Financial Data and Key Metrics Changes - The company reported net income of $93 million or $1.24 per diluted share for Q2 2023, representing a 51% decrease year-over-year [24][41] - Home sales revenues decreased by 24% year-over-year due to lower closing volume, with total revenues of $1.1 billion [41] - Gross margin from home sales was 16.4%, down from 26.8% in the prior year, primarily due to increased incentives and higher construction costs [13][41] - The company ended the quarter with over $1.8 billion in cash and marketable securities, indicating strong liquidity [35][47] Business Line Data and Key Metrics Changes - The dollar value of net orders increased by 37% year-over-year to $1.21 billion, driven by a 21% increase in gross orders [4] - The company delivered 2,009 homes during the quarter, a 21% decrease year-over-year, but exceeded previous estimates [32][41] - The average selling price of homes delivered decreased by 4% year-over-year to $549,000 [43] Market Data and Key Metrics Changes - The company noted that market conditions remained favorable, with healthy traffic trends and resilient buyer engagement despite higher interest rates [2][3] - Each homebuilding segment saw improvements in sales on both a sequential and year-over-year basis, with the West segment outperforming others [28] Company Strategy and Development Direction - The company is pivoting towards building more spec homes in response to market demand, with a goal of having a mix of to-be-built and spec homes available [64][72] - The company approved the purchase of over 1,300 lots in Q2, enhancing its land pipeline to support growth objectives [26][71] - The strategy includes leveraging curated spec homes to meet demand for quicker move-in options, which is expected to improve margins [68][72] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the housing market, citing a need for new housing after years of underbuilding [27] - The company anticipates continued improvements in construction cycle times, projecting under-180 days for homes starting today [14][36] - Management noted that the increase in mortgage rates has led homeowners to stay put, creating opportunities for homebuilders [37] Other Important Information - The company ended the quarter with 2,155 unsold homes under construction, indicating a strategic shift towards increased spec inventory [39] - SG&A expenses decreased by $27.1 million year-over-year, primarily due to lower headcount and decreased stock-based compensation [69] Q&A Session Summary Question: Can you elaborate on the gross margin expectations for the back half of the year? - Management expects gross margins in Q3 to be between 18% and 19%, with potential for upside in Q4 based on pricing and incentive activity [74] Question: What drove the outperformance in gross margin this quarter? - The outperformance was influenced by a reduction in incentives and improved pricing as demand strengthened [75] Question: What is the expected level of owned lots? - The company aims for a level of owned lots that aligns with their operational strategy, currently focusing on a mix of finished and developed lots [106]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _____________________________________________ FORM 10-Q (Address of principal executive offices) (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 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 specifi ...

Financial Data and Key Metrics Changes - The company generated net income of $80.7 million, or $1.08 per diluted share, representing a 46% decrease from the first quarter of 2022 [9] - Gross margin from home sales decreased by 890 basis points year-over-year to 16.8% [12] - Total dollar SG&A expense for the first quarter decreased by $34.3 million from the previous year, driven by decreased general and administrative expenses [13] - The average selling price of homes delivered decreased by 1% to $551,000, below the midpoint of previously provided guidance [11] Business Line Data and Key Metrics Changes - The company delivered 1,851 homes during the quarter, a 17% decrease year-over-year, but exceeded previously estimated guidance [35][122] - The dollar value of net orders decreased by 48% year-over-year to $957.3 million, driven by a 44% decrease in net unit orders [38] - The company started 1,666 homes during the quarter, up 170% sequentially from the fourth quarter [41] Market Data and Key Metrics Changes - The company ended the quarter with over $1.6 billion in cash and short-term investments, total liquidity of $2.8 billion, and no senior note maturities until January 2030 [16] - Existing home inventory remains constrained, with only 980,000 homes for sale nationally, representing a 2.6 months supply [99] Company Strategy and Development Direction - The company plans to maintain a higher level of speculative inventory to appeal to quick move-in buyers, while still believing a build-to-order model is prudent long-term [32] - The company is optimistic about lower incentive levels on spec inventory moving forward, as design teams are enhancing these homes with popular options and upgrades [36] - The strategic decision to build more spec inventory is already paying dividends, with over one-third of first-quarter deliveries sold and closed during the quarter [136] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing a strong balance sheet and positive fundamentals in the homebuilding industry [6] - The company noted a rebound in order activity across homebuilding operations, with all three segments performing well [7] - Management acknowledged heightened risks of underperformance due to increased economic volatility but remains confident in the company's ability to adapt [12][29] Other Important Information - The company has seen a significant improvement in market conditions in the first quarter of 2023 compared to the fourth quarter of 2022, with stabilized mortgage rates and improved buyer confidence [93] - The company has a strong financial position, with stockholders' equity over $3.1 billion and a book value per share of $42.83 [111] Q&A Session Summary Question: What is the outlook for the interest income and its sustainability? - Management indicated that interest income jumped to $13.5 million, implying an 8% annualized yield, and discussed the sustainability of these investments [51] Question: How do you see the level of speculative orders moving forward? - Management noted that two-thirds of orders were started as specs, indicating a preference for quick move-in homes, and this trend is expected to continue [69] Question: Can you elaborate on the gross margin and its future stabilization? - Management acknowledged that gross margin came in below expectations but expressed hope for stabilization and potential improvement as construction costs decrease [145][159] Question: What is the company's strategy regarding land acquisition and pricing? - Management reported seeing softness in land prices and terms, indicating a favorable environment for land acquisition moving forward [55][78]

