News
M.D.C. Holdings, Inc.
Net income for the year ended December 31, 2006 was $214.3 million, or $4.66 per diluted share, compared with net income of $505.7 million, or $10.99 per diluted share, for the same period in 2005. Total revenue for the year ended December 31, 2006 was $4.80 billion, compared with $4.89 billion for the year ended December 31, 2005. Operating results for the 2006 full year were impacted adversely by after-tax charges for asset impairments and project cost write-offs of $69.3 million and $18.4 million, respectively. Without these charges, net income would have improved to $302.0 million, or $6.57 per diluted share. Please see the last page of this document for a reconciliation of non-GAAP financial measures.
Larry A. Mizel, MDC's chairman and chief executive officer, stated, "Even though the environment for new home sales showed little improvement from the first nine months of 2006, we were successful in strengthening our financial position during the fourth quarter. We reduced our lots owned and under option by over 4,000 since the end of the third quarter, which contributed to a 35% reduction in our total lots controlled since the beginning of the year. Decreases in our homebuilding inventories enabled us to generate more than $400 million of operating cash flow during the fourth quarter alone, which allowed us to end the year with $508 million in cash and nothing outstanding under our $1.25 billion homebuilding line of credit. This contributed to a 30% increase in our combined cash and available borrowing capacity during the fourth quarter to more than $1.7 billion. In addition, our stockholders' equity and book value per share grew by 11% and 9%, respectively, from the previous year, despite the impact of $88 million in after-tax charges associated with project cost write-offs and asset impairments incurred throughout the year. As a result, we ended the year with a ratio of homebuilding and corporate debt to capital, net of cash, of 0.18, which continues to be one of the lowest in the industry."
Mizel concluded, "As we begin a new year, we are focused on initiatives that should help improve our business for the important spring selling season and beyond. We have enhanced the training for our sales and customer service personnel in an effort to better attract and retain potential buyers. We plan to open more than 120 model homes over the next 90 days, with many featuring new or enhanced designs. We recognize the need to continue evaluating potential investments in our core homebuilding operations. Consistent with this objective, we have been and will be communicating to land sellers in all of our markets that we are ready to acquire attractively-priced land assets. If we are successful in taking advantage of opportunities that may emerge during this downturn period, we will be positioned to accelerate our Company's growth when the industry eventually rebounds."
Homebuilding Results
Homebuilding loss before taxes for the quarter ended December 31, 2006 was $14.3 million, compared with income before taxes of $333.2 million for the same period in 2005. Homebuilding income before taxes for the full year 2006 was $371.4 million, compared with $892.3 million for the full year 2005. The income decreases in the 2006 periods were driven in large part by reduced home closings and significant declines in home gross margins from the record levels achieved during the same periods in 2005, partially offset by the impact of increased average selling prices. In addition, homebuilding results for the 2006 periods were impacted adversely by non-cash, pre-tax asset impairment charges of $91.3 million and $112.0 million, respectively, while no impairments were realized for the comparable periods in 2005. The Company closed 3,594 homes and produced home gross margins of 16.6% in the 2006 fourth quarter, compared with 4,951 home closings and home gross margins of 27.8% for the comparable period in 2005. For the year ended December 31, 2006, the Company closed 13,123 homes and produced home gross margins of 22.2%, compared with 15,307 home closings and home gross margins of 28.3% for the year ended December 31, 2005. Average selling prices reached $360,100 and $354,400, respectively, for the quarter and year ended December 31, 2006, up $15,600 and $41,300 from the same periods in 2005.
Homebuilding commissions, marketing, general and administrative ("SG&A") expenses were $141.7 million, or 11.0% of home sales revenue, for the 2006 fourth quarter, compared with $143.2 million, or 8.4% of home sales revenue, for the 2005 fourth quarter. For the year ended December 31, 2006, homebuilding SG&A expenses were $560.1 million, or 12.0% of home sales revenue, compared with $473.0 million, or 9.9% of home sales revenue, for the same period in 2005. The SG&A expenses for the three months and year ended December 31, 2006 included project cost write-offs of $6.7 million and $29.7 million, respectively, compared with $5.2 million and $10.4 million of such costs for the same periods in 2005.
