QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. employer identification no.) |
(Zip code) | |||||||||||
(Address of principal executive offices) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | |||||||||||||||
☒ | Accelerated Filer | ☐ | ||||||||||||||||||
Non-Accelerated Filer | ☐ | Smaller Reporting Company | ||||||||||||||||||
Emerging growth company |
Page No. | ||||||||
September 30, 2022 | December 31, 2021 | ||||||||||
(unaudited) | |||||||||||
(Dollars in thousands, except share and per share amounts) | |||||||||||
ASSETS | |||||||||||
Homebuilding: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash | |||||||||||
Marketable securities | |||||||||||
Trade and other receivables | |||||||||||
Inventories: | |||||||||||
Housing completed or under construction | |||||||||||
Land and land under development | |||||||||||
Total inventories | |||||||||||
Property and equipment, net | |||||||||||
Deferred tax asset, net | |||||||||||
Prepaids and other assets | |||||||||||
Total homebuilding assets | |||||||||||
Financial Services: | |||||||||||
Cash and cash equivalents | |||||||||||
Marketable securities | — | ||||||||||
Mortgage loans held-for-sale, net | |||||||||||
Other assets | |||||||||||
Total financial services assets | |||||||||||
Total Assets | $ | $ | |||||||||
LIABILITIES AND EQUITY | |||||||||||
Homebuilding: | |||||||||||
Accounts payable | $ | $ | |||||||||
Accrued and other liabilities | |||||||||||
Revolving credit facility | |||||||||||
Senior notes, net | |||||||||||
Total homebuilding liabilities | |||||||||||
Financial Services: | |||||||||||
Accounts payable and accrued liabilities | |||||||||||
Mortgage repurchase facility | |||||||||||
Total financial services liabilities | |||||||||||
Total Liabilities | |||||||||||
Stockholders' Equity | |||||||||||
Preferred stock, $ | |||||||||||
Common stock, $ | |||||||||||
Additional paid-in-capital | |||||||||||
Retained earnings | |||||||||||
Total Stockholders' Equity | |||||||||||
Total Liabilities and Stockholders' Equity | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
(Dollars in thousands, except share and per share amounts) | |||||||||||||||||||||||
Homebuilding: | |||||||||||||||||||||||
Home sale revenues | $ | $ | $ | $ | |||||||||||||||||||
Home cost of sales | ( | ( | ( | ( | |||||||||||||||||||
Inventory impairments | ( | ( | |||||||||||||||||||||
Total cost of sales | ( | ( | ( | ( | |||||||||||||||||||
Gross profit | |||||||||||||||||||||||
Selling, general and administrative expenses | ( | ( | ( | ( | |||||||||||||||||||
Loss on debt retirement | ( | ( | |||||||||||||||||||||
Interest and other income | |||||||||||||||||||||||
Other expense | ( | ( | ( | ( | |||||||||||||||||||
Homebuilding pretax income | |||||||||||||||||||||||
Financial Services: | |||||||||||||||||||||||
Revenues | |||||||||||||||||||||||
Expenses | ( | ( | ( | ( | |||||||||||||||||||
Other income, net | |||||||||||||||||||||||
Financial services pretax income | |||||||||||||||||||||||
Income before income taxes | |||||||||||||||||||||||
Provision for income taxes | ( | ( | ( | ( | |||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Comprehensive income | $ | $ | $ | $ | |||||||||||||||||||
Earnings per share: | |||||||||||||||||||||||
Basic | $ | $ | $ | $ | |||||||||||||||||||
Diluted | $ | $ | $ | $ | |||||||||||||||||||
Weighted average common shares outstanding: | |||||||||||||||||||||||
Basic | |||||||||||||||||||||||
Diluted | |||||||||||||||||||||||
Dividends declared per share | $ | $ | $ | $ |
Nine Months Ended September 30, 2022 | |||||||||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Retained Earnings | Total | ||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||
Balance at December 31, 2021 | $ | $ | $ | $ | |||||||||||||||||||||||||
Net income | — | — | — | ||||||||||||||||||||||||||
Shares issued under stock-based compensation programs, net | ( | — | ( | ||||||||||||||||||||||||||
Cash dividends declared | — | — | — | ( | ( | ||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | ||||||||||||||||||||||||||
Forfeiture of restricted stock | ( | — | — | — | |||||||||||||||||||||||||
Balance at March 31, 2022 | $ | $ | $ | $ | |||||||||||||||||||||||||
Net Income | — | — | — | ||||||||||||||||||||||||||
Shares issued under stock-based compensation programs, net | ( | ( | — | ( | |||||||||||||||||||||||||
Cash dividends declared | — | — | — | ( | ( | ||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | ||||||||||||||||||||||||||
Forfeiture of restricted stock | ( | — | — | — | |||||||||||||||||||||||||
Balance at June 30, 2022 | $ | $ | $ | $ | |||||||||||||||||||||||||
Net Income | — | — | — | ||||||||||||||||||||||||||
Shares issued under stock-based compensation programs, net | |||||||||||||||||||||||||||||
Cash dividends declared | — | — | — | ( | ( | ||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | ||||||||||||||||||||||||||
Forfeiture of restricted stock | ( | — | — | — | |||||||||||||||||||||||||
Balance at September 30, 2022 | $ | $ | $ | $ | |||||||||||||||||||||||||
Nine Months Ended September 30, 2021 | |||||||||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Retained Earnings | Total | ||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||
Balance at December 31, 2020 | $ | $ | $ | $ | |||||||||||||||||||||||||
Net income | — | — | — | ||||||||||||||||||||||||||
Shares issued under stock-based compensation programs, net | — | ||||||||||||||||||||||||||||
Cash dividends declared | — | — | — | ( | ( | ||||||||||||||||||||||||
Stock dividends declared | ( | ( | |||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | ||||||||||||||||||||||||||
Balance at March 31, 2021 | $ | $ | $ | $ | |||||||||||||||||||||||||
Net Income | — | — | — | ||||||||||||||||||||||||||
Shares issued under stock-based compensation programs, net | ( | — | ( | ||||||||||||||||||||||||||
Cash dividends declared | — | — | — | ( | ( | ||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | ||||||||||||||||||||||||||
Forfeiture of restricted stock | ( | — | — | — | |||||||||||||||||||||||||
Balance at June 30, 2021 | $ | $ | $ | $ | |||||||||||||||||||||||||
Net Income | — | — | — | ||||||||||||||||||||||||||
Shares issued under stock-based compensation programs, net | ( | — | ( | ||||||||||||||||||||||||||
Cash dividends declared | — | — | — | ( | ( | ||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | ||||||||||||||||||||||||||
Forfeiture of restricted stock | ( | $ | — | $ | — | $ | — | $ |
Balance at September 30, 2021 | $ | $ | $ | $ | |||||||||||||||||||||||||
Nine Months Ended September 30, | |||||||||||
2022 | 2021 | ||||||||||
(Dollars in thousands) | |||||||||||
Operating Activities: | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||||||||||
Stock-based compensation expense | |||||||||||
Depreciation and amortization | |||||||||||
Inventory impairments | |||||||||||
Gain on sale of other assets | ( | ||||||||||
Amortization of discount of marketable debt securities | ( | ||||||||||
Loss on debt retirement | |||||||||||
Deferred income tax benefit | ( | ( | |||||||||
Net changes in assets and liabilities: | |||||||||||
Trade and other receivables | ( | ( | |||||||||
Mortgage loans held-for-sale, net | ( | ||||||||||
Housing completed or under construction | ( | ( | |||||||||
Land and land under development | ( | ||||||||||
Prepaids and other assets | ( | ||||||||||
Accounts payable and accrued and other liabilities | |||||||||||
Net cash provided by (used in) operating activities | ( | ||||||||||
Investing Activities: | |||||||||||
Purchases of marketable securities | ( | ||||||||||
Proceeds from sale of other assets | |||||||||||
Purchases of property and equipment | ( | ( | |||||||||
Net cash used in investing activities | ( | ( | |||||||||
Financing Activities: | |||||||||||
Proceeds from (payments on) mortgage repurchase facility, net | ( | ||||||||||
Repayments of senior notes | ( | ||||||||||
Proceeds from issuance of senior notes | |||||||||||
Dividend payments | ( | ( | |||||||||
Payments of deferred financing costs | ( | ||||||||||
Issuance of shares under stock-based compensation programs, net | ( | ( | |||||||||
Net cash provided by (used in) financing activities | ( | ||||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | ( | ||||||||||
Cash, cash equivalents and restricted cash: | |||||||||||
Beginning of period | |||||||||||
End of period | $ | $ | |||||||||
Reconciliation of cash, cash equivalents and restricted cash: | |||||||||||
Homebuilding: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash | |||||||||||
Financial Services: |
Cash and cash equivalents | |||||||||||
Total cash, cash equivalents and restricted cash | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Homebuilding | |||||||||||||||||||||||
West | $ | $ | $ | $ | |||||||||||||||||||
Mountain | |||||||||||||||||||||||
East | |||||||||||||||||||||||
Total homebuilding revenues | $ | $ | $ | $ | |||||||||||||||||||
Financial Services | |||||||||||||||||||||||
Mortgage operations | $ | $ | $ | $ | |||||||||||||||||||
Other | |||||||||||||||||||||||
Total financial services revenues | $ | $ | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Homebuilding | |||||||||||||||||||||||
West | $ | $ | $ | $ | |||||||||||||||||||
Mountain | |||||||||||||||||||||||
East | |||||||||||||||||||||||
Corporate | ( | ( | ( | ( | |||||||||||||||||||
Total homebuilding pretax income | $ | $ | $ | $ | |||||||||||||||||||
Financial Services | |||||||||||||||||||||||
Mortgage operations | $ | $ | $ | $ | |||||||||||||||||||
Other | |||||||||||||||||||||||
Total financial services pretax income | $ | $ | $ | $ | |||||||||||||||||||
Total pretax income | $ | $ | $ | $ |
September 30, 2022 | December 31, 2021 | ||||||||||
(Dollars in thousands) | |||||||||||
Homebuilding assets | |||||||||||
West | $ | $ | |||||||||
Mountain | |||||||||||
East | |||||||||||
Corporate | |||||||||||
Total homebuilding assets | $ | $ | |||||||||
Financial services assets | |||||||||||
Mortgage operations | $ | $ | |||||||||
Other | |||||||||||
Total financial services assets | $ | $ | |||||||||
Total assets | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
(Dollars in thousands, except per share amounts) | |||||||||||||||||||||||
Numerator | |||||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Less: distributed earnings allocated to participating securities | ( | ( | ( | ( | |||||||||||||||||||
Less: undistributed earnings allocated to participating securities | ( | ( | ( | ( | |||||||||||||||||||
Net income attributable to common stockholders (numerator for basic earnings per share) | |||||||||||||||||||||||
Add back: undistributed earnings allocated to participating securities | |||||||||||||||||||||||
Less: undistributed earnings reallocated to participating securities | ( | ( | ( | ( | |||||||||||||||||||
Numerator for diluted earnings per share under two class method | $ | $ | $ | $ | |||||||||||||||||||
Denominator | |||||||||||||||||||||||
Weighted-average common shares outstanding | |||||||||||||||||||||||
Add: dilutive effect of stock options | |||||||||||||||||||||||
Add: dilutive effect of contingently issuable equity awards | |||||||||||||||||||||||
Denominator for diluted earnings per share under two class method | |||||||||||||||||||||||
Basic Earnings Per Common Share | $ | $ | $ | $ | |||||||||||||||||||
Diluted Earnings Per Common Share | $ | $ | $ | $ |
Fair Value | ||||||||||||||||||||