[Part I. Financial Information](index=3&type=section&id=Part%20I.%20Financial%20Information) This section presents the company's unaudited consolidated financial statements and management's analysis for the quarter ended March 31, 2023 [Item 1. Unaudited Consolidated Financial Statements](index=3&type=section&id=Item%201.%20Unaudited%20Consolidated%20Financial%20Statements) This section presents the unaudited consolidated financial statements for the quarter ended March 31, 2023, detailing financial position, performance, cash flows, and comprehensive accounting notes [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) This statement provides a snapshot of the company's assets, liabilities, and stockholders' equity at specific points in time Consolidated Balance Sheet Summary (in thousands) | Metric | March 31, 2023 (in thousands) | December 31, 2022 (in thousands) | | :-------------------------------- | :------------------------------ | :------------------------------- | | Total Assets | $5,315,821 | $5,363,272 | | Total Liabilities | $2,185,700 | $2,271,488 | | Total Stockholders' Equity | $3,130,121 | $3,091,784 | | Homebuilding Cash & Equivalents | $781,738 | $696,075 | | Homebuilding Inventories | $3,257,775 | $3,515,779 | | Mortgage loans held-for-sale, net | $166,252 | $229,513 | [Consolidated Statements of Operations and Comprehensive Income](index=4&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) This statement details the company's revenues, expenses, and net income over a specific period, reflecting operational performance Consolidated Statements of Operations Summary (in thousands) | Metric | 3 Months Ended March 31, 2023 (in thousands) | 3 Months Ended March 31, 2022 (in thousands) | | :----------------------------------- | :------------------------------------------- | :------------------------------------------- | | Home sale revenues | $1,020,016 | $1,240,520 | | Homebuilding Gross profit | $171,469 | $318,482 | | Homebuilding pretax income | $90,999 | $188,499 | | Financial services revenues | $29,486 | $29,131 | | Financial services pretax income | $17,970 | $13,383 | | Net income | $80,700 | $148,421 | | Basic EPS | $1.10 | $2.09 | | Diluted EPS | $1.08 | $2.02 | | Dividends declared per share | $0.50 | $0.50 | [Consolidated Statements of Changes in Stockholders' Equity](index=5&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) This statement outlines changes in equity components, including net income, other comprehensive income, and dividends, over a period Consolidated Statements of Changes in Stockholders' Equity Summary (in thousands) | Metric | 3 Months Ended March 31, 2023 (in thousands) | 3 Months Ended March 31, 2022 (in thousands) | | :----------------------------------- | :------------------------------------------- | :------------------------------------------- | | Balance at beginning of period | $3,091,784 | $2,597,146 | | Net income | $80,700 | $148,421 | | Other comprehensive income (loss) | $323 | $0 | | Shares issued under stock-based compensation programs, net | $(11,740) | $(12,628) | | Cash dividends declared | $(36,543) | $(35,583) | | Stock-based compensation expense | $5,597 | $13,726 | | Balance at end of period | $3,130,121 | $2,711,082 | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This statement categorizes cash inflows and outflows from operating, investing, and financing activities over a period Consolidated Statements of Cash Flows Summary (in thousands) | Metric | 3 Months Ended March 31, 2023 (in thousands) | 3 Months Ended March 31, 2022 (in thousands) | | :------------------------------------------------- | :------------------------------------------- | :------------------------------------------- | | Net cash provided by operating activities | $426,164 | $118,055 | | Net cash used in investing activities | $(244,760) | $(6,884) | | Net cash used in financing activities | $(93,508) | $(126,280) | | Net increase (decrease) in cash, cash equivalents and restricted cash | $87,896 | $(15,109) | | Cash, cash equivalents and restricted cash, end of period | $804,991 | $588,350 | [Notes to Unaudited Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) These notes provide detailed explanations and additional information supporting the consolidated financial statements - The financial statements are unaudited and prepared in accordance with SEC rules, reflecting normal and recurring adjustments[21](index=21&type=chunk) - Forward-looking statements are included, highlighting known and unknown risks that could materially affect results[22](index=22&type=chunk) [1. Basis of Presentation](index=7&type=section&id=Note%201.%20Basis%20of%20Presentation) This note describes the accounting principles and rules used in preparing the unaudited consolidated financial statements - The unaudited consolidated financial statements are prepared in accordance with SEC rules and U.S. GAAP, reflecting all necessary adjustments[21](index=21&type=chunk) [2. Recently Issued Accounting Standards](index=7&type=section&id=Note%202.%20Recently%20Issued%20Accounting%20Standards) This note discusses the impact of recently issued accounting standards on the company's financial reporting - The company plans to adopt ASU 2020-04 (Reference Rate Reform) in Q2 2023, but does not expect a **material impact** on its financial statements[24](index=24&type=chunk) [3. Segment Reporting](index=8&type=section&id=Note%203.%20Segment%20Reporting) This note provides financial information for the company's operating segments, including homebuilding and financial services Homebuilding Revenues by Segment (in thousands) | Segment | 2023 (in thousands) | 2022 (in thousands) | | :-------- | :------------------ | :------------------ | | West | $577,933 | $707,311 | | Mountain | $301,155 | $335,128 | | East | $140,928 | $198,081 | | **Total** | **$1,020,016** | **$1,240,520** | Financial Services Revenues by Segment (in thousands) | Segment | 2023 (in thousands) | 2022 (in thousands) | | :------------------ | :------------------ | :------------------ | | Mortgage operations | $18,419 | $17,601 | | Other | $11,067 | $11,530 | | **Total** | **$29,486** | **$29,131** | Total Pretax Income by Segment (in thousands) | Segment | 2023 (in thousands) | 2022 (in thousands) | | :------------------ | :------------------ | :------------------ | | Homebuilding | $90,999 | $188,499 | | Financial Services | $17,970 | $13,383 | | **Total** | **$108,969** | **$201,882** | [4. Earnings Per Share](index=10&type=section&id=Note%204.