homes each year to other
large national homebuilding companies. In addition, the company competes with
consumer alternatives such as existing homes and rental housing. Principal
competitive factors in homebuilding are design, quality, reputation,
relationship with developers, availability and location of lots, and price and
availability of customer financing.
The financial services segment competes with other mortgage bankers to arrange
financing for home buying customers. Principal competitive factors include
interest rates and various other features of mortgage loan products available to
the home buyer. The loan servicing operations of the financial services segment
competes with other national loan servicers for loan servicing rights. This
segment also competes in the securities markets with investment bankers, issuers
and servicers for the business of issuing, administering and managing mortgage-
backed bonds and other securities.
REGULATORY AND ENVIRONMENTAL MATTERS
The company is subject to various local, state and federal statutes, ordinances,
rules and regulations concerning zoning, building design, construction and
similar matters, including local regulations which impose restrictive zoning and
density requirements in order to limit the number of homes that can eventually
be built within the boundaries of a particular locality. The company may also
be subject to periodic delays in homebuilding projects due to building moratoria
in any of the states in which it operates. Generally, such moratoria relate to
insufficient water or sewage facilities, or inadequate roads, or local services.
The company is subject to various local, state and federal statutes, ordinances,
rules and regulations concerning the protection of health and the environment.
The company is also subject to a variety of environmental conditions that can
affect its business and its homebuilding projects. The particular environmental
laws which apply to any given homebuilding site vary greatly according to the
site's location, its environmental condition and the present and former uses of
the site. Environmental laws and conditions may result in delays, may cause the
company to incur substantial compliance and other costs, and can prohibit or
severely restrict homebuilding activity in certain environmentally sensitive
areas.
9
The company's financial services segment is subject to the rules and regulations
of FHA, VA, FNMA, FHLMC, and GNMA ("regulatory agencies") with respect to
originating, processing, selling and servicing mortgage loans. As a FHA lender,
the company is required to file its audited financial statements with these
various regulatory agencies. Additionally, the company is required to maintain a
minimum net worth level as specified by HUD, GNMA, and FNMA. Mortgage
origination activities are subject to the Equal Credit Opportunity Act, Federal
Truth-in-Lending Act and the Real Estate Settlement Procedures Act and the
regulations promulgated thereunder which prohibit discrimination and require the
disclosure of certain information to mortgagors concerning credit and settlement
costs.
EMPLOYEES
At December 31, 1993 the company employed 3,326 people. The company considers
its employee relations to be good. No employees are represented by a collective
bargaining agent.
ITEM 2. PROPERTIES
The company leases office space for its corporate headquarters in Columbia,
Maryland, and for various operating offices. The company operates building
component plants in Houston, Texas, New Windsor, Maryland, and Harrison, Ohio,
and leases a building component plant in Shelby, North Carolina.
ITEM 3. LEGAL PROCEEDINGS
The company believes that approximately 6,400 townhomes and condominiums
constructed from the mid-1970s through 1988 contain fire-retardant treated
plywood used as roof sheathing that has been observed to fail over a relatively
short period of time after installation. The company is in the process of
inspecting and repairing the roofs of these homes. The cost of repairing these
roofs, net of settlements from third parties, has been provided for by the
company. As a result, it is the opinion of management that the costs to repair
the remaining roofs will not adversely impact results of operations in future
periods.
Contingent liabilities may arise from the obligations incurred in the ordinary
course of business. The company is also party to various legal
proceedings generally incidental to its businesses. Based on evaluation of the
above matters and discussions with counsel, management believes that liabilities
to the company arising from these matters will not have a material adverse
effect on the financial condition of the company.
ITEM 4. SUBMISSION TO A VOTE OF SECURITY HOLDERS.
No matters were submitted to a vote of security holders during the fourth
quarter of the year ended December 31, 1993.
