DENVER , Feb. 7 /PRNewswire-FirstCall/ -- M.D.C. Holdings, Inc. (NYSE: MDC) today announced a net loss for the quarter ended December 31, 2007 of $281.1 million , or $6.14 per diluted share, which included pre-tax charges of $175.2 million for asset impairments and $7.8 million for write-offs of deposits and pre-acquisition costs associated with land option contracts the Company does not intend to pursue. The loss also included net pre-tax losses on land sales of $13.8 million and an after-tax valuation allowance of
$160.0 million related to MDC's deferred tax assets. Net loss for the fourth quarter of 2006 was $6.4 million , or $0.14 per diluted share, including pre-tax charges of $91.3 million for asset impairments and $6.7 million for write-offs of option deposits and pre-acquisition costs. Total revenue for the fourth quarter of 2007 was $784.8 million , compared with revenue of $1.34 billion for the same period in 2006.
The net loss for the year ended December 31, 2007 was $636.9 million , or $13.94 per diluted share, which included pre-tax charges of $726.6 million for asset impairments and $23.4 million for write-offs of deposits and pre-acquisition costs. The loss also included net pre-tax losses on land sales of $9.4 million and the after-tax valuation allowance of $160.0 million related to MDC's deferred tax assets. Net income for the 2006 full year was $214.3 million , or $4.66 per diluted share, including pre-tax charges of $112.0 million for asset impairments and $29.7 million for write-offs of option deposits and pre-acquisition costs. Total revenue for the 2007 full year was $2.93 billion , compared with revenue of $4.80 billion for the same period in 2006.
Larry A. Mizel, MDC's chairman and chief executive officer, stated, 'After generating over $590 million in operating cash flow during 2007, including almost $260 million in the fourth quarter, we ended the year with more than $1.0 billion in cash on hand. With no borrowings outstanding on our $1.25 billion line of credit, we expanded our year-end cash and available borrowing capacity year-over-year by 30% to nearly $2.25 billion . Earlier this week, we further increased our cash balances when we received a $90 million tax refund from the IRS for the carryback of our 2007 net operating loss.'
Mizel continued, 'Our strong financial position at the end of 2007 is a result of our high level of preparedness at the onset of this downturn, combined with our continuing efforts to improve our balance sheet. During the fourth quarter alone, we reduced our supply of lots owned by 20%, which contributed significantly to the 9,000 lot decrease we achieved during the year. Throughout 2007, we worked diligently to conserve our cash by tightening controls on land development expenditures, working with our suppliers and subcontractors to reduce the direct costs of home construction and shrinking our overhead to more closely match current levels of demand. These steps should help us to maximize cash flow going forward as we continue to look for opportunities to invest our substantial cash and make use of our available borrowing capacity.'
Homebuilding Results
Homebuilding loss before taxes for the quarter and year ended December 31, 2007 was $195.9 million and $764.2 million , respectively, compared with a loss before taxes of $14.3 million and income before taxes of $371.4 million for the same periods in 2006. The pre-tax differences were driven in large part by the asset impairment charges and net land sale losses discussed above, as well as significant declines in home closings, average selling prices and home gross margins from the 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 expenses ('SG&A').
The Company closed 2,200 homes and produced home gross margins of 11.7% in the 2007 fourth quarter, compared with 3,594 home closings and home gross margins of 16.6% for the same period in 2006. For the year ended December 31, 2007 , the Company closed 8,195 homes and produced home gross margins of 13.9%, compared with 13,123 home closings and home gross margins of 22.2% for the year ended December 31, 2006 . Average selling prices were $325,100 and $337,500 , respectively, for the quarter and year ended December 31, 2007 , down $35,000 and $16,900 from the same periods in 2006. Homebuilding SG&A decreased to $95.4 million and $425.5 million , respectively, for the three months and year ended December 31, 2007 , compared with $141.7 million and $560.1 million for the same periods in the prior year.
