News
M.D.C. Holdings, Inc.
Net loss for the six months ended June 30, 2007 was $200.5 million, or $4.40 per diluted share, which included pre-tax charges of $302.5 million for asset impairments and $10.5 million for write-offs of deposits and pre-acquisition costs associated with land option contracts the Company does not intend to pursue. Net income for the first six months of 2006 was $171.9 million, or $3.74 per diluted share, including pre-tax charges of $15.8 million for write-offs of deposits and pre-acquisition costs. Total revenue for the 2007 first six months was $1.46 billion, compared with revenue of $2.38 billion for the same period in 2006.
Larry A. Mizel, MDC's chairman and chief executive officer, stated, "While industry conditions deteriorated further in all of our markets throughout the 2007 second quarter, we made significant strides, both operationally and financially, in positioning our Company to take advantage of opportunities that may be presented when these markets begin to stabilize and recover."
Mizel concluded, "Our continuing focus on conforming our operating and administrative infrastructure to changes in demand levels in each of our markets resulted in a year-over-year reduction in our total second quarter general and administrative expense of more than $35 million. Adding to the strength of our investment grade balance sheet, we reduced our lot supply by 15% in the second quarter alone, which enabled us to generate almost $160 million in cash flow from a decrease in our land inventory. At the same time, we minimized our incremental investment in work-in-process inventory by closely monitoring our supply of unsold homes. The combination of these efforts enabled us to generate $50 million in operating cash flow this quarter, raising our cumulative total over the last twelve months to $675 million. As a result, we ended the quarter with $668 million in cash and no borrowings under our $1.25 billion homebuilding line of credit, contributing to a 44% year-over-year increase in our cash and available borrowing capacity."
Homebuilding Results
Homebuilding loss before taxes for the quarter and six months ended June 30, 2007 was $171.3 million and $310.3 million, respectively, compared with income before taxes of $132.5 million and $303.4 million for the same periods in 2006. The pre-tax differences were driven in large part by the asset impairment charges discussed above, as well as significant declines in home closings and home gross margins from the second quarter and six month levels achieved during the same periods in 2006. These income decreases were offset partially by the impact of reduced homebuilding commissions, marketing, general and administrative expense ("SG&A").
The Company closed 2,031 homes and produced home gross margins of 14.1% in the 2007 second quarter, compared with 3,376 home closings and home gross margins of 23.3% for the comparable period in 2006. For the six months ended June 30, 2007, the Company closed 4,032 homes and produced home gross margins of 15.0%, compared with 6,574 home closings and 25.1% home gross margins for the six months ended June 30, 2006. Average selling prices were $338,700 and $347,100, respectively, for the quarter and six months ended June 30, 2007, down $13,400 and $3,600 from the same periods in 2006. Homebuilding SG&A decreased to $111.6 million and $224.9 million, respectively, for the three and six months ended June 30, 2007, compared with $147.8 million and $281.3 million for the same periods in the prior year.
Paris G. Reece III, MDC's executive vice president and chief financial officer, said, "In the 2007 second quarter, we recognized impairments to land inventory and work-in-process inventory of $123 million and $38 million, respectively, as the high level of competition for new home orders caused us to reduce prices, increase incentives and, as a result, decrease our performance expectations with respect to certain subdivisions. As in the prior three quarters, the largest impairments occurred in California, which accounted for almost 50% of the total charge. Outside of California, the impairments occurred primarily in Arizona, Nevada, Florida and Colorado. In total, more than 4,400 lots in 83 subdivisions were impaired. The quarter-end book value of the impaired subdivisions after the impairments was $448 million, including $190 million of land and $258 million of work-in- process. Over the last twelve months, we have impaired approximately 40% of the 21,000 lots we owned at the end of our 2007 second quarter."
Financial Services and Other Results
Income before taxes from the Company's Financial Services and Other segment for the quarter and six months ended June 30, 2007 was $4.2 million and $11.8 million, respectively, compared with $11.0 million and $22.2 million for the same periods in the previous year. The decrease for both periods primarily resulted from lower gains on sales of mortgage loans, as the dollar volumes of mortgage loan originations and mortgage loans sold declined in line with builder home closings. Additionally, in an effort to reduce its exposure to the risks inherent in holding mortgage loans, the Company shifted to a less profitable loan sales strategy during the quarter.