10
SEPARATE ITEM: EXECUTIVE OFFICERS OF THE REGISTRANT
Name Age Position (date elected to position)
- --------------------------------------------------------------------------------
R. Chad Dreier 46 Director/President and Chief Executive Officer
(November 1993)
Alan P. Hoblitzell, Jr. 62 Director/Executive Vice President, Chief
Financial Officer (February 1991).
Robert J. Gaw 60 Director/Executive Vice President and President
of Ryland Mortgage Company (April 1979).
Thurman W. Bretz 59 Secretary (April 1991). Senior Vice President
(October 1983).
J. Sidney Davenport 52 Senior Vice President of Ryland Mortgage
Company (November 1988).
Stewart M. Cline 48 President of Southwest Region (June 1992).
Executive Vice President of Ryland Homes
(October 1991 to June 1992). President of
Ryland Homes (January 1989 to October 1991).
President, Central Area (October 1982 to
December 1988).
Timothy R. Doyle 43 President of Midwest Region (December 1991).
Vice President-Operations of the Maryland
Region (July 1976 to December 1991).
Thomas C. Krobot 47 President of Southeast Region (October 1991).
Senior Vice President, Ryland Homes (January
1988 to October 1991).
John D. Napolitan 49 President of West Region (October 1991).
Senior Vice President, Ryland Homes
(January 1988 to October 1991).
Frank J. Scardina 45 President of California Region (January 1994).
Vice President, Ryland Homes (March 1993 to
January 1994).
Arthur L. Titus 49 President of Mid-Atlantic Region
(October 1991). Senior Vice President, Ryland
Homes (August 1990 to October 1991).
Stephen B. Cook 46 Vice President and Corporate Controller
(October 1992).
All officers are elected by the board of directors.
There are no family relationships nor arrangements or understandings pursuant to
which any of the officers listed were elected. For a description of employment
and severance arrangements with certain executive officers of the company, see
page 18 of the Proxy Statement for the 1994 Annual Meeting of Stockholders.
11
BUSINESS EXPERIENCE
All of the executive officers listed above have served in various capacities
with The Ryland Group, Inc. over the past five years, with the exception of
Messrs. R. Chad Dreier, Alan P. Hoblitzell, Jr., Frank J. Scardina, Arthur L.
Titus and Stephen B. Cook.
Prior to joining the company in 1993, Mr. Dreier was executive vice president
and chief financial officer of Kaufman and Broad Home Corporation and chairman
of Kaufman and Broad Mortgage Company. Prior to joining the company in 1991,
Mr. Hoblitzell was chairman and chief executive officer of MNC Financial, Inc.
Prior to joining the Company in 1993, Mr. Scardina was president of Birtcher
Real Estate Ltd. Prior to joining the company in 1990, Mr. Titus was a region
president of NVR L.P. Prior to joining the company in 1992, Mr. Cook was vice
president and controller of United States Fidelity and Guaranty Company.
12
PART II
Item 5. Market for the Company's Common Stock and Related Stockholder Matters.
The information required by this item is incorporated by reference from the
section entitled "Common Stock Prices and Dividends" appearing on page 46 of the
Annual Report to Shareholders for the year ended December 31, 1993.
Item 6. Selected Financial Data.
The information required by this item is incorporated by reference from the
sections entitled "Financial Highlights" appearing on page 1 and "Selected
Financial Data" appearing on pages 18 and 19 of the Annual Report to
Shareholders for the year ended December 31, 1993.
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
The information required by this item is incorporated by reference from the
section entitled "Management's Discussion and Analysis of Results of Operations
and Financial Condition" appearing on pages 20 through 26 of the Annual Report
to Shareholders for the year ended December 31, 1993.
Item 8. Financial Statements and Supplementary Data.
The information required by this item is incorporated by reference from the
information appearing on pages 27 through 43 and from the section entitled
"Quarterly Financial Data (unaudited)" appearing on page 45 of the Annual Report
to Shareholders for the year ended December 31, 1993.
