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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
FORM 10-Q
(Mark One)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2000
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File No. 1-8951
M.D.C. HOLDINGS, INC.
(Exact name of Registrant as specified in its charter)
Delaware 84-0622967
(State or other jurisdiction (I.R.S. employer
of incorporation or organization) identification no.)
3600 South Yosemite Street, Suite 900 80237
Denver, Colorado (Zip code)
(Address of principal executive offices)
(303) 773-1100
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
As of November 2, 2000, 21,102,000 shares of M.D.C.
Holdings, Inc. common stock were outstanding.
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<PAGE>
M.D.C. HOLDINGS, INC. AND SUBSIDIARIES
FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 2000
INDEX
Page
No.
----
Part I. Financial Information:
Item 1. Condensed Consolidated Financial Statements:
Balance Sheets as of September 30, 2000
(Unaudited) and December 31, 1999............. 1
Statements of Income (Unaudited) for the three
and nine months ended September 30, 2000 and
1999.......................................... 3
Statements of Cash Flows (Unaudited) for the
nine months ended September 30, 2000 and 1999. 4
Notes to Financial Statements (Unaudited)....... 5
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations. 8
Item 3. Quantitative and Qualitative Disclosures About
Market Risk.................................. 18
Part II. Other Information:
Item 1. Legal Proceedings............................... 19
Item 4. Submission of Matters to a Vote of Shareowners.. 19
Item 5. Other Information............................... 19
Item 6. Exhibits and Reports on Form 8-K................ 19
(i)
<PAGE>
M.D.C. HOLDINGS, INC.
Condensed Consolidated Balance Sheets
(In thousands)
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
------------- -------------
(Unaudited)
<S> <C> <C>
ASSETS
Corporate
Cash and cash equivalents................................................ $ 12,842 $ 33,637
Property and equipment, net.............................................. 2,946 2,909
Deferred income taxes.................................................... 29,742 21,201
Deferred debt issue costs, net........................................... 2,235 2,393
Other assets, net........................................................ 8,384 6,771
------------- -------------
56,149 66,911
------------- -------------
Homebuilding
Cash and cash equivalents................................................ 5,591 4,935
Home sales and other accounts receivable................................. 10,657 3,496
Inventories, net
Housing completed or under construction................................ 489,733 337,029
Land and land under development........................................ 333,529 308,680
Prepaid expenses and other assets, net................................... 60,567 58,156
------------- -------------
900,077 712,296
------------- -------------
Financial Services
Cash and cash equivalents................................................ 506 358
Mortgage loans held in inventory, net.................................... 96,252 89,953
Other assets, net........................................................ 6,321 7,490
------------- -------------
103,079 97,801
------------- -------------
Total Assets....................................................... $ 1,059,305 $ 877,008
============= =============
</TABLE>
See notes to condensed consolidated financial statements.
-1-
<PAGE>
M.D.C. HOLDINGS, INC.
Condensed Consolidated Balance Sheets
(In thousands, except share amounts)
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
------------- -------------
(Unaudited)
<S> <C> <C>
LIABILITIES
Corporate
Accounts payable and accrued expenses........................................ $ 46,223 $ 46,721
Income taxes payable......................................................... 9,922 18,291
Senior notes, net............................................................ 174,430 174,389
------------- -------------
230,575 239,401
------------- -------------
Homebuilding
Accounts payable and accrued expenses........................................ 158,687 152,488
Line of credit............................................................... 155,000 40,000
------------- -------------
313,687 192,488
------------- -------------
Financial Services
Accounts payable and accrued expenses........................................ 19,620 5,862
Line of credit............................................................... 54,815 50,234
------------- -------------
74,435 56,096
------------- -------------
Total Liabilities...................................................... 618,697 487,985
------------- -------------
COMMITMENTS AND CONTINGENCIES................................................... - - - -
------------- -------------
STOCKHOLDERS' EQUITY
Preferred stock, $.01 par value; 25,000,000 shares authorized; none issued... - - - -
Common stock, $.01 par value; 100,000,000 shares authorized; 28,539,000 and
28,166,000 shares issued, respectively, at September 30, 2000 and
December 31, 1999.......................................................... 285 282
Additional paid-in capital................................................... 183,073 179,094
Retained earnings............................................................ 325,372 245,235
Accumulated comprehensive income............................................. 57 3,623
------------- -------------
508,787 428,234
Less treasury stock, at cost; 7,499,000 and 5,850,000 shares, respectively,
at September 30, 2000 and December 31, 1999................................ (68,179) (39,211)
------------- -------------
Total Stockholders' Equity............................................. 440,608 389,023
------------- -------------
Total Liabilities and Stockholders' Equity............................. $ 1,059,305 $ 877,008
============= =============
</TABLE>
See notes to condensed consolidated financial statements.
-2-
<PAGE>
M.D.C. HOLDINGS, INC.
Condensed Consolidated Statements of Income
(In thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30, Ended September 30,
--------------------------- ----------------------------
2000 1999 2000 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
REVENUES
Homebuilding.................................... $ 438,818 $ 403,195 $ 1,191,769 $ 1,084,205
Financial services.............................. 7,203 6,739 20,507 20,664
Corporate....................................... 218 192 768 2,141
------------ ------------ ------------ ------------
Total Revenues.............................. 446,239 410,126 1,213,044 1,107,010
------------ ------------ ------------ ------------
COSTS AND EXPENSES
Homebuilding.................................... 377,623 357,363 1,032,745 969,223
Financial services.............................. 3,833 3,812 10,708 10,892
Corporate general and administrative............ 11,168 8,719 28,237 22,683
------------ ------------ ------------ ------------
Total Costs and Expenses.................... 392,624 369,894 1,071,690 1,002,798
------------ ------------ ------------ ------------
Income before income taxes......................... 53,615 40,232 141,354 104,212
Provision for income taxes......................... (19,355) (16,092) (57,264) (41,364)
------------ ------------ ------------ ------------
NET INCOME......................................... 34,260 24,140 84,090 62,848
Unrealized holding gains (losses) on securities
arising during the period, net.................. 92 424 (35) 1,721
Reclassification adjustment for gains included in
net income...................................... (81) (87) (3,531) (168)
------------ ------------ ------------ ------------
Net unrealized holding gains (losses) on securities
arising during the period, net of deferred income
taxes........................................... 11 337 (3,566) 1,553
------------ ------------ ------------ ------------
COMPREHENSIVE INCOME............................... $ 34,271 $ 24,477 $ 80,524 $ 64,401
============ ============ ============ ============
EARNINGS PER SHARE
Basic........................................... $ 1.62 $ 1.08 $ 3.90 $ 2.83
=========== =========== =========== ===========
Diluted......................................... $ 1.58 $ 1.06 $ 3.83 $ 2.77
=========== =========== =========== ===========
WEIGHTED-AVERAGE SHARES OUTSTANDING
Basic........................................... 21,179 22,294 21,587 22,224
============ ============ ============ ============
Diluted......................................... 21,700 22,739 21,957 22,667
============ ============ ============ ============
DIVIDENDS PAID PER SHARE........................... $ .06 $ .05 $ .18 $ .15
=========== =========== =========== ===========
</TABLE>
See notes to condensed consolidated financial statements.