Financial Instrument | Hierarchy | September 30, 2022 | December 31, 2021 | |||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Marketable securities | ||||||||||||||||||||
Debt securities (available-for-sale) | Level 1 | $ | $ | |||||||||||||||||
Mortgage loans held-for-sale, net | Level 2 | $ | $ |
September 30, 2022 | December 31, 2021 | ||||||||||||||||||||||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
$ | $ | $ | $ | $ | |||||||||||||||||||
$ | |||||||||||||||||||||||
$ | |||||||||||||||||||||||
$ | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
September 30, 2022 | December 31, 2021 | ||||||||||
(Dollars in thousands) | |||||||||||
Housing completed or under construction: | |||||||||||
West | $ | $ | |||||||||
Mountain | |||||||||||
East | |||||||||||
Subtotal | |||||||||||
Land and land under development: | |||||||||||
West | |||||||||||
Mountain | |||||||||||
East | |||||||||||
Subtotal | |||||||||||
Total inventories | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||||||
(Dollars in thousands) | (Dollars in thousands) | |||||||||||||||||||
West | $ | $ | $ | $ | ||||||||||||||||
Mountain | ||||||||||||||||||||
East | ||||||||||||||||||||
Total Inventory Impairments | $ | $ | $ | $ |
Impairment Data | Quantitative Data | |||||||||||||||||||||||||||||||||||||
Three Months Ended | Number of Subdivisions Impaired | Inventory Impairments | Fair Value of Inventory After Impairments | Discount Rate | ||||||||||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||
March 31, 2022 | $ | $ | N/A | |||||||||||||||||||||||||||||||||||
September 30, 2022 | $ | $ | % | — | ||||||||||||||||||||||||||||||||||
Total | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Homebuilding interest incurred | $ | $ | $ | $ | |||||||||||||||||||
Less: Interest capitalized | ( | ( | ( | ( | |||||||||||||||||||
Homebuilding interest expensed | $ | $ | $ | $ | |||||||||||||||||||
Interest capitalized, beginning of period | $ | $ | $ | $ | |||||||||||||||||||
Plus: Interest capitalized during period | |||||||||||||||||||||||
Less: Previously capitalized interest included in home cost of sales | ( | ( | ( | ( | |||||||||||||||||||
Interest capitalized, end of period | $ | $ | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Operating lease cost 1 | $ | $ | $ | $ | |||||||||||||||||||
Less: Sublease income (Note 19) | ( | ( | ( | ( | |||||||||||||||||||
Net lease cost | $ | $ | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||||||||||||||
Operating cash flows from operating leases | $ | $ | $ | $ | |||||||||||||||||||
Right of use assets obtained in exchange for new operating lease liabilities | $ | $ | $ | $ |
September 30, 2022 | September 30, 2021 | |||||||
Weighted-average remaining lease term (in years) | ||||||||
Weighted-average discount rate | % | % |
Year Ended December 31, | |||||
(Dollars in thousands) | |||||
2022 (excluding the nine months ended September 30, 2022) | $ | ||||
2023 | |||||
2024 | |||||
2025 | |||||
2026 | |||||
Thereafter | |||||
Total operating lease payments 1 | $ | ||||
Less: Interest | |||||
Present value of operating lease liabilities 2 | $ |
September 30, 2022 | December 31, 2021 | ||||||||||
(Dollars in thousands) | |||||||||||
Land option deposits | $ | $ | |||||||||
Operating lease right-of-use asset (Note 8) | |||||||||||
Prepaids | |||||||||||
Goodwill | |||||||||||
Deferred debt issuance costs on revolving credit facility, net | |||||||||||
Other | |||||||||||
Total prepaids and other assets | $ | $ |
September 30, 2022 | December 31, 2021 | ||||||||||
(Dollars in thousands) | |||||||||||
Accrued compensation and related expenses | $ | $ | |||||||||
Customer and escrow deposits | |||||||||||
Warranty accrual (Note 11) | |||||||||||
Lease liability (Note 8) | |||||||||||
Land development and home construction accruals | |||||||||||
Accrued interest | |||||||||||
Income Taxes Payable | |||||||||||
Construction defect claim reserves (Note 12) | |||||||||||
Other accrued liabilities | |||||||||||
Total accrued and other liabilities | $ | $ |
September 30, 2022 | December 31, 2021 | ||||||||||
(Dollars in thousands) | |||||||||||
Insurance reserves (Note 12) | $ | $ | |||||||||
Accounts payable and other accrued liabilities | |||||||||||
Total accounts payable and accrued liabilities | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Balance at beginning of period | $ | $ | $ | $ | |||||||||||||||||||
Expense provisions | |||||||||||||||||||||||
Cash payments | ( | ( | ( | ( | |||||||||||||||||||
Adjustments | |||||||||||||||||||||||
Balance at end of period | $ | $ | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Balance at beginning of period | $ | $ | $ | $ | |||||||||||||||||||
Expense provisions | |||||||||||||||||||||||
Cash payments, net of recoveries | ( | ( | ( | ( | |||||||||||||||||||
Balance at end of period | $ | $ | $ | $ |
September 30, 2022 | December 31, 2021 | ||||||||||
(Dollars in thousands) | |||||||||||
$ | $ | ||||||||||
Total | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Stock option grants expense | $ | $ | $ | $ | |||||||||||||||||||
Restricted stock awards expense | |||||||||||||||||||||||
Performance share units expense | |||||||||||||||||||||||
Total stock-based compensation | $ | $ | $ | $ |
September 30, 2022 | December 31, 2021 | ||||||||||
(Dollars in thousands) | |||||||||||
Interest rate lock commitments | $ | $ | |||||||||
Forward sales of mortgage-backed securities | |||||||||||
Mandatory delivery forward loan sale commitments | |||||||||||
Best-effort delivery forward loan sale commitments |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
(Dollars in thousands, except per share amounts) | |||||||||||||||||||||||
Homebuilding: | |||||||||||||||||||||||
Home sale revenues | $ | 1,407,642 | $ | 1,257,701 | $ | 4,098,985 | $ | 3,667,332 | |||||||||||||||
Home cost of sales | (1,059,996) | (962,078) | (3,043,390) | (2,827,147) | |||||||||||||||||||
Inventory impairments | (28,415) | — | (29,075) | — | |||||||||||||||||||
Total cost of sales | (1,088,411) | (962,078) | (3,072,465) | (2,827,147) | |||||||||||||||||||
Gross profit | 319,231 | 295,623 | 1,026,520 | 840,185 | |||||||||||||||||||
Gross margin | 22.7 | % | 23.5 | % | 25.0 | % | 22.9 | % | |||||||||||||||
Selling, general and administrative expenses | (141,435) | (120,116) | (404,598) | (363,970) | |||||||||||||||||||
Loss on debt retirement | — | (12,150) | — | (12,150) | |||||||||||||||||||
Interest and other income | 2,220 | 3,149 | 3,797 | 4,984 | |||||||||||||||||||
Other expense | (11,800) | (1,354) | (28,733) | (2,881) | |||||||||||||||||||
Homebuilding pretax income | 168,216 | 165,152 | 596,986 | 466,168 | |||||||||||||||||||
Financial Services: | |||||||||||||||||||||||
Revenues | 34,101 | 43,104 | 99,461 | 121,445 | |||||||||||||||||||
Expenses | (18,704) | (16,377) | (54,440) | (47,922) | |||||||||||||||||||
Other income, net | 2,176 | 813 | 4,627 | 2,855 | |||||||||||||||||||
Financial services pretax income | 17,573 | 27,540 | 49,648 | 76,378 | |||||||||||||||||||
Income before income taxes | 185,789 | 192,692 | 646,634 | 542,546 | |||||||||||||||||||
Provision for income taxes | (41,389) | (46,738) | (164,271) | (131,550) | |||||||||||||||||||
Net income | $ | 144,400 | $ | 145,954 | $ | 482,363 | $ | 410,996 | |||||||||||||||
Earnings per share: | |||||||||||||||||||||||
Basic | $ | 2.03 | $ | 2.07 | $ | 6.78 | $ | 5.83 | |||||||||||||||
Diluted | $ | 1.98 | $ | 1.99 | $ | 6.59 | $ | 5.62 | |||||||||||||||
Weighted average common shares outstanding: | |||||||||||||||||||||||
Basic | 70,880,405 | 70,301,085 | 70,829,761 | 70,130,853 | |||||||||||||||||||
Diluted | 72,729,453 | 72,800,011 | 72,892,635 | 72,770,432 | |||||||||||||||||||
Dividends declared per share | $ | 0.50 | $ | 0.40 | $ | 1.50 | $ | 1.17 | |||||||||||||||
Cash provided by (used in): | |||||||||||||||||||||||
Operating Activities | $ | 172,893 | $ | (98,606) | $ | 343,953 | $ | (86,522) | |||||||||||||||
Investing Activities | $ | (298,857) | $ | (7,567) | $ | (312,555) | $ | (21,014) | |||||||||||||||
Financing Activities | $ | (13,832) | $ | 232,460 | $ | (178,416) | $ | 471,210 |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||
September 30, | Change | September 30, | Change | ||||||||||||||||||||||||||||||||||||||||||||
2022 | 2021 | Amount | % | 2022 | 2021 | Amount | % | ||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
West | $ | 105,680 | $ | 120,284 | $ | (14,604) | (12) | % | $ | 384,714 | $ | 330,390 | $ | 54,324 | 16 | % | |||||||||||||||||||||||||||||||
Mountain | 68,106 | 55,386 | 12,720 | 23 | % | 197,747 | 165,296 | 32,451 | 20 | % | |||||||||||||||||||||||||||||||||||||
East | 28,245 | 15,410 | 12,835 | 83 | % | 94,046 | 34,091 | 59,955 | 176 | % | |||||||||||||||||||||||||||||||||||||
Corporate | (33,815) | (25,928) | (7,887) | (30) | % | (79,521) | (63,609) | (15,912) | (25) | % | |||||||||||||||||||||||||||||||||||||
Total Homebuilding pretax income | $ | 168,216 | $ | 165,152 | $ | 3,064 | 2 | % | $ | 596,986 | $ | 466,168 | $ | 130,818 | 28 | % |
September 30, 2022 | December 31, 2021 | Change | |||||||||||||||||||||
Amount | % | ||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
West | $ | 2,595,147 | $ | 2,472,378 | $ | 122,769 | 5 | % | |||||||||||||||
Mountain | 1,164,506 | 1,072,717 | 91,789 | 9 | % | ||||||||||||||||||
East | 494,078 | 450,675 | 43,403 | 10 | % | ||||||||||||||||||
Corporate | 691,130 | 547,364 | 143,766 | 26 | % | ||||||||||||||||||
Total homebuilding assets | $ | 4,944,861 | $ | 4,543,134 | $ | 401,727 | 9 | % |
Three Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||||||||
2022 | 2021 | % Change | |||||||||||||||||||||||||||||||||||||||||||||||||||
Homes | Home Sale Revenues | Average Price | Homes | Home Sale Revenues | Average Price | Homes | Home Sale Revenues | Average Price | |||||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
West | 1,312 | $ | 772,356 | $ | 588.7 | 1,376 | $ | 729,777 | $ | 530.4 | (5) | % | 6 | % | 11 | % | |||||||||||||||||||||||||||||||||||||
Mountain | 647 | 424,397 | 655.9 | 666 | 379,041 | 569.1 | (3) | % | 12 | % | 15 | % | |||||||||||||||||||||||||||||||||||||||||
East | 428 | 210,889 | 492.7 | 377 | 148,883 | 394.9 | 14 | % | 42 | % | 25 | % | |||||||||||||||||||||||||||||||||||||||||
Total | 2,387 | $ | 1,407,642 | $ | 589.7 | 2,419 | $ | 1,257,701 | $ | 519.9 | (1) | % | 12 | % | 13 | % |
Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||||||||
2022 | 2021 | % Change | |||||||||||||||||||||||||||||||||||||||||||||||||||
Homes | Home Sale Revenues | Average Price | Homes | Home Sale Revenues | Average Price | Homes | Home Sale Revenues | Average Price | |||||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
West | 3,926 | $ | 2,267,946 | $ | 577.7 | 4,324 | $ | 2,194,071 | $ | 507.4 | (9) | % | 3 | % | 14 | % | |||||||||||||||||||||||||||||||||||||
Mountain | 1,860 | 1,196,526 | 643.3 | 1,989 | 1,104,391 | 555.2 | (6) | % | 8 | % | 16 | % | |||||||||||||||||||||||||||||||||||||||||
East | 1,370 | 634,513 | 463.1 | 1,006 | 368,870 | 366.7 | 36 | % | 72 | % | 26 | % | |||||||||||||||||||||||||||||||||||||||||
Total | 7,156 | $ | 4,098,985 | $ | 572.8 | 7,319 | $ | 3,667,332 | $ | 501.1 | (2) | % | 12 | % | 14 | % |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
(Dollars in thousands) | (Dollars in thousands) | ||||||||||||||||||||||
West | $ | 25,900 | $ | — | $ | 26,560 | $ | — | |||||||||||||||
Mountain | — | — | — | — | |||||||||||||||||||
East | 2,515 | — | 2,515 | — | |||||||||||||||||||