%20Earnings%20Per%20Share) This note details the calculation of basic and diluted earnings per share for common stockholders EPS Calculation Summary (in thousands, except per share data) | Metric | 2023 | 2022 | | :------------------------------------------------- | :----- | :----- | | Net income attributable to common stockholders (basic) | $80,254 | $147,665 | | Numerator for diluted EPS | $80,258 | $147,681 | | Weighted-average common shares outstanding (basic) | 72,647,659 | 70,766,146 | | Denominator for diluted EPS | 74,021,989 | 72,938,414 | | **Basic Earnings Per Common Share** | **$1.10** | **$2.09** | | **Diluted Earnings Per Common Share** | **$1.08** | **$2.02** | [5. Fair Value Measurements](index=10&type=section&id=Note%205.%20Fair%20Value%20Measurements) This note describes the valuation methodologies and fair value hierarchy for financial instruments Fair Value of Financial Instruments (in thousands) | Financial Instrument | Hierarchy | March 31, 2023 (in thousands) | December 31, 2022 (in thousands) | | :-------------------------------- | :-------- | :------------------------------ | :------------------------------- | | Debt securities (available-for-sale) | Level 1 | $809,377 | $561,100 | | Mortgage loans held-for-sale, net | Level 2 | $166,252 | $229,513 | Senior Notes Carrying Amount vs. Fair Value (in thousands) | Senior Notes | Carrying Amount (Mar 31, 2023) | Fair Value (Mar 31, 2023) | Carrying Amount (Dec 31, 2022) | Fair Value (Dec 31, 2022) | | :--------------------------------------- | :----------------------------- | :-------------------------- | :----------------------------- | :-------------------------- | | 3.850% due Jan 2030 | $298,012 | $256,148 | $297,949 | $246,236 | | 2.500% due Jan 2031 | $347,486 | $272,690 | $347,413 | $255,374 | | 6.000% due Jan 2043 | $491,176 | $432,430 | $491,120 | $414,017 | | 3.966% due Aug 2061 | $346,105 | $205,959 | $346,094 | $204,014 | | **Total** | **$1,482,779** | **$1,167,227** | **$1,482,576** | **$1,119,641** | - Loss on mortgage loans held-for-sale, net, was **$2.3 million** for Q1 2023, compared to **$5.0 million** for the same period in the prior year[38](index=38&type=chunk) [6. Inventories](index=12&type=section&id=Note%206.%20Inventories) This note provides a breakdown of inventory types and details related to inventory impairments Total Inventories by Type (in thousands) | Inventory Type | March 31, 2023 (in thousands) | December 31, 2022 (in thousands) | | :-------------------------------- | :------------------------------ | :------------------------------- | | Housing completed or under construction | $1,585,951 | $1,722,061 | | Land and land under development | $1,671,824 | $1,793,718 | | **Total inventories** | **$3,257,775** | **$3,515,779** | Total Inventory Impairments (in thousands) | Inventory Type | 2023 (in thousands) | 2022 (in thousands) | | :-------------------------------- | :------------------ | :------------------ | | Housing Completed or Under Construction | $664 | $660 | | Land and Land Under Development | $7,136 | $0 | | **Total Inventory Impairments** | **$7,800** | **$660** | - The fair value of impaired inventory after impairments was **$13,016 thousand** in Q1 2023, with a discount rate of **18%**[50](index=50&type=chunk) [7. Capitalization of Interest](index=14&type=section&id=Note%207.%20Capitalization%20of%20Interest) This note explains the company's policy and amounts related to the capitalization of homebuilding interest Homebuilding Interest Activity (in thousands) | Metric | 2023 (in thousands) | 2022 (in thousands) | | :------------------------------------------------ | :------------------ | :------------------ | | Homebuilding interest incurred | $17,454 | $17,258 | | Interest capitalized during period | $17,454 | $17,258 | | Previously capitalized interest included in home cost of sales | $(16,065) | $(14,844) | | Interest capitalized, end of period | $61,310 | $60,468 | - All homebuilding interest incurred was capitalized for the three months ended March 31, 2023 and 2022, as qualified assets exceeded homebuilding debt[51](index=51&type=chunk) [8. Leases](index=15&type=section&id=Note%208.%20Leases) This note provides details on the company's operating lease arrangements, including costs and liabilities Net Lease Cost (in thousands) | Metric | 2023 (in thousands) | 2022 (in thousands) | | :---------------- | :------------------ | :------------------ | | Operating lease cost | $2,156 | $2,131 | | Sublease income | $(144) | $(83) | | **Net lease cost** | **$2,012** | **$2,048** | - Weighted-average remaining lease term for operating leases was **3.8 years** at March 31, 2023, with a weighted-average discount rate of **5.5%**[57](index=57&type=chunk) - Present value of operating lease liabilities was **$25,671 thousand** at March 31, 2023[58](index=58&type=chunk) [9. Homebuilding Prepaids and Other Assets](index=16&type=section&id=Note%209.%20Homebuilding%20Prepaids%20and%20Other%20Assets) This note details the composition of homebuilding prepaids and other assets, including land option deposits Homebuilding Prepaids and Other Assets (in thousands) | Asset Type | March 31, 2023 (in thousands) | December 31, 2022 (in thousands) | | :------------------------------------------ | :------------------------------ | :------------------------------- | | Land option deposits | $20,058 | $19,539 | | Operating lease right-of-use asset | $24,559 | $25,636 | | Prepaids | $11,073 | $13,333 | | **Total prepaids and other assets** | **$66,721** | **$70,007** | [10. Homebuilding Accrued and Other Liabilities and Financial Services Accounts Payable and Accrued Liabilities](index=17&type=section&id=Note%2010.%20Homebuilding%20Accrued%20and%20Other%20Liabilities%20and%20Financial%20Services%20Accounts%20Payable%20and%20Accrued%20Liabilities) This note provides a breakdown of accrued liabilities for both homebuilding and financial services segments Homebuilding Accrued and Other Liabilities (in thousands) | Liability Type | March 31, 2023 (in thousands) | December 31, 2022 (in thousands) | | :------------------------------------ | :------------------------------ | :------------------------------- | | Accrued compensation and related expenses | $57,040 | $100,653 | | Customer and escrow deposits | $47,191 | $42,296 | | Warranty accrual | $46,666 | $46,857 | | Lease liability | $25,426 | $26,574 | | Accrued interest | $14,889 | $30,934 | | Income taxes payable | $49,461 | $23,880 | | **Total accrued and other liabilities** | **$342,167** | **$383,406** | Financial Services Accounts Payable and Accrued Liabilities (in thousands) | Liability Type | March 31, 2023 (in thousands) | December 31, 2022 (in thousands) | | :------------------------------------ | :------------------------------ | :------------------------------- | | Insurance reserves | $82,815 | $84,108 | | Accounts payable and other accrued liabilities | $18,061 | $26,428 | | **Total accounts payable and accrued liabilities** | **$100,876** | **$110,536** | [11. Warranty Accrual](index=18&type=section&id=Note%2011.