-3-
<PAGE>
M.D.C. HOLDINGS, INC.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
<TABLE>
<CAPTION> Nine Months
Ended September 30,
2000 1999
------------- -------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income.......................................................... $ 84,090 $ 62,848
Adjustments to reconcile net income to net cash used in operating
activities
Depreciation and amortization.................................. 14,793 12,968
Deferred income taxes.......................................... (8,541) (3,704)
Homebuilding asset impairment charges.......................... 800 - -
Net changes in assets and liabilities
Home sales and other accounts receivable.................... (7,161) (2,452)
Homebuilding inventories.................................... (178,353) (154,636)
Mortgage loans held in inventory............................ (6,299) (2,696)
Accounts payable and accrued expenses and income taxes
payable.................................................... 10,506 30,428
Prepaid expenses and other assets........................... (15,197) 138
Other, net..................................................... (2,132) 317
------------- -------------
Net cash used in operating activities................................ (107,494) (56,789)
------------- -------------
FINANCING ACTIVITIES
Lines of credit
Advances........................................................ 1,167,881 1,109,955
Principal payments.............................................. (1,048,300) (1,048,033)
Notes payable
Principal payments.............................................. - - (1,898)
Dividend payments.................................................... (3,954) (3,331)
Stock repurchases.................................................... (30,828) - -
Proceeds from stock issuances........................................ 2,704 891
------------- -------------
Net cash provided by financing activities............................ 87,503 57,584
------------- -------------
Net increase (decrease) in cash and cash equivalents................. (19,991) 795
Cash and cash equivalents
Beginning of period............................................. 38,930 10,079
------------- -------------
End of period................................................... $ 18,939 $ 10,874
============= =============
</TABLE>
See notes to condensed consolidated financial statements.
-4-
<PAGE>
M.D.C. HOLDINGS, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
A. Presentation of Financial Statements
The condensed consolidated financial statements of M.D.C. Holdings,
Inc. ("MDC" or the "Company," 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. These statements reflect
all adjustments (including all normal recurring accruals) which, in the opinion
of management, are necessary to present fairly the financial position, results
of operations and cash flows of MDC as of September 30, 2000 and for all of the
periods presented. These statements are condensed and do not include all of the
information required by generally accepted accounting principles in a full set
of financial statements. These statements should be read in conjunction with
MDC's financial statements and notes thereto included in MDC's Annual Report on
Form 10-K for its fiscal year ended December 31, 1999.
B. Corporate and Homebuilding Interest Activity (in thousands)
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30, Ended September 30,
--------------------------- ---------------------------
2000 1999 2000 1999
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Interest capitalized in homebuilding
inventory, beginning of period....... $ 18,037 $ 22,183 $ 17,406 $ 26,332
Interest incurred....................... 6,836 5,393 17,328 15,344
Interest expensed....................... - - - - - - - -
Previously capitalized interest included
in cost of sales..................... (6,041) (9,527) (15,902) (23,627)
----------- ----------- ----------- -----------
Interest capitalized in homebuilding
inventory, end of period............. $ 18,832 $ 18,049 $ 18,832 $ 18,049
=========== =========== =========== ===========
</TABLE>
C. Earnings Per Share
The basic and diluted earnings per share calculations are shown below
(in thousands, except per share amounts).
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30, Ended September 30,
------------------------ -------------------------
2000 1999 2000 1999
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Basic Earnings Per Share
Net income....................................... $ 34,260 $ 24,140 $ 84,090 $ 62,848
=========== =========== =========== ===========
Basic weighted-average shares outstanding........ 21,179 22,294 21,587 22,224
=========== =========== =========== ===========
Per share amounts................................ $ 1.62 $ 1.08 $ 3.90 $ 2.83
=========== =========== =========== ===========
Diluted Earnings Per Share
Net income....................................... $ 34,260 $ 24,140 $ 84,090 $ 62,848
=========== =========== =========== ===========
Basic weighted-average shares outstanding........ 21,179 22,294 21,587 22,224
Stock options, net............................... 521 445 370 443
Diluted weighted-average shares outstanding...... 21,700 22,739 21,957 22,667
=========== =========== =========== ===========
Per share amounts................................ $ 1.58 $ 1.06 $ 3.83 $ 2.77
=========== =========== =========== ===========
</TABLE>
-5-
<PAGE>
D. Information on Business Segments
The Company operates in two business segments: homebuilding and
financial services. A summary of the Company's segment information is shown
below (in thousands).