Total Inventory Impairments | $ | 28,415 | $ | — | $ | 29,075 | $ | — |
Impairment Data | Quantitative Data | |||||||||||||||||||||||||||||||||||||
Three Months Ended | Number of Subdivisions Impaired | Inventory Impairments | Fair Value of Inventory After Impairments | Discount Rate | ||||||||||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||
March 31, 2022 | 1 | $ | 660 | $ | 1,728 | N/A | ||||||||||||||||||||||||||||||||
September 30, 2022 | 9 | $ | 28,415 | $ | 44,615 | 15 | % | — | 18% | |||||||||||||||||||||||||||||
Total | $ | 29,075 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
2022 | 2021 | Change | 2022 | 2021 | Change | ||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||
General and administrative expenses | $ | 80,858 | $ | 59,935 | $ | 20,923 | $ | 225,735 | $ | 179,056 | $ | 46,679 | |||||||||||||||||||||||
General and administrative expenses as a percentage of home sale revenues | 5.7 | % | 4.8 | % | 90 bps | 5.5 | % | 4.9 | % | 60 bps | |||||||||||||||||||||||||
Marketing expenses | $ | 26,355 | $ | 25,660 | $ | 695 | $ | 78,022 | $ | 78,195 | $ | (173) | |||||||||||||||||||||||
Marketing expenses as a percentage of home sale revenues | 1.9 | % | 2.0 | % | -10 bps | 1.9 | % | 2.1 | % | -20 bps | |||||||||||||||||||||||||
Commissions expenses | $ | 34,222 | $ | 34,521 | $ | (299) | $ | 100,841 | $ | 106,719 | $ | (5,878) | |||||||||||||||||||||||
Commissions expenses as a percentage of home sale revenues | 2.4 | % | 2.7 | % | -30 bps | 2.5 | % | 2.9 | % | -40 bps | |||||||||||||||||||||||||
Total selling, general and administrative expenses | $ | 141,435 | $ | 120,116 | $ | 21,319 | $ | 404,598 | $ | 363,970 | $ | 40,628 | |||||||||||||||||||||||
Total selling, general and administrative expenses as a percentage of home sale revenues | 10.0 | % | 9.6 | % | 40 bps | 9.9 | % | 9.9 | % | 0 bps |
Three Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2022 | 2021 | % Change | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Homes | Dollar Value | Average Price | Monthly Absorption Rate * | Homes | Dollar Value | Average Price | Monthly Absorption Rate * | Homes | Dollar Value | Average Price | Monthly Absorption Rate | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
West | 193 | $ | 93,481 | $ | 484.4 | 0.51 | 1,437 | $ | 783,072 | $ | 544.9 | 4.91 | (87) | % | (88) | % | (11) | % | (90) | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
Mountain | (3) | 2,838 | N/A | (0.02) | 505 | 323,018 | 639.6 | 2.99 | (101) | % | (99) | % | N/A | (101) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
East | 109 | 56,514 | 518.5 | 1.01 | 457 | 199,985 | 437.6 | 3.67 | (76) | % | (72) | % | 18 | % | (73) | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | 299 | $ | 152,833 | $ | 511.1 | 0.46 | 2,399 | $ | 1,306,075 | $ | 544.4 | 4.10 | (88) | % | (88) | % | (6) | % | (89) | % |
Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2022 | 2021 | % Change | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Homes | Dollar Value | Average Price | Monthly Absorption Rate * | Homes | Dollar Value | Average Price | Monthly Absorption Rate * | Homes | Dollar Value | Average Price | Monthly Absorption Rate | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
West | 2,754 | $ | 1,677,039 | $ | 608.9 | 2.66 | 4,814 | $ | 2,613,279 | $ | 542.8 | 5.42 | (43) | % | (36) | % | 12 | % | (51) | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
Mountain | 1,194 | 811,860 | 679.9 | 2.52 | 2,222 | 1,375,442 | 619.0 | 4.35 | (46) | % | (41) | % | 10 | % | (42) | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
East | 906 | 457,919 | 505.4 | 2.80 | 1,286 | 558,716 | 434.5 | 3.91 | (30) | % | (18) | % | 16 | % | (28) | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | 4,854 | $ | 2,946,818 | $ | 607.1 | 2.64 | 8,322 | $ | 4,547,437 | $ | 546.4 | 4.82 | (42) | % | (35) | % | 11 | % | (45) | % |
Average Active Subdivisions | Average Active Subdivisions | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Active Subdivisions | Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||
September 30, | % | September 30, | % | September 30, | % | ||||||||||||||||||||||||||||||||||||||||||||||||
2022 | 2021 | Change | 2022 | 2021 | Change | 2022 | 2021 | Change | |||||||||||||||||||||||||||||||||||||||||||||
West | 132 | 104 | 27 | % | 127 | 98 | 30 | % | 115 | 99 | 16 | % | |||||||||||||||||||||||||||||||||||||||||
Mountain | 51 | 56 | (9) | % | 52 | 56 | (7) | % | 53 | 57 | (7) | % | |||||||||||||||||||||||||||||||||||||||||
East | 37 | 43 | (14) | % | 36 | 42 | (14) | % | 36 | 37 | (3) | % | |||||||||||||||||||||||||||||||||||||||||
Total | 220 | 203 | 8 | % | 215 | 196 | 10 | % | 204 | 193 | 6 | % |
Cancellations as a Percentage of Homes in Beginning Backlog | ||||||||||||||||||||||||||||||||||||||
2022 | 2021 | |||||||||||||||||||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||||||||||||||||||||
March 31, | June 30, | September 30, | March 31, | June 30, | September 30, | |||||||||||||||||||||||||||||||||
West | 8 | % | 10 | % | 17 | % | 7 | % | 5 | % | 8 | % | ||||||||||||||||||||||||||
Mountain | 8 | % | 9 | % | 17 | % | 8 | % | 5 | % | 7 | % | ||||||||||||||||||||||||||
East | 9 | % | 11 | % | 17 | % | 13 | % | 9 | % | 7 | % | ||||||||||||||||||||||||||
Total | 8 | % | 10 | % | 17 | % | 8 | % | 6 | % | 7 | % |
September 30, | |||||||||||||||||||||||||||||||||||||||||||||||||||||
2022 | 2021 | % Change | |||||||||||||||||||||||||||||||||||||||||||||||||||
Homes | Dollar Value | Average Price | Homes | Dollar Value | Average Price | Homes | Dollar Value | Average Price | |||||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
West | 3,044 | $ | 1,762,858 | $ | 579.1 | 4,200 | $ | 2,295,570 | $ | 546.6 | (28) | % | (23) | % | 6 | % | |||||||||||||||||||||||||||||||||||||
Mountain | 1,508 | 1,038,037 | 688.4 | 2,251 | 1,408,945 | 625.9 | (33) | % | (26) | % | 10 | % | |||||||||||||||||||||||||||||||||||||||||
East | 786 | 396,406 | 504.3 | 1,207 | 537,983 | 445.7 | (35) | % | (26) | % | 13 | % | |||||||||||||||||||||||||||||||||||||||||
Total | 5,338 | $ | 3,197,301 | $ | 599.0 | 7,658 | $ | 4,242,498 | $ | 554.0 | (30) | % | (25) | % | 8 | % |
September 30, | % | ||||||||||||||||
2022 | 2021 | Change | |||||||||||||||
Unsold: | |||||||||||||||||
Completed | 187 | 21 | 790 | % | |||||||||||||
Under construction | 895 | 345 | 159 | % | |||||||||||||
Total unsold started homes | 1,082 | 366 | 196 | % | |||||||||||||
Sold homes under construction or completed | 5,094 | 6,468 | (21) | % | |||||||||||||
Model homes under construction or completed | 532 | 490 | 9 | % | |||||||||||||
Total homes completed or under construction | 6,708 | 7,324 | (8) | % |
September 30, 2022 | September 30, 2021 | ||||||||||||||||||||||||||||||||||||||||
Lots Owned | Lots Optioned | Total | Lots Owned | Lots Optioned | Total | Total % Change | |||||||||||||||||||||||||||||||||||
West | 13,893 | 914 | 14,807 | 14,209 | 5,811 | 20,020 | (26) | % | |||||||||||||||||||||||||||||||||
Mountain | 6,151 | 2,458 | 8,609 | 6,258 | 4,236 | 10,494 | (18) | % | |||||||||||||||||||||||||||||||||
East | 3,848 | 1,992 | 5,840 | 3,824 | 2,328 | 6,152 | (5) | % | |||||||||||||||||||||||||||||||||
Total | 23,892 | 5,364 | 29,256 | 24,291 | 12,375 | 36,666 | (20) | % |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||
September 30, | Change | September 30, | Change | ||||||||||||||||||||||||||||||||||||||||||||
2022 | 2021 | Amount | % | 2022 | 2021 | Amount | % | ||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
Financial services revenues | |||||||||||||||||||||||||||||||||||||||||||||||
Mortgage operations | $ | 16,933 | $ | 31,122 | $ | (14,189) | (46) | % | $ | 56,611 | $ | 89,608 | $ | (32,997) | (37) | % | |||||||||||||||||||||||||||||||
Other | 17,168 | 11,982 | 5,186 | 43 | % | 42,850 | 31,837 | 11,013 | 35 | % | |||||||||||||||||||||||||||||||||||||
Total financial services revenues | $ | 34,101 | $ | 43,104 | $ | (9,003) | (21) | % | $ | 99,461 | $ | 121,445 | $ | (21,984) | (18) | % | |||||||||||||||||||||||||||||||
Financial services pretax income | |||||||||||||||||||||||||||||||||||||||||||||||
Mortgage operations | $ | 5,676 | $ | 21,214 | $ | (15,538) | (73) | % | $ | 23,782 | $ | 61,341 | $ | (37,559) | (61) | % | |||||||||||||||||||||||||||||||
Other | 11,897 | 6,326 | 5,571 | 88 | % | 25,866 | 15,037 | $ | 10,829 | 72 | % | ||||||||||||||||||||||||||||||||||||
Total financial services pretax income | $ | 17,573 | $ | 27,540 | $ | (9,967) | (36) | % | $ | 49,648 | $ | 76,378 | $ | (26,730) | (35) | % |
Three Months Ended | % or Percentage | Nine Months Ended | % or Percentage Change | ||||||||||||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||||||||||||||
2022 | 2021 | Change | 2022 | 2021 | |||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||
Total Originations (including transfer loans): | |||||||||||||||||||||||||||||||||||
Loans | 1,447 | 1,453 | — | % | 4,278 | 4,585 | (7) | % | |||||||||||||||||||||||||||
Principal | $ | 688,983 | $ | 620,454 | 11 | % | $ | 1,998,086 | $ | 1,879,587 | 6 | % | |||||||||||||||||||||||
Capture Rate Data: | |||||||||||||||||||||||||||||||||||
Capture rate as % of all homes delivered | 61 | % | 60 | % | 1 | % | 60 | % | 62 | % | (2) | % | |||||||||||||||||||||||
Capture rate as % of all homes delivered (excludes cash sales) | 64 | % | 62 | % | 2 | % | 63 | % | 65 | % | (2) | % | |||||||||||||||||||||||
Mortgage Loan Origination Product Mix: | |||||||||||||||||||||||||||||||||||
FHA loans | 12 | % | 14 | % | (2) | % | 13 | % | 17 | % | (4) | % | |||||||||||||||||||||||
Other government loans (VA & USDA) | 23 | % | 19 | % | 4 | % | 21 | % | 18 | % | 3 | % | |||||||||||||||||||||||
Total government loans | 35 | % | 33 | % | 2 | % | 34 | % | 35 | % | (1) | % | |||||||||||||||||||||||
Conventional loans | 65 | % | 67 | % | (2) | % | 66 | % | 65 | % | 1 | % | |||||||||||||||||||||||
100 | % | 100 | % | — | % | 100 | % | 100 | % | — | % | ||||||||||||||||||||||||
Loan Type: | |||||||||||||||||||||||||||||||||||
Fixed rate | 98 | % | 100 | % | (2) | % | 98 | % | 100 | % | (2) | % | |||||||||||||||||||||||
ARM | 2 | % | — | % | 2 | % | 2 | % | — | % | 2 | % | |||||||||||||||||||||||
Credit Quality: | |||||||||||||||||||||||||||||||||||
Average FICO Score | 744 | 740 | 1 | % | 744 | 739 | 1 | % | |||||||||||||||||||||||||||
Other Data: | ` | ` | |||||||||||||||||||||||||||||||||
Average Combined LTV ratio | 81 | % | 84 | % | (3) | % | 82 | % | 84 | % | (2) | % | |||||||||||||||||||||||
Full documentation loans | 100 | % | 100 | % | — | % | 100 | % | 100 | % | — | % | |||||||||||||||||||||||
Loans Sold to Third Parties: | |||||||||||||||||||||||||||||||||||
Loans | 1,435 | 1,325 | 8 | % | 4,465 | 4,612 | (3) | % | |||||||||||||||||||||||||||
Principal | $ | 676,451 | $ | 557,876 | 21 | % | $ | 2,068,243 | $ | 1,858,303 | 11 | % |
Period | Total Number of Shares Purchased (1) | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plan or Program (2) | Maximum Number of Shares that may yet be Purchased under the Plan or Program (2) | ||||||||||||||||||||||
July 1 to July 31, 2022 | — | N/A | — | 4,000,000 | ||||||||||||||||||||||
August 1 to August 31, 2022 | — | N/A | — | 4,000,000 | ||||||||||||||||||||||
September 1 to September 30, 2022 | — | N/A | — | 4,000,000 |
10.1 | |||||
22 | |||||
31.1 | |||||
31.2 | |||||
32.1 | |||||
32.2 | |||||