Paris G. Reece III, MDC's executive vice president and chief financial officer, said, 'During the 2007 fourth quarter, we recognized $175 million in inventory impairments, including $27 million on land held for sale, with respect to almost 4,900 lots in 153 subdivisions. Land inventory was impaired by $126 million and work-in-process inventory was impaired by $49 million . The year-end book value of the impaired subdivisions after the impairments was $397 million , consisting of $126 million of land and $271 million of work-in-process. As has been the case in each of the last four quarters, the impairments this quarter primarily occurred in our West homebuilding segment, with more than 75% applicable to subdivisions in our Arizona, Nevada and California markets. Over the last six quarters, we have impaired approximately 60% of the 15,000 lots we owned at the end of our 2007 fourth quarter.'
Reece continued, 'Of the $727 million impairment charge we took during 2007, $556 million related to our land inventory, which decreased by almost 65% year-over-year to $554 million at December 31, 2007 . In our West segment, where 80% of the impairments in 2007 occurred, land inventory decreased by more than 75% during the year. California's land balance alone dropped by more than 90% in 2007, and most of the remaining $35 million of land is being held for sale to third-party developers or investors.'
Reece concluded, 'We were successful in reducing our general and administrative expenses year-over-year in the 2007 fourth quarter and full year by 36% and 27%, respectively, reflecting our continued efforts to right-size our homebuilding operations in view of current market conditions. We have cut our operating divisions by approximately half from their peak levels two years ago, and we will continue to assess the need for further adjustments as we move through 2008.'
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, 2007 was $6.3 million and $23.1 million , respectively, compared with $10.0 million and $45.2 million for the same periods in the previous year. The decreases in both 2007 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 conjunction with builder home closings. The lower gains were offset partially by year-over-year reductions in financial services general and administrative expenses for both periods.
Home Orders and Backlog
MDC received orders, net of cancellations, for 748 homes with an estimated sales value of $187.0 million during the 2007 fourth quarter, compared with net orders for 1,571 homes with an estimated sales value of $515.0 million during the same period in 2006. For the year ended December 31, 2007 , the Company received net orders for 6,504 homes with a sales value of $2.11 billion , compared with orders for 10,229 homes with a sales value of $3.47 billion for the year ended December 31, 2006 . During the 2007 fourth quarter and full year, the Company's order cancellation rates were 65% and 48%, respectively, compared with rates of 57% and 43% experienced during the same periods in 2006. The Company ended the fourth quarter of 2007 with a backlog of 1,947 homes with an estimated sales value of $650.0 million , compared with a backlog of 3,638 homes with an estimated sales value of $1.30 billion at December 31, 2006 .
Since 1972, MDC has built and financed the American dream for more than 150,000 families. MDC's commitment to customer satisfaction, quality and value is reflected in each home it builds. As one of the largest homebuilders in the United States , the Company has homebuilding divisions across the country, including Colorado, Salt Lake City , Las Vegas , Phoenix , Tucson , California, Chicago , Northern Virginia, Maryland, Philadelphia/Delaware Valley and Jacksonville . The Company also provides mortgage financing, insurance and title services, primarily for MDC homebuyers, through its wholly owned subsidiaries, HomeAmerican Mortgage Corporation, American Home Insurance Agency and American Home Title and Escrow, respectively. M.D.C. Holdings, Inc. is traded on the New York Stock Exchange under the symbol 'MDC.' For more information, visit http://www.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, mortgage lending programs and the availability of credit; (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) terrorist acts and other acts of war; and (14) 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, 2007 , which is scheduled to be filed with the Securities and Exchange Commission today. All forward-looking statements made in this press release are made as of the date hereof, and the risk that actual results will differ materially from expectations expressed in this press release will increase with the passage of time. The Company undertakes no duty to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. However, any further disclosures made on related subjects in our subsequent filings, releases or presentations should be consulted.
M.D.C. HOLDINGS, INC.
Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Year Ended
December 31, December 31,
2007 2006 2007 2006
REVENUE
Home sales revenue $715,244 $1,294,140 $2,765,981 $4,650,556
Land sales revenue 37,979 15,799 50,130 34,611
Other revenue 31,533 33,474 117,138 116,575
Total Revenue 784,756 1,343,413 2,933,249 4,801,742
COSTS AND EXPENSES
Home cost of sales 631,262 1,079,275 2,380,427 3,619,656
Land cost of sales 51,789 15,367 59,529 33,491
Asset impairments 175,199 91,252 726,621 112,027
Marketing expenses 29,944 36,957 117,088 128,856
Commission expenses 26,421 44,481 97,951 151,108
General and
administrative expenses 59,486 92,284 306,715 418,879
Related party expenses 1,096 1,796 1,382 4,588
Total Costs and Expenses 975,197 1,361,412 3,689,713 4,468,605
(Loss) income before income
taxes (190,441) (17,999) (756,464) 333,137
(Provision for) benefit
from income taxes (90,651) 11,634 119,524 (118,884)
NET (LOSS) INCOME $(281,092) $(6,365) $(636,940) $214,253
(LOSS) EARNINGS PER SHARE
Basic $(6.14) $(0.14) $(13.94) $4.77
Diluted $(6.14) $(0.14) $(13.94) $4.66
WEIGHTED-AVERAGE SHARES
Basic 45,772 45,073 45,687 44,952
Diluted 45,772 45,073 45,687 45,971
DIVIDENDS DECLARED PER SHARE $0.25 $0.25 $1.00 $1.00
M.D.C. HOLDINGS, INC.
Consolidated Balance Sheets
(Dollars in thousands, except per share amounts)
(Unaudited)
December 31, December 31,
2007 2006
ASSETS
Cash and cash equivalents $1,004,763 $507,947
Restricted cash 1,898 2,641
Receivables
Home sales receivables 33,647 128,614
Income taxes receivable, net 36,988 -
Other receivables 16,796 15,322
Mortgage loans held in inventory, net 100,144 212,903
Inventories
Housing completed or under construction 902,221 1,178,671
Land and land under development 554,336 1,575,158
Property and equipment, net 44,368 44,606
Deferred income taxes, net 160,565 124,880
Related party assets 28,627 -
Prepaid expenses and other assets, net 71,884 119,133
Total Assets $2,956,237 $3,909,875
LIABILITIES
Accounts payable $71,932 $171,005
Accrued liabilities 339,353 418,953
Income taxes payable - 28,485
Related party liabilities 1,701 2,401
Homebuilding line of credit - -
Mortgage line of credit 70,147 130,467
Senior notes, net 997,091 996,682
Total Liabilities 1,480,224 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; 46,084,000 and 46,053,000
issued and outstanding, respectively, at
December 31, 2007 and 45,179,000 and
45,165,000 issued and outstanding,
respectively, at December 31, 2006 461 452
Additional paid-in capital 757,039 760,831
Retained earnings 719,841 1,402,261
Accumulated other comprehensive loss (669) (1,003)
Treasury stock, at cost; 31,000 and 14,000
shares, respectively, at December 31, 2007
and December 31, 2006 (659) (659)
Total Stockholders' Equity 1,476,013 2,161,882
Total Liabilities and Stockholders'
Equity $2,956,237 $3,909,875
M.D.C. HOLDINGS, INC.