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30, Ended September 30,
---------------------------- ----------------------------
2000 1999 2000 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Homebuilding
Home sales......................... $ 436,174 $ 398,833 $ 1,173,084 $ 1,076,061
Land sales......................... 939 2,912 5,482 5,737
Other revenues..................... 1,705 1,450 13,203 2,407
------------ ------------ ------------ ------------
438,818 403,195 1,191,769 1,084,205
------------ ------------ ------------ ------------
Home cost of sales................. 334,884 320,020 911,778 866,833
Land cost of sales................. 842 2,403 3,197 4,426
Asset impairment charges........... - - - - 800 - -
Marketing.......................... 24,230 19,936 66,077 58,045
General and administrative......... 17,667 15,004 50,893 39,919
------------ ------------ ------------ ------------
377,623 357,363 1,032,745 969,223
------------ ------------ ------------ ------------
Homebuilding Operating Profit.. 61,195 45,832 159,024 114,982
------------ ------------ ------------ ------------
Financial Services
Mortgage Lending Revenues
Net interest income................ 651 735 1,714 2,012
Origination fees................... 3,535 3,315 9,573 9,035
Gains on sales of mortgage
servicing......................... 706 543 2,535 2,832
Gains on sales of mortgage loans,
net............................... 2,151 2,011 6,243 6,361
Mortgage servicing and other....... 160 135 442 424
------------ ------------ ------------ ------------
7,203 6,739 20,507 20,664
General and Administrative Expenses.. 3,833 3,812 10,708 10,892
------------ ------------ ------------ ------------
Financial Services Operating
Profit....................... 3,370 2,927 9,799 9,772
------------ ------------ ------------ ------------
Total Operating Profit................. 64,565 48,759 168,823 124,754
------------ ------------ ------------ ------------
Corporate
Interest and other revenues........ 218 192 768 2,141
General and administrative......... (11,168) (8,719) (28,237) (22,683)
------------ ------------ ------------ ------------
Net Corporate Expenses......... (10,950) (8,527) (27,469) (20,542)
------------ ------------ ------------ ------------
Income Before Income Taxes.............. $ 53,615 $ 40,232 $ 141,354 $ 104,212
============ ============ ============ ============
</TABLE>
-6-
<PAGE>
E. Supplemental Disclosure of Cash Flow Information (in thousands)
<TABLE>
<CAPTION>
Nine Months
Ended September 30,
2000 1999
----------- -----------
<S> <C> <C>
Cash paid during the period for
Interest................................................... $ 26,102 $ 16,793
Income taxes............................................... $ 65,633 $ 46,192
Non-cash investing and financing activities
Land purchases financed by seller.......................... $ - - $ 1,032
Land sales financed by MDC................................. $ - - $ 43
</TABLE>
F. Stockholders' Equity
On January 24, 2000, MDC's Board of Directors authorized the repurchase
of up to 1,000,000 shares of MDC common stock. On February 21, 2000, MDC's Board
of Directors authorized the repurchase of up to 2,000,000 additional shares of
MDC common stock. The Company has repurchased a total of 1,931,800 shares of MDC
common stock under these programs through September 30, 2000 at a total cost of
$30,828,000. The per share prices, including commissions, for these repurchases
range from $13.53 to $22.02 with an average cost of $15.96.
G. Gain on Sale of Investments
During the quarter and nine months ended September 30, 2000, net income
included realized pre-tax gains of $215,000 and $9,736,000, respectively, less
applicable taxes of $134,000 and $6,205,000, respectively, from the sale of
certain investments by MDC's captive insurance subsidiary.
H. Homebuilding Line of Credit
During the nine months ended September 30, 2000, the Company received
increased participations from two of its existing banks and participation from
two additional lenders, increasing the maximum amount available under the
homebuilding line of credit ("Homebuilding Line") to $375,000,000 at September
30, 2000 from $300,000,000 at December 31, 1999. In October 2000, an additional
lender committed $38,000,000 to the Homebuilding Line, increasing the maximum
amount available to $413,000,000.
I. Income Taxes
In August 2000, the Company resolved its income tax examination by the
Internal Revenue Service (the "IRS") for the years 1991 through 1995. Primarily
as a result, the Company's effective income tax rate decreased to 36.1% for the
third quarter of 2000. The Company currently has no outstanding IRS
examinations.
J. Foundation
In the third quarter of 2000, the Company committed to contribute
$1,000,000 to the MDC Holdings Foundation (the "Foundation"), a Delaware not for
profit corporation which was incorporated on September 30, 1999. The Foundation
is a charitable organization with the primary purpose of supporting non-profit
charities in communities where the Company conducts its business. Certain
directors and officers of the Company are the trustees and officers of the
Foundation.
-7-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
INTRODUCTION
M.D.C. Holdings, Inc. is a Delaware Corporation originally
incorporated in Colorado in 1972. We refer to M.D.C. Holdings, Inc. as the
"Company" or as "MDC" in this Form 10-Q. The "Company" or "MDC" includes our
subsidiaries unless we state otherwise. MDC's primary business is building and
selling homes under the name "Richmond American Homes." We also originate
mortgage loans, primarily for customers of Richmond American Homes, through
MDC's subsidiary, HomeAmerican Mortgage Corporation ("HomeAmerican").
RESULTS OF OPERATIONS
The table below summarizes MDC's results of operations (in thousands,
except per share amounts).
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30, Ended September 30,
---------------------------- ----------------------------
2000 1999 2000 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues................................ $ 446,239 $ 410,126 $ 1,213,044 $ 1,107,010
Income Before Income Taxes.............. $ 53,615 $ 40,232 $ 141,354 $ 104,212
Net Income.............................. $ 34,260 $ 24,140 $ 84,090 $ 62,848
Earnings Per Share:
Basic.............................. $ 1.62 $ 1.08 $ 3.90 $ 2.83
Diluted............................ $ 1.58 $ 1.06 $ 3.83 $ 2.77
</TABLE>
Revenues for the third quarter and first nine months of 2000 increased
$36,113,000 and $106,034,000, respectively, compared with the same periods in
1999, primarily due to higher homebuilding revenues resulting from (1)
significant increases in average selling prices per home closed; (2) increases
in the number of homes closed; and (3) for the first nine months of 2000, gains
of $9,736,000 realized on sales of certain investments by MDC's captive
insurance subsidiary.
Income before income taxes increased 33% and 36%, respectively, in the
third quarter and first nine months of 2000, compared with the same periods in
1999. These increases primarily were a result of increased operating profit from
the Company's homebuilding segment, due to the home sales revenue increases
described above and substantial increases in Home Gross Margins (as defined
below).