101 | The following financial statements, formatted in Inline Extensible Business Reporting Language (iXBRL): (i) Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021, (ii) Consolidated Statements of Operations and Comprehensive Income for the three and nine months ended September 30, 2022 and 2021, (iii) Consolidated Statements of Changes in Stockholders’ Equity for the three and nine months ended September 30, 2022 and 2021, (iv) Consolidated Statements of Cash Flows for the nine months ended September 30, 2022 and 2021; and (v) Notes to the Unaudited Consolidated Financial Statements, tagged as blocks of text. | ||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
Date: October 27, 2022 | M.D.C. HOLDINGS, INC. | ||||
(Registrant) | |||||
By: /s/ Robert N. Martin | |||||
Robert N. Martin Senior Vice President and Chief Financial Officer (principal financial officer and duly authorized officer) |
Date: October 27, 2022 | /s/ Larry A. Mizel | ||||
Larry A. Mizel Executive Chairman (principal executive officer) |
Date: October 27, 2022 | /s/ Robert N. Martin | ||||
Robert N. Martin Senior Vice President, Chief Financial Officer (principal financial officer) |
Date: October 27, 2022 | /s/ Larry A. Mizel | ||||
Larry A. Mizel Executive Chairman (principal executive officer) |
Date: October 27, 2022 | /s/ Robert N. Martin | ||||
Robert N. Martin Senior Vice President, Chief Financial Officer (principal financial officer) |
Consolidated Balance Sheets (Parentheticals) - $ / shares |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred stock par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 25,000,000 | 25,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 250,000,000 | 250,000,000 |
Common stock, shares issued (in shares) | 71,254,143 | 70,668,093 |
Common stock, shares outstanding (in shares) | 71,254,143 | 70,668,093 |
Consolidated Statements of Operations and Comprehensive Income (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Inventory Impairments | $ (28,415) | $ (29,075) | $ 0 | |
Loss on debt retirement | 0 | $ (12,150) | 0 | (12,150) |
Total pretax income | 185,789 | 192,692 | 646,634 | 542,546 |
Provision for income taxes | (41,389) | (46,738) | (164,271) | (131,550) |
Net income | 144,400 | 145,954 | 482,363 | 410,996 |
Comprehensive income | $ 144,400 | $ 145,954 | $ 482,363 | $ 410,996 |
Earnings per share: | ||||
Basic Earnings Per Common Share (in dollars per share) | $ 2.03 | $ 2.07 | $ 6.78 | $ 5.83 |
Diluted Earnings Per Common Share (in dollars per share) | $ 1.98 | $ 1.99 | $ 6.59 | $ 5.62 |
Weighted average common shares outstanding: | ||||
Basic (in shares) | 70,880,405 | 70,301,085 | 70,829,761 | 70,130,853 |
Diluted (in shares) | 72,729,453 | 72,800,011 | 72,892,635 | 72,770,432 |
Dividends declared per share (in dollars per share) | $ 0.50 | $ 0.40 | $ 1.50 | $ 1.17 |
Homebuilding: | ||||
Total financial services revenues | $ 1,407,642 | $ 1,257,701 | $ 4,098,985 | $ 3,667,332 |
Home cost of sales | (1,059,996) | (962,078) | (3,043,390) | (2,827,147) |
Inventory Impairments | (28,415) | 0 | (29,075) | 0 |
Total cost of sales | (1,088,411) | (962,078) | (3,072,465) | (2,827,147) |
Gross profit | 319,231 | 295,623 | 1,026,520 | 840,185 |
Selling, general and administrative expenses | (141,435) | (120,116) | (404,598) | (363,970) |
Interest and other income | 2,220 | 3,149 | 3,797 | 4,984 |
Other expense | (11,800) | (1,354) | (28,733) | (2,881) |
Total pretax income | 168,216 | 165,152 | 596,986 | 466,168 |
Financial Services: | ||||
Total financial services revenues | 34,101 | 43,104 | 99,461 | 121,445 |
Expenses | (18,704) | (16,377) | (54,440) | (47,922) |
Other income, net | 2,176 | 813 | 4,627 | 2,855 |
Total pretax income | $ 17,573 | $ 27,540 | $ 49,648 | $ 76,378 |
Basis of Presentation |
9 Months Ended |
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Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The Unaudited Consolidated Financial Statements of M.D.C. Holdings, Inc. ("MDC," “the Company," “we,” “us,” or “our,” which refers to M.D.C. Holdings, Inc. and its subsidiaries) have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"). Accordingly, they do not include all information and footnotes required by U.S. generally accepted accounting principles (“GAAP”) for complete financial statements. These statements reflect all normal and recurring adjustments which, in the opinion of management, are necessary to present fairly the financial position, results of operations and cash flows of MDC at September 30, 2022 and for all periods presented. These statements should be read in conjunction with MDC’s Consolidated Financial Statements and Notes thereto included in MDC’s Annual Report on Form 10-K for the year ended December 31, 2021. Included in these footnotes are certain statements that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements regarding our business, financial condition, results of operations, cash flows, strategies and prospects. These forward-looking statements may be identified by terminology such as “likely,” “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue,” or the negative of such terms and other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements contained in this section are reasonable, we cannot guarantee future results. These 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 those expressed or implied by the forward-looking statements. We undertake no obligation 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 subsequent reports on Forms 10-K, 10-Q and 8-K should be considered. Where necessary, reclassifications have been made to our prior period financial information to conform to the current year presentation.
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Recently Issued Accounting Standards |
9 Months Ended |
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Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Recently Issued Accounting Standards | Recently Issued Accounting StandardsThere are no recently issued accounting standards applicable to the Company. |
Segment Reporting |
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Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting | Segment Reporting An operating segment is defined as a component of an enterprise for which discrete financial information is available and is reviewed regularly by the Chief Operating Decision Maker (“CODM”), or decision-making group, to evaluate performance and make operating decisions. We have identified our CODM as two key executives—the Executive Chairman and the Chief Executive Officer (“CEO”). We have identified each homebuilding division as an operating segment. Our homebuilding operating segments have been aggregated into the reportable segments noted below because they are similar in the following regards: (1) economic characteristics; (2) housing products; (3) class of homebuyer; (4) regulatory environments; and (5) methods used to construct and sell homes. Our homebuilding reportable segments are as follows •West (Arizona, California, Nevada, New Mexico, Oregon, Texas and Washington) •Mountain (Colorado, Idaho and Utah) •East (Florida, mid-Atlantic, which includes Maryland, Pennsylvania and Virginia, and Tennessee) Our financial services business consists of the operations of the following operating segments: (1) HomeAmerican Mortgage Corporation (“HomeAmerican”); (2) Allegiant Insurance Company, Inc., A Risk Retention Group (“Allegiant”); (3) StarAmerican Insurance Ltd. (“StarAmerican”); (4) American Home Insurance Agency, Inc.; and (5) American Home Title and Escrow Company. Due to its contributions to consolidated pretax income, we consider HomeAmerican to be a reportable segment (“mortgage operations”). The remaining operating segments have been aggregated into one reportable segment (“other”) because they do not individually exceed 10 percent of: (1) consolidated revenue; (2) the greater of (a) the combined reported profit of all operating segments that did not report a loss or (b) the positive value of the combined reported loss of all operating segments that reported losses; or (3) consolidated assets. Corporate is a non-operating segment that develops and implements strategic initiatives and supports our operating divisions by centralizing key administrative functions such as finance, treasury, information technology, insurance, risk management, litigation and human resources. Corporate also provides the necessary administrative functions to support MDC as a publicly traded company. A portion of the expenses incurred by Corporate are allocated to the homebuilding operating segments based on their respective percentages of assets, and to a lesser degree, a portion of Corporate expenses are allocated to the financial services segments. A majority of Corporate’s personnel and resources are primarily dedicated to activities relating to the homebuilding segments, and, therefore, the balance of any unallocated Corporate expenses is included in the homebuilding operations section of our consolidated statements of operations and comprehensive income. The following table summarizes revenues for our homebuilding and financial services operations:
The following table summarizes pretax income (loss) for our homebuilding and financial services operations:
The following table summarizes total assets for our homebuilding and financial services operations. The assets in our West, Mountain and East segments consist primarily of inventory while the assets in our Corporate segment primarily include our cash and cash equivalents, marketable securities and deferred tax assets. The assets in our financial services segment consist mostly of cash and cash equivalents, marketable securities and mortgage loans held-for-sale.
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Earnings Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Earnings Per Share Accounting Standards Codification ("ASC") Topic 260, Earnings per Share ("ASC 260") requires a company that has participating security holders (for example, holders of unvested restricted stock that have non-forfeitable dividend rights) to utilize the two-class method for calculating earnings per share (“EPS”) unless the treasury stock method results in lower EPS. The two-class method is an allocation of earnings/(loss) between the holders of common stock and a company’s participating security holders. Under the two-class method, earnings/(loss) for the reporting period are allocated between common shareholders and other security holders based on their respective rights to receive distributed earnings (i.e., dividends) and undistributed earnings (i.e., net income/(loss)). Our common shares outstanding are comprised of shareholder owned common stock and shares of unvested restricted stock held by participating security holders. Basic EPS is calculated by dividing income or loss attributable to common stockholders by the weighted average number of shares of common stock outstanding, excluding participating shares in accordance with ASC 260. To calculate diluted EPS, basic EPS is adjusted to include the effect of potentially dilutive stock options outstanding and contingently issuable equity awards. The table below shows our basic and diluted EPS calculations.
Diluted EPS for both the three and nine months ended September 30, 2022 excluded options to purchase 1,861,534 shares of common stock, because the effect of their inclusion would be anti-dilutive. There were 15,000 anti-dilutive options for both the three and nine months ended September 30, 2021.