Information on Segments
(Dollars in thousands)
(Unaudited)
Three Months Ended Year Ended
December 31, December 31,
2007 2006 2007 2006
REVENUE
Homebuilding
West $448,754 $809,332 $1,725,766 $2,871,040
Mountain 131,471 211,382 549,771 730,489
East 113,200 183,743 318,723 628,508
Other Homebuilding 69,432 119,329 253,627 493,628
Total Homebuilding 762,857 1,323,786 2,847,887 4,723,665
Financial Services and Other 15,672 29,085 63,508 103,243
Corporate 11,329 1,113 41,839 1,788
Inter-company Adjustments (5,102) (10,571) (19,985) (26,954)
Consolidated $784,756 $1,343,413 $2,933,249 $4,801,742
(LOSS) INCOME BEFORE INCOME TAXES
Homebuilding
West $(159,227) $(38,688) $(621,774) $235,954
Mountain (14,613) 18,307 (11,395) 43,490
East (11,580) 19,015 (38,748) 104,706
Other Homebuilding (10,475) (12,946) (92,251) (12,709)
Total Homebuilding (195,895) (14,312) (764,168) 371,441
Financial Services and Other 6,286 10,025 23,062 45,186
Corporate (832) (13,712) (15,358) (83,490)
Consolidated $(190,441) $(17,999) $(756,464) $333,137
ASSET IMPAIRMENTS
West $136,372 $75,561 $581,494 $90,804
Mountain 13,397 1,265 30,106 1,892
East 17,386 6,879 42,055 8,236
Other Homebuilding 8,044 7,547 72,966 11,095
Total Homebuilding $175,199 $91,252 $726,621 $112,027
December December
31, 31,
2007 2006
TOTAL ASSETS
West $747,835 $1,869,442
Mountain 474,203 535,554
East 250,658 333,902
Other Homebuilding 125,003 266,326
Total Homebuilding 1,597,699 3,005,224
Financial Services and Other 174,617 284,791
Corporate 1,229,178 657,917
Inter-company (45,257) (38,057)
Consolidated $2,956,237 $3,909,875
M.D.C. HOLDINGS, INC.
Selected Financial Data
(Dollars in thousands)
(Unaudited)
Three Months Ended
December 31, Change
2007 2006 Amount %
SELECTED FINANCIAL DATA
General and Administrative
Expenses
Homebuilding Operations $39,036 $60,309 $(21,273) -35%
Financial Services and
Other Operations $9,385 $19,018 $(9,633) -51%
Corporate (1) $12,161 $14,753 $(2,592) -18%
SG&A as a % of
Home Sales Revenue
Homebuilding Operations 13.3% 10.9% 2.4%
Corporate (1) 1.7% 1.1% 0.6%
Depreciation and
Amortization $13,348 $17,493 $(4,145) -24%
Home Gross Margins (2) 11.7% 16.6% -4.9%
Cash Provided by
Operating Activities $257,015 $404,391 $(147,376)
Cash Provided by (Used in)
Investing Activities $6,915 $(2,997) $9,912
Cash Provided by (Used in)
Financing Activities $11,354 $(26,291) $37,645
Ending Unrestricted
Cash and Available
Borrowing Capacity $2,246,696 $1,736,054 $510,642 29%
Corporate and
Homebuilding Interest
Interest Capitalized
During the Period $14,471 $14,148 $323 2%
Interest Included in
Home Cost of Sales
for the Period $14,988 $13,638 $1,350 10%
Interest in Home Cost
of Sales as a
% of Home Sales Revenue 2.1% 1.1% 1.0%
Interest Capitalized
in Inventories
at End of Period $53,487 $50,655 $2,832 6%
Year Ended
December 31, Change
2007 2006 Amount %
SELECTED FINANCIAL DATA
General and Administrative
Expenses
Homebuilding Operations $210,455 $280,128 $(69,673) -25%
Financial Services and
Other Operations $40,445 $58,059 $(17,614) -30%
Corporate (1) $57,197 $85,279 $(28,082) -33%
SG&A as a % of
Home Sales Revenue
Homebuilding Operations 15.4% 12.0% 3.4%
Corporate (1) 2.1% 1.8% 0.3%
Depreciation and
Amortization $47,342 $59,030 $(11,688) -20%
Home Gross Margins (2) 13.9% 22.2% -8.3%
Cash Provided by
Operating Activities $592,583 $363,048 $229,535
Cash Provided by (Used in)
Investing Activities $(1,447) $(10,221) $8,774
Cash Provided by (Used in)
Financing Activities $(94,320) $(59,411) $(34,909)
Ending Unrestricted
Cash and Available
Borrowing Capacity
Corporate and
Homebuilding Interest
Interest Capitalized
During the Period $57,791 $58,141 $(350) -1%
Interest Included in
Home Cost of Sales
for the Period $54,959 $49,485 $5,474 11%
Interest in Home Cost
of Sales as a
% of Home Sales Revenue 2.0% 1.1% 0.9%
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. During the three and
twelve months ended December 31, 2007, we closed homes on lots for
which we had previously recorded $65.0 million and $121.6 million,
respectively, of asset impairments. During both the three and
twelve months ended December 31, 2006, we closed homes on lots for
which we had previously recorded $2.9 million of asset impairments.