-8-
<PAGE>
Homebuilding Segment
The tables below set forth information relating to the Company's
homebuilding segment (dollars in thousands).
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30, Ended September 30,
--------------------------- ----------------------------
2000 1999 2000 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Home Sales Revenues......................... $ 436,174 $ 398,833 $ 1,173,084 $ 1,076,061
Operating Profit............................ $ 61,195 $ 45,832 $ 159,024 $ 114,982
Average Selling Price Per Home Closed..... $ 224.5 $ 212.7 $ 219.1 $ 207.5
Home Gross Margins.......................... 23.2% 19.8% 22.3% 19.4%
Excluding Interest in Home Cost of Sales 24.6% 21.9% 23.6% 21.5%
Orders For Homes, net (units)
Colorado............................. 668 655 2,134 2,259
California........................... 415 329 1,272 1,129
Arizona.............................. 573 261 1,486 1,199
Nevada............................... 199 151 631 425
Virginia............................. 177 150 641 611
Maryland............................. 60 70 217 268
------------ ------------ ------------ ------------
Total........................... 2,092 1,616 6,381 5,891
============ ============ ============ ============
Homes Closed (units)
Colorado............................. 702 653 2,152 1,846
California........................... 369 381 887 921
Arizona.............................. 405 444 1,094 1,299
Nevada............................... 212 151 500 407
Virginia............................. 175 183 497 493
Maryland............................. 80 63 225 220
------------ ------------ ------------ ------------
Total........................... 1,943 1,875 5,355 5,186
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
September 30, December 31, September 30,
2000 1999 1999
------------ ------------ ------------
<S> <C> <C> <C>
Backlog (units)
Colorado............................. 1,608 1,626 1,768
California........................... 642 257 534
Arizona.............................. 844 452 596
Nevada............................... 268 137 164
Virginia............................. 434 290 372
Maryland............................. 171 179 201
------------ ------------ ------------
Total........................... 3,967 2,941 3,635
============ ============ ============
Estimated Sales Value........... $ 930,000 $ 600,000 $ 750,000
============ ============ ============
</TABLE>
-9-
<PAGE>
<TABLE>
<CAPTION>
September 30, December 31, September 30,
2000 1999 1999
------------ ------------ ------------
<S> <C> <C> <C>
Active Subdivisions
Colorado............................. 44 50 48
California........................... 24 24 26
Arizona.............................. 27 20 18
Nevada............................... 9 12 11
Virginia............................. 9 16 16
Maryland............................. 7 9 10
------------ ------------ ------------
Total........................... 120 131 129
============ ============ ============
</TABLE>
Home Sales Revenues - Home sales revenues in the third quarter and
first nine months of 2000 were 9% higher than home sales revenues for the same
periods in 1999. The improved revenues were a result of increased home closings
and higher average selling prices per home closed, as further discussed below.
Homes Closed - Home closings for the three and nine months ended
September 30, 2000 increased approximately 3% compared with comparable periods
in 1999. Home closings in the third quarter and first nine months of 2000 were
higher in Colorado (increases of 8% and 17%, respectively), Nevada (increases of
40% and 23%, respectively), Northern California (increases of 14% and 46%,
respectively) and Tucson (increases of 14% and 15%, respectively), primarily as
a result of the strong demand for homes in these markets. Home closings
decreased in the three and nine months ended September 30, 2000 in Phoenix and
Southern California, compared with the same periods in 1999, primarily due to
fewer active subdivisions in each of these markets during the latter half of
1999 and first quarter of 2000. Active subdivisions subsequently have increased
to 18 and 20, respectively, in Southern California and Phoenix at September 30,
2000, compared with 14 and 11, respectively, at June 30, 1999.
Average Selling Price Per Home Closed - The average selling price per
home closed in the third quarter and first nine months of 2000 increased $11,800
and $11,600, respectively, compared with the same periods in 1999, primarily as
a result of (1) the ability to increase sales prices due to the strong demand
for new homes in most of the Company's markets; (2) a greater number of homes
closed in higher-priced subdivisions in Northern California, where average
selling prices were approximately $300,000; and (3) increased sales volume per
home from the Company's design centers in Northern California, Nevada, Virginia
and Colorado. Average selling prices were lower in the third quarter and first
nine months of 2000, compared with the same periods in 1999, in Phoenix, due to
the division's increased emphasis on more affordable homes, and in Southern
California, where the Company closed fewer homes in higher-priced subdivisions.
Home Gross Margins - We define "Home Gross Margins" to mean home sales
revenues less cost of goods sold (which primarily includes land and construction
costs, capitalized interest, financing costs, and a reserve for warranty
expense) as a percent of home sales revenues. Home Gross Margins were 23.2% and
22.3%, representing increases of 340 and 290 basis points, respectively, during
the quarter and nine months ended September 30, 2000, compared with the same
periods in 1999. The increases largely were due to (1) selling price increases
and reduced incentives offered to home buyers due to the continued strong demand
for new homes in most of the Company's markets; (2) in Maryland, fewer
under-performing subdivisions in 2000 and management's continued efforts to
improve profitability; (3) reduced interest in home cost of sales, (as discussed
below); (4) increased rebates collected from suppliers through the Company's
national purchasing programs; (5) increases in sales of higher-margin
-10-
<PAGE>
products through the Company's design centers; (6) a reduction in previous
estimates of costs to complete land development and homes in certain projects in
Phoenix, Southern California and Colorado; and (7) ongoing initiatives in each
of the Company's markets designed to improve operating efficiency, control costs
and increase rates of return.
Future Home Gross Margins may be impacted adversely by (1) increased
competition; (2) increases in the costs of subcontracted labor, finished lots,
building materials and other resources, to the extent that market conditions
prevent the recovery of increased costs through higher selling prices; (3)
adverse weather; and (4) shortages of subcontractor labor, finished lots and
other resources. Looking forward to the balance of 2000, we currently anticipate
that Home Gross Margins for the fourth quarter may be lower than the level
realized in the 2000 third quarter, but are expected to exceed 20%. See "Forward
Looking Statements" below.