Paris G. Reece III, MDC's executive vice president and chief financial officer, said, "From the 2006 third quarter to the 2006 fourth quarter, we experienced a reduction in home gross margins of at least 400 basis points in each of our markets except Utah, Delaware Valley and Colorado, where margins improved slightly. The margin declines were caused by our increased use of incentives, designed to spur demand in the midst of extremely competitive market conditions in most of our markets."
Reece continued, "The $91.3 million in impairment charges we recognized during the fourth quarter relate to 52 projects spread throughout most of our markets. More than 80% of the impairment charge occurred in our West homebuilding segment, which includes California, Nevada and Arizona, with California alone accounting for almost half of the total charge. The impairments were recognized in subdivisions where we experienced a much slower than anticipated home order pace and significantly increased incentives required to generate new orders and keep existing orders in backlog."
Reece concluded, "Our SG&A expenses declined slightly year-over-year in the 2006 fourth quarter, reflecting reduced employee-related costs resulting from our continued efforts to right-size our homebuilding operations in view of current market conditions. However, these savings partially were offset by significantly higher advertising expenses incurred to improve traffic levels in response to the more competitive home selling environment in most of our markets. Our 2006 full year SG&A expenses were impacted similarly by higher advertising costs, which contributed to a year-over-year increase in marketing costs of $22.8 million. In addition, our 2006 commissions expense increased by $20.8 million year-over-year as a result of increased amounts paid to outside brokers due to the more competitive home selling conditions. And our project cost write-offs rose by nearly $20 million, as we relinquished control of almost 7,000 optioned lots during the year."
Financial Services and Other Results
Income before taxes from the Company's Financial Services and Other segment for the quarter and year ended December 31, 2006 were $10.0 million and $45.2 million, respectively, compared with $16.1 million and $35.0 million, respectively, for the same periods in the previous year. In the 2006 fourth quarter, increased profits from the mortgage operations were more than offset by increases in actuarially determined loss reserves related to the Company's insurance activities. Full year profit improvements in 2006 primarily resulted from higher gains on sales of mortgage loans, compared with 2005. Increased dollar volumes of mortgage loan originations and mortgage loans sold during 2006 drove the higher gains. The Company achieved these increased volumes by improving its mortgage capture rate, largely as a result of expanding the mortgage loan products that it could originate directly for its customers, and increasing its average loan amounts in connection with the Company's higher average selling prices.
Home Orders and Backlog
MDC received orders, net of cancellations, for 1,571 homes with an estimated sales value of $515.0 million during the 2006 fourth quarter, compared with net orders for 2,405 homes with an estimated sales value of $831.0 million during the same period in 2005. The decline in quarterly net home orders was related almost exclusively to a year-over-year increase in the number of order cancellations recorded, as the number of gross orders taken was virtually unchanged. For the year ended December 31, 2006, the Company received net orders for 10,229 homes with an estimated sales value of $3.47 billion, compared with 15,334 net orders with an estimated sales value of $5.23 billion for the year ended December 31, 2005. The reduction in annual net home orders related largely to an increase in the number of order cancellations received and, to a lesser extent, a decrease in the number of gross orders taken in every market except Utah, Arizona, Maryland and the Delaware Valley. The Company ended the fourth quarter of 2006 with a backlog of 3,638 homes, compared with a backlog of 6,532 homes at December 31, 2005. The estimated sales value of backlog at the end of the 2006 fourth quarter was $1.30 billion, compared with $2.44 billion at December 31, 2005.
MDC, whose subsidiaries build homes under the name "Richmond American Homes," is one of the top ten homebuilders in the United States, based on 2005 revenue. The Company also provides mortgage financing, primarily for MDC's homebuyers, through its wholly owned subsidiary HomeAmerican Mortgage Corporation. MDC, a Fortune 500 Company, is a major regional homebuilder with a significant presence in Colorado, Jacksonville, Las Vegas, Maryland, Northern California, Northern Virginia, Phoenix, Salt Lake City, Southern California and Tucson. MDC also has established operating divisions in Chicago, Philadelphia/Delaware Valley and West Florida. For more information about our Company, please visit RichmondAmerican.com.