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value MeasurementsASC Topic 820, Fair Value Measurements (“ASC 820”), defines fair value, establishes guidelines for measuring fair value and expands disclosures regarding fair value measurements. ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs, other than quoted prices in active markets, that are either directly or indirectly observable; and Level 3, defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions. The following table sets forth the fair values and methods used for measuring the fair values of financial instruments on a recurring basis, except those for which the carrying values approximate fair values:
The following methods and assumptions were used to estimate the fair value of each class of financial instruments as of September 30, 2022 and December 31, 2021. Debt securities. Our debt securities consist of U.S. government treasury securities with original maturities upon acquisition of less than six months and are treated as available-for-sale investments and, as such, are recorded at fair value with all changes in fair value initially recorded through other comprehensive income. Debt securities are reviewed on a regular basis for impairment. Mortgage loans held-for-sale, net. Our mortgage loans held-for-sale, which are measured at fair value on a recurring basis, include (1) mortgage loans held-for-sale that are under commitments to sell and (2) mortgage loans held-for-sale that are not under commitments to sell. At September 30, 2022 and December 31, 2021, we had $124.8 million and $157.7 million, respectively, of mortgage loans held-for-sale at fair value under commitments to sell. The fair value for those loans was based on quoted market prices for those mortgage loans, which are Level 2 fair value inputs. At September 30, 2022 and December 31, 2021, we had $66.0 million and $124.9 million, respectively, of mortgage loans held-for-sale that were not under commitments to sell. The fair value for those loans was primarily based upon the estimated market price received from an outside party, which is a Level 2 fair value input. Gains (losses) on sales of mortgage loans, net, are included as a component of revenues in the financial services section of our consolidated statements of operations and comprehensive income. For the three and nine months ended September 30, 2022, we recorded gain (loss) on mortgage loans held-for-sale, net of $(4.3) million and $(13.6) million, compared to $24.4 million and $70.6 million for the same period in the prior year. For the financial assets and liabilities that the Company does not reflect at fair value, the following methods and assumptions were used to estimate the fair value of each class of financial instruments. Cash and cash equivalents (excluding debt securities with an original maturity of three months or less), restricted cash, trade and other receivables, prepaids and other assets, accounts payable, accrued and other liabilities and borrowings on our revolving credit facility. Fair value approximates carrying value. Mortgage Repurchase Facility. The debt associated with our mortgage repurchase facility (see Note 18 for further discussion) is at floating rates that approximate current market rates and have relatively short-term maturities, generally within 30 days. The fair value approximates carrying value and is based on Level 2 inputs. Senior Notes. The estimated values of the senior notes in the following table are based on Level 2 inputs, which primarily reflect estimated prices for our senior notes that were provided by multiple sources.
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Inventories |
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Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories The following table sets forth, by reportable segment, information relating to our homebuilding inventories:
Our inventories are primarily associated with communities where we intend to construct and sell homes, including models and unsold homes. Costs capitalized to land and land under development primarily include: (1) land costs; (2) land development costs; (3) entitlement costs; (4) capitalized interest; (5) engineering fees; and (6) title insurance, real property taxes and closing costs directly related to the purchase of the land parcel. Components of housing completed or under construction primarily include: (1) land costs transferred from land and land under development; (2) direct construction costs associated with a house; (3) real property taxes, engineering fees, permits and other fees; (4) capitalized interest; and (5) indirect construction costs, which include field construction management salaries and benefits, utilities and other construction related costs. Land costs are transferred from land and land under development to housing completed or under construction at the point in time that construction of a home on an owned lot begins. In accordance with ASC Topic 360, Property, Plant, and Equipment (“ASC 360”), homebuilding inventories, excluding those classified as held for sale, are carried at cost unless events and circumstances indicate that the carrying value of the underlying subdivision may not be recoverable. We evaluate inventories for impairment at each quarter end on a subdivision level basis as each such subdivision represents the lowest level of identifiable cash flows. In making this determination, we review, among other things, the following for each subdivision: •actual and trending “Operating Margin” (which is defined as home sale revenues less home cost of sales and all incremental costs associated directly with the subdivision, including sales commissions and marketing costs); •forecasted Operating Margin for homes in backlog; •actual and trending net home orders; •homes available for sale; •market information for each sub-market, including competition levels, home foreclosure levels, the size and style of homes currently being offered for sale and lot size; and •known or probable events indicating that the carrying value may not be recoverable. If events or circumstances indicate that the carrying value of our inventory may not be recoverable, assets are reviewed for impairment by comparing the undiscounted estimated future cash flows from an individual subdivision (including capitalized interest) to its carrying value. If the undiscounted future cash flows are less than the subdivision’s carrying value, the carrying value of the subdivision is written down to its then estimated fair value. We generally determine the estimated fair value of each subdivision by determining the present value of the estimated future cash flows at discount rates, which are Level 3 inputs, that are commensurate with the risk of the subdivision under evaluation. The evaluation for the recoverability of the carrying value of the assets for each individual subdivision can be impacted significantly by our estimates of future home sale revenues, home construction costs, and development costs per home, all of which are Level 3 inputs. If land is classified as held for sale, we measure it in accordance with ASC 360 at the lower of the carrying value or fair value less estimated costs to sell. In determining fair value, we primarily rely upon the most recent negotiated price, which is a Level 2 input. If a negotiated price is not available, we will consider several factors including, but not limited to, current market conditions, recent comparable sales transactions and market analysis studies, which are considered Level 3 inputs. If the fair value less estimated costs to sell is lower than the current carrying value, the land is impaired down to its estimated fair value less costs to sell. Inventory impairments recognized by segment for the three and nine months ended September 30, 2022 and 2021 are shown in the table below.
The table below provides quantitative data, for the periods presented, where applicable, used in determining the fair value of the impaired inventory.
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Capitalization of Interest |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Capitalization of Interest | Capitalization of Interest We capitalize interest to inventories during the period of development in accordance with ASC Topic 835, Interest (“ASC 835”). Homebuilding interest capitalized as a cost of inventories is included in cost of sales during the period that related units or lots are delivered. To the extent our homebuilding debt exceeds our qualified assets as defined in ASC 835, we expense a portion of the interest incurred. Qualified homebuilding assets consist of all lots and homes, excluding finished unsold homes or finished models, within projects that are actively selling or under development. The table set forth below summarizes homebuilding interest activity. For all periods presented below, our qualified assets exceeded our homebuilding debt and as such, all interest incurred has been capitalized.
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases We lease certain property, land and equipment, the majority of which comprise property related leases to provide office space where we operate our business. Leases with an initial term of 12 months or less are not recorded on the balance sheet. We recognize lease expense for these leases on a straight-line basis over the lease term. Our property related leases typically have terms of between and five years, with the exception of the lease governing the Company’s headquarters. All of our property related leases are classified as operating leases. These leases do not contain any residual value guarantees or restrictive covenants and do not include variable lease payments, except for the payment of common area maintenance and real estate taxes. Many of our property related leases give us the option to extend the lease term for a period of time, generally consistent with the initial lease term. These options are excluded from our calculation of the right-of-use asset and lease liability until such time as we determine it is reasonably certain that the option will be exercised. The property related lease for the Company’s headquarters in Denver, Colorado is ten years in length with an expiration date of October 31, 2026 and contains a ten year option to extend the term of the lease through 2036. This option has been excluded from our calculation of the right-of-use asset and lease liability as it is not currently considered reasonably certain that the option will be exercised. Operating lease expense is included as a component of selling, general and administrative expenses in the homebuilding section and expenses in the financial services section of our consolidated statements of operations and comprehensive income. Components of operating lease expense were as follows:
1Includes variable lease costs, which are immaterial. Supplemental cash flow information related to leases was as follows:
Weighted-average remaining lease term and discount rate for operating leases were as follows:
Maturities of operating lease liabilities were as follows:
_______________________________________________________________ 1Operating lease payments exclude $1.2 million of legally binding lease payments for leases signed but not yet commenced. 2Homebuilding and financial services operating lease liabilities of $26.3 million and $0.5 million, respectively, are included as a component of accrued and other liabilities and accounts payable and accrued liabilities, respectively, in the homebuilding and financial services sections of our consolidated balance sheet at September 30, 2022.
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Homebuilding Prepaids and Other Assets |
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Prepaid Expense and Other Assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Homebuilding Prepaids and Other Assets | Homebuilding Prepaids and Other Assets The following table sets forth the components of homebuilding prepaids and other assets:
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Homebuilding Accrued and Other Liabilities and Financial Services Accounts Payable and Accrued Liabilities |
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Accounts Payable and Accrued Liabilities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Homebuilding Accrued and Other Liabilities and Financial Services Accounts Payable and Accrued Liabilities | Homebuilding Accrued and Other Liabilities and Financial Services Accounts Payable and Accrued Liabilities The following table sets forth information relating to homebuilding accrued and other liabilities:
The following table sets forth information relating to financial services accounts payable and accrued liabilities:
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Warranty Accrual |
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Product Warranties Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warranty Accrual | Warranty Accrual Our homes are sold with limited third-party warranties and, under our agreement with the issuer of the third-party warranties, we are responsible for performing all of the work for the first two years of the warranty coverage, and paying for certain work required to be performed subsequent to year . We record accruals for general and structural warranty claims, as well as accruals for known, unusual warranty-related expenditures. Our warranty accrual is recorded based upon historical payment experience in an amount estimated to be adequate to cover expected costs of materials and outside labor during warranty periods. The determination of the warranty accrual rate for closed homes and the evaluation of our warranty accrual balance at period end are based on an internally developed analysis that includes known facts and interpretations of circumstances, including, among other things, our trends in historical warranty payment levels and warranty payments for claims not considered to be normal and recurring. Our warranty accrual is included in accrued and other liabilities in the homebuilding section of our consolidated balance sheets and adjustments to our warranty accrual are recorded as an increase or reduction to home cost of sales in the homebuilding section of our consolidated statements of operations and comprehensive income. The table set forth below summarizes accrual, adjustment and payment activity related to our warranty accrual for the three and nine months ended September 30, 2022 and 2021. The warranty accrual for the three and nine months ended September 30, 2022 increased due to the increase in the number of home closings. The warranty accrual for the nine months ended September 30, 2022 also increased as a result of a $3.0 million adjustment to increase our warranty accrual during the period. This adjustment was due to higher general warranty related expenditures. There were $0.3 million of warranty adjustments during the three and nine months ended September 30, 2021.
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Insurance and Construction Defect Claim Reserves |
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Insurance [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Insurance and Construction Defect Claim Reserves | Insurance and Construction Defect Claim Reserves The establishment of reserves for estimated losses associated with insurance policies issued by Allegiant and re-insurance agreements issued by StarAmerican are based on actuarial studies that include known facts and interpretations of circumstances, including our experience with similar cases and historical trends involving claim payment patterns, pending levels of unpaid claims, product mix or concentration, claim severity, frequency patterns, and changing regulatory and legal environments. It is possible that changes in the insurance payment experience used in estimating our ultimate insurance losses could have a material impact on our insurance reserves. The establishment of reserves for estimated losses to be incurred by our homebuilding subsidiaries associated with: (1) the self-insured retention (“SIR”) portion of construction defect claims that are expected to be covered under insurance policies with Allegiant and (2) the entire cost of any construction defect claims that are not expected to be covered by insurance policies with Allegiant, are based on third party actuarial studies that include known facts similar to those for our insurance reserves. It is possible that changes in the payment experience used in estimating our ultimate losses for construction defect claims could have a material impact on our reserves. The table set forth below summarizes our insurance and construction defect claim reserves activity for the three and nine months ended September 30, 2022 and 2021. These reserves are included as a component of accounts payable and accrued liabilities and accrued and other liabilities in the financial services and homebuilding sections, respectively, of the consolidated balance sheets.
In the ordinary course of business, we make payments from our insurance and construction defect claim reserves to settle litigation claims arising from our homebuilding activities. These payments are irregular in both their timing and their magnitude. As a result, the cash payments, net of recoveries shown for the three and nine months ended September 30, 2022 and 2021 are not necessarily indicative of what future cash payments will be for subsequent periods.
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Income Taxes |
9 Months Ended |
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Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income TaxesOur overall effective income tax rates were 22.3% and 25.4% for the three and nine months ended September 30, 2022, respectively, and 24.3% and 24.2% for the three and nine months ended September 30, 2021, respectively. The rates for the three and nine months ended September 30, 2022 resulted in income tax expense of $41.4 million and $164.3 million, respectively, compared to income tax expense of $46.7 million and $131.5 million for the three and nine months ended September 30, 2021, respectively. The year-over-year decrease in the effective tax rate for the three months ended September 30, 2022, was primarily due to the Inflation Reduction Act retroactively extending the energy tax credit for the period January 1, 2022 through December 31, 2022 during the quarter. This was partially offset by an increase in non-deductible executive compensation. The year-over-year increase in the effective rate for the nine months ended September 30, 2022 was primarily related to an increase in non-deductible executive compensation and a decrease in the windfall on non-qualifying stock options exercised and lapsed restricted stock during the current period. |
Senior Notes |
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Senior Notes | Senior Notes The carrying values of our senior notes as of September 30, 2022 and December 31, 2021, net of any unamortized debt issuance costs or discount, were as follows:
Our senior notes are not secured and, while the senior note indentures contain some restrictions on secured debt and other transactions, they do not contain financial covenants. Our senior notes are fully and unconditionally guaranteed on an unsecured basis, jointly and severally, by most of our homebuilding segment subsidiaries. In January 2021, we completed an offering of $350.0 million of 2.500% senior notes due January 2031 at 100% of par. In August 2021, the Company issued $350.0 million of 3.966% senior notes due August 2061 at 100% of par. We used the net proceeds for general corporate purposes, which included the retirement of our 5.500% senior notes discussed further below, which were scheduled to mature in January 2024. In September 2021, we accelerated the retirement of $123.6 million of our 5.500% senior notes scheduled to mature in January 2024 through a cash tender offer. The retirement resulted in a loss of $12.2 million, which included the write-off of debt issuance costs and transaction fees.
