XML 73 R26.htm IDEA: XBRL DOCUMENT

Note 20 - Supplemental Guarantor Information

3 Months Ended

Mar. 31, 2020

Supplemental Guarantor Information [Text Block]

20.	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 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 Oregon, 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

	March 31, 2020
					Non-
			Guarantor		Guarantor		Eliminating			Consolidated
	MDC		Subsidiaries		Subsidiaries		Entries			MDC
	(Dollars in thousands)
ASSETS
Homebuilding:
Cash and cash equivalents	$	380,318	$	6,386	$	-	$	-		$	386,704
Restricted cash		-		15,762		-		-			15,762
Trade and other receivables		694		68,607		-		-			69,301
Inventories:
Housing completed or under construction		-		1,215,214		-		-			1,215,214
Land and land under development		-		1,301,433		-		-			1,301,433
Total inventories		-		2,516,647		-		-			2,516,647
Intercompany receivables		2,265,553		5,919		-		(2,271,472	)		-
Investment in subsidiaries		279,593		-		-		(279,593	)		-
Property and equipment, net		23,033		39,283		-		-			62,316
Deferred tax asset, net		18,962		-		-		1,698			20,660
Prepaid and other assets		32,961		45,041		-		-			78,002
Total homebuilding assets		3,001,114		2,697,645		-		(2,549,367	)		3,149,392

Financial Services:
Cash and cash equivalents		-		-		22,159		-			22,159
Marketable securities		-		-		43,985		-			43,985
Intercompany receivables		-		-		64,666		(64,666	)		-
Mortgage loans held-for-sale, net		-		-		133,921		-			133,921
Other assets		-		-		25,953		(1,698	)		24,255
Total financial services assets		-		-		290,684		(66,364	)		224,320
Total Assets	$	3,001,114	$	2,697,645	$	290,684	$	(2,615,731	)	$	3,373,712

LIABILITIES AND EQUITY
Homebuilding:
Accounts payable	$	515	$	97,465	$	-	$	-		$	97,980
Accrued and other liabilities		67,874		162,742		-		2,418			233,034
Advances and notes payable to parent and subsidiaries		69,748		2,254,742		-		(2,324,490	)		-
Revolving credit facility		15,000		-		-		-			15,000
Senior notes, net		1,036,900		-		-		-			1,036,900
Total homebuilding liabilities		1,190,037		2,514,949		-		(2,322,072	)		1,382,914

Financial Services:
Accounts payable and other liabilities		-		-		73,395		(2,418	)		70,977
Advances and notes payable to parent and subsidiaries		-		-		11,648		(11,648	)		-
Mortgage repurchase facility		-		-		108,744		-			108,744
Total financial services liabilities		-		-		193,787		(14,066	)		179,721
Total Liabilities		1,190,037		2,514,949		193,787		(2,336,138	)		1,562,635

Equity:
Total Stockholders' Equity		1,811,077		182,696		96,897		(279,593	)		1,811,077
Total Liabilities and Stockholders' Equity	$	3,001,114	$	2,697,645	$	290,684	$	(2,615,731	)	$	3,373,712

Supplemental Condensed Combining Balance Sheet

	December 31, 2019
					Non-
			Guarantor		Guarantor		Eliminating			Consolidated
	MDC		Subsidiaries		Subsidiaries		Entries			MDC
	Dollars in thousands
ASSETS
Homebuilding:
Cash and cash equivalents	$	418,822	$	5,364	$	-	$	-		$	424,186
Restricted cash		-		14,279		-		-			14,279
Trade and other receivables		624		65,205		-		-			65,829
Inventories:
Housing completed or under construction		-		1,036,191		-		-			1,036,191
Land and land under development		-		1,330,384		-		-			1,330,384
Total inventories		-		2,366,575		-		-			2,366,575
Intercompany receivables		1,936,075		6,370		-		(1,942,445	)		-
Investment in subsidiaries		488,993		-		-		(488,993	)		-
Property and equipment, net		23,192		37,222		-		-			60,414
Deferred tax assets, net		22,508		-		-		(740	)		21,768
Other assets		34,728		43,630		-		-			78,358
Total Homebuilding Assets		2,924,942		2,538,645		-		(2,432,178	)		3,031,409

Financial Services:
Cash and cash equivalents		-		-		35,747		-			35,747
Marketable securities		-		-		56,747		-			56,747
Intercompany receivables		-		-		47,753		(47,753	)		-
Mortgage loans held-for-sale, net		-		-		197,021		-			197,021
Other assets		-		-		16,692		740			17,432
Total Financial Services Assets		-		-		353,960		(47,013	)		306,947
Total Assets	$	2,924,942	$	2,538,645	$	353,960	$	(2,479,191	)	$	3,338,356

LIABILITIES AND EQUITY
Homebuilding:
Accounts payable	$	289	$	87,075	$	-	$	-		$	87,364
Accrued and other liabilities		84,088		156,652		-		5,200			245,940
Advances and notes payable to parent and subsidiaries		53,658		1,912,969		-		(1,966,627	)		-
Revolving credit facility		15,000		-		-		-			15,000
Senior notes, net		989,422		-		-		-			989,422
Total Homebuilding Liabilities		1,142,457		2,156,696		-		(1,961,427	)		1,337,726

Financial Services:
Accounts payable and accrued liabilities		-		-		73,729		(5,200	)		68,529
Advances and notes payable to parent and subsidiaries		-		-		23,571		(23,571	)		-
Mortgage repurchase facility		-		-		149,616		-			149,616
Total Financial Services Liabilities		-		-		246,916		(28,771	)		218,145
Total Liabilities		1,142,457		2,156,696		246,916		(1,990,198	)		1,555,871