%20Warranty%20Accrual) This note details the activity and balance of the warranty accrual, reflecting changes in home closings and expenditures Warranty Accrual Activity (in thousands) | Metric | 2023 (in thousands) | 2022 (in thousands) | | :------------------------ | :------------------ | :------------------ | | Balance at beginning of period | $46,857 | $37,491 | | Expense provisions | $5,635 | $5,832 | | Cash payments | $(5,826) | $(4,817) | | Adjustments | $0 | $2,440 | | **Balance at end of period** | **$46,666** | **$40,946** | - The warranty accrual decreased in Q1 2023 due to increased cash payments and fewer home closings, contrasting with an increase in Q1 2022 due to higher general warranty related expenditures[65](index=65&type=chunk) [12. Insurance and Construction Defect Claim Reserves](index=19&type=section&id=Note%2012.%20Insurance%20and%20Construction%20Defect%20Claim%20Reserves) This note outlines the company's reserves for insurance and construction defect claims, based on actuarial studies Insurance and Construction Defect Claim Reserves Activity (in thousands) | Metric | 2023 (in thousands) | 2022 (in thousands) | | :------------------------ | :------------------ | :------------------ | | Balance at beginning of period | $94,574 | $82,187 | | Expense provisions | $3,789 | $4,432 | | Cash payments, net of recoveries | $(5,226) | $(2,195) | | **Balance at end of period** | **$93,137** | **$84,424** | - Reserves are based on actuarial studies considering historical trends, claim patterns, and regulatory environments[67](index=67&type=chunk)[68](index=68&type=chunk) [13. Income Taxes](index=19&type=section&id=Note%2013.%20Income%20Taxes) This note explains the effective income tax rate and income tax expense, highlighting factors influencing changes - The effective income tax rate decreased to **25.9%** for Q1 2023 from **26.5%** for Q1 2022, primarily due to energy tax credits benefiting 2023[71](index=71&type=chunk) - Income tax expense was **$28.3 million** for Q1 2023, down from **$53.5 million** in Q1 2022[71](index=71&type=chunk) [14. Senior Notes](index=20&type=section&id=Note%2014.%20Senior%20Notes) This note provides details on the company's senior unsecured notes, including carrying values and guarantees Carrying Values of Senior Notes (in thousands) | Senior Notes | March 31, 2023 (in thousands) | December 31, 2022 (in thousands) | | :--------------------------------------- | :------------------------------ | :------------------------------- | | 3.850% due Jan 2030, net | $298,012 | $297,949 | | 2.500% due Jan 2031, net | $347,486 | $347,413 | | 6.000% due Jan 2043, net | $491,176 | $491,120 | | 3.966% due Aug 2061, net | $346,105 | $346,094 | | **Total** | **$1,482,779** | **$1,482,576** | - Senior notes are unsecured, fully and unconditionally guaranteed by most homebuilding segment subsidiaries, and do not contain financial covenants[73](index=73&type=chunk) [15. Stock-Based Compensation](index=20&type=section&id=Note%2015.%20Stock-Based%20Compensation) This note details the types and amounts of stock-based compensation expense, explaining factors for changes Stock-Based Compensation Expense (in thousands) | Expense Type | 2023 (in thousands) | 2022 (in thousands) | | :-------------------------- | :------------------ | :------------------ | | Stock option grants expense | $157 | $587 | | Restricted stock awards expense | $3,562 | $2,587 | | Performance share units expense | $1,779 | $11,708 | | **Total stock-based compensation** | **$5,498** | **$14,882** | - The decrease in total stock-based compensation was primarily due to lower performance share units (PSUs) expense, as 2020 PSU awards vested and 2021 PSU expense was adjusted based on performance target probability[74](index=74&type=chunk)[75](index=75&type=chunk) [16. Commitments and Contingencies](index=20&type=section&id=Note%2016.%20Commitments%20and%20Contingencies) This note outlines the company's various commitments and potential liabilities, including surety bonds and option contracts - Outstanding surety bonds totaled **$359.1 million** and letters of credit totaled **$116.0 million** at March 31, 2023, supporting land development and other obligations[76](index=76&type=chunk) - Estimated cost to complete obligations related to these bonds and letters of credit were approximately **$157.3 million** and **$75.1 million**, respectively[76](index=76&type=chunk) - Cash deposits, capitalized costs, and letters of credit at risk for lot option contracts totaled **$19.2 million**, **$2.6 million**, and **$2.2 million**, respectively, for **2,951 lots**[80](index=80&type=chunk) [17. Derivative and Financial Instruments](index=22&type=section&id=Note%2017.%20Derivative%20and%20Financial%20Instruments) This note describes the company's use of derivative instruments to manage market risks, including interest rate fluctuations Notional Amounts and Fair Value of Derivative and Financial Instruments (in thousands) | Instrument | Notional Value (Mar 31, 2023) | Derivatives, Net (Mar 31, 2023) | Notional Value (Dec 31, 2022) | Derivatives, Net (Dec 31, 2022) | | :--------------------------------------- | :------------------------------ | :------------------------------ | :------------------------------ | :------------------------------ | | Interest rate lock commitments | $391,487 | $2,682 | $394,004 | $(1,678) | | Forward sales of mortgage backed securities | $362,500 | $(2,349) | $323,000 | $(5,269) | | Mandatory delivery forward loan sale commitments | $106,607 | $(81) | $105,060 | $79 | | Best-effort delivery forward loan sale commitments | $11,237 | $3 | $139,972 | $1,970 | - The company recorded net losses on these derivative and financial instruments of **$(3.8) million** for Q1 2023, compared to net gains of **$17.5 million** for Q1 2022[84](index=84&type=chunk) [18. Lines of Credit](index=23&type=section&id=Note%2018.%20Lines%20of%20Credit) This note details the company's revolving credit facility and mortgage repurchase facility, including available capacity and terms - The Revolving Credit Facility has an aggregate commitment of **$1.2 billion**, extendable to **$1.7 billion**, with approximately **$1.14 billion** available at March 31, 2023[86](index=86&type=chunk)[90](index=90&type=chunk) - The Revolving Credit Facility was amended effective April 11, 2023, to transition from a eurocurrency-based interest rate to a Secured Overnight Financing Rate (SOFR) based interest rate[87](index=87&type=chunk) - HomeAmerican's Mortgage Repurchase Facility has a total capacity of **$230 million** at March 31, 2023, with **$130.5 million** of mortgage loans obligated to repurchase[91](index=91&type=chunk)[92](index=92&type=chunk) [19. Related Party Transactions](index=24&type=section&id=Note%2019.