DENVER , July 25 /PRNewswire-FirstCall/ -- M.D.C. Holdings, Inc. (NYSE: MDC) today announced a net loss for the quarter ended June 30, 2007 of $106.1 million , or $2.32 per diluted share, which included pre-tax charges of $161.1 million for asset impairments and $6.4 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 second quarter of 2006 was $76.5 million , or $1.66 per diluted share, including pre-tax charges of $12.1 million for write-offs of deposits and pre-acquisition costs. Total revenue for the second quarter was $716.7 million , compared with revenue of $1.23 billion for the same period in 2006.
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.
SOURCE M.D.C. Holdings, Inc.
