Note 19 - Supplemental Guarantor Information

6 Months Ended

Jun. 30, 2015

Supplemental Guarantor Information [Abstract]

Supplemental Guarantor Information [Text Block]

19. 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 Homes of Arizona, Inc.

● Richmond American Homes of Colorado, Inc.

● Richmond American Homes of Delaware, Inc.

● Richmond American Homes of Florida, LP

● Richmond American Homes of Illinois, Inc.

● Richmond American Homes of Maryland, Inc.

● Richmond American Homes of Nevada, Inc.

● Richmond American Homes of New Jersey, Inc.

● Richmond American Homes of Pennsylvania, 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, but do 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). 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.

We have determined that separate, full financial statements of the Guarantor Subsidiaries would not be material to investors and, accordingly, supplemental financial information for the Guarantor and Non-Guarantor Subsidiaries is presented below.

Supplemental Condensed Combining Balance Sheet

	June 30, 2015
					Non-
			Guarantor		Guarantor		Eliminating			Consolidated
	MDC		Subsidiaries		Subsidiaries		Entries			MDC
	Dollars in thousands
ASSETS
Homebuilding:
Cash and cash equivalents	$	145,214	$	3,012	$	-	$	-		$	148,226
Marketable securities		123,105		-		-		-			123,105
Restricted cash		-		4,944		-		-			4,944
Trade and other receivables		5,455		24,016		-		(2,351	)		27,120
Inventories:
Housing completed or under construction		-		774,069		-					774,069
Land and land under development		-		898,398		-					898,398
Total inventories		-		1,672,467		-		-			1,672,467
Intercompany receivables		1,497,794		2,855		5,645		(1,506,294	)		-
Investment in subsidiaries		220,845		-		-		(220,845	)		-
Metropolitan district bond securities (related party)		22,259		-		-		-			22,259
Deferred tax asset, net		121,457		-		-		2,062			123,519
Other assets, net		38,034		59,769		-		-			97,803
Total homebuilding assets		2,174,163		1,767,063		5,645		(1,727,428	)		2,219,443
Financial Services:
Cash and cash equivalents		-		-		32,062		-			32,062
Marketable securities		-		-		14,438		-			14,438
Intercompany receivables		-		-		38,585		(38,585	)		-
Mortgage loans held-for-sale, net		-		-		79,728		-			79,728
Other assets		-		-		8,327		(2,062	)		6,265
Total financial services assets		-		-		173,140		(40,647	)		132,493
Total Assets	$	2,174,163	$	1,767,063	$	178,785	$	(1,768,075	)	$	2,351,936
LIABILITIES AND EQUITY
Homebuilding:
Accounts payable	$	-	$	33,956	$	-	$	-		$	33,956
Accrued liabilities		29,101		85,836		19		1,078			116,034
Advances and notes payable to parent and subsidiaries		47,085		1,464,528		25,421		(1,537,034	)		-
Revolving credit facility		15,000		-		-		-			15,000
Senior notes, net		846,752		-		-		-			846,752
Total homebuilding liabilities		937,938		1,584,320		25,440		(1,535,956	)		1,011,742
Financial Services:
Accounts payable and other liabilities		-		-		57,398		(3,429	)		53,969
Advances and notes payable to parent and subsidiaries		-		-		7,845		(7,845	)		-
Mortgage repurchase facility		-		-		50,000		-			50,000
Total financial services liabilities		-		-		115,243		(11,274	)		103,969
Total Liabilities		937,938		1,584,320		140,683		(1,547,230	)		1,115,711
Equity:
Total Stockholders' Equity		1,236,225		182,743		38,102		(220,845	)		1,236,225
Total Liabilities and Stockholders' Equity	$	2,174,163	$	1,767,063	$	178,785	$	(1,768,075	)	$	2,351,936