M.D.C. HOLDINGS, INC.
Selected Financial Data
(Dollars in thousands)
(Unaudited)
Three Months Ended
December 31, Change
2007 2006 Amount %
HOMEAMERICAN OPERATING
ACTIVITIES
Principal Amount
of Mortgage
Loans Originated $303,179 $691,810 $(388,631) -56%
Principal Amount
of Mortgage
Loans Brokered $146,993 $162,783 $(15,790) -10%
Capture Rate 54% 62% -8%
Including Brokered Loans 75% 80% -5%
Mortgage Products (% of Loans
Originated)
Fixed Rate 94% 63% 31%
Adjustable Rate -
Interest Only 4% 35% -31%
Adjustable Rate - Other 2% 2% 0%
Prime Loans (3) 79% 49% 30%
Alt-A Loans (4) 0% 46% -46%
Government Loans (5) 21% 4% 17%
Sub-Prime Loans (6) 0% 1% -1%
Year Ended
December 31, Change
2007 2006 Amount %
HOMEAMERICAN OPERATING
ACTIVITIES
Principal Amount
of Mortgage
Loans Originated $1,233,948 $2,363,906 $(1,129,958) -48%
Principal Amount
of Mortgage
Loans Brokered $511,806 $701,498 $(189,692) -27%
Capture Rate 55% 59% -4%
Including Brokered Loans 74% 76% -2%
Mortgage Products (% of Loans
Originated)
Fixed Rate 82% 53% 29%
Adjustable Rate -
Interest Only 16% 40% -24%
Adjustable Rate - Other 2% 7% -5%
Prime Loans (3) 78% 57% 21%
Alt-A Loans (4) 10% 37% -27%
Government Loans (5) 12% 4% 8%
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)
December December December
31, 2007 31, 2006 31, 2005
HOMES COMPLETED OR UNDER CONSTRUCTION
Unsold Homes Under Construction - Final 515 476 258
Unsold Homes Under Construction - Frame 656 573 520
Unsold Homes Under Construction -
Foundation 229 400 353
Total Unsold Homes Under Construction 1,400 1,449 1,131
Sold Homes Under Construction 1,350 2,430 5,093
Model Homes 730 757 667
Homes Completed or Under Construction 3,480 4,636 6,891
LOTS OWNED (excluding homes completed
or under construction)
Arizona 2,969 6,368 7,385
California 1,491 2,802 3,367
Nevada 1,549 2,747 4,055
West 6,009 11,917 14,807
Colorado 2,992 3,479 3,639
Utah 863 1,185 964
Mountain 3,855 4,664 4,603
Maryland 302 528 679
Virginia 369 643 783
East 671 1,171 1,462
Delaware Valley 151 265 471
Florida 638 1,093 1,201
Illinois 191 287 430
Texas - 13 471
Other Homebuilding 980 1,658 2,573
Total 11,515 19,410 23,445
LOTS UNDER OPTION
Arizona 512 744 3,650
California 157 387 2,005
Nevada 4 250 1,400
West 673 1,381 7,055
Colorado 262 801 2,198
Utah - 91 418
Mountain 262 892 2,616
Maryland 558 960 1,173
Virginia 1,311 2,381 3,224
East 1,869 3,341 4,397
Delaware Valley 327 683 1,283
Florida 484 1,800 3,202
Illinois - - 186
Texas - - 80
Other Homebuilding 811 2,483 4,751
Total 3,615 8,097 18,819
Non-Refundable Option Deposits
Cash $6,292 $20,228 $48,157
Letters of Credit 6,547 14,224 23,142
Total Non-Refundable Option
Deposits $12,839 $34,452 $71,299
M.D.C. HOLDINGS, INC.