Home Orders and Backlog
MDC received orders, net of cancellations, for 1,970 homes with an estimated sales value of $653 million during the 2007 second quarter, compared with net orders for 2,738 homes with an estimated sales value of $914 million during the same period in 2006. For the six months ended June 30, 2007, the Company received net orders for 4,528 homes with a sales value of $1.56 billion, compared with 6,538 homes with a sales value of $2.27 billion for the six months ended June 30, 2006. Net home orders in the 2007 second quarter declined year-over-year in all of the Company's markets except Illinois, with the largest unit decreases occurring in the Mountain and West homebuilding segments. During the second quarter and first six months of 2007, the Company's approximate order cancellation rates of 44% and 39%, respectively, were consistent with the 43% and 37% rates experienced during the same periods in 2006. The Company ended the second quarter of 2007 with a backlog of 4,134 homes with an estimated sales value of $1.48 billion, compared with a backlog of 6,496 homes with an estimated sales value of $2.44 billion at June 30, 2006.
MDC, whose subsidiaries build homes under the name "Richmond American Homes," is one of the top ten homebuilders in the United States, based on 2006 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 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 and business conditions, including changes in cancellation rates, net home orders, home gross margins, and land and home values; (2) changes in interest rates and mortgage lending programs; (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 Annual Report on Form 10-K for the year ended December 31, 2006 and Form 10-Q for the quarter ended March 31, 2007, 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 Operations (In thousands, except per share amounts) (Unaudited) Three Months Ended Six Months Ended June 30, June 30, 2007 2006 2007 2006 REVENUE Home sales revenue $687,813 $1,188,561 $1,399,613 $2,305,716 Land sales revenue 3,417 13,639 9,451 15,476 Other revenue 25,478 29,781 52,768 56,214 Total Revenue 716,708 1,231,981 1,461,832 2,377,406 COSTS AND EXPENSES Home cost of sales 590,564 911,707 1,189,763 1,726,557 Land cost of sales 2,181 13,140 7,288 14,914 Asset impairments 161,050 260 302,472 860 Marketing expenses 29,371 31,568 58,450 60,603 Commission expenses 24,380 37,394 47,630 70,237 General and administrative expenses 80,090 115,551 170,747 226,816 Related party expenses 100 127 191 2,704 Total Costs and Expenses 887,736 1,109,747 1,776,541 2,102,691 (Loss) income before income taxes (171,028) 122,234 (314,709) 274,715 Benefit from (provision for) income taxes 64,956 (45,743) 114,239 (102,803) NET (LOSS) INCOME $(106,072) $76,491 $(200,470) $171,912 (LOSS) EARNINGS PER SHARE Basic $(2.32) $1.70 $(4.40) $3.83 Diluted $(2.32) $1.66 $(4.40) $3.74 WEIGHTED-AVERAGE SHARES Basic 45,722 44,939 45,612 44,880 Diluted 45,722 45,972 45,612 45,967 DIVIDENDS DECLARED PER SHARE $0.25 $0.25 $0.50 $0.50 M.D.C. HOLDINGS, INC. Consolidated Balance Sheets (In thousands, except share and per share amounts) (Unaudited) June 30, December 31, 2007 2006 ASSETS Cash and cash equivalents $668,379 $507,947 Restricted cash 2,176 2,641 Home sales and other receivables 87,823 143,936 Mortgage loans held in inventory, net 125,717 212,903 Inventories Housing completed or under construction 1,273,042 1,178,671 Land and land under development 1,061,884 1,575,158 Property and equipment, net 