Supplemental Condensed Combining Balance Sheet

	December 31, 2014
					Non-
			Guarantor		Guarantor		Eliminating			Consolidated
	MDC		Subsidiaries		Subsidiaries		Entries			MDC
	(Dollars in thousands)
ASSETS
Homebuilding:
Cash and cash equivalents	$	119,951	$	2,691	$	-	$	-		$	122,642
Marketable securities		140,878		-		-		-			140,878
Restricted cash		-		2,816		-		-			2,816
Trade and other receivables		6,573		24,449		-		(2,467	)		28,555
Inventories:
Housing completed or under construction		-		732,692		-		-			732,692
Land and land under development		-		935,268		-		-			935,268
Total inventories		-		1,667,960		-		-			1,667,960
Intercompany receivables		1,418,705		2,854		5,295		(1,426,854	)		-
Investment in subsidiaries		260,874		-		-		(260,874	)		-
Deferred tax asset		137,529		-		-		2,957			140,486
Metropolitan district bond securities (related party)		18,203		-		-		-			18,203
Other assets, net		41,743		56,744		-		-			98,487
Total homebuilding assets		2,144,456		1,757,514		5,295		(1,687,238	)		2,220,027
Financial Services:
Cash and cash equivalents		-		-		31,183		-			31,183
Marketable securities		-		-		15,262		-			15,262
Intercompany receivables		-		-		39,513		(39,513	)		-
Mortgage loans held-for-sale, net		-		-		88,392		-			88,392
Other assets		-		-		6,531		(2,957	)		3,574
Total financial services assets		-		-		180,881		(42,470	)		138,411
Total Assets	$	2,144,456	$	1,757,514	$	186,176	$	(1,729,708	)	$	2,358,438
LIABILITIES AND EQUITY
Homebuilding:
Accounts payable	$	-	$	35,445	$	-	$	-		$	35,445
Accrued liabilities		7,007		105,529		67		2,514			115,117
Advances and notes payable to parent and subsidiaries		47,663		1,392,111		23,809		(1,463,583	)		-
Revolving credit facility		15,000		-		-		-			15,000
Senior notes, net		846,450		-		-		-			846,450
Total homebuilding liabilities		916,120		1,533,085		23,876		(1,461,069	)		1,012,012
Financial Services:
Accounts payable and accrued liabilities		-		-		62,249		(4,981	)		57,268
Advances and notes payable to parent and subsidiaries		-		-		2,784		(2,784	)		-
Mortgage repurchase facility		-		-		60,822		-			60,822
Total financial services liabilities		-		-		125,855		(7,765	)		118,090
Total Liabilities		916,120		1,533,085		149,731		(1,468,834	)		1,130,102
Equity:
Total Stockholders' Equity		1,228,336		224,429		36,445		(260,874	)		1,228,336
Total Liabilities and Stockholders' Equity	$	2,144,456	$	1,757,514	$	186,176	$	(1,729,708	)	$	2,358,438

Supplemental Condensed Combining Statement of Operations

	Three Months Ended June 30, 2015
							Non-
				Guarantor			Guarantor			Eliminating			Consolidated
	MDC			Subsidiaries			Subsidiaries			Entries			MDC
	(Dollars in thousands)
Homebuilding:
Revenues	$	-		$	461,708		$	-		$	-		$	461,708
Cost of sales		-			(385,019	)		-			-			(385,019	)
Gross margin		-			76,689			-			-			76,689
Selling, general, and administrative expenses		(8,638	)		(46,048	)		-			(95	)		(54,781	)
Equity income of subsidiaries		24,248			-			-			(24,248	)		-
Interest and other income		1,728			994			-			(2	)		2,720
Interest expense		192			-			-			(192	)		-
Other expense		(1	)		(1,054	)		-			-			(1,055	)
Homebuilding pretax income (loss)		17,529			30,581			-			(24,537	)		23,573
Financial Services:
Financial services pretax income		-			-			8,020			289			8,309
Income before income taxes		17,529			30,581			8,020			(24,248	)		31,882
(Provision) benefit for income taxes		2,469			(11,408	)		(2,945	)		-			(11,884	)
Net income	$	19,998		$	19,173		$	5,075		$	(24,248	)	$	19,998
Other comprehensive income related to available for sale securities, net of tax		(360	)		-			(539	)		539			(360	)
Comprehensive income	$	19,638		$	19,173		$	4,536		$	(23,709	)	$	19,638

	Three Months Ended June 30, 2014
							Non-
				Guarantor			Guarantor			Eliminating			Consolidated
	MDC			Subsidiaries			Subsidiaries			Entries			MDC
	(Dollars in thousands)
Homebuilding:
Revenues	$	-		$	431,261		$	-		$	-		$	431,261
Cost of sales		-			(356,697	)		-			-			(356,697	)
Inventory impairments		-			(850	)		-			-			(850	)
Gross margin		-			73,714			-			-			73,714
Selling, general, and administrative expenses		(10,644	)		(38,977	)		-			(177	)		(49,798	)
Equity income of subsidiaries		25,679			-			-			(25,679	)		-
Interest and other income		4,114			506			6			(13	)		4,613
Other expense		(2	)		(1,078	)		-			-			(1,080	)
Homebuilding pretax income (loss)		19,147			34,165			6			(25,869	)		27,449
Financial Services:
Financial services pretax income		-			-			6,387			190			6,577
Income before income taxes		19,147			34,165			6,393			(25,679	)		34,026
(Provision) benefit for income taxes		2,395			(12,494	)		(2,385	)		-			(12,484	)
Net income	$	21,542		$	21,671		$	4,008		$	(25,679	)	$	21,542
Other comprehensive income related to available for sale securities, net of tax		2,327			-			53			(53	)		2,327
Comprehensive income	$	23,869		$	21,671		$	4,061		$	(25,732	)	$	23,869