%20Related%20Party%20Transactions) This note discloses transactions with related parties, including a sublease agreement with an entity associated with an executive - The company has a sublease agreement with CVentures, Inc., where Larry A. Mizel, the Executive Chairman, is the President[94](index=94&type=chunk) [20. Supplemental Guarantor Information](index=25&type=section&id=Note%2020.%20Supplemental%20Guarantor%20Information) This note provides information on subsidiaries that guarantee the company's senior notes and intercompany balances - Most homebuilding segment subsidiaries fully and unconditionally guarantee the company's senior notes[96](index=96&type=chunk) - Amounts due to non-guarantor subsidiaries from the Obligor Group totaled **$46.7 million** at March 31, 2023[97](index=97&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's analysis of the company's financial condition and operational results, highlighting market challenges and strategic responses [Overview](index=27&type=section&id=Overview) This overview summarizes key financial highlights, including net income, segment performance, and liquidity position - Net income for Q1 2023 was **$80.7 million** (**$1.08 diluted EPS**), a **46% decrease** year-over-year, primarily driven by a **52% decrease** in homebuilding pretax income[104](index=104&type=chunk) - Financial services pretax income increased by **34%** year-over-year, partially offsetting the decline in homebuilding[104](index=104&type=chunk) - Net orders decreased **44%** and net order value decreased **48%** in Q1 2023 compared to Q1 2022, reflecting challenging housing market conditions[101](index=101&type=chunk) - The company ended the quarter with **$1.61 billion** in cash, cash equivalents, and marketable securities, and **$2.79 billion** in total liquidity, maintaining a debt-to-capital ratio of **32.3%**[103](index=103&type=chunk) [Homebuilding](index=28&type=section&id=Homebuilding) This section analyzes the performance of the homebuilding segment, including pretax income, assets, deliveries, and sales metrics [Pretax Income (Loss)](index=28&type=section&id=Homebuilding%20Pretax%20Income%20(Loss)) This section details the homebuilding segment's pretax income by region, highlighting factors contributing to changes Homebuilding Pretax Income by Segment (in thousands) | Segment | 2023 (in thousands) | 2022 (in thousands) | Change | % Change | | :-------- | :------------------ | :------------------ | :----- | :------- | | West | $43,200 | $130,526 | $(87,326) | (67)% | | Mountain | $25,036 | $50,506 | $(25,470) | (50)% | | East | $15,309 | $31,394 | $(16,085) | (51)% | | Corporate | $7,454 | $(23,927) | $31,381 | 131 % | | **Total** | **$90,999** | **$188,499** | **$(97,500)** | **(52)%** | - The decrease in homebuilding pretax income was due to an **18% decrease** in home sale revenues and an **890 basis point decrease** in gross margin from home sales[106](index=106&type=chunk) - Corporate segment pretax income increased due to decreased compensation-related costs and increased interest income[107](index=107&type=chunk) [Assets](index=28&type=section&id=Homebuilding%20Assets) This section reviews the composition and changes in homebuilding assets across different segments Total Homebuilding Assets by Segment (in thousands) | Segment | March 31, 2023 (in thousands) | December 31, 2022 (in thousands) | Change | % Change | | :-------- | :------------------------------ | :------------------------------- | :----- | :------- | | West | $2,098,329 | $2,275,144 | $(176,815) | (8)% | | Mountain | $898,227 | $1,005,622 | $(107,395) | (11)% | | East | $407,046 | $427,926 | $(20,880) | (5)% | | Corporate | $1,574,847 | $1,249,370 | $325,477 | 26 % | | **Total** | **$4,978,449** | **$4,958,062** | **$20,387** | **0 %** | - Total homebuilding assets remained relatively flat, with an increase in Corporate segment assets (cash and marketable securities) offsetting decreases in West and Mountain segment assets (receivables, land, and housing inventory)[108](index=108&type=chunk) [New Home Deliveries & Home Sale Revenues](index=29&type=section&id=New%20Home%20Deliveries%20%26%20Home%20Sale%20Revenues) This section presents data on new home deliveries, home sale revenues, and average selling prices by segment New Home Deliveries & Home Sale Revenues (in thousands, except homes) | Metric | 2023 Homes | 2023 Home Sale Revenues (in thousands) | 2023 Average Price (in thousands) | 2022 Homes | 2022 Home Sale Revenues (in thousands) | 2022 Average Price (in thousands) | % Change Homes | % Change Revenues | % Change Average Price | | :------- | :--------- | :------------------------------------- | :-------------------------------- | :--------- | :------------------------------------- | :-------------------------------- | :--------------- | :---------------- | :-------------------- | | West | 1,064 | $577,933 | $543.2 | 1,243 | $707,311 | $569.0 | (14)% | (18)% | (5)% | | Mountain | 487 | $301,155 | $618.4 | 548 | $335,128 | $611.5 | (11)% | (10)% | 1 % | | East | 300 | $140,928 | $469.8 | 442 | $198,081 | $448.1 | (32)% | (29)% | 5 % | | **Total** | **1,851** | **$1,020,016** | **$551.1** | **2,233** | **$1,240,520** | **$555.5** | **(17)%** | **(18)%** | **(1)%** | - The decrease in new home deliveries was due to a lower backlog at the beginning of the period, partially offset by an increase in backlog conversion rates from quick move-in inventory[110](index=110&type=chunk) - Average selling price in the West segment decreased due to a mix shift from California to Arizona divisions, while the East segment saw an increase due to a mix shift to higher-priced communities in Florida[112](index=112&type=chunk)[116](index=116&type=chunk) [Gross Margin from Home Sales](index=30&type=section&id=Gross%20Margin%20from%20Home%20Sales) This section analyzes the gross margin from home sales, identifying key factors influencing its change - Gross margin from home sales decreased by **890 basis points** to **16.8%** in Q1 2023 (from **25.7%** in Q1 2022)[118](index=118&type=chunk) - The decrease was largely driven by increases in both incentives and construction costs, and **$7.8 million** of inventory impairments[118](index=118&type=chunk) [Inventory Impairments](index=30&type=section&id=Inventory%20Impairments) This section details the amounts and types of inventory impairments recognized during the period Total Inventory Impairments (in thousands) | Inventory Type | 2023 (in thousands) | 2022 (in thousands) | | :-------------------------------- | :------------------ | :------------------ | | Housing Completed or Under Construction | $664 | $660 | | Land and Land Under Development | $7,136 | $0 | | **Total Inventory Impairments** | **$7,800** | **$660** | - Total inventory impairments increased significantly to **$7.8 million** in Q1 2023 from **$0.7 million** in Q1 2022, with the majority in land and land under development in the Mountain segment[120](index=120&type=chunk) [Selling, General and Administrative Expenses](index=31&type=section&id=Selling,%20General%20and%20Administrative%20Expenses) This section reviews selling, general, and administrative expenses, including their components and impact on revenues Selling, General and Administrative Expenses (in thousands) | Expense Type | 2023 (in thousands) | 2022 (in thousands) | % of Home Sale Revenues (2023) | % of Home Sale Revenues (2022) | | :------------------------------------------ | :------------------ | :------------------ | :------------------------------- | :------------------------------- | | General and administrative expenses | $42,776 | $71,983 | 4.2 % | 5.8 % | | Marketing expenses | $23,096 | $25,632 | 2.3 % | 2.1 % | | Commissions expenses | $29,116 | $31,699 | 2.9 % | 2.6 % | | **Total SG&A expenses** | **$94,988** | **$129,314** | **9.3 %** | **10.4 %** | - Total SG&A expenses decreased by **$34.3 million**, and as a percentage of home sale revenues, decreased by **110 basis points** to **9.3%**, primarily due to lower compensation-related costs and reduced headcount[122](index=122&type=chunk) [Other Homebuilding Operating Data](index=32&type=section&id=Other%20Homebuilding%20Operating%20Data) This section provides additional operational metrics for the homebuilding segment, including orders, cancellations, and inventory [Net New Orders and Active Subdivisions](index=32&type=section&id=Net%20New%20Orders%20and%20Active%20Subdivisions) This section presents data on net new home orders, their dollar value, and the number of active subdivisions Net New Orders (in thousands, except homes) | Metric | 2023 Homes | 2023 Dollar Value (in thousands) | 2023 Average Price (in thousands) | 2022 Homes | 2022 Dollar Value (in thousands) | 2022 Average Price (in thousands) | % Change Homes | % Change Dollar Value | % Change Average Price | | :------- | :--------- | :------------------------------- | :-------------------------------- | :--------- | :------------------------------- | :-------------------------------- | :--------------- | :-------------------- | :-------------------- | | West | 1,012 | $566,909 | $560.2 | 1,704 | $1,000,954 | $587.4 | (41)% | (43)% | (5)% | | Mountain | 410 | $237,546 | $579.4 | 920 | $581,971 | $632.6 | (55)% | (59)% | (8)% | | East | 345 | $152,809 | $442.9 | 527 | $253,850 | $481.7 | (35)% | (40)% | (8)% | | **Total** | **1,767** | **$957,264** | **$541.7** | **3,151** | **$1,836,775** | **$582.9** | **(44)%** | **(48)%** | **(7)%** | - Monthly absorption rate decreased by **53%** to **2.56 homes** per community per month in Q1 2023[126](index=126&type=chunk) - Average active subdivisions increased by **18%** to **230** in Q1 2023[127](index=127&type=chunk) [Cancellation Rate](index=33&type=section&id=Cancellation%20Rate) This section reports on home cancellation rates, reflecting changes in market demand and buyer confidence Cancellation Rates | Metric | 2023 | 2022 | | :------------------------------------------ | :----- | :----- | | Cancellations as a Percentage of Homes in Beginning Backlog | 25 % | 8 % | | Cancellations as a Percentage of Gross Sales | 30 % | 17 % | - Increased cancellation rates reflect softening housing market demand and homebuyer sentiment[132](index=132&type=chunk) [Backlog](index=33&type=section&id=Backlog) This section details the home backlog in terms of homes and dollar value, and factors influencing its changes Backlog (in thousands, except homes) | Metric | 2023 Homes | 2023 Dollar Value (in thousands) | 2023 Average Price (in thousands) | 2022 Homes | 2022 Dollar Value (in thousands) | 2022 Average Price (in thousands) | % Change Homes | % Change Dollar Value | % Change Average Price | | :------- | :--------- | :------------------------------- | :-------------------------------- | :--------- | :------------------------------- | :-------------------------------- | :--------------- | :-------------------- | :-------------------- | | West | 1,839 | $1,020,206 | $554.8 | 4,677 | $2,651,123 | $566.8 | (61)% | (62)% | (2)% | | Mountain | 638 | $444,681 | $697.0 | 2,546 | $1,668,048 | $655.2 | (75)% | (73)% | 6 % | | East | 413 | $197,034 | $477.1 | 1,335 | $628,631 | $470.9 | (69)% | (69)% | 1 % | | **Total** | **2,890** | **$1,661,921** | **$575.1** | **8,558** | **$4,947,802** | **$578.1** | **(66)%** | **(66)%** | **(1)%** | - The decrease in backlog was primarily a result of lower net new orders and a shift in consumer preference to quick move-in homes, leading to a focus on speculative construction starts[133](index=133&type=chunk) [Homes Completed or Under Construction (WIP lots)](index=34&type=section&id=Homes%20Completed%20or%20Under%20Construction%20(WIP%20lots)) This section provides data on the number of homes completed or under construction, distinguishing between sold and unsold units Homes Completed or Under Construction | Metric | 2023 | 2022 | % Change | | :------------------------------------ | :----- | :----- | :------- | | Unsold: Completed | 255 | 19 | 1,242 % | | Unsold: Under construction | 1,277 | 313 | 308 % | | **Total unsold started homes** | **1,532** | **332** | **361 %** | | Sold homes under construction or completed | 2,493 | 7,445 | (67)% | | Model homes under construction or completed | 560 | 513 | 9 % | | **Total homes completed or under construction** | **4,585** | **8,290** | **(45)%** | - The significant increase in total unsold started homes is due to higher cancellation rates and a strategic pivot to focus more on speculative construction starts[134](index=134&type=chunk) [Lots Owned and Optioned (including homes completed or under construction)](index=34&type=section&id=Lots%20Owned%20and%20Optioned%20(including%20homes%20completed%20or%20under%20construction)) This section details the total number of lots owned and optioned, reflecting land acquisition strategies Lots Owned and Optioned | Segment | 2023 Lots Owned | 2023 Lots Optioned | 2023 Total | 2022 Lots Owned | 2022 Lots Optioned | 2022 Total | Total % Change | | :-------- | :-------------- | :----------------- | :--------- | :-------------- | :----------------- | :--------- | :------------- | | West | 11,766 | 422 | 12,188 | 15,548 | 4,237 | 19,785 | (38)% | | Mountain | 4,944 | 1,034 | 5,978 | 6,741 | 4,240 | 10,981 | (46)% | | East | 3,281 | 1,495 | 4,776 | 4,318 | 2,728 | 7,046 | (32)% | | **Total** | **19,991** | **2,951** | **22,942** | **26,607** | **11,205** | **37,812** | **(39)%** | - Total owned and optioned lots decreased by **39%** year-over-year, reflecting an intentional slowdown in land