38,983 44,606 Deferred income taxes 229,291 124,880 Prepaid expenses and other assets, net 98,406 119,133 Total Assets $3,585,701 $3,909,875 LIABILITIES Accounts payable $161,208 $171,005 Accrued liabilities 361,154 418,953 Income taxes payable - 28,485 Related party liabilities 701 2,401 Homebuilding line of credit - - Mortgage line of credit 99,411 130,467 Senior notes, net 996,883 996,682 Total Liabilities 1,619,357 1,747,993 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; 45,866,000 and 45,841,000 issued and outstanding, respectively, at June 30, 2007 and 45,179,000 and 45,165,000 issued and outstanding, respectively, at December 31, 2006 458 452 Additional paid-in capital 788,316 760,831 Retained earnings 1,179,232 1,402,261 Accumulated other comprehensive loss (1,003) (1,003) Less treasury stock, at cost; 25,000 and 14,000 shares, respectively, at June 30, 2007 and December 31, 2006 (659) (659) Total Stockholders' Equity 1,966,344 2,161,882 Total Liabilities and Stockholders' Equity $3,585,701 $3,909,875 M.D.C. HOLDINGS, INC. Information on Segments (Dollars in thousands) (Unaudited) Three Months Ended Six Months Ended June 30, June 30, 2007 2006 2007 2006 REVENUE Homebuilding West $433,049 $720,530 $887,703 $1,407,776 Mountain 134,670 187,724 279,861 350,914 East 71,800 160,534 133,155 307,715 Other Homebuilding 58,971 142,859 123,831 268,746 Total Homebuilding 698,490 1,211,647 1,424,550 2,335,151 Financial Services and Other 13,614 26,673 33,184 50,315 Corporate 9,029 183 14,462 615 Inter-company Adjustments (4,425) (6,522) (10,364) (8,675) Consolidated $716,708 $1,231,981 $1,461,832 $2,377,406 (LOSS) INCOME BEFORE INCOME TAXES Homebuilding West $(139,239) $98,817 $(264,630) $220,880 Mountain (6,828) 7,228 4,143 15,863 East (6,784) 26,462 (11,170) 61,780 Other Homebuilding (18,487) 15 (38,618) 4,897 Total Homebuilding (171,338) 132,522 (310,275) 303,420 Financial Services and Other 4,241 10,988 11,758 22,172 Corporate (3,931) (21,276) (16,192) (50,877) Consolidated $(171,028) $122,234 $(314,709) $274,715 ASSET IMPAIRMENTS West $132,730 $- $254,634 $- Mountain 9,123 - 9,777 - East 5,865 - 8,432 - Other Homebuilding 13,332 260 29,629 860 Total Homebuilding $161,050 $260 $302,472 $860 Realized Benefit of Prior-Period Asset Impairments $18,793 $- $28,006 $- June 30, December 31, 2007 2006 TOTAL ASSETS West $1,438,028 $1,869,442 Mountain 545,487 535,554 East 313,380 333,902 Other Homebuilding 208,654 266,326 Total Homebuilding 2,505,549 3,005,224 Financial Services and Other 196,655 284,791 Corporate 924,354 657,917 Inter-company (40,857) (38,057) Consolidated $3,585,701 $3,909,875 M.D.C. HOLDINGS, INC. Selected Financial Data (Dollars in thousands) (Unaudited) Three Months Ended June 30, Change 2007 2006 Amount % SELECTED FINANCIAL DATA General and Administrative Expenses Homebuilding Operations $57,859 $78,821 $(20,962) -27% Financial Services and Other Operations $9,367 $15,397 $(6,030) -39% Corporate (1) $12,964 $21,459 $(8,495) -40% SG&A as a % of Home Sales Revenue Homebuilding Operations 16.2% 12.4% 3.8% Corporate (1) 1.9% 1.8% 0.1% Depreciation and Amortization $10,397 $14,881 $(4,484) -30% Home Gross Margins (2) 14.1% 23.3% -9.2% Cash Provided by (Used in) Operating Activities $49,999 $(3,828) $53,827 Cash Used in Investing Activities $(1,345) $(2,693) $1,348 Cash Used in Financing Activities $(10,956) $(67,734) $56,778 Ending Unrestricted Cash and Available Borrowing Capacity $1,888,793 $1,311,515 $577,278 44% Corporate and Homebuilding Interest Interest