Interest in Home Cost of Sales - Interest in home cost of sales as a
percent of home sales revenues in the third quarter and first nine months of
2000 decreased to 1.4% and l.3%, respectively, compared with 2.2% and 2.1% for
the same periods in 1999. These reductions primarily resulted from lower levels
of capitalized interest in homebuilding inventories during the first nine months
of 2000, compared with the first nine months of 1999. Interest capitalized as a
percentage of homebuilding inventories has continued to decrease to 2.3% at
September 30, 2000, from 2.7% at September 30, 1999 and 5.9% at September 30,
1998. This decrease primarily is due to (1) the close-out of older projects with
higher levels of capitalized interest in Colorado, Virginia and Maryland; and
(2) the financing of a portion of the Company's expanded homebuilding operations
with cash from current operations.
Orders for Homes and Backlog - Orders for homes in the third quarter
and first nine months of 2000 increased 29% and 8%, respectively, compared with
the comparable periods in 1999. Home orders in the third quarter of 2000
particularly were strong in Phoenix, Northern California and Nevada (increases
of 220%, 72% and 32%, respectively), primarily as a result of the continued
strong demand for new homes in these markets. Also contributing to the higher
home orders in Phoenix was the increase in the number of active subdivisions to
20 at September 30, 2000 from 9 at September 30, 1999. Home orders were lower
for the nine months ended September 30, 2000 in Colorado and Maryland, primarily
resulting from (1) fewer active subdivisions; and (2) in Colorado, a greater
number of active subdivisions nearing close-out, with fewer homes available for
sale, and the close-out of several high-volume subdivisions after the second
quarter of 1999.
Homes under contract but not yet delivered ("Backlog") at September 30,
2000 was 3,967 units with an estimated sales value of $930,000,000, compared
with a Backlog of 3,635 units with an estimated sales value of $750,000,000 at
September 30, 1999. Assuming no significant change in market conditions or
mortgage interest rates, the Company expects approximately 75% of its September
30, 2000 Backlog to close under existing sales contracts during the fourth
quarter of 2000 and first half of 2001. The remaining 25% of the homes in
Backlog are not expected to close under existing contracts due to cancellations.
See "Forward-Looking Statements" below.
Other Revenues - Other revenues during the first nine months of 2000
included gains realized on the sales of certain investments by MDC's captive
insurance subsidiary of $9,736,000, compared with $278,000 realized in the
comparable period of 1999.
Asset Impairment Charge - Operating results during the first nine
months of 2000 were reduced by an asset impairment charge of $800,000, related
to certain of the Company's homebuilding assets in Southern California.
-11-
<PAGE>
The asset impairment charge resulted from the write-down to fair value of a
subdivision that experienced slow sales during the second quarter of 2000 and
anticipated negative Home Gross Margins. No asset impairment charge was recorded
during the first nine months of 1999.
Marketing - Marketing expenses (which include sales commissions,
advertising, amortization of deferred marketing and other costs) increased to
$24,230,000 and $66,077,000, respectively, for the quarter and nine months ended
September 30, 2000, compared with $19,936,000 and $58,045,000, respectively, for
the same periods in 1999. The increases in 2000 primarily resulted from higher
sales commissions, advertising and model home costs incurred in connection with
the Company's increased home sales revenues and model home inventory.
General and Administrative - General and administrative expenses
increased to $17,667,000 and $50,893,000, respectively, during the third quarter
and first nine months of 2000, compared with $15,004,000 and $39,919,000,
respectively, for the same periods in 1999, primarily due to increased
compensation costs resulting from expanded operations in certain of the
Company's markets, most notably Colorado, Southern California and Northern
California.
Land Inventory
The table below shows the carrying value of land and land under
development, by market, the total number of lots owned and lots controlled under
option agreements and total option deposits (dollars in thousands).
<TABLE>
<CAPTION>
September 30, December 31, September 30,
2000 1999 1999
----------- ----------- -----------
<S> <C> <C> <C>
Colorado....................................... $ 90,342 $ 74,117 $ 64,873
California..................................... 159,509 161,508 150,716
Arizona........................................ 43,741 29,426 28,197
Nevada......................................... 25,600 27,419 26,838
Virginia....................................... 9,089 6,357 7,040
Maryland....................................... 5,248 9,853 7,413
----------- ----------- -----------
Total..................................... $ 333,529 $ 308,680 $ 285,077
=========== =========== ===========
Lots Owned (excluding lots in work-in-process). 10,098 10,452 9,436
Lots Controlled Under Option................... 8,567 8,063 8,503
----------- ----------- -----------
Total Lots Owned and Controlled........... 18,665 18,515 17,939
=========== =========== ===========
Option Deposits................................ $ 9,323 $ 8,673 $ 8,591
=========== =========== ===========
</TABLE>
-12-
<PAGE>
Financial Services Segment
The table below sets forth information relating to HomeAmerican's
operations (dollars in thousands).
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30, Ended September 30,
------------------------- -------------------------
2000 1999 2000 1999
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Loan Origination Fees....................... $ 3,535 $ 3,315 $ 9,573 $ 9,035
Gains on Sales of Mortgage Loans, net....... $ 2,151 $ 2,011 $ 6,243 $ 6,361
Gains on Sales of Mortgage Servicing, net... $ 706 $ 543 $ 2,535 $ 2,832
Operating Profit............................ $ 3,370 $ 2,927 $ 9,799 $ 9,772
Principal Amount of Loans Originated and
Purchased
MDC home buyers........................ $ 229,139 $ 223,568 $ 605,071 $ 610,985
Spot................................... 3,553 11,403 11,390 33,929
Correspondent.......................... - - - - - - 12,074
----------- ----------- ----------- -----------
Total.............................. $ 232,692 $ 234,971 $ 616,461 $ 656,988
=========== =========== =========== ===========
Principal Amount of Loans Brokered
MDC home buyers........................ $ 65,738 $ 50,675 $ 178,360 $ 123,964
Spot................................... 1,911 359 4,302 3,198
----------- ----------- ----------- -----------
Total.............................. $ 67,649 $ 51,034 $ 182,662 $ 127,162
=========== =========== =========== ===========
Capture Rate................................ 66% 69% 64% 70%
=========== =========== =========== ===========
Including Brokered Loans............... 82% 81% 81% 81%
=========== =========== =========== ===========
</TABLE>
HomeAmerican's operating profits for the third quarter of 2000
increased, compared with the third quarter of 1999, due to higher gains on sales
of mortgage loans and loan servicing, as well as higher origination fee income.