acquisition and approval activity due to market uncertainty[135](index=135&type=chunk) - The company aims to maintain a **two to three-year supply** of land[135](index=135&type=chunk) [Financial Services](index=34&type=section&id=Financial%20Services) This section analyzes the performance of the financial services segment, including revenues, pretax income, and mortgage operations data Financial Services Revenues and Pretax Income (in thousands) | Metric | 2023 (in thousands) | 2022 (in thousands) | % Change | | :-------------------------- | :------------------ | :------------------ | :------- | | Total financial services revenues | $29,486 | $29,131 | 1 % | | Total financial services pretax income | $17,970 | $13,383 | 34 % | - Financial services pretax income increased by **34%** due to decreased salary-related expenses (lower headcount) and an increased capture rate in mortgage operations, and higher interest income from insurance operations[136](index=136&type=chunk) Mortgage Operations Data | Metric | 2023 | 2022 | % or Percentage Change | | :------------------------------------------ | :----- | :----- | :--------------------- | | Total Originations (Loans) | 1,221 | 1,314 | (7)% | | Total Originations (Principal) | $555,608 | $605,800 | (8)% | | Capture rate as % of all homes delivered | 66 % | 59 % | 7 % | | Capture rate as % of all homes delivered (excludes cash sales) | 72 % | 62 % | 10 % | | FHA loans as % of product mix | 17 % | 12 % | 5 % | | Conventional loans as % of product mix | 64 % | 68 % | (4)% | | Loans Sold to Third Parties (Loans) | 1,354 | 1,527 | (11)% | | Loans Sold to Third Parties (Principal) | $620,329 | $691,358 | (10)% | [Income Taxes](index=35&type=section&id=Income%20Taxes) This section discusses the effective income tax rate and its drivers for the reporting period - The overall effective income tax rate was **25.9%** for Q1 2023, down from **26.5%** in Q1 2022, primarily due to energy tax credits benefiting 2023[139](index=139&type=chunk) [Critical Accounting Estimates and Policies](index=36&type=section&id=Critical%20Accounting%20Estimates%20and%20Policies) This section confirms the consistency of critical accounting estimates and policies and the nature of management's judgments - The company's critical accounting estimates and policies have not changed from those reported in its 2022 Annual Report on Form 10-K[142](index=142&type=chunk) - Management's estimates and judgments are based on historical experience and other reasonable factors, with actual results potentially differing if future conditions vary significantly[141](index=141&type=chunk) [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses the company's ability to meet its financial obligations and fund operations through available capital [Material Cash Requirements](index=36&type=section&id=Material%20Cash%20Requirements) This section outlines significant future cash obligations, including debt payments, lease payments, and option contracts - Outstanding senior notes totaled **$1.5 billion** in principal, with no maturities within 12 months; future interest payments total **$1.3 billion**, with **$64.2 million** due within 12 months[146](index=146&type=chunk) - Required operating lease future minimum payments were **$28.5 million** at March 31, 2023[146](index=146&type=chunk) - The company had **$20.1 million** in cash deposits and **$2.7 million** in letters of credit securing option contracts to purchase **2,951 lots** for an estimated **$332.8 million**[147](index=147&type=chunk) - Outstanding surety bonds and letters of credit totaled **$359.1 million** and **$116.0 million**, respectively, with estimated completion costs of **$157.3 million** and **$75.1 million**[148](index=148&type=chunk) [Capital Resources](index=36&type=section&id=Capital%20Resources) This section describes the components of the company's capital structure and its adequacy for future needs - The company's capital structure includes stockholders' equity, long-term senior notes, a Revolving Credit Facility, and a Mortgage Repurchase Facility[149](index=149&type=chunk) - Management believes current capital resources, including cash, marketable securities, and available credit, are adequate to satisfy short and long-term capital requirements[149](index=149&type=chunk)[150](index=150&type=chunk) [Senior Notes, Revolving Credit Facility and Mortgage Repurchase Facility](index=37&type=section&id=Senior%20Notes,%20Revolving%20Credit%20Facility%20and%20Mortgage%20Repurchase%20Facility) This section provides details on the company's debt instruments and credit facilities, including terms and covenants - Senior notes are unsecured, guaranteed by homebuilding subsidiaries, and do not contain financial covenants[152](index=152&type=chunk) - The Revolving Credit Facility, with **$1.14 billion** available at March 31, 2023, was amended to a SOFR-based interest rate and is subject to financial covenants (consolidated tangible net worth and leverage tests)[154](index=154&type=chunk)[155](index=155&type=chunk)[157](index=157&type=chunk) - The Mortgage Repurchase Facility provides liquidity to HomeAmerican with a total capacity of **$230 million** and is currently under negotiation for extension[158](index=158&type=chunk) [Dividends](index=38&type=section&id=Dividends) This section reports on cash dividends declared and paid per share during the reporting periods - Cash dividends of **$0.50 per share** were paid for the three months ended March 31, 2023 and 2022[161](index=161&type=chunk) [MDC Common Stock Repurchase Program](index=38&type=section&id=MDC%20Common%20Stock%20Repurchase%20Program) This section details the company's common stock repurchase authorization and any activity under the program - The company is authorized to repurchase up to **4.0 million shares** of common stock but did not repurchase any shares under this program during Q1 2023[162](index=162&type=chunk) - **47,131 shares** were withheld in February 2023 to cover withholding taxes due upon the vesting of restricted stock award shares[181](index=181&type=chunk) [Consolidated Cash Flow](index=39&type=section&id=Consolidated%20Cash%20Flow) This section analyzes the changes in cash flows from operating, investing, and financing activities - Net cash provided by operating activities significantly increased to **$426.2 million** in Q1 2023 (from **$118.1 million** in Q1 2022), driven by a decrease in housing inventory and trade receivables[164](index=164&type=chunk) - Net cash used in investing activities increased to **$244.8 million** in Q1 2023 (from **$6.9 million** in Q1 2022), primarily due to **$434.4 million** in marketable securities purchases, partially offset by **$195.0 million** in maturities[165](index=165&type=chunk) - Net cash used in financing activities decreased to **$93.5 