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Stock-Based Compensation |
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Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation The following table sets forth share-based award expense activity for the three and nine months ended September 30, 2022 and 2021, which is included as a component of selling, general and administrative expenses and expenses in the homebuilding and financial services sections, respectively, of our consolidated statements of operations and comprehensive income:
On September 28, 2022 the Compensation Committee of the Company granted long-term non-qualified stock options for 1,800,000 shares of common stock under the Company’s 2021 Equity Incentive Plan. The stock options vested immediately and will become exercisable equally over three years, starting with the first anniversary of the grant date. The option exercise price is equal to the closing price of the Company’s common stock on the date of grant, which was $28.78 and the expiration date of each option is September 28, 2032. The grant date fair value of these options is $8.34 per share, resulting in $15.0 million of compensation expense recognized during the three and nine months ended September 30, 2022. Additional detail on the performance share units ("PSUs") expense is included below: 2018 PSU Grants. The 2018 PSU awards vested on April 29, 2021. For the three and nine months ended September 30, 2021, the Company recorded share-based award expense of $1.3 million related to these awards. 2019 PSU Grants. The 2019 PSU awards vested on February 3, 2022. For the three and nine months ended September 30, 2021, the Company recorded share-based award expense of $1.8 million and $5.5 million, respectively, related to these awards. 2020 PSU Grants. As of September 30, 2022, the Company recorded the required share-based award expense related to the awards of $2.5 million and $7.4 million for the three and nine months ended September 30, 2022, based on its assessment of the probability for achievement of the performance targets. For the three and nine months ended September 30, 2021, the Company recorded share-based award expense of $2.5 million and $10.9 million, respectively, related to these awards. 2021 PSU Grants. As of September 30, 2022, the Company recorded the required share-based award expense related to the awards of $4.8 million and $18.9 million for the three and nine months ended September 30, 2022, based on its assessment of the probability for achievement of the performance targets. As of September 30, 2021, the Company concluded that achievement of any of the performance metrics had not met the level of probability required to record compensation expense and accordingly, no expense related to these awards was recognized.
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Commitments and Contingencies |
9 Months Ended |
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Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Surety Bonds and Letters of Credit. We are required to obtain surety bonds and letters of credit in support of our obligations for land development and subdivision improvements, homeowner association dues, warranty work, contractor license fees and earnest money deposits. At September 30, 2022, we had outstanding surety bonds and letters of credit totaling $367.6 million and $166.8 million, respectively, including $117.4 million in letters of credit issued by HomeAmerican. The estimated cost to complete obligations related to these bonds and letters of credit were approximately $155.8 million and $122.9 million, respectively. All letters of credit as of September 30, 2022, excluding those issued by HomeAmerican, were issued under our unsecured revolving credit facility (see Note 18 for further discussion of the revolving credit facility). We expect that the obligations secured by these performance bonds and letters of credit generally will be performed in the ordinary course of business and in accordance with the applicable contractual terms. To the extent that the obligations are performed, the related performance bonds and letters of credit should be released and we should not have any continuing obligations. However, in the event any such performance bonds or letters of credit are called, our indemnity obligations could require us to reimburse the issuer of the performance bond or letter of credit. We have made no material guarantees with respect to third-party obligations. Litigation. Due to the nature of the homebuilding business, we have been named as defendants in various claims, complaints and other legal actions arising in the ordinary course of business, including product liability claims and claims associated with the sale and financing of homes. In the opinion of management, the outcome of these ordinary course matters will not have a material adverse effect upon our financial condition, results of operations or cash flows. Lot Option Contracts. In the ordinary course of business, we enter into lot option purchase contracts (“Option Contracts”), generally through a deposit of cash or a letter of credit, for the right to purchase land or lots at a future point in time with predetermined terms. The use of such land option and other contracts generally allow us to reduce the risks associated with direct land ownership and development, reduces our capital and financial commitments, and minimizes the amount of land inventories on our consolidated balance sheets. In certain cases, these contracts will be settled shortly following the end of the period. Our obligation with respect to Option Contracts is generally limited to forfeiture of the related deposits. At September 30, 2022, we had cash deposits and letters of credit totaling $24.1 million and $5.9 million, respectively, at risk associated with the option to purchase 5,364 lots.
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Derivative Financial Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Financial Instruments | Derivative Financial Instruments In the normal course of business, we enter into interest rate lock commitments ("IRLCs") with borrowers who have applied for loan funding and meet defined credit and underwriting criteria. Since we can terminate a loan commitment if the borrower does not comply with the terms of the contract, and some loan commitments may expire without being drawn upon, these commitments do not necessarily represent future cash requirements. Market risk arises if interest rates move adversely between the time of the IRLCs and the date the loan is committed or sold to an investor. We mitigate our exposure to interest rate market risk relating to mortgage loans held-for-sale and IRLCs using: (1) forward sales of mortgage-backed securities, which are commitments to sell a specified financial instrument at a specified future date for a specified price, (2) mandatory delivery forward loan sale commitments, which are obligations of an investor to buy loans at a specified price within a specified time period, and (3) best-effort delivery forward loan sale commitments, which are obligations of an investor to buy loans at a specified price subject to the underlying mortgage loans being funded and closed. The best-effort delivery forward loan sale commitments do not meet the definition of derivative financial instruments in accordance with ASC Topic 815, Derivatives and Hedging ("ASC 815"). We have elected the fair value option for the best-effort delivery forward loan sale commitments in accordance with ASC Topic 825, Financial Instruments ("ASC 825"). Forward sales of mortgage-backed securities are the predominant derivative financial instruments we use to minimize market risk during the period from the time we extend an interest rate lock to a loan applicant until the time the loan is committed under a best-effort or mandatory delivery forward loan sale commitment. The following table sets forth the notional amounts of our financial instruments at September 30, 2022 and December 31, 2021:
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Lines of Credit |
9 Months Ended |
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Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Lines of Credit | Lines of Credit Revolving Credit Facility. We have an unsecured revolving credit agreement (“Revolving Credit Facility”) with a group of lenders which may be used for general corporate purposes. This agreement was amended on December 28, 2020 to (1) increase the aggregate commitment from $1.0 billion to $1.2 billion (the “Commitment”), (2) extend the Revolving Credit Facility maturity of $1.125 billion of the Commitments to December 18, 2025 with the remaining Commitment continuing to terminate on December 18, 2023 and (3) provide that the aggregate amount of the commitments may increase to an amount not to exceed $1.7 billion upon our request, subject to receipt of additional commitments from existing or additional lenders and, in the case of additional lenders, the consent of the co-administrative agents. As defined in the Revolving Credit Facility, interest rates on base rate borrowings are equal to the highest of (1) 0.0%, (2) a prime rate, (3) a federal funds effective rate plus 1.50%, and (4) a specified eurocurrency rate plus 1.00% and, in each case, plus a margin that is determined based on our credit ratings and leverage ratio. Interest rates on eurocurrency borrowings are equal to a specified eurocurrency rate plus a margin that is determined based on our credit ratings and leverage ratio. At any time at which our leverage ratio, as of the last day of the most recent calendar quarter, exceeds 55%, the aggregate principal amount of all consolidated senior debt borrowings outstanding may not exceed the borrowing base. There is no borrowing base requirement if our leverage ratio, as of the last day of the most recent calendar quarter, is 55% or less. The Revolving Credit Facility provides for a transition from the eurocurrency rate to a benchmark replacement upon the occurrence of certain events. The Revolving Credit Facility is fully and unconditionally guaranteed, jointly and severally, by most of our homebuilding segment subsidiaries. The facility contains various representations, warranties and covenants that we believe are customary for agreements of this type. The financial covenants include a consolidated tangible net worth test and a leverage test, along with a consolidated tangible net worth covenant, all as defined in the Revolving Credit Facility. A failure to satisfy the foregoing tests does not constitute an event of default, but can trigger a “term-out” of the facility. A breach of the consolidated tangible net worth covenant (but not the consolidated tangible net worth test) or a violation of anti-corruption or sanctions laws would result in an event of default. The Revolving Credit Facility is subject to acceleration upon certain specified events of default, including breach of the consolidated tangible net worth covenant, a violation of anti-corruption or sanctions laws, failure to make timely payments, breaches of certain representations or covenants, failure to pay other material indebtedness, or another person becoming beneficial owner of 50% or more of our outstanding common stock. We believe we were in compliance with the representations, warranties and covenants included in the Revolving Credit Facility as of September 30, 2022. We incur costs associated with unused commitment fees pursuant to the terms of the Revolving Credit Facility. At September 30, 2022 and December 31, 2021, there were $49.4 million and $40.1 million, respectively, in letters of credit outstanding, which reduced the amounts available to be borrowed under the Revolving Credit Facility. At September 30, 2022 and December 31, 2021, we had $10.0 million and $10.0 million, respectively, outstanding under the Revolving Credit Facility. As of September 30, 2022, availability under the Revolving Credit Facility was approximately $1.14 billion. Mortgage Repurchase Facility. HomeAmerican has a Master Repurchase Agreement (the “Mortgage Repurchase Facility”) with U.S. Bank National Association (“USBNA”). The Mortgage Repurchase Facility provides liquidity to HomeAmerican by providing for the sale of up to an aggregate of $75 million (subject to increase by up to $75 million under certain conditions) of eligible mortgage loans to USBNA with an agreement by HomeAmerican to repurchase the mortgage loans at a future date. Until such mortgage loans are transferred back to HomeAmerican, the documents relating to such loans are held by USBNA, as custodian, pursuant to the Custody Agreement (“Custody Agreement”), dated as of November 12, 2008, by and between HomeAmerican and USBNA. In the event that an eligible mortgage loan becomes ineligible, as defined under the Mortgage Repurchase Facility, HomeAmerican may be required to repurchase the ineligible mortgage loan immediately. The Mortgage Repurchase Facility was amended on September 24, 2020, March 25, 2021, May 20, 2021, December 21, 2021 and May 19, 2022 to adjust the commitments to purchase for specific time periods. The total capacity of the facility at September 30, 2022 was $275 million. The May 19, 2022 amendment extended the termination date of the Repurchase Agreement to May 18, 2023. At September 30, 2022 and December 31, 2021, HomeAmerican had $196.2 million and $256.3 million, respectively, of mortgage loans that HomeAmerican was obligated to repurchase under the Mortgage Repurchase Facility. Mortgage loans that HomeAmerican is obligated to repurchase under the Mortgage Repurchase Facility are accounted for as a debt financing arrangement and are reported as mortgage repurchase facility in the consolidated balance sheets. The December 21, 2021 amendment also provides for a transition from a pricing rate based on the London Interbank Offered Rate (LIBOR) to one based on the Secured Overnight Financing Rate (SOFR). The Mortgage Repurchase Facility contains various representations, warranties and affirmative and negative covenants that we believe are customary for agreements of this type. The negative covenants include, among others, (i) a minimum Adjusted Tangible Net Worth requirement, (ii) a maximum Adjusted Tangible Net Worth ratio, (iii) a minimum adjusted net income requirement, and (iv) a minimum Liquidity requirement. The foregoing capitalized terms are defined in the Mortgage Repurchase Facility. We believe HomeAmerican was in compliance with the representations, warranties and covenants included in the Mortgage Repurchase Facility as of September 30, 2022.