Item 9. Changes In and Disagreements with Accountants on Accounting
and Financial Disclosure.
During the fiscal years ended December 31, 1993 and 1992, there have been no
disagreements between the company and its accountants on any matter of
accounting principle or financial statement disclosure.
13
PART III
Item 10. Directors and Executive Officers of the Registrant.
Information as to the company's Directors is incorporated by reference from
pages 3, 4, 9 and 10 of the company's Proxy Statement for its 1994 Annual
Meeting of Stockholders. Information as to the company's executive officers
is shown under Part I as a separate item.
Item 11. Executive Compensation.
The information required by this item is incorporated by reference from pages
10-18 of the company's Proxy Statement for its 1994 Annual Meeting of
Stockholders.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
The information required by this item is incorporated by reference from pages 8
and 9 of the company's Proxy Statement for its 1994 Annual Meeting of
Stockholders.
Item 13. Certain Relationships and Related Transactions.
There are no transactions, business relationships, or indebtedness required to
be reported by the company pursuant to this Item.
14
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
(a) 1. Financial Statements.
The following consolidated financial statements of
The Ryland Group, Inc. and Subsidiaries, included in the Annual Report
to Shareholders for the year ended December 31, 1993, are incorporated
by reference in Item 8:
Consolidated Statements of Earnings -
years ended December 31, 1993, 1992, and 1991.
Consolidated Balance Sheets -
December 31, 1993 and 1992.
Consolidated Statements of Stockholders' Equity -
years ended December 31, 1993, 1992 and 1991.
Consolidated Statements of Cash Flows -
years ended December 31, 1993, 1992 and 1991.
Notes to Consolidated Financial Statements.
(a) 2. Financial Statement Schedules. (filed herewith) PAGE NO.
Schedule VIII - Valuation and Qualifying Accounts. 19
Schedule IX - Short-Term Borrowings. 20
Schedule X - Supplementary Income
Statement Information. 21
Schedules not listed above have been omitted because they areeither
inapplicable or the required information has been given in the
financial statements or notes thereto.
15
(a) 3. Exhibits
EXHIBIT NO.
3.1 Charter of The Ryland Group, Inc., as amended.
(Incorporated by reference from Form 10-K for the
year ended December 31, 1989)
3.2 By-Laws of The Ryland Group, Inc., as amended.
(Incorporated by reference from Form 10-Q for the
quarter ended June 30, 1990)
4.1 Rights Agreement dated as of December 17, 1986
between The Ryland Group, Inc. and Maryland National
Bank as amended by The First Amendment of Rights
Agreement dated as of October 17, 1990.
(Incorporated by reference from Form 8 filed
October 25,1990)
4.2 Articles Supplementary dated as of August 31, 1989.
(Incorporated by reference from Form 8-K filed
September 12, 1989)
4.3 Indenture dated as of November 2, 1989 between
The Ryland Group, Inc. and Manufacturers Hanover Trust
Company, as Trustee.
(Incorporated by reference from Exhibits to Registration
Statement on Form S-3, Registration No. 33-28692)
4.4 First Supplemental Indenture dated as of December 28, 1990
between The Ryland Group, Inc. and Manufacturers Hanover
Trust company, as Trustee.
(Incorporated by reference from Form 8-K filed
December 31, 1990)
4.5 Senior Subordinated Notes dated as of July 23, 1992.
(Incorporated by reference from Form 8-K filed
August 6, 1992)
4.6 Senior Subordinated Notes dated as of November 4, 1993.
(Incorporated by reference from Registration Statement
on Form S-3, Registration No. 33-48071)
4.7 Indenture dated as of July 15, 1992 between The Ryland
Group, Inc. and Security Trust Company, N.A., as Trustee.
(Incorporated by reference from Form 8-K filed August 6,
1992)
10.1 Form of Senior Executive Severance Agreement between
The Ryland Group, Inc., and certain of its executive
officers.