HomeAmerican continues to benefit from the Company's homebuilding growth as MDC
home buyers were the source of approximately 98% of the principal amount of
mortgage loans originated and brokered by HomeAmerican in both the third quarter
and first nine months of 2000.
Mortgage loans originated by HomeAmerican for MDC home buyers as a
percentage of total MDC home closings ("Capture Rate") decreased to 66% and 64%,
respectively, for the quarter and nine months ended September 30, 2000, compared
with 69% and 70%, respectively, for the same periods in 1999. However, the
number of mortgage loans brokered by HomeAmerican for origination by outside
lending institutions has increased, primarily due to an increase in the number
of MDC home buyers with non-agency qualified credit. These brokered mortgage
loans, for which HomeAmerican receives a fee, have been excluded from the
computation of the Capture Rate above. If the Capture Rate was computed to
include brokered loans, it would have been 82% and 81%, respectively, for the
third quarter and first nine months of 2000, compared with 81% for both
comparable periods in 1999.
Forward Sales Commitments - HomeAmerican's operations are affected by
changes in mortgage interest rates. HomeAmerican utilizes forward mortgage
securities contracts to manage the interest rate
-13-
<PAGE>
risk on its fixed-rate mortgage loans owned and rate-locked mortgage loans in
the pipeline. These contracts are the only significant financial derivative
instrument utilized by MDC.
Other Operating Results
Corporate Other Revenues - In the first nine months of 1999, the
Company recognized income of approximately $1,500,000 related to its share of a
gain from the sale of substantially all of the assets of a partnership in which
it was an investor.
Interest Expense - The Company capitalizes interest on its homebuilding
inventories during the period of active development and through the completion
of construction. Corporate and homebuilding interest incurred but not
capitalized is reflected as interest expense and totalled zero for both the
third quarter and first nine months of 2000 and 1999.
For a reconciliation of interest incurred, capitalized and expensed,
see Note B to the Company's Condensed Consolidated Financial Statements.
Corporate General and Administrative Expenses - Corporate general and
administrative expenses totalled $11,168,000 and $28,237,000, respectively,
during the third quarter and first nine months of 2000, compared with $8,719,000
and $22,683,000, respectively, for the same periods in 1999. The 2000 increases
primarily were due to (1) greater compensation-related costs in 2000 as a result
of the Company's higher profitability and increased homebuilding activities; and
(2) a commitment for a $1,000,000 donation to the Foundation in the third
quarter of 2000.
Income Taxes - MDC's overall effective income tax rate decreased to
36.1% for the third quarter of 2000, bringing the nine-month income tax rate
down to 40.5% from the 43.2% income tax rate recorded for the first six months
of 2000. This decrease in the effective rate primarily was the result of the
Company resolving the Internal Revenue Service ("IRS") income tax examination
for the years 1991 through 1995 in August 2000. Also affecting the rate in the
first nine months of 2000 were investment gains of $9,736,000, discussed under
"Results of Operations" above, that are subject to taxation at both the
subsidiary and Company levels, resulting in taxes at an effective rate of 64%.
In April 2000, the IRS completed its examination of the Company's
federal income tax returns for the years 1996 and 1997. The conclusion of this
examination resulted in no material impact to the Company's financial position
or results of operations. The Company currently has no outstanding IRS
examinations. See "Forward-Looking Statements" below.
LIQUIDITY AND CAPITAL RESOURCES
MDC uses its liquidity and capital resources to (1) support its
operations, including its inventories of homes, home sites and land; (2) provide
working capital; and (3) provide mortgage loans for its home buyers. Liquidity
and capital resources are generated internally from operations and from external
sources.
-14-
<PAGE>
Capital Resources
The Company's capital structure is a combination of (1) permanent
financing, represented by stockholders' equity; (2) long-term financing,
represented by its publicly traded 8 3/8% senior notes due 2008 (the "Senior
Notes") and its homebuilding line of credit; and (3) current financing,
primarily its mortgage lending line of credit. Based upon its current capital
resources and additional liquidity available under existing credit agreements,
the Company believes that its current financial condition is both balanced to
fit its current operating structure and adequate to satisfy its current and
near-term capital requirements, including the acquisition of land. The Company
believes that it can meet its long-term capital needs (including meeting future
debt payments and refinancing or paying off other long-term debt as it becomes
due) from operations and external financing sources, assuming that no
significant adverse changes in the Company's business or capital and credit
market occur as a result of the various risk factors described elsewhere in this
report. See "Forward-Looking Statements" below.
Lines of Credit and Other
Homebuilding - In October 1999, the homebuilding line of credit (the
"Homebuilding Line") was amended and restated (the "Amended and Restated Credit
Agreement") to extend the maturity date to September 30, 2004 and increase the
$300,000,000 maximum amount available to $450,000,000 upon the Company's
request, subject to the receipt of additional commitments from existing or
additional participant lenders. Pursuant to the terms of the Amended and
Restated Credit Agreement, a term-out of this credit may commence earlier under
certain circumstances. Having received increased participations from two of the
Company's existing banks and three additional lenders, the maximum amount
available under the Homebuilding Line was increased to $350,000,000 in April
2000, to $375,000,000 in July 2000, and to $413,000,000 in October 2000. There
is no assurance that existing or additional lenders will agree to provide
additional commitments. At September 30, 2000, $155,000,000 was borrowed and
$5,595,000 in letters of credit were outstanding under the Homebuilding Line.
Mortgage Lending - To provide funds to originate and purchase mortgage
loans and to finance these mortgage loans on a short-term basis, HomeAmerican
utilizes its mortgage lending bank line of credit (the "Mortgage Line"). These
mortgage loans are pooled into GNMA, FNMA and FHLMC pools, or retained as whole
loans, and subsequently sold in the open market on a spot basis or pursuant to
mortgage loan sale commitments, generally within 40 days after origination.