Forward-Looking Statements
Certain statements in this release, including statements regarding future home closings, revenue and earnings, constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward- looking statements. Such factors include, among other things, (1) general economic and business conditions, including changes in cancellation rates, net home orders, home gross margins, and land and home values; (2) interest rate changes; (3) the relative stability of debt and equity markets; (4) competition; (5) the availability and cost of land and other raw materials used by the Company in its homebuilding operations; (6) the availability and cost of performance bonds and insurance covering risks associated with our business; (7) shortages and the cost of labor; (8) weather related slowdowns; (9) slow growth initiatives; (10) building moratoria; (11) governmental regulation, including the interpretation of tax, labor and environmental laws; (12) changes in consumer confidence and preferences; (13) required accounting changes; (14) terrorist acts and other acts of war; and (15) other factors over which the Company has little or no control. Additional information about the risks and uncertainties applicable to the Company's business is contained in the Company's reports on Form 10-K/A for the year ended December 31, 2005, and Form 10-Q for the quarter ended September 30, 2006, which were filed with the Securities and Exchange Commission. 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 publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. However, any further disclosures made on related subjects in our subsequent filings, releases or presentations should be consulted.
M.D.C. HOLDINGS, INC. Consolidated Statements of Income (In thousands, except per share amounts) (Unaudited) Three Months Ended Year Ended December 31, December 31, 2006 2005 2006 2005 REVENUE Home sales revenue $1,294,140 $1,705,525 $4,650,556 $4,792,700 Land sales revenue 15,799 430 34,611 2,995 Other revenue 33,474 33,659 116,575 96,894 Total Revenue 1,343,413 1,739,614 4,801,742 4,892,589 COSTS AND EXPENSES Home cost of sales 1,079,274 1,231,797 3,619,656 3,436,035 Land cost of sales 15,367 365 33,491 1,861 Asset impairments 91,252 -- 112,027 -- Marketing expenses 36,957 32,583 128,856 106,015 Commission expenses 44,481 45,045 151,108 130,307 General and administrative expenses 92,285 106,083 419,780 401,184 Related party expenses 1,796 8,210 3,687 8,424 Total Costs and Expenses 1,361,412 1,424,083 4,468,605 4,083,826 Income (loss) before income taxes (17,999) 315,531 333,137 808,763 Benefit from (provision for) income taxes 11,634 (118,052) (118,884) (303,040) NET INCOME (LOSS) $(6,365) $197,479 $214,253 $505,723 EARNINGS (LOSS) PER SHARE Basic $(0.14) $4.43 $4.77 $11.48 Diluted $(0.14) $4.29 $4.66 $10.99 WEIGHTED-AVERAGE SHARES Basic 45,073 44,605 44,952 44,046 Diluted 46,097 46,068 45,971 46,036 DIVIDENDS DECLARED PER SHARE $0.25 $0.25 $1.00 $0.76 M.D.C. HOLDINGS, INC. Consolidated Balance Sheets (Dollars in thousands, except per share amounts) (Unaudited) December 31, December 31, 2006 2005 ASSETS Cash and cash equivalents $507,947 $214,531 Restricted cash 2,641 6,742 Home sales and other accounts receivable 143,936 158,808 Mortgage loans held in inventory 212,903 237,376 Inventories, net Housing completed or under construction 1,178,671 1,320,106 Land and land under development 1,575,158 1,677,948 Property and equipment, net 44,606 49,119 Deferred income taxes 124,880 54,319 Prepaid expenses and other assets, net 119,133 140,901 Total Assets $3,909,875 $3,859,850 LIABILITIES Accounts payable $171,005 $201,747 Accrued liabilities 419,654 442,409 Income taxes payable 28,485 102,656 Related party liabilities 1,700 8,100 Homebuilding line of credit -- -- Mortgage line of credit 130,467 156,532 Senior notes, net 996,682 996,297 Total Liabilities 