(Incorporated by reference from Form 10-K for the
year ended December 31, 1989)
16
(a) 3. Exhibits, continued
EXHIBIT NO.
10.2 Lease Agreement between Seventy Corporate Center
Limited Partnership and The Ryland Group, Inc. dated
April 17, 1990.
(Incorporated by reference from Form 10-K for the
year ended December 31, 1990)
10.3 1992 Equity Incentive Plan of The Ryland Group, Inc.
(Incorporated by reference from Form 10-Q for the
quarter ended June 30, 1992)
10.4 Alan P. Hoblitzell, Jr. Employment Agreement dated as of
September 30, 1993 between Alan P. Hoblitzell, Jr. and
The Ryland Group, Inc.
(Filed Herewith)
10.5 1992 Non-Employee Director Equity Plan of The Ryland
Group, Inc.
(Incorporated by reference from Form 10-Q for the quarter
ended June 30, 1992)
10.6 Credit Agreement dated as of July 29, 1993 between The
Ryland Group, Inc. and certain banks a party thereto.
(Filed Herewith)
10.7 Restated Loan Agreement dated as of May 28, 1993, between
Ryland Mortgage Company, Associates Mortgage Funding
Corporation, BankOne, Texas, N.A., and certain lenders
a party thereto.
(Filed Herewith)
11. Statement Re Computation of Per Share Earnings.
(Filed Herewith)
13. Annual Report to Shareholders for the year ended
December 31,1993.
(Filed Herewith)
22. Subsidiaries of the Company.
(Filed Herewith)
24. Consent of Ernst & Young.
(Filed Herewith)
25. Power of Attorney.
(Filed Herewith)
17
Executive Compensation Plans and Arrangements:
10.1 Form of Senior Executive Severance Agreement between The
Ryland Group, Inc., and certain of its executive officers.
(Incorporated by reference from Form 10-K for the year
ended December 31, 1989)
10.3 1992 Equity Incentive Plan of The Ryland Group, Inc.
(Incorporated by reference from Form 10-Q for the quarter
ended June 30, 1992)
10.4 Alan P. Hoblitzell, Jr. Employment Agreement dated as of
September 30, 1993 between Alan P. Hoblitzell, Jr. and
The Ryland Group, Inc.
(Filed Herewith)
10.5 1992 Non-Employee Director Equity Plan of The Ryland
Group, Inc.
(Incorporated by reference from Form 10-Q for the quarter
ended June 30, 1992)
(b) Reports on Form 8-K filed in the fourth quarter of 1993:
Form 8-K dated October 28, 1993
Item 5. Other Events - Third Quarter Inventory Provision
18
The Ryland Group, Inc. and Subsidiaries
Schedule VIII--Valuation and Qualifying Accounts
(dollar amounts in thousands)
Balance at Charged to Charged to Balance
Beginning Costs and Other Deductions & at end
Description of Period Expenses Accounts(1) Transfers (2) of Period
- -------------------------------------------------------------------------
Qualifying account:
Discounts on mortgages
and mortgage-backed
securities held for sale
1993.... $ 8,839 $ 0 $ 209 $ 0 $ 9,048
1992.... 4,990 0 3,849 0 8,839
1991.... 4,231 0 759 0 4,990
Valuation allowance:
Homebuilding inventory
1993.... $ 20,422 $ 43,000 $ 0 $ (10,089) $ 53,333
1992.... 3,650 3,191 0 13,581 20,422
1991.... 6,124 5,309 0 (7,783) 3,650
Valuation allowance:
Investment and advances
to joint ventures
1993.... $ 1,180 $ 2,680 $ 0 $ (2,191) $ 1,669
1992.... 14,400 902 0 (14,122) 1,180
1991.... 1,400 13,000 0 0 14,400
<FN>
(1) Additions charged to other accounts for mortgages and mortgage-backed
securities held for sale are generally the result of the origination or
purchase of mortgage loans and the early redemption of mortgage-backed
bonds previously owned by the limited-purpose subsidiaries segment.