During the first nine months of 2000 and 1999, HomeAmerican sold $606,930,000
and $652,647,000, respectively, principal amount of mortgage loans and
mortgage-backed certificates to unaffiliated purchasers.
Available borrowings under the Mortgage Line are collateralized by
mortgage loans and mortgage-backed certificates and are limited to the value of
eligible collateral, as defined. In September 2000, the Company received a
$25,000,000 increase in the available borrowings to $100,000,000. At September
30, 2000, $54,815,000 was borrowed under the Mortgage Line and an additional
$27,725,000 was collateralized and available to be borrowed. The Mortgage Line
is cancelable upon 90 days' notice.
General - The agreements for the Company's Senior Notes and bank lines
of credit require compliance with certain representations, warranties and
covenants. The Company believes that it is in compliance with these
representations, warranties and covenants. The agreements containing these
representations, warranties and covenants, other than the Mortgage Line, are on
file with the Securities and Exchange Commission and are listed in the Exhibit
Table in Part IV of MDC's Annual Report on Form 10-K for its fiscal year ended
December 31, 1999.
-15-
<PAGE>
The financial covenants contained in the Amended and Restated Credit
Agreement include a leverage test and a consolidated tangible net worth test.
Under the leverage test, generally MDC's consolidated indebtedness is not
permitted to exceed 2.15 (subject to downward adjustment in certain
circumstances) times MDC's "adjusted consolidated tangible net worth," as
defined. Under the consolidated tangible net worth test, MDC's "tangible net
worth," as defined, must not be less than the sum of $238,000,000 and 50% of
"consolidated net income," as defined, after December 31, 1998. In addition,
"consolidated tangible net worth," as defined, must not be less than
$150,000,000.
The Company's Senior Notes indenture does not contain financial
covenants. However, there are covenants that limit transactions with affiliates,
limit the amount of additional indebtedness that MDC may incur, restrict certain
payments on, or the redemptions of the Company's securities, restrict certain
sales of assets and limit incurring liens. In addition, under certain
circumstances, in the event of a change of control (generally a sale, transfer,
merger or acquisition of MDC or substantially all of its assets), MDC may be
required to offer to repurchase the Senior Notes. The Senior Notes are not
secured.
MDC Common Stock Repurchase Programs
On January 24, 2000, MDC's Board of Directors authorized the repurchase
of up to 1,000,000 shares of MDC common stock. On February 21, 2000, MDC's Board
of Directors authorized the repurchase of up to 2,000,000 additional shares of
MDC common stock. The Company has repurchased a total of 1,931,800 shares of MDC
common stock under these programs through September 30, 2000. The per share
prices, including commissions, for these repurchases range from $13.53 to $22.02
with an average cost of $15.96. At September 30, 2000, the Company held
7,499,000 shares of treasury stock with an average purchase price of $9.09.
Consolidated Cash Flow
During the first nine months of 2000 and 1999, the Company used
$107,494,000 and $56,789,000, respectively, of cash in its operating activities,
primarily due to increases in homebuilding inventories related to its expanded
homebuilding operations. In addition, in the first nine months of 2000, the
Company used $30,828,000 to repurchase 1,931,800 shares of MDC common stock. The
Company financed these operating cash requirements and stock repurchases
primarily through borrowings on its bank lines of credit.
IMPACT OF INFLATION, CHANGING PRICES AND ECONOMIC CONDITIONS
Real estate and residential housing prices are affected by inflation,
which can cause increases in the price of land, raw materials and subcontracted
labor. Unless these increased costs are recovered through higher sales prices,
Home Gross Margins would decrease. If interest rates increase, construction and
financing costs, as well as the cost of borrowings, also would increase, which
can result in lower Home Gross Margins. Increases in home mortgage interest
rates would make it more difficult for MDC's customers to qualify for home
mortgage loans, potentially decreasing home sales volume. Increases in interest
rates also may affect adversely the volume of mortgage loan originations.
The volatility of interest rates could have an adverse effect on MDC's
future operations and liquidity. An increase in interest rates may affect
adversely the demand for housing and the availability
-16-
<PAGE>
of mortgage financing and may reduce the credit facilities offered to MDC by
banks, investment bankers and mortgage bankers. See "Forward-Looking Statements"
below.
MDC's business also is affected significantly by general economic
conditions, consumer confidence and, particularly, the demand for new homes in
the markets in which it builds.
ISSUANCE OF STATEMENTS OF FINANCIAL ACCOUNTING STANDARDS
In June 1998, Statement of Financial Accounting Standards No. 133,
"Accounting for Derivative Instruments and Hedging Activities" ("SFAS 133") was
issued. In June 2000, Statement of Financial Accounting Standards No. 138,
"Accounting for Certain Derivative Instruments and Hedging Activities, an
Amendment of FASB Statement No. 133" ("SFAS 138") was issued. SFAS 133 and SFAS
138 address the accounting for derivative instruments, including certain
derivative instruments embedded in other contracts, and hedging activities. The
Company is required to adopt SFAS 133 and SFAS 138 in the first quarter of 2001.
The Company anticipates that the adoption of SFAS 133 and SFAS 138 as of January
1, 2001 will not have a material effect on its financial position or results of
operations. See "Forward-Looking Statements" below.
In December 1999, the Securities and Exchange Commission ("SEC") issued
Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements"
("SAB 101"). SAB 101 summarizes certain of the SEC's views in applying generally
accepted accounting principles to revenue recognition in financial statements.
SAB 101 is effective for the fourth quarter of fiscal years beginning after
December 1999. The Company believes that it is in compliance with the guidelines
set forth in SAB 101 and that the adoption of SAB 101 had no material effect on
its financial position or results of operations. See "Forward-Looking
Statements" below.