Supplemental Condensed Combining Statement of Operations

	Six Months Ended June 30, 2015
							Non-
				Guarantor			Guarantor			Eliminating			Consolidated
	MDC			Subsidiaries			Subsidiaries			Entries			MDC
	(Dollars in thousands)
Homebuilding:
Revenues	$	-		$	839,627		$	-		$	-		$	839,627
Cost of sales		-			(704,786	)		-			-			(704,786	)
Inventory impairments		-			(350	)		-			-			(350	)
Gross margin		-			134,491			-			-			134,491
Selling, general, and administrative expenses		(17,560	)		(87,505	)		-			(248	)		(105,313	)
Equity income of subsidiaries		37,240			-			-			(37,240	)		-
Interest and other income		3,291			1,275			5			3			4,574
Interest expense		278			-			-			(278	)		-
Other expense		(3	)		(2,186	)		-			-			(2,189	)
Homebuilding pretax income (loss)		23,246			46,075			5			(37,763	)		31,563
Financial Services:
Financial services pretax income		-			-			13,122			523			13,645
Income before income taxes		23,246			46,075			13,127			(37,240	)		45,208
(Provision) benefit for income taxes		5,172			(17,112	)		(4,850	)		-			(16,790	)
Net income	$	28,418		$	28,963		$	8,277		$	(37,240	)	$	28,418
Other comprehensive income related to available for sale securities, net of tax		948			-			(280	)		280			948
Comprehensive income	$	29,366		$	28,963		$	7,997		$	(36,960	)	$	29,366

	Six Months Ended June 30, 2014
							Non-
				Guarantor			Guarantor			Eliminating			Consolidated
	MDC			Subsidiaries			Subsidiaries			Entries			MDC
Homebuilding:
Revenues	$	-		$	749,795		$	-		$	-		$	749,795
Cost of sales		-			(616,175	)		-			-			(616,175	)
Inventory impairments		-			(850	)		-			-			(850	)
Gross margin		-			132,770			-			-			132,770
Selling, general, and administrative expenses		(22,721	)		(75,087	)		-			(332	)		(98,140	)
Equity income of subsidiaries		42,752			-			-			(42,752	)		-
Interest and other income		17,341			835			9			(23	)		18,162
Interest expense		(685	)		-			-			-			(685	)
Other expense		(4	)		(1,689	)		-			-			(1,693	)
Loss on early extinguishment of debt		(9,412	)		-			-			-			(9,412	)
Homebuilding pretax income (loss)		27,271			56,829			9			(43,107	)		41,002
Financial Services:
Financial services pretax income		-			-			11,309			355			11,664
Income before income taxes		27,271			56,829			11,318			(42,752	)		52,666
(Provision) benefit for income taxes		5,775			(21,171	)		(4,224	)		-			(19,620	)
Net income	$	33,046		$	35,658		$	7,094		$	(42,752	)	$	33,046
Other comprehensive income related to available for sale securities, net of tax		(1,719	)		-			115			(115	)		(1,719	)
Comprehensive income	$	31,327		$	35,658		$	7,209		$	(42,867	)	$	31,327

Supplemental Condensed Combining Statement of Cash Flows

	Six Months Ended June 30, 2015
							Non-
				Guarantor			Guarantor			Eliminating			Consolidated
	MDC			Subsidiaries			Subsidiaries			Entries			MDC
	(Dollars in thousands)
Net cash provided by (used in) operating activities	$	35,266		$	(895	)	$	10,138		$	-		$	44,509
Net cash provided by (used in) investing activities		13,810			(265	)		698			2,346			16,589
Financing activities:
Payments from (advances to) subsidiaries		-			1,481			865			(2,346	)		-
Mortgage repurchase facility		-			-			(10,822	)		-			(10,822	)
Dividend payments		(24,425	)		-			-			-			(24,425	)
Proceeds from the exercise of stock options		612			-			-			-			612
Net cash provided by (used in) financing activities		(23,813	)		1,481			(9,957	)		(2,346	)		(34,635	)
Net increase in cash and cash equivalents		25,263			321			879			-			26,463
Cash and cash equivalents:
Beginning of period		119,951			2,691			31,183			-			153,825
End of period	$	145,214		$	3,012		$	32,062		$	-		$	180,288

	Six Months Ended June 30, 2014
							Non-
				Guarantor			Guarantor			Eliminating			Consolidated
	MDC			Subsidiaries			Subsidiaries			Entries			MDC
	(Dollars in thousands)
Net cash provided by (used in) operating activities	$	(26,472	)	$	(110,958	)	$	41,158		$	-		$	(96,272	)
Net cash provided by (used in) investing activities		3,390			(223	)		5,664			74,094			82,925
Financing activities:
Payments from (advances to) subsidiaries		-			110,863			(36,769	)		(74,094	)		-
Mortgage repurchase facility		-			-			(30,876	)		-			(30,876	)
Proceeds from issuance of senior notes		248,375			-			-			-			248,375
Repayment of senior notes		(259,118	)		-			-			-			(259,118	)
Advances on revolving credit facility, net		10,000			-			-			-			10,000
Dividend payments		(24,412	)		-			-			-			(24,412	)
Proceeds from the exercise of stock options		71			-			-			-			71
Net cash provided by (used in) financing activities		(25,084	)		110,863			(67,645	)		(74,094	)		(55,960	)
Net increase in cash and cash equivalents		(48,166	)		(318	)		(20,823	)		-			(69,307	)
Cash and cash equivalents:
Beginning of period		145,180			3,454			50,704			-			199,338
End of period	$	97,014		$	3,136		$	29,881		$	-		$	130,031