(2) Deductions for homebuilding inventory are generally the result of
normal inventory turnover or land sales. In 1992, there was a
transfer from investment in and advances to joint ventures to
homebuilding inventory as the result of the acquisition of joint
ventures which were previously unconsolidated.
19
Ryland Group, Inc. and Subsidiaries
Schedule IX--Short-Term Borrowings
(dollar amounts in thousands)
During the period
-----------------------------
Balance Weighted average
Category of at interest rate Maximum Average Weighted
aggregate short- end of at end Amount Amount Average
term borrowings(1) period of period Outstanding Outstanding Int rate
- --------------------------------------------------------------------------------------
Financial Services:
December 31, 1993
Notes payable
to banks $ 716,933 3.1% $ 825,246 $ 627,848 3.1%
December 31, 1992
Notes payable
to banks 587,872 3.3% 821,724 510,013 3.3%
December 31, 1991 348,403 4.8% 348,403 247,069 4.8%
Notes payable
to banks
<FN>
(1) See Note F to the financial statements of The Ryland Group, Inc. and
subsidiaries, on page 37 of the company's 1993 Annual Report to
Shareholders, included as Exhibit 13.
(2) Computed by dividing interest paid by the daily average bank borrowing.
20
The Ryland Group, Inc. and Subsidiaries
Schedule X--Supplementary Income Statement Information
(dollar amounts in thousands)
Charged to costs and expenses
Year ended December 31,
--------------------------------------------
Item 1993 1992 1991
---- ---- ---- ----
Advertising costs $ 13,346 $ 13,423 $ 13,725
21
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
THE RYLAND GROUP, INC.
By: /s/ Alan P. Hoblitzell, Jr. March 25,1994
-----------------------------------
Alan P. Hoblitzell, Jr.
Director, Executive Vice President and
Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Principal Executive Officer:
/s/ R. Chad Dreier March 25, 1994
- ---------------------------------------------
R. Chad Dreier
Chief Executive Officer
Principal Financial Officer:
/s/ Alan P. Hoblitzell, Jr. March 25, 1994
- ---------------------------------------------
Alan P. Hoblitzell, Jr.
Chief Financial Officer
Principal Accounting Officer:
/s/ Stephen B. Cook March 25, 1994
- ---------------------------------------------
Stephen B. Cook
Vice President and Corporate Controller
A Majority of the Board of Directors: Andre W. Brewster,
James A. Flick, Jr., R. Chad Dreier, Robert J. Gaw, Leonard M. Harlan,
L. C. Heist, William G. Kagler, John H. Mullin, III
By: /s/ Alan P. Holbitzell, Jr. March 25,1994
-------------------------------------
Alan P. Hoblitzell, Jr.
For Himself and as Attorney-in-Fact
22
Page Of
Sequentially
Numbered Pages
--------------
INDEX OF EXHIBITS:
10.4 Alan P. Hoblitzell, Jr. Employment Agreement 24 - 30
dated as of September 30, 1993 between Alan P.
Hoblitzell, Jr. and The Ryland Group, Inc.
10.6 Credit Agreement dated as of July 29, 1993 31 - 131
between The Ryland Group, Inc. and certain
banks a party thereto.
10.7 Restated Loan Agreement dated as of May 28, 132 - 198
1993 between Ryland Mortgage Company,
Associates Mortgage Funding Corporation,
BankOne, Texas, N.A., and certain lenders
a party thereto.
11 Statement Re Computation of Per Share Earnings 199
13 Annual Report to Shareholders for the year ended 200 - 228
December 31, 1993
22 Subsidiaries of the Company 229
24 Consent of Ernst & Young, Independent Auditors 230
25 Power of Attorney 231
23