Capitalized During the Period $14,435 $15,006 $(571) -4% Interest Included in Home Cost of Sales for the Period $12,258 $13,659 $(1,401) -10% Interest in Home Cost of Sales as a % of Home Sales Revenue 1.8% 1.2% 0.6% Interest Capitalized in Inventories at End of Period $53,988 $48,569 $5,419 11% Six Months Ended June 30, Change 2007 2006 Amount % SELECTED FINANCIAL DATA General and Administrative Expenses Homebuilding Operations $118,858 $150,503 $(31,645) -21% Financial Services and Other Operations $21,425 $27,525 $(6,100) -22% Corporate (1) $30,655 $51,492 $(20,837) -40% SG&A as a % of Home Sales Revenue Homebuilding Operations 16.1% 12.2% 3.9% Corporate (1) 2.2% 2.2% 0.0% Depreciation and Amortization $22,217 $28,509 $(6,292) -22% Home Gross Margins (2) 15.0% 25.1% -10.1% Cash Provided by (Used in) Operating Activities $199,322 $(112,271) $311,593 Cash Used in Investing Activities $(2,055) $(4,331) $2,276 Cash Used in Financing Activities $(36,835) $(6,445) $(30,390) Ending Unrestricted Cash and Available Borrowing Capacity Corporate and Homebuilding Interest Interest Capitalized During the Period $28,876 $29,843 $(967) -3% Interest Included in Home Cost of Sales for the Period $25,543 $23,273 $2,270 10% Interest in Home Cost of Sales as a % of Home Sales Revenue 1.8% 1.0% 0.8% Interest Capitalized in Inventories at End of Period (1) Includes related party expenses. (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. M.D.C. HOLDINGS, INC. Selected Financial Data (Dollars in thousands) (Unaudited) Three Months Ended June 30, Change 2007 2006 Amount % HOMEAMERICAN OPERATING ACTIVITIES Principal Amount of Mortgage Loans Originated $293,544 $604,419 $(310,875) -51% Principal Amount of Mortgage Loans Brokered $127,892 $171,847 $(43,955) -26% Capture Rate 52% 59% -7% Including Brokered Loans 72% 75% -3% Mortgage Products (% of Loans Originated) Fixed Rate 83% 49% 34% Adjustable Rate - Interest Only 14% 43% -29% Adjustable Rate - Other 3% 8% -5% Prime Loans (3) 86% 61% 25% Alt-A Loans (4) 5% 33% -28% Government Loans (5) 9% 4% 5% Sub-Prime Loans (6) 0% 2% -2% Six Months Ended June 30, Change 2007 2006 Amount % HOMEAMERICAN OPERATING ACTIVITIES Principal Amount of Mortgage Loans Originated $644,577 $1,130,650 $(486,073) -43% Principal Amount of Mortgage Loans Brokered $246,233 $329,090 $(82,857) -25% Capture Rate 55% 57% -2% Including Brokered Loans 74% 73% 1% Mortgage Products (% of Loans Originated) Fixed Rate 76% 49% 27% Adjustable Rate - Interest Only 20% 44% -24% Adjustable Rate - Other 4% 7% -3% Prime Loans (3) 73% 64% 9% Alt-A Loans (4) 20% 30% -10% Government Loans (5) 7% 4% 3% Sub-Prime Loans (6) 0% 2% -2% (3) Prime loans are defined as loans with Fair, Isaac and Company ("FICO") scores greater than 620 and that comply in all ways with the documentation standards of the government sponsored enterprise guidelines. (4) Alt-A loans are defined as loans that would otherwise qualify as prime loans except that they do not comply in all ways with the government sponsored enterprise guidelines. (5) Government loans are loans either insured by the Federal Housing Administration or guaranteed by the Department of Veteran Affairs. (6) Sub-prime loans are loans that have FICO scores of less than or equal to 620. M.D.C. HOLDINGS, INC. Homebuilding Operational Data (Dollars in thousands) (Unaudited) June 30, December 31, June 30, 2007 2006 2006 HOMES COMPLETED OR UNDER CONSTRUCTION Unsold Homes Under Construction - Final 423 476 279 Unsold Homes Under Construction - Frame 