1,747,993 1,907,741 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; 45,179,000 and 45,165,000 issued and outstanding, respectively, at December 31, 2006 and 44,642,000 and 44,630,000 issued and outstanding, respectively, at December 31, 2005 452 447 Additional paid-in capital 760,831 719,813 Retained earnings 1,402,261 1,232,971 Accumulated other comprehensive loss (1,003) (622) Less treasury stock, at cost; 14,000 and 12,000 shares, respectively, at December 31, 2006 and December 31, 2005 (659) (500) Total Stockholders' Equity 2,161,882 1,952,109 Total Liabilities and Stockholders' Equity $3,909,875 $3,859,850 M.D.C. HOLDINGS, INC. Information on Segments (Dollars in thousands) (Unaudited) Three Months Ended Year Ended December 31, December 31, 2006 2005 2006 2005 REVENUE West $809,332 $1,098,986 $2,871,040 $2,833,398 Mountain 211,382 230,514 730,489 834,270 East 183,743 261,912 628,508 732,132 Other Homebuilding 119,329 120,362 493,628 413,628 Total Homebuilding 1,323,786 1,711,774 4,723,665 4,813,428 Financial Services and Other 29,086 31,021 103,243 87,849 Corporate 1,113 28 1,788 1,487 Intercompany Adjustments (10,572) (3,209) (26,954) (10,175) Consolidated $1,343,413 $1,739,614 $4,801,742 $4,892,589 INCOME (LOSS) BEFORE INCOME TAXES West $(38,688) $226,081 $235,954 $611,603 Mountain 18,307 20,852 43,490 70,348 East 19,015 80,844 104,706 203,853 Other Homebuilding (12,946) 5,439 (12,709) 6,538 Total Homebuilding (14,312) 333,216 371,441 892,342 Financial Services and Other 10,025 16,067 45,186 34,964 Corporate (13,712) (33,752) (83,490) (118,543) Consolidated $(17,999) $315,531 $333,137 $808,763 ASSET IMPAIRMENTS West $75,561 $-- $90,802 $-- Mountain 1,265 -- 1,891 -- East 6,879 -- 8,236 -- Other Homebuilding 7,547 -- 11,098 -- Total Homebuilding $91,252 $-- $112,027 $-- December 31, December 31, 2006 2005 TOTAL ASSETS West $1,869,442 $2,092,833 Mountain 535,554 469,572 East 333,902 362,292 Other Homebuilding 266,326 358,958 Total Homebuilding 3,005,224 3,283,655 Financial Services and Other 246,734 277,455 Corporate 657,917 298,740 Consolidated $3,909,875 $3,859,850 M.D.C. HOLDINGS, INC. Selected Financial Data (Dollars in thousands, except per share amounts) (Unaudited) Three Months Ended Year Ended December 31, December 31, 2006 2005 2006 2005 SELECTED OPERATING DATA General and Administrative Expenses Homebuilding Operations $60,309 $65,562 $280,129 $236,695 Financial Services and Other Operations 19,019 14,951 58,059 52,883 Corporate 12,957 25,570 81,592 111,606 Total $92,285 $106,083 $419,780 $401,184 SG&A as a Percent of Home Sales Revenues Homebuilding Operations 11.0% 8.4% 12.0% 9.9% Corporate 1.1% 2.0% 1.8% 2.5% Total Homebuilding and Corporate 12.1% 10.4% 13.9% 12.4% Depreciation and Amortization $17,493 $19,907 $59,030 $54,425 Home Gross Margins(1) 16.6% 27.8% 22.2% 28.3% Cash Provided by (Used in) Operating Activities $413,013 $132,107 $371,670 $(424,929) Cash Used in Investing Activities $(2,997) $(4,771) $(10,221) $(22,889) Cash Provided by (Used in) Financing Activities $(34,913) $(32,575) $(68,033) $261,390 Ending Unrestricted Cash and Available Borrowing Capacity $1,736,054 $1,245,540 N/A N/A Ending Book Value Per Share(2) $47.87 $43.74 N/A N/A After-Tax Return on Average Capital(3) 6.6% 19.2% N/A N/A After-Tax Return on Average Assets(3) 5.5% 15.8% N/A N/A After-Tax Return on Average Equity(3) 10.2% 28.7% N/A N/A Interest in Home Cost of Sales as a Percent of Home Sales Revenue 1.1% 0.7% 1.1% 0.7% Corporate and Homebuilding Interest Capitalized Interest Capitalized in Inventories at Beginning of Period $50,145 $37,878 $41,999 $24,220 Interest Capitalized During the Period 14,148 15,332 58,141 51,872 Interest in Home and Land Cost of Sales for the Period 13,638 11,211 49,485 34,093 Interest Capitalized in Inventories at End of Period $50,655 $41,999 $50,655 $41,999 Interest Capitalized