OTHER
Forward-Looking Statements
Certain statements in this Quarterly Report on Form 10-Q, the Company's
Annual Report on Form 10-K for its fiscal year ended December 31, 1999, the
Company's Annual Report to Shareowners, as well as statements made by the
Company in periodic press releases, oral statements made by the Company's
officials to analysts and shareowners in the course of presentations about the
Company and conference calls following quarterly earnings releases, constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements involve known and
unknown risks, uncertainties and other factors that may cause the actual
results, performance or achievements of the Company to be materially different
from any future results, performance or achievements expressed or implied by the
forward-looking statements. Such factors include, among other things, (1)
general economic and business conditions; (2) interest rate changes; (3) the
relative stability of debt and equity markets; (4) competition; (5) the
availability and cost of land and other raw materials used by the Company in its
homebuilding operations; (6) demographic changes; (7) shortages and the cost of
labor; (8) weather related slowdowns; (9) slow growth initiatives (including
initiatives which have been proposed in Colorado and Arizona and will be voted
on at the November 2000 general election in each of those states); (10) building
moratoria; (11) governmental regulation, including the interpretation of tax,
labor and environmental laws; (12) changes in consumer confidence and
preferences; (13) required accounting changes; and (14) other factors over which
the Company has little or no control.
-17-
<PAGE>
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
The Company is exposed to market risks related to fluctuations in
interest rates on mortgage loans receivable and debt. The Company utilizes
forward sale commitments to mitigate some of the risk associated with the
mortgage loan portfolio. Other than these forward commitments, the Company does
not utilize interest rate swaps, forward option contracts on foreign currencies
or commodities, or other types of derivative financial instruments.
HomeAmerican provides mortgage loans which generally are sold forward
and subsequently delivered to a third-party purchaser within approximately 40
days. Forward commitments are used for non-trading purposes to sell mortgage
loans and hedge interest rate risk on rate-locked mortgage loans in process
which have not closed. Due to this hedging philosophy, the market risk
associated with these mortgages is minimal.
The Company utilizes both short-term and long-term debt to finance its
operations. For fixed-rate debt, changes in interest rates generally affect the
fair value of the debt instrument, but not the Company's earnings or cash flows.
Conversely, for variable-rate debt, changes in interest rates generally do not
impact the fair value of the debt instrument, but may affect the Company's
future earnings and cash flows. The Company does not have an obligation to
prepay fixed-rate debt prior to maturity and, as a result, interest rate risk
and changes in fair value should not have a significant impact on the fixed-rate
debt until such time as the Company is required to refinance such debt.
As of September 30, 2000, short-term debt was $54,815,000, which
consisted of MDC's Mortgage Line. The Mortgage Line is collateralized by
residential mortgage loans. The Company borrows on a short-term basis from banks
under committed lines of credit that bear interest at prevailing market rates.
Long-term debt obligations outstanding, their maturities and estimated
fair values at September 30, 2000 are as follows (in thousands).
<TABLE>
<CAPTION>
Maturities through December 31, Estimated
---------------------------------------------------------------
2000 2001 2002 2003 2004 Thereafter Total Fair Value
-------------------- -------------------- ---------- -------------------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Fixed Rate Debt............ $ - - $ - - $ - - $ - - $ - - $ 175,000 $ 175,000 $ 162,969
Average Interest Rate
(units)................ - - - - - - - - - - 8.38% 8.38%
Variable Rate Debt......... $ - - $ - - $ - - $ - - $ 155,000 $ - - $ 155,000 $ 155,000
Average Interest Rate... - - - - - - - - 8.05% - - 8.05%
</TABLE>
The Company believes that its overall balance sheet structure has
repricing and cash flow characteristics that mitigate the impact of interest
rate movements.
-18-
<PAGE>
M.D.C. HOLDINGS, INC.
FORM 10-Q
PART II
ITEM 1. LEGAL PROCEEDINGS
------ -----------------
The Company and certain of its subsidiaries and affiliates have been
named as defendants in various claims, complaints and other legal actions
arising in the normal course of business. In the opinion of management, the
outcome of these matters will not have a material adverse effect upon the
financial condition, results of operations or cash flows of the Company.
Because of the nature of the homebuilding business, and in the ordinary
course of its operations, the Company from time to time may be subject to
product liability claims.
The Company is not aware of any litigation, matter or pending claim
against the Company which would result in material contingent liabilities
related to environmental hazards or asbestos.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SHAREOWNERS
------ ----------------------------------------------
No matters were submitted to shareowners during the third quarter of
2000.
ITEM 5. OTHER INFORMATION
------ -----------------
On October 23, 2000, the Company's board of directors declared a
dividend of six cents per share for the quarter ended September 30, 2000,
payable November 21, 2000, to shareowners of record on November 7, 2000. Future
dividend payments are subject to the discretion of the Company's board of
directors.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
------ --------------------------------
(a) Exhibit:
4.1 Commitment and Acceptance Agreement
dated as of August 22, 2000 among the
Registrant, Bank One, N.A., as
Administrative Agent and California
Bank & Trust as Accepting Bank.
4.2 Form of Promissory Note dated
August 22, 2000 of the Registrant
as Maker payable to California Bank
& Trust.
-19-
<PAGE>
4.3 Consent of Guarantors dated August 22,
2000.
4.4 Commitment and Acceptance Agreement
dated as of October 16, 2000 among the
Registrant, Bank One, N.A., as
Administrative Agent and U.S. Bank,
National Association as Accepting
Bank.
4.5 Form of Promissory Note dated October
16, 2000 of the Registrant as Maker
payable to U.S. Bank, National
Association as Accepting Bank.
4.6 Consent of Guarantors Dated October
16, 2000.
10.1 Letter Agreement between the
Registrant and Gilbert Goldstein, P.C.
dated October 23, 2000 amending the
Consulting Agreement effective October
1, 1998 between the Registrant and
Gilbert Goldstein, P.C.
27 Financial Data Schedule.
(b) Reports on Form 8-K:
No Current Reports on Form 8-K were filed by
the Registrant during the period covered by
this Quarterly Report on Form 10-Q.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: November 3, 2000 M.D.C. HOLDINGS, INC.
----------------
(Registrant)
By: /s/ Paris G. Reece III
-------------------------------
Paris G. Reece III,
Executive Vice President,
Chief Financial Officer and
Principal Accounting Officer
-20-