690 573 781 Unsold Homes Under Construction - Foundation 382 400 395 Total Unsold Homes Under Construction 1,495 1,449 1,455 Sold Homes Under Construction 3,095 2,430 4,699 Model Homes 764 757 720 Homes Completed or Under Construction 5,354 4,636 6,874 LOTS OWNED (excluding homes completed or under construction) Arizona 4,771 6,368 7,477 California 2,182 2,802 3,391 Nevada 2,038 2,747 3,619 West 8,991 11,917 14,487 Colorado 3,052 3,479 3,390 Utah 933 1,185 1,159 Mountain 3,985 4,664 4,549 Maryland 389 528 558 Virginia 542 643 822 East 931 1,171 1,380 Delaware Valley 212 265 372 Florida 907 1,093 1,307 Illinois 233 287 312 Texas - 13 77 Other Homebuilding 1,352 1,658 2,068 Total 15,259 19,410 22,484 LOTS UNDER OPTION Arizona 548 744 2,506 California 157 387 1,510 Nevada 4 250 568 West 709 1,381 4,584 Colorado 312 801 1,785 Utah 93 91 553 Mountain 405 892 2,338 Maryland 925 960 1,156 Virginia 1,894 2,381 2,642 East 2,819 3,341 3,798 Delaware Valley 741 683 966 Florida 1,073 1,800 2,367 Illinois - - 139 Texas - - - Other Homebuilding 1,814 2,483 3,472 Total 5,747 8,097 14,192 Non-refundable Option Deposits Cash $11,009 $20,228 $37,993 Letters of Credit 11,850 14,224 17,640 Total Non-refundable Option Deposits $22,859 $34,452 $55,633 M.D.C. HOLDINGS, INC. Homebuilding Operational Data (Dollars in thousands) (Unaudited) Three Months Ended June 30, Change 2007 2006 Amount % HOMES CLOSED (UNITS) Arizona 645 843 (198) -23% California 266 405 (139) -34% Nevada 405 738 (333) -45% West 1,316 1,986 (670) -34% Colorado 200 421 (221) -52% Utah 178 201 (23) -11% Mountain 378 622 (244) -39% Maryland 61 112 (51) -46% Virginia 76 171 (95) -56% East 137 283 (146) -52% Delaware Valley 35 41 (6) -15% Florida 138 255 (117) -46% Illinois 13 37 (24) -65% Texas 14 152 (138) -91% Other Homebuilding 200 485 (285) -59% Total 2,031 3,376 (1,345) -40% AVERAGE SELLING PRICES PER HOME CLOSED Arizona $253.1 $313.6 $(60.5) -19% California 534.6 574.5 (39.9) -7% Colorado 326.5 308.3 18.2 6% Delaware Valley 439.9 387.5 52.4 14% Florida 260.1 293.5 (33.4) -11% Illinois 412.0 374.5 37.5 10% Maryland 513.4 573.9 (60.5) -11% Nevada 304.2 320.9 (16.7) -5% Texas 126.3 166.8 (40.5) -24% Utah 369.2 291.5 77.7 27% Virginia 497.8 573.3 (75.5) -13% Company Average $338.7 $352.1 $(13.4) -4% Six Months Ended June 30, Change 2007 2006 Amount % HOMES CLOSED (UNITS) Arizona 1,297 1,621 (324) -20% California 594 869 (275) -32% Nevada 718 1,413 (695) -49% West 2,609 3,903 (1,294) -33% Colorado 364 820 (456) -56% Utah 406 374 32 9% Mountain 770 1,194 (424) -36% Maryland 110 186 (76) -41% Virginia 144 348 (204) -59% East 254 534 (280) -52% Delaware Valley 81 72 9 13% Florida 266 507 (241) -48% Illinois 27 73 (46) -63% Texas 25 291 (266) -91% Other Homebuilding 399 943 (544) -58% Total 4,032 6,574 (2,542) -39% AVERAGE SELLING PRICES PER HOME CLOSED Arizona $257.8 $300.0 $(42.2) -14% California 537.6 552.5 (14.9) -3% Colorado 338.2 302.6 35.6 12% Delaware Valley 468.1 398.0 70.1 18% Florida 270.1 295.6 (25.5) -9% Illinois 359.8 369.0 (9.2) -2% Maryland 521.2 572.5 (51.3) -9% Nevada 304.7 321.9 (17.2) -5% Texas 130.4 167.9 (37.5) -22% Utah 358.4 277.3 81.1 29% Virginia 495.1 584.9 (89.8) -15% Company Average $347.1 $350.7 $(3.6) -1% M.D.C. HOLDINGS, INC. Homebuilding Operational Data (Dollars in thousands) (Unaudited) Three Months Ended June 30, Change 2007 2006 Amount % ORDERS FOR HOMES, NET (UNITS) Arizona 611 679 (68) -10% California 282 392 (110) -28% Nevada 365 519 (154) -30% West 1,258 1,590 (332) -21% Colorado 224 291 (67) -23% Utah 139 326 (187) -57% Mountain 363 617 (254) -41% Maryland 92 98 (6) -6% Virginia 82 113 (31) -27% East 174 211 (37) -18% Delaware Valley 19 35 (16) -46% Florida 117 177 (60) -34% Illinois 31 18 13 72% Texas 8 90 (82) -91% Other Homebuilding 175 320 (145) -45% Total 1,970 2,738 (768) -28% Estimated Value of Orders for Homes, net $653,000 $914,000 $(261,000) -29% Estimated Average Selling Price of Orders for Homes, net $331.5 $333.8 $(2.3) -1% Approximate Order Cancellation Rate (7) 44% 43% 1% Six Months Ended June 30, Change 2007 2006 Amount % ORDERS FOR HOMES, NET (UNITS) Arizona 1,365 1,598 (233) -15% California 697 936 (239) -26% Nevada 745 1,298 (553) -43% West 2,807 3,832 (1,025) -27% Colorado 524 742 (218) -29% Utah 349 665 (316) -48% Mountain 873 1,407 (534) -38% Maryland 191 250 (59) -24% Virginia 194 307 (113) -37% East 385 557 (172) -31% Delaware Valley 81 74 7 9% Florida 296 449 (153) -34% Illinois 72 62 10 16% Texas 14 157 (143) -91% Other Homebuilding 463 742 (279) -38% Total 4,528 6,538 (2,010) -31% Estimated Value of Orders for Homes, net $1,555,000 $2,274,000 $(719,000) -32% Estimated Average Selling Price of Orders for Homes, net $343.4 $347.8 $(4.4) -1% Approximate Order Cancellation Rate (7) 39% 37% 2% (7) Gross number of cancellations received divided by gross number of orders received. M.D.C. HOLDINGS, INC. Homebuilding Operational Data (Dollars in thousands) (Unaudited) June 30, December 31, June 30, 2007 2006 2006 BACKLOG (UNITS) Arizona 1,572 1,504 2,076 California 530 427 832 Nevada 342 315 908 West 2,444 2,246 3,816 Colorado 413 253 499 Utah 408 465 629 Mountain 821 718 1,128 Maryland 268 187 315 Virginia 186 136 340 East 454 323 655 Delaware Valley 119 119 183 Florida 227 197 541 Illinois 68 23 69 Texas 1 12 104 Other Homebuilding 415 351 897 Total 4,134 3,638 6,496 Backlog Estimated Sales Value $1,480,000 $1,300,000 $2,440,000 Estimated Average Selling Price of Homes in Backlog $358.0 $357.3 $375.6 ACTIVE SUBDIVISIONS Arizona 69 67 61 California 44 45 45 Nevada 43 41 35 West 156 153 141 Colorado 50 47 45 Utah 25 22 20 Mountain 75 69 65 Maryland 16 19 18 Virginia 23 19 23 East 39 38 41 Delaware Valley 5 8 7 Florida 27 30 28 Illinois 6 6 7 Texas - 2 4 Other Homebuilding 38 46 46 Total 308 306 293 Average for Quarter Ended 311 299 300 M.D.C. HOLDINGS, INC. Reconciliation of Non-GAAP Financial Measures (Dollars in thousands) (Unaudited) June 30, December 31, June 30, 2007 2006 2006 CORPORATE AND HOMEBUILDING DEBT-TO- CAPITAL, NET OF CASH Total Debt $1,096,294 $1,127,149 $1,164,649 Less Mortgage Line of Credit (99,411) (130,467) (168,163) Total Corporate and Homebuilding Debt 996,883 996,682 996,486 Less Cash (Including Restricted Cash) (670,555) (510,588) (98,339) Total Corporate and Homebuilding Debt, Net of Cash 326,328 486,094 898,147 Stockholders' Equity 1,966,344 2,161,882 2,126,233 Total Corporate and Homebuilding Capital, Net of Cash $2,292,672 $2,647,976 $3,024,380 Ratio of Corporate and Homebuilding Debt to Capital, Net of Cash 0.14 0.18 0.30
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 a selected non-GAAP measure with the most directly comparable GAAP financial measure.
"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 typical liquidated within 45 days of origination, thereby 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: Kathrine.Burnett@mdch.com
SOURCE: M.D.C. Holdings, Inc.
CONTACT: Paris G. Reece III, Chief Financial Officer, +1-303-804-7706,
+1-720-977-3204,
Web site: https://www.richmondamerican.com/