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Related Party Transactions |
9 Months Ended |
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Sep. 30, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party TransactionsThe Company has a sublease agreement with CVentures, Inc. Larry A. Mizel, the Executive Chairman of the Company, is the President of CVentures, Inc. The sublease is for office space that CVentures, Inc. has continuously leased from the Company as disclosed in the Form 8-K filed July 27, 2005 and the Form 8-K filed March 28, 2006. The current sublease term commenced November 1, 2016 and will continue through October 31, 2026. The sublease agreement is for approximately 5,437 rentable square feet at a base rent that increases over the term from $26.50 to $31.67 per rentable square foot per year. The sublease rent is an allocation of the rent under the master lease agreement based on the sublease square footage. |
Supplemental Guarantor Information |
9 Months Ended |
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Sep. 30, 2022 | |
Condensed Financial Information Disclosure [Abstract] | |
Supplemental Guarantor Information | Supplemental Guarantor Information Our senior notes are fully and unconditionally guaranteed on an unsecured basis, jointly and severally, by the following subsidiaries (collectively, the "Guarantor Subsidiaries"), which are 100%-owned subsidiaries of the Company: •M.D.C. Land Corporation •RAH of Florida, Inc. •Richmond American Construction, Inc. •Richmond American Construction NM, Inc. •Richmond American Homes of Arizona, Inc. •Richmond American Homes of Colorado, Inc. •Richmond American Homes of Florida, LP •Richmond American Homes of Idaho, Inc. •Richmond American Homes of Maryland, Inc. •Richmond American Homes of Nevada, Inc. •Richmond American Homes of New Mexico, Inc. •Richmond American Homes of Oregon, Inc. •Richmond American Homes of Pennsylvania, Inc. •Richmond American Homes of Tennessee, Inc. •Richmond American Homes of Texas, Inc. •Richmond American Homes of Utah, Inc. •Richmond American Homes of Virginia, Inc. •Richmond American Homes of Washington, Inc. The senior note indentures do not provide for a suspension of the guarantees. Other than for the senior notes due 2061, the senior note indentures, provide that any Guarantor may be released from its guarantee so long as (1) no default or event of default exists or would result from release of such guarantee, (2) the Guarantor being released has consolidated net worth of less than 5% of the Company’s consolidated net worth as of the end of the most recent fiscal quarter, (3) the Guarantors released from their guarantees in any year-end period comprise in the aggregate less than 10% (or 15% if and to the extent necessary to permit the cure of a default) of the Company’s consolidated net worth as of the end of the most recent fiscal quarter, (4) such release would not have a material adverse effect on the homebuilding business of the Company and its subsidiaries and (5) the Guarantor is released from its guarantee(s) under all Specified Indebtedness (other than by reason of payment under its guarantee of Specified Indebtedness). The indenture for the senior notes due 2061 provides that, if a Guarantor is released under its guarantees of our credit facilities or other publicly traded debt securities, the Guarantor will also be released under its guarantee of the senior notes due 2061. Upon delivery of an officers’ certificate and an opinion of counsel stating that all conditions precedent provided for in the indenture relating to such transactions have been complied with and the release is authorized, the guarantee will be automatically and unconditionally released. “Specified Indebtedness” means indebtedness under the senior notes, the Company’s Indenture dated as of December 3, 2002, the Revolving Credit Facility, and any refinancing, extension, renewal or replacement of any of the foregoing. As the combined assets, liabilities and results of operations of M.D.C. Holdings, Inc. and the Guarantor Subsidiaries (the “Obligor Group”) are not materially different from those in the homebuilding section of our consolidated balance sheets and consolidated statements of operations and comprehensive income, separate summarized financial information of the Obligor Group has not been included. As of September 30, 2022 and December 31, 2021, amounts due to non-guarantor subsidiaries from the Obligor Group totaled $65.8 million and $60.2 million, respectively.
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Segment Reporting (Tables) |
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Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Revenue from Segments to Consolidated | The following table summarizes revenues for our homebuilding and financial services operations:
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Reconciliation of Operating Profit (Loss) from Segments to Consolidated | The following table summarizes pretax income (loss) for our homebuilding and financial services operations:
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Reconciliation of Assets from Segment to Consolidated | The following table summarizes total assets for our homebuilding and financial services operations. The assets in our West, Mountain and East segments consist primarily of inventory while the assets in our Corporate segment primarily include our cash and cash equivalents, marketable securities and deferred tax assets. The assets in our financial services segment consist mostly of cash and cash equivalents, marketable securities and mortgage loans held-for-sale.
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Earnings Per Share (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | To calculate diluted EPS, basic EPS is adjusted to include the effect of potentially dilutive stock options outstanding and contingently issuable equity awards. The table below shows our basic and diluted EPS calculations.
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Fair Value Measurements (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, Assets Measured on Recurring Basis | The following table sets forth the fair values and methods used for measuring the fair values of financial instruments on a recurring basis, except those for which the carrying values approximate fair values:
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Fair Value of Senior Notes | The estimated values of the senior notes in the following table are based on Level 2 inputs, which primarily reflect estimated prices for our senior notes that were provided by multiple sources.
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Inventories (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventory | The following table sets forth, by reportable segment, information relating to our homebuilding inventories:
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Schedule of Inventory Impairments | Inventory impairments recognized by segment for the three and nine months ended September 30, 2022 and 2021 are shown in the table below.
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Quantitative Data for Fair Value of the Impaired Inventory | The table below provides quantitative data, for the periods presented, where applicable, used in determining the fair value of the impaired inventory.
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Capitalization of Interest (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Capitalization of Interest | For all periods presented below, our qualified assets exceeded our homebuilding debt and as such, all interest incurred has been capitalized.
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Leases (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lease, Cost | Components of operating lease expense were as follows:
1Includes variable lease costs, which are immaterial.
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Schedule of Lease Cash Flow Information | Supplemental cash flow information related to leases was as follows:
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Schedule of Lease Terms and Discount Rates | Weighted-average remaining lease term and discount rate for operating leases were as follows:
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Lessee, Operating Lease, Liability, Maturity | Maturities of operating lease liabilities were as follows:
_______________________________________________________________ 1Operating lease payments exclude $1.2 million of legally binding lease payments for leases signed but not yet commenced. 2Homebuilding and financial services operating lease liabilities of $26.3 million and $0.5 million, respectively, are included as a component of accrued and other liabilities and accounts payable and accrued liabilities, respectively, in the homebuilding and financial services sections of our consolidated balance sheet at September 30, 2022.
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Homebuilding Prepaids and Other Assets (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Prepaid Expense and Other Assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Assets | The following table sets forth the components of homebuilding prepaids and other assets:
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Homebuilding Accrued and Other Liabilities and Financial Services Accounts Payable and Accrued Liabilities (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Payable and Accrued Liabilities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accrued Liabilities | The following table sets forth information relating to homebuilding accrued and other liabilities:
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Schedule of Accounts Payable and Accrued Liabilities | The following table sets forth information relating to financial services accounts payable and accrued liabilities:
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Warranty Accrual (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Product Warranties Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Product Warranty Liability | The table set forth below summarizes accrual, adjustment and payment activity related to our warranty accrual for the three and nine months ended September 30, 2022 and 2021. The warranty accrual for the three and nine months ended September 30, 2022 increased due to the increase in the number of home closings. The warranty accrual for the nine months ended September 30, 2022 also increased as a result of a $3.0 million adjustment to increase our warranty accrual during the period. This adjustment was due to higher general warranty related expenditures. There were $0.3 million of warranty adjustments during the three and nine months ended September 30, 2021.
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Insurance and Construction Defect Claim Reserves (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Insurance [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Liability for Unpaid Claims and Claims Adjustment Expense | The table set forth below summarizes our insurance and construction defect claim reserves activity for the three and nine months ended September 30, 2022 and 2021. These reserves are included as a component of accounts payable and accrued liabilities and accrued and other liabilities in the financial services and homebuilding sections, respectively, of the consolidated balance sheets.
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Senior Notes (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt | The carrying values of our senior notes as of September 30, 2022 and December 31, 2021, net of any unamortized debt issuance costs or discount, were as follows:
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Stock-Based Compensation (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement, Activity | The following table sets forth share-based award expense activity for the three and nine months ended September 30, 2022 and 2021, which is included as a component of selling, general and administrative expenses and expenses in the homebuilding and financial services sections, respectively, of our consolidated statements of operations and comprehensive income:
|
Derivative Financial Instruments (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Gain (Loss) on Financial Instruments | The following table sets forth the notional amounts of our financial instruments at September 30, 2022 and December 31, 2021:
|
Segment Reporting - Narrative (Details) |
9 Months Ended |
---|---|
Sep. 30, 2022
segment
| |
Other | |
Segment Reporting Information [Line Items] | |
Number of reportable segments | 1 |
Earnings Per Share - Narrative (Details) - shares |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Earnings Per Share [Abstract] | ||||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 1,861,534 | 15,000 | 1,861,534 | 15,000 |
Fair Value Measurements - Fair Value Methods Used for Measuring Fair Values of Financial Instruments on Recurring Basis (Details) - USD ($) $ in Thousands |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Fair Value, Inputs, Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities (available-for-sale) | $ 292,208 | $ 0 |
Fair Value, Inputs, Level 2 | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Mortgage loans held-for-sale, net | $ 190,833 | $ 282,529 |
Fair Value Measurements - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
Dec. 31, 2021 |
|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Gain (losses) on sale of mortgage loans | $ (4.3) | $ 24.4 | $ (13.6) | $ 70.6 | |
Minimum | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Short term borrowings maturity period | 30 days | ||||
Fair Value, Inputs, Level 2 | Under Commitment to Sell | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Mortgage loans held-for-sale, net | 124.8 | $ 124.8 | $ 157.7 | ||