Homebuilding Operational Data
(Dollars in thousands)
(Unaudited)
Three Months Ended
December 31, Change
2007 2006 Amount %
HOMES CLOSED (UNITS)
Arizona 804 1,016 (212) -21%
California 305 536 (231) -43%
Nevada 262 647 (385) -60%
West 1,371 2,199 (828) -38%
Colorado 235 309 (74) -24%
Utah 145 342 (197) -58%
Mountain 380 651 (271) -42%
Maryland 107 154 (47) -31%
Virginia 128 209 (81) -39%
East 235 363 (128) -35%
Delaware Valley 62 78 (16) -21%
Florida 115 219 (104) -47%
Illinois 37 55 (18) -33%
Texas - 29 (29) -100%
Other Homebuilding 214 381 (167) -44%
Total 2,200 3,594 (1,394) -39%
AVERAGE SELLING PRICES PER HOME CLOSED
Arizona $230.1 $273.9 $(43.8) -16%
California 494.1 596.0 (101.9) -17%
Colorado 348.3 332.7 15.6 5%
Delaware Valley 441.4 420.1 21.3 5%
Florida 249.4 267.7 (18.3) -7%
Illinois 355.2 367.3 (12.1) -3%
Maryland 504.8 528.3 (23.5) -4%
Nevada 275.5 307.6 (32.1) -10%
Texas N/A 151.0 N/A N/A
Utah 338.6 320.8 17.8 6%
Virginia 461.7 491.2 (29.5) -6%
Company Average $325.1 $360.1 $(35.0) -10%
Year Ended
December 31, Change
2007 2006 Amount %
HOMES CLOSED (UNITS)
Arizona 2,801 3,353 (552) -16%
California 1,136 1,788 (652) -36%
Nevada 1,290 2,756 (1,466) -53%
West 5,227 7,897 (2,670) -34%
Colorado 818 1,463 (645) -44%
Utah 713 922 (209) -23%
Mountain 1,531 2,385 (854) -36%
Maryland 288 444 (156) -35%
Virginia 344 707 (363) -51%
East 632 1,151 (519) -45%
Delaware Valley 178 200 (22) -11%
Florida 496 921 (425) -46%
Illinois 105 174 (69) -40%
Texas 26 395 (369) -93%
Other Homebuilding 805 1,690 (885) -52%
Total 8,195 13,123 (4,928) -38%
AVERAGE SELLING PRICES PER HOME CLOSED
Arizona $247.4 $294.6 $(47.2) -16%
California 516.5 558.7 (42.2) -8%
Colorado 346.3 308.7 37.6 12%
Delaware Valley 448.8 405.7 43.1 11%
Florida 261.5 284.8 (23.3) -8%
Illinois 372.4 367.5 4.9 1%
Maryland 515.2 558.0 (42.8) -8%
Nevada 296.2 317.5 (21.3) -7%
Texas 129.6 165.9 (36.3) -22%
Utah 355.5 303.3 52.2 17%
Virginia 480.4 536.3 (55.9) -10%
Company Average $337.5 $354.4 $(16.9) -5%
M.D.C. HOLDINGS, INC.