Equity:
Total Stockholders' Equity		1,782,485		381,949		107,044		(488,993	)		1,782,485
Total Liabilities and Stockholders' Equity	$	2,924,942	$	2,538,645	$	353,960	$	(2,479,191	)	$	3,338,356

Supplemental Condensed Combining Statement of Operations

	Three Months Ended March 31, 2020
							Non-
				Guarantor			Guarantor			Eliminating			Consolidated
	MDC			Subsidiaries			Subsidiaries			Entries			MDC
Homebuilding:	(Dollars in thousands)
Revenues	$	-		$	697,085		$	-		$	-		$	697,085
Cost of sales		-			(558,647	)		-			-			(558,647	)
Inventory impairments		-			-			-			-			-
Gross profit		-			138,438			-			-			138,438
Selling, general, and administrative expenses		(10,782	)		(78,408	)		-			(131	)		(89,321	)
Equity income of subsidiaries		43,236			-			-			(43,236	)		-
Interest and other income		1,783			291			-			(185	)		1,889
Other expense		8			(1,345	)		-			-			(1,337	)
Homebuilding pretax income (loss)		34,245			58,976			-			(43,552	)		49,669
Financial Services:
Financial services pretax income		-			-			(1,423	)		316			(1,107	)
Income before income taxes		34,245			58,976			(1,423	)		(43,236	)		48,562
(Provision) benefit for income taxes		2,515			(14,333	)		16			-			(11,802	)
Net income	$	36,760		$	44,643		$	(1,407	)	$	(43,236	)	$	36,760
Other comprehensive income related to available-for-sale securities, net of tax		-			-			-			-			-
Comprehensive income	$	36,760		$	44,643		$	(1,407	)	$	(43,236	)	$	36,760

	Three Months Ended March 31, 2019
							Non-
				Guarantor			Guarantor			Eliminating			Consolidated
	MDC			Subsidiaries			Subsidiaries			Entries			MDC
Homebuilding:	(Dollars in thousands)
Revenues	$	-		$	647,278		$	-		$	-		$	647,278
Cost of sales		-			(524,552	)		-			-			(524,552	)
Inventory impairments		-			(610	)		-			-			(610	)
Gross profit		-			122,116			-			-			122,116
Selling, general, and administrative expenses		(17,438	)		(64,701	)		-			(122	)		(82,261	)
Equity income of subsidiaries		52,165			-			-			(52,165	)		-
Interest and other income		2,409			155			-			(173	)		2,391
Other expense		7			(1,198	)		-			-			(1,191	)
Homebuilding pretax income (loss)		37,143			56,372			-			(52,460	)		41,055
Financial Services:
Financial services pretax income		-			-			14,256			295			14,551
Income before income taxes		37,143			56,372			14,256			(52,165	)		55,606
(Provision) benefit for income taxes		3,407			(15,264	)		(3,199	)		-			(15,056	)
Net income	$	40,550		$	41,108		$	11,057		$	(52,165	)	$	40,550
Other comprehensive income related to available-for-sale securities, net of tax		-			-			-			-			-
Comprehensive income	$	40,550		$	41,108		$	11,057		$	(52,165	)	$	40,550

Supplemental Condensed Combining Statement of Cash Flows

	Three Months Ended March 31, 2020
							Non-
				Guarantor			Guarantor			Eliminating			Consolidated
	MDC			Subsidiaries			Subsidiaries			Entries			MDC
	(Dollars in thousands)
Net cash provided by (used in) operating activities	$	(13,287	)	$	(89,277	)	$	65,391		$	-		$	(37,173	)
Net cash provided by (used in) investing activities		(60,693	)		(6,384	)		(506	)		60,565			(7,018	)
Financing activities:
Payments from (advances to) subsidiaries		-			98,166			(37,601	)		(60,565	)		-
Mortgage repurchase facility		-			-			(40,872	)		-			(40,872	)
Proceeds from issuance of senior notes		298,050			-			-			-			298,050
Repayment of senior notes		(250,000	)		-			-			-			(250,000	)
Dividend payments		(20,768	)		-			-			-			(20,768	)
Issuance of shares under stock-based compensation programs, net		8,194			-			-			-			8,194
Net cash provided by (used in) financing activities		35,476			98,166			(78,473	)		(60,565	)		(5,396	)

Net increase (decrease) in cash and cash equivalents		(38,504	)		2,505			(13,588	)		-			(49,587	)
Cash and cash equivalents:
Beginning of period		418,822			19,643			35,747			-			474,212
End of period	$	380,318		$	22,148		$	22,159		$	-		$	424,625

	Three Months Ended March 31, 2019
							Non-
				Guarantor			Guarantor			Eliminating			Consolidated
	MDC			Subsidiaries			Subsidiaries			Entries			MDC
	(Dollars in thousands)
Net cash provided by (used in) operating activities	$	(18,145	)	$	31,508		$	40,985		$	-		$	54,348
Net cash provided by (used in) investing activities		29,796			(6,094	)		(93	)		(30,043	)		(6,434	)
Financing activities:
Payments from (advances to) subsidiaries		-			(23,614	)		(6,429	)		30,043			-
Mortgage repurchase facility		-			-			(31,959	)		-			(31,959	)
Dividend payments		(17,115	)		-			-			-			(17,115	)
Issuance of shares under stock-based compensation programs, net		7,087			-			-			-			7,087
Net cash provided by (used in) financing activities		(10,028	)		(23,614	)		(38,388	)		30,043			(41,987	)

Net increase (decrease) in cash and cash equivalents		1,623			1,800			2,504			-			5,927
Cash and cash equivalents:
Beginning of period		410,127			10,960			49,052			-			470,139
End of period	$	411,750		$	12,760		$	51,556		$	-		$	476,066