Fair Value, Inputs, Level 2 | Not Under Commitment to Sell | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Mortgage loans held-for-sale, net | $ 66.0 | $ 66.0 | $ 124.9 |
Inventories - Summary of Inventory (Details) - USD ($) $ in Thousands |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Inventory [Line Items] | ||
Housing completed or under construction | $ 2,233,908 | $ 1,917,616 |
Land and land under development | 1,808,526 | 1,843,235 |
Total inventories | 4,042,434 | 3,760,851 |
Homebuilding: | ||
Inventory [Line Items] | ||
Housing completed or under construction | 2,233,908 | 1,917,616 |
Land and land under development | 1,808,526 | 1,843,235 |
Total inventories | 4,042,434 | 3,760,851 |
Homebuilding: | West | ||
Inventory [Line Items] | ||
Housing completed or under construction | 1,284,960 | 1,077,256 |
Land and land under development | 1,177,322 | 1,235,363 |
Homebuilding: | Mountain | ||
Inventory [Line Items] | ||
Housing completed or under construction | 675,660 | 596,164 |
Land and land under development | 444,017 | 435,958 |
Homebuilding: | East | ||
Inventory [Line Items] | ||
Housing completed or under construction | 273,288 | 244,196 |
Land and land under development | $ 187,187 | $ 171,914 |
Inventories - Inventory Impairments (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2022 |
Mar. 31, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Inventory [Line Items] | |||||
Inventory Impairments | $ 28,415 | $ 660 | $ 29,075 | $ 0 | |
Homebuilding: | |||||
Inventory [Line Items] | |||||
Inventory Impairments | 28,415 | $ 0 | 29,075 | 0 | |
Homebuilding: | Housing Completed or Under Construction | |||||
Inventory [Line Items] | |||||
Inventory Impairments | 28,415 | 0 | 29,075 | 0 | |
Homebuilding: | West | Housing Completed or Under Construction | |||||
Inventory [Line Items] | |||||
Inventory Impairments | 25,900 | 0 | 26,560 | 0 | |
Homebuilding: | Mountain | Housing Completed or Under Construction | |||||
Inventory [Line Items] | |||||
Inventory Impairments | 0 | 0 | 0 | 0 | |
Homebuilding: | East | Housing Completed or Under Construction | |||||
Inventory [Line Items] | |||||
Inventory Impairments | $ 2,515 | $ 0 | $ 2,515 | $ 0 |
Inventories - Fair Value of Impaired Inventory (Details) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022
USD ($)
subdivision
|
Mar. 31, 2022
USD ($)
subdivision
|
Sep. 30, 2022
USD ($)
|
Sep. 30, 2021
USD ($)
|
|
Inventory [Line Items] | ||||
Number of Subdivisions Impaired | subdivision | 9 | 1 | ||
Inventory Impairments | $ 28,415 | $ 660 | $ 29,075 | $ 0 |
Fair Value of Inventory After Impairments | $ 44,615 | $ 1,728 | ||
Minimum | ||||
Inventory [Line Items] | ||||
Discount Rate | 15.00% | |||
Maximum | ||||
Inventory [Line Items] | ||||
Discount Rate | 18.00% |
Capitalization of Interest - Interest Activity (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Debt Disclosure [Abstract] | ||||
Homebuilding interest incurred | $ 17,391 | $ 19,108 | $ 52,031 | $ 53,849 |
Less: Interest capitalized | (17,391) | (19,108) | (52,031) | (53,849) |
Homebuilding interest expensed | 0 | 0 | 0 | 0 |
Real Estate Inventory, Capitalized Interest Costs [Roll Forward] | ||||
Interest capitalized, beginning of period | 62,169 | 54,351 | 58,054 | 52,777 |
Plus: Interest capitalized during period | 17,391 | 19,108 | 52,031 | 53,849 |
Less: Previously capitalized interest included in home cost of sales | (15,977) | (16,024) | (46,502) | (49,191) |
Interest capitalized, end of period | $ 63,583 | $ 57,435 | $ 63,583 | $ 57,435 |
Leases - Narrative (Details) |
Sep. 30, 2022 |
---|---|
Company Headquarters | |
Lessee, Lease, Description [Line Items] | |
Term of contract | 10 years |
Renewal term | 10 years |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Term of contract | 3 years |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Term of contract | 5 years |
Leases - Components of Operating Lease Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Leases [Abstract] | ||||
Operating lease cost | $ 2,180 | $ 2,018 | $ 6,418 | $ 5,990 |
Less: Sublease income | (141) | (39) | (366) | (117) |
Net lease cost | $ 2,039 | $ 1,979 | $ 6,052 | $ 5,873 |
Leases - Supplemental Cash Flow Information Related to Leases (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Cash paid for amounts included in the measurement of lease liabilities: | ||||
Operating cash flows from operating leases | $ 2,038 | $ 1,900 | $ 6,059 | $ 5,645 |
Right of use assets obtained in exchange for new operating lease liabilities | $ 1,689 | $ 0 | $ 5,984 | $ 830 |
Leases - Weighted Average Remaining Lease Term and Discount Rate (Details) |
Sep. 30, 2022 |
Sep. 30, 2021 |
---|---|---|
Leases [Abstract] | ||
Weighted-average remaining lease term (in years) | 4 years 3 months 18 days | 4 years 8 months 12 days |
Weighted-average discount rate | 5.50% | 5.50% |
Leases - Maturities of Operating Lease Liabilities (Details) - USD ($) $ in Thousands |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Lessee, Lease, Description [Line Items] | ||
2022 (excluding the nine months ended September 30, 2022) | $ 1,425 | |
2023 | 7,404 | |
2024 | 6,968 | |
2025 | 6,857 | |
2026 | 5,892 | |
Thereafter | 1,584 | |
Total operating lease payments | 30,130 | |
Less: Interest | 3,315 | |
Legally binding lease liability for leases signed but not yet commenced | $ 1,200 | |
Present value of operating lease liabilities | 26,815 | |
Homebuilding: | ||
Lessee, Lease, Description [Line Items] | ||
Present value of operating lease liabilities | 26,284 | $ 26,440 |
Financial Services: | ||
Lessee, Lease, Description [Line Items] | ||
Present value of operating lease liabilities | $ 500 |
Homebuilding Prepaids and Other Assets - Summary of Homebuilding Prepaid and Other Assets (Details) - Homebuilding: - USD ($) $ in Thousands |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Schedule of Prepaid Expenses and Other Assets [Line Items] | ||
Land option deposits | $ 26,051 | $ 41,617 |
Operating lease right-of-use asset | 25,296 | 25,514 |
Prepaids | 15,510 | 26,058 |
Goodwill | 6,008 | 6,008 |
Deferred debt issuance costs on revolving credit facility, net | 5,717 | 7,166 |
Other | 239 | 199 |
Total prepaids and other assets | $ 78,821 | $ 106,562 |
Homebuilding Accrued and Other Liabilities and Financial Services Accounts Payable and Accrued Liabilities - Homebuilding Accrued Liabilities (Details) - USD ($) $ in Thousands |
Sep. 30, 2022 |
Jun. 30, 2022 |
Dec. 31, 2021 |
Sep. 30, 2021 |
Jun. 30, 2021 |
Dec. 31, 2020 |
---|---|---|---|---|---|---|
Segment Reporting Information [Line Items] | ||||||
Warranty accrual | $ 45,161 | $ 42,711 | $ 37,491 | $ 36,120 | $ 35,017 | $ 33,664 |
Lease liability | 26,815 | |||||
Homebuilding: | ||||||
Segment Reporting Information [Line Items] | ||||||
Accrued compensation and related expenses | 81,908 | 81,417 | ||||
Customer and escrow deposits | 69,757 | 89,353 | ||||
Warranty accrual | 45,161 | 37,491 | ||||
Lease liability | 26,284 | 26,440 | ||||
Land development and home construction accruals | 21,418 | 22,012 | ||||
Accrued interest | 14,889 | 30,934 | ||||
Income Taxes Payable | 10,843 | 9,836 | ||||
Construction defect claim reserves | 9,282 | 9,287 | ||||
Other accrued liabilities | 84,742 | 64,140 | ||||
Total accrued and other liabilities | $ 364,284 | $ 370,910 |
Homebuilding Accrued and Other Liabilities and Financial Services Accounts Payable and Accrued Liabilities - Financial Services Accounts Payable and Accrued Liabilities (Details) - USD ($) $ in Thousands |
Sep. 30, 2022 |
Jun. 30, 2022 |
Dec. 31, 2021 |
Sep. 30, 2021 |
Jun. 30, 2021 |
Dec. 31, 2020 |
---|---|---|---|---|---|---|
Segment Reporting Information [Line Items] | ||||||
Insurance reserves | $ 91,440 | $ 87,924 | $ 82,187 | $ 78,999 | $ 76,286 | $ 70,054 |
Financial Services: | ||||||
Segment Reporting Information [Line Items] | ||||||
Insurance reserves | 82,158 | 72,900 | ||||
Accounts payable and other accrued liabilities | 34,576 | 25,003 | ||||
Total accounts payable and accrued liabilities | $ 116,734 | $ 97,903 |
Warranty Accrual - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Product Warranty Liability [Line Items] | ||||
Period responsible for performing all warranty work (in years) | 2 years | |||
Adjustment to increase warranty accrual | $ 523 | $ 319 | $ 2,963 | $ 319 |
Minimum | ||||
Product Warranty Liability [Line Items] | ||||
Period responsible for paying for substantially all warranty work required (in years) | 2 years |
Warranty Accrual - Warranty Accrual and Payment Activity (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Movement in Standard and Extended Product Warranty Accrual, Increase (Decrease) [Roll Forward] | ||||
Balance at beginning of period | $ 42,711 | $ 35,017 | $ 37,491 | $ 33,664 |
Expense provisions | 6,856 | 5,618 | 19,475 | 15,706 |
Cash payments | (4,929) | (4,834) | (14,768) | (13,569) |
Adjustments | 523 | 319 | 2,963 | 319 |
Balance at end of period | $ 45,161 | $ 36,120 | $ 45,161 | $ 36,120 |
Insurance and Construction Defect Claim Reserves - Summary of Insurance and Defect Claim Reserves Activity (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Movement in Liability for Future Policy Benefits [Roll Forward] | ||||
Balance at beginning of period | $ 87,924 | $ 76,286 | $ 82,187 | $ 70,054 |
Expense provisions | 4,879 | 4,776 | 14,331 | 14,447 |
Cash payments, net of recoveries | (1,363) | (2,063) | (5,078) | (5,502) |
Balance at end of period | $ 91,440 | $ 78,999 | $ 91,440 | $ 78,999 |
Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate | 22.30% | 24.30% | 25.40% | 24.20% |
Income tax expense | $ 41,389 | $ 46,738 | $ 164,271 | $ 131,550 |
Senior Notes - Carrying Amount of Senior Notes (Details) - USD ($) $ in Thousands |
Sep. 30, 2022 |
Dec. 31, 2021 |
Aug. 31, 2021 |
Jan. 31, 2021 |
---|---|---|---|---|
Debt Instrument [Line Items] | ||||
Carrying Amount | $ 1,482,374 | $ 1,481,781 | ||
Senior Notes 3.850% Due January 2030 | ||||
Debt Instrument [Line Items] | ||||
Interest rate, stated percentage | 3.85% | |||
Carrying Amount | $ 297,884 | 297,699 | ||
Senior Notes 2.500% Due January 2031 | ||||
Debt Instrument [Line Items] | ||||
Interest rate, stated percentage | 2.50% | 2.50% | ||
Carrying Amount | $ 347,341 | 347,126 | ||
Senior Notes 6.000 % Due January 2043 | ||||
Debt Instrument [Line Items] | ||||
Interest rate, stated percentage | 6.00% | |||
Carrying Amount | $ 491,065 | 490,903 | ||
Senior Notes 3.966% Due August 2061 | ||||
Debt Instrument [Line Items] | ||||
Interest rate, stated percentage | 3.966% | 3.966% | ||
Carrying Amount | $ 346,084 | $ 346,053 |
Stock-Based Compensation - Share-based Award Expense Activity (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based payment arrangement, expense | $ 25,555 | $ 7,919 | $ 50,348 | $ 26,864 |
Stock option grants expense | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based payment arrangement, expense | 16,914 | 600 | 18,094 | 2,189 |
Restricted stock awards expense | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based payment arrangement, expense | 1,364 | 3,026 | 5,992 | 6,947 |
Performance share units expense | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based payment arrangement, expense | $ 7,277 | $ 4,293 | $ 26,262 | $ 17,728 |
Commitments and Contingencies (Details) $ in Millions |
9 Months Ended |
---|---|
Sep. 30, 2022
USD ($)
lot
| |
Loss Contingencies [Line Items] | |
Surety bonds, outstanding, amount | $ 367.6 |
Letters of credit outstanding, amount | 166.8 |
Estimated cost related to letters of credit | 155.8 |
Estimated cost related to bonds | $ 122.9 |
Number of lots | lot | 5,364 |
Option Contracts | |
Loss Contingencies [Line Items] | |
Letters of credit outstanding, amount | $ 5.9 |
Deposits | 24.1 |
HomeAmerican | |
Loss Contingencies [Line Items] | |
Surety bonds, outstanding, amount | $ 117.4 |
Derivative Financial Instruments - Notional Amounts of Financial Instruments (Details) - USD ($) $ in Thousands |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Interest rate lock commitments | ||
Derivatives, Fair Value [Line Items] | ||
Notional amount | $ 609,271 | $ 268,796 |
Forward sales of mortgage-backed securities | ||
Derivatives, Fair Value [Line Items] | ||
Notional amount | 373,000 | 275,600 |
Mandatory delivery forward loan sale commitments | ||
Derivatives, Fair Value [Line Items] | ||
Notional amount | 89,631 | 128,391 |
Best-effort delivery forward loan sale commitments | ||
Derivatives, Fair Value [Line Items] | ||
Notional amount | $ 325,739 | $ 51,993 |
Derivative Financial Instruments - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||
Net gains (losses) on financial instruments | $ 7.3 | $ (0.9) | $ 44.6 | $ 5.6 |
Related Party Transactions (Details) - CVentures, Inc. |
Oct. 31, 2021
$ / ft²
|
Nov. 01, 2016
ft²
$ / ft²
|
---|---|---|
Related Party Transaction [Line Items] | ||
Area of real estate property | ft² | 5,437 | |
Minimum | ||
Related Party Transaction [Line Items] | ||
Yearly rental rate per rentable square foot | 26.50 | |
Maximum | ||
Related Party Transaction [Line Items] | ||
Yearly rental rate per rentable square foot | 31.67 |
Supplemental Guarantor Information (Details) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Sep. 30, 2022 |
Dec. 31, 2021 |
|
Guarantor Obligations [Line Items] | ||
Maximum percentage of consolidated net worth of guarantor for suspension of guarantee | 5.00% | |
Maximum aggregate percentage of consolidated net worth of all guarantors for suspension of guarantee | 10.00% | |
Maximum aggregate percentage of consolidated net worth of all guarantors for suspension of guarantee to permit cure of default | 15.00% | |
Non-Guarantor Subsidiaries | ||
Guarantor Obligations [Line Items] | ||
Due to non-guarantor subsidiaries | $ 65.8 | $ 60.2 |
All Guarantor Subsidiaries | ||
Guarantor Obligations [Line Items] | ||
Ownership interest | 100.00% |
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