Homebuilding Operational Data
(Dollars in thousands)
(Unaudited)
Three Months Ended
December 31, Change
2007 2006 Amount %
ORDERS FOR HOMES, NET (UNITS)
Arizona 139 480 (341) -71%
California 63 241 (178) -74%
Nevada 298 314 (16) -5%
West 500 1,035 (535) -52%
Colorado 101 201 (100) -50%
Utah 36 133 (97) -73%
Mountain 137 334 (197) -59%
Maryland - 60 (60) -100%
Virginia 33 79 (46) -58%
East 33 139 (106) -76%
Delaware Valley 12 28 (16) -57%
Florida 47 (11) 58 N/A
Illinois 19 35 (16) -46%
Texas - 11 (11) -100%
Other Homebuilding 78 63 15 24%
Total 748 1,571 (823) -52%
Estimated Value of Orders
for Homes, net $187,000 $515,000 $(328,000) -64%
Estimated Average Selling
Price of Orders for Homes, net $250.0 $327.8 $(77.8) -24%
Cancellation Rate (7) 65% 57% 8%
Year Ended
December 31, Change
2007 2006 Amount %
ORDERS FOR HOMES, NET (UNITS)
Arizona 1,889 2,758 (869) -32%
California 912 1,450 (538) -37%
Nevada 1,282 2,048 (766) -37%
West 4,083 6,256 (2,173) -35%
Colorado 778 1,139 (361) -32%
Utah 426 1,049 (623) -59%
Mountain 1,204 2,188 (984) -45%
Maryland 227 380 (153) -40%
Virginia 308 462 (154) -33%
East 535 842 (307) -36%
Delaware Valley 116 138 (22) -16%
Florida 424 519 (95) -18%
Illinois 128 117 11 9%
Texas 14 169 (155) -92%
Other Homebuilding 682 943 (261) -28%
Total 6,504 10,229 (3,725) -36%
Estimated Value of Orders
for Homes, net $2,107,000 $3,467,000 $(1,360,000) -39%
Estimated Average Selling
Price of Orders for Homes, net $324.0 $338.9 $(14.9) -4%
Cancellation Rate (7) 48% 43% 5%
(7) We define 'Cancellation Rate' as the approximate number of cancelled
home order contracts during a reporting period as a percent of total
home orders received during such reporting period.
M.D.C. HOLDINGS, INC.
Homebuilding Operational Data
(Dollars in thousands)
(Unaudited)
December December December
31, 31, 31,
2007 2006 2005
BACKLOG (UNITS)
Arizona 592 1,504 2,099
California 203 427 765
Nevada 307 315 1,023
West 1,102 2,246 3,887
Colorado 213 253 577
Utah 178 465 338
Mountain 391 718 915
Maryland 126 187 251
Virginia 100 136 381
East 226 323 632
Delaware Valley 57 119 181
Florida 125 197 599
Illinois 46 23 80
Texas - 12 238
Other Homebuilding 228 351 1,098
Total 1,947 3,638 6,532
Backlog Estimated Sales Value $650,000 $1,300,000 $2,440,000
Estimated Average Selling Price of
Homes in Backlog $333.8 $357.3 $373.5
ACTIVE SUBDIVISIONS
Arizona 66 67 54
California 41 45 34
Nevada 39 41 43
West 146 153 131
Colorado 47 47 57
Utah 23 22 18
Mountain 70 69 75
Maryland 15 19 11
Virginia 18 19 20
East 33 38 31
Delaware Valley 4 8 7
Florida 20 30 19
Illinois 5 6 8
Texas - 2 21
Other Homebuilding 29 46 55
Total 278 306 292
Average for Quarter Ended 287 299 287
M.D.C. HOLDINGS, INC.
Reconciliation of Non-GAAP Financial Measures
(Dollars in thousands)
(Unaudited)
December December December
31, 31, 31,
2007 2006 2005
CORPORATE AND HOMEBUILDING DEBT-TO-CAPITAL, NET OF CASH
Total Debt $1,067,238 $1,127,149 $1,152,829
Less Mortgage Line of Credit (70,147) (130,467) (156,532)
Total Corporate and
Homebuilding Debt 997,091 996,682 996,297
Less Cash (Including
Restricted Cash) (1,006,661) (510,588) (221,273)
Total Corporate and Homebuilding
Debt, Net of Cash (9,570) 486,094 775,024
Stockholders' Equity 1,476,013 2,161,882 1,952,109
Total Corporate and Homebuilding
Capital, Net of Cash $1,466,443 $2,647,976 $2,727,133
Ratio of Corporate and Homebuilding
Debt to Capital, Net of Cash (0.01) 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 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 typically liquidated within 60 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.