as a Percent of Inventories 1.8% 1.4% N/A N/A (1) Home sales revenue less home cost of sales (excluding commissions, amortization of deferred marketing and asset impairments) as a percent of home sales revenue. Prior year information has been reclassified to conform with current year presentation. (2) Ending stockholders' equity divided by ending shares outstanding. (3) Based on last twelve months data. M.D.C. HOLDINGS, INC. Homebuilding Operational Data (Dollars in thousands) (Unaudited) December 31, December 31, December 31, 2006 2005 2004 LOTS OWNED AND CONTROLLED Lots Owned 19,410 23,445 20,760 Lots Under Option 8,097 18,819 21,164 Homes Completed or Under Construction 4,636 6,891 5,573 LOTS OWNED BY MARKET (excluding homes completed or under construction) Arizona 6,368 7,385 5,657 California 2,802 3,367 2,646 Colorado 3,479 3,639 3,993 Delaware Valley 265 471 312 Florida 1,093 1,201 594 Illinois 287 430 508 Maryland 528 679 650 Nevada 2,747 4,055 3,916 Texas 13 471 642 Utah 1,185 964 862 Virginia 643 783 980 Total Company 19,410 23,445 20,760 LOTS UNDER OPTION BY MARKET Arizona 744 3,650 5,494 California 387 2,005 1,782 Colorado 801 2,198 1,866 Delaware Valley 683 1,283 723 Florida 1,800 3,202 2,980 Illinois -- 186 203 Maryland 960 1,173 1,206 Nevada 250 1,400 1,859 Texas -- 80 1,694 Utah 91 418 216 Virginia 2,381 3,224 3,141 Total Company 8,097 18,819 21,164 Non-refundable Option Deposits Cash $20,228 $48,157 $41,804 Letters of Credit 14,224 23,142 22,062 Total Non-refundable Option Deposits $34,452 $71,299 $63,866 M.D.C. HOLDINGS, INC. Homebuilding Operational Data (Dollars in thousands) (Unaudited) Three Months Ended Year Ended December 31, December 31, 2006 2005 2006 2005 HOMES CLOSED (UNITS) Arizona 1,016 1,121 3,353 3,671 California 536 864 1,788 2,102 Colorado 309 575 1,463 2,190 Delaware Valley 78 15 200 33 Florida 219 251 921 1,083 Illinois 55 46 174 86 Maryland 154 137 444 397 Nevada 647 1,165 2,756 3,016 Texas 29 183 395 799 Utah 342 264 922 904 Virginia 209 330 707 1,026 Total Company 3,594 4,951 13,123 15,307 AVERAGE SELLING PRICE PER HOME CLOSED Arizona $273.9 $255.0 $294.6 $227.2 California 596.0 517.5 558.7 512.6 Colorado 332.7 288.0 308.7 286.3 Delaware Valley 420.1 379.4 405.7 369.6 Florida 267.7 268.2 284.8 219.9 Illinois 367.3 357.2 367.5 389.4 Maryland 528.3 528.8 558.0 482.8 Nevada 307.6 318.2 317.5 305.8 Texas 151.0 165.7 165.9 160.6 Utah 320.8 244.4 303.3 226.4 Virginia 491.2 577.0 536.3 527.1 Company Average $360.1 $344.5 $354.4 $313.1 ORDERS FOR HOMES, NET (UNITS) Arizona 480 587 2,758 3,627 California 241 323 1,450 2,060 Colorado 201 348 1,139 2,075 Delaware Valley 28 35 138 191 Florida (11) 127 519 1,044 Illinois 35 35 117 148 Maryland 60 58 380 423 Nevada 314 505 2,048 3,293 Texas 11 109 169 781 Utah 133 212 1,049 953 Virginia 79 66 462 739 Total Company 1,571 2,405 10,229 15,334 Estimated Value of Orders for Homes, net $515,000 $831,000 $3,467,000 $5,233,000 Estimated Average Selling Price of Orders for Homes, net $327.8 $345.5 $338.9 $341.3 Order Cancellation Rate(4) 56.5% 33.8% 43.4% 23.7% (4) Gross number of cancellations received divided by gross number of orders received. M.D.C. HOLDINGS, INC. Homebuilding Operational Data (Dollars in thousands) (Unaudited) December 31, December 31, December 31, BACKLOG (UNITS) 2006 2005 2004 Arizona 1,504 2,099 2,143 California 427 765 807 Colorado 253 577 692 Delaware Valley 119 181 23 Florida 197 599 638 Illinois 23 80 18 Maryland 187 251 225 Nevada 315 1,023 746 Texas 12 238 256 Utah 465 338 289 Virginia 136 381 668 Total Company 3,638 6,532 6,505 Backlog Estimated Sales Value $1,300,000 $2,440,000 $1,920,000 Estimated Average Selling Price of Homes in Backlog $357.3 $373.5 $295.2 ACTIVE SUBDIVISIONS Arizona 67 54 32 California 45 34 22 Colorado 47 57 53 Delaware Valley 8 7 2 Florida 30 19 18 Illinois 6 8 1 Maryland 19 11 11 Nevada 41 43 31 Texas 