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SECURITIES AND EXCHANGE COMMISSION
Washington D.C.
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 18, 1995
The Ryland Group, Inc.
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(Exact name of registrant as specified in its charter)
Maryland 1-8029 52-0849948
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(State or other jurisdiction (Commission File No.) (IRS Employer
of incorporation) Identification
Number)
11000 Broken Land Parkway, Columbia, Maryland 21044
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (410) 715-7000
Not Applicable
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(Former name or former address, if changed since last report
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Item 5. Other Events
RYLAND ADOPTS NEW ACCOUNTING STANDARD
AND TAKES FOURTH-QUARTER CHARGE
The Ryland Group, Inc., (NYSE Symbol: RYL) today announced that it will
adopt a new accounting standard that affects the valuation of its homebuilding
inventories. Concurrent with that decision, Ryland will take a non-cash
charge that will impact fourth quarter after-tax earnings by $24 million to
$27 million, or $1.51 to $1.70 per share.
The charge is being taken primarily as a result of the adoption of the
new accounting standard, Financial Accounting Standards No. 121 (FASB 121),
which Ryland is required to adopt no later than January 1, 1996. The charge
relates principally to Southern California inventories acquired in 1988 and
1989 and, to a lesser degree, certain joint venture investments in the
Washington, D.C. metropolitan area entered into during that same time period.
FASB 121 changes the method that companies must use to value long-lived
assets, including inventories held by homebuilders. Previously, accounting
standards required companies to carry inventories at the lower of cost or net
realizable value. Under the new standard, if a valuation adjustment to
inventories is required, the asset is adjusted to its fair value. Fair value
is a more conservative measurement than net realizable value.
"This non-cash charge does not affect the company's business strategies,
which we feel confident will continue to lead to improved profitability for
Ryland," said Ryland Chairman R. Chad Dreier. "We have made significant
progress over the past two years with new home designs and more effective land
strategies, which are resulting in increased traffic and higher margins, and
we feel positive about our progress in these areas." Dreier also noted that
the fourth-quarter non-cash charge in no way affects the company's fourth-
quarter dividend distribution, which was announced on December 14, 1995.
Ryland is the nation's third-largest homebuilder and a leading mortgage-
finance company, with headquarters in Columbia, Maryland. The company has
built more than 130,000 homes since its founding in 1967 and currently
operates in 19 states.
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SIGNATURES
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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 hereunto duly authorized.
The Ryland Group, Inc.
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(Registrant)
Date: December 18, 1995 /s/ Stephen B. Cook
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Stephen B. Cook
Vice President and
Corporate Controller