2 21 24 Utah 22 18 22 Virginia 19 20 26 Total Company 306 292 242 Average for Quarter Ended 299 287 237 M.D.C. HOLDINGS, INC. Reconciliation of Non-GAAP Financial Measures (In thousands, except ratios and per share amounts) (Unaudited) Three Months Ended Year Ended December 31, December 31, 2006 2005 2006 2005 NON-GAAP FINANCIAL MEASURES Net income and earnings per share, excluding asset impairments and project cost write-offs Asset impairments, before tax $91,252 $-- $112,027 $$-- Project cost write-offs, before tax 6,686 5,223 29,708 10,439 Total 97,938 5,223 141,735 10,439 Income tax affect 37,314 1,990 54,001 3,977 After-tax asset impairments and project cost write-offs $60,624 $3,233 $87,734 $6,462 Net income (loss), as reported (6,365) 197,479 214,253 505,723 Plus After-tax asset impairments and project cost write-offs 60,624 3,233 87,734 6,462 Net income, excluding asset impairments and project cost write-offs $54,259 $200,712 $301,987 $512,185 Weighted average shares (basic) 45,073 44,605 44,952 44,046 Weighted average shares (diluted) 46,097 46,068 45,971 46,036 Diluted earnings (loss) per share, as reported $(0.14) $4.29 $4.66 $10.99 Diluted earnings per share, before asset impairments and project cost write-offs $1.18 $4.36 $6.57 $11.13 December 31, December 31, 2006 2005 Corporate and homebuilding debt-to-capital, net of cash Total debt $1,127,149 $1,152,829 Less mortgage line of credit (130,467) (156,532) Total corporate and homebuilding debt 996,682 996,297 Less cash and restricted cash (510,588) (221,273) Total corporate and homebuilding debt, net of cash 486,094 775,024 Stockholders' equity 2,161,882 1,952,109 Total corporate and homebuilding capital, net of cash $2,647,976 $2,727,133 Ratio of corporate and homebuilding debt to capital, net of cash 0.18 0.28
NOTE: From time to time, MDC discloses selected non-GAAP financial measures. While non-GAAP financial measures are not a substitute for the comparable GAAP measures, we believe that certain non-GAAP information is useful to investors and management in comparing current results to historical periods and to competitor results, and that it provides additional information on the performance of MDC's businesses. The above is a presentation of and reconciliation of non-GAAP measures disclosed in this press release with the most directly comparable GAAP financial measure.
"Net income, excluding asset impairments and project write-offs" and "diluted earnings per share, before asset impairments and project write-offs," are non-GAAP financial measures. These two non-GAAP measures exclude the impact of asset impairments and project cost write-offs, as these charges generally do not relate to homes that closed during the period. As such, MDC believes that these measures can help its management and investors better assess the Company's effectiveness in managing the home construction process, including direct and indirect costs, for homes closed during the period.
"Ratio of corporate and homebuilding debt to capital, net of cash" is a non-GAAP financial measure. MDC's management and investors use this ratio to help assess the risk associated with debt in the Company's capital structure. It excludes debt incurred under MDC's mortgage line of credit from both the numerator and denominator, as this debt is directly collateralized by mortgage loans held in inventory, which are typically liquidated within 45 days from origination, thereby substantially reducing the risk associated with this type of debt. The ratio's numerator and denominator are also reduced by MDC's cash position, as this balance could be used to reduce MDC's exposure to debt outstanding.
First Call Analyst:
FCMN Contact: lynn.gore@mdch.com
SOURCE: M.D.C. Holdings, Inc.
CONTACT: Paris G. Reece III, Chief Financial Officer, +1-303-804-7706,
+1-720-977-3554,
Web site: https://www.richmondamerican.com/