million** in Q1 2023 (from **$126.3 million** in Q1 2022), mainly due to lower net payments on the mortgage repurchase facility[166](index=166&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=40&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section details the company's exposure to market risks, particularly interest rate fluctuations, and its use of financial instruments for mitigation - The company is exposed to market risks related to fluctuations in interest rates on mortgage loans held-for-sale, mortgage interest rate lock commitments (IRLCs), marketable securities, and debt[172](index=172&type=chunk) - Forward sales of mortgage-backed securities are the predominant derivative and financial instruments used to minimize market risk during the period from interest rate lock to loan commitment/sale[84](index=84&type=chunk)[172](index=172&type=chunk)[174](index=174&type=chunk) - At March 31, 2023, HomeAmerican had **$385.7 million** in IRLCs and **$53.8 million** in mortgage loans held-for-sale not yet committed to a mortgage purchaser, hedged by **$362.5 million** in forward sales of securities[172](index=172&type=chunk) [Item 4. Controls and Procedures](index=41&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of disclosure controls and procedures, reporting no material changes in internal control over financial reporting - Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2023[177](index=177&type=chunk) - There were no material changes in internal control over financial reporting during the quarter ended March 31, 2023[177](index=177&type=chunk) [Part II. Other Information](index=42&type=section&id=Part%20II.%20Other%20Information) This section provides additional disclosures on legal proceedings, risk factors, equity sales, and exhibits [Item 1. Legal Proceedings](index=42&type=section&id=Item%201.%20Legal%20Proceedings) This section addresses legal actions in the ordinary course of business, with management expecting no material adverse financial impact - The company is named as defendants in various claims and legal actions arising in the ordinary course of the homebuilding business, including product liability and sales/financing claims[179](index=179&type=chunk) - Management believes the outcome of these matters will not have a material adverse effect on the company's financial condition, results of operations, or cash flows[179](index=179&type=chunk) [Item 1A. Risk Factors](index=42&type=section&id=Item%201A.%20Risk%20Factors) This section confirms no material changes to the risk factors previously disclosed in the company's 2022 Annual Report on Form 10-K - There are no material changes from the risk factors included in the Company's 2022 Annual Report on Form 10-K[180](index=180&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=42&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section reports no common stock repurchases under the program, though shares were withheld for restricted stock vesting taxes - The company did not repurchase any shares of its common stock under its publicly announced repurchase program during the three months ended March 31, 2023[181](index=181&type=chunk) - **47,131 shares** of common stock were withheld in February 2023 to cover withholding taxes due upon the vesting of restricted stock award shares[181](index=181&type=chunk) [Item 6. Exhibits](index=43&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including agreements, plans, certifications, and iXBRL financial statements - Exhibits include the Credit Agreement amendment (April 11, 2023), First Amendment to the 2021 Equity Incentive Plan, Subsidiary Guarantors list, Section 302 and 906 certifications, and iXBRL financial statements[185](index=185&type=chunk) [Signatures](index=43&type=section&id=Signatures) This section contains the official signatures of authorized officers, confirming the submission of the Form 10-Q - The report was signed by Robert N. Martin, Senior Vice President and Chief Financial Officer, and Derek R. Kimmerle, Vice President, Controller and Chief Accounting Officer, on May 2, 2023[185](index=185&type=chunk)

Financial Performance - Home sale revenues for 2022 reached $5.59 billion, a 9% increase from $5.10 billion in 2021[107] - Net income for 2022 was $562.1 million, or $7.67 per diluted share, representing a 2% decrease compared to $573.7 million, or $7.83 per diluted share, in 2021[113] - Homebuilding pretax income increased by $31.8 million, or 5%, to $691.5 million in 2022, driven by a 9% increase in home sale revenues[115] - The effective tax rate increased to 26.0% in 2022 from 23.7% in the prior year, impacting net income[113] - Total financial services revenues fell by 13% to $131.7 million in 2022, down from $152.2 million in 2021[145] - Basic Earnings Per Common Share for 2022 was $7.87, a decrease of 3.2% from $8.13 in 2021[291] - Diluted Earnings Per Common Share for 2022 was $7.67, down from $7.83 in 2021, reflecting a slight decline[291] - Net income attributable to common stockholders for 2022 was $559,396, compared to $570,680 in 2021, indicating a decrease of 2.3%[291] Cash Flow and Liquidity - The company ended 2022 with total cash and cash equivalents of $1.28 billion and total liquidity of $2.43 billion[111] - The company generated cash flow from operating activities of $905.6 million in 2022, a significant improvement from a cash outflow of $207.99 million in 2021[107] - For the year ended December 31, 2022, net cash provided by operating activities was $905.6 million, a significant increase from net cash used of $208.0 million in the prior year[172] - Cash used to increase land and land under development decreased to $95.4 million in 2022 from $502.8 million in 2021, driven by the acquisition of 4,377 lots compared to 15,435 lots in the prior year[172] - Net cash used in investing activities was $585.9 million for the year ended December 31, 2022, compared to $27.7 million in the prior year, primarily due to $656.8 million used for the purchase of marketable securities[173] - Net cash used in financing activities was $206.1 million in 2022, a decrease from net cash provided of $335.2 million in the prior year, largely due to the absence of proceeds from the issuance of senior notes[174] Inventory and Deliveries - For the year ended December 31, 2022, total new home deliveries decreased to 9,710 homes, down 3% from 9,982 homes in 2021[119] - The total number of unsold homes completed increased by 1,484% to 396 homes, while homes under construction rose by 241% to 1,063 homes[143] - The total inventories as of December 31, 2022, were approximately $3.516 billion, down from $3.761 billion in 2021, reflecting a decrease of 6.5%[221] - Total inventory impairments for the year ended December 31, 2022, amounted to $121.9 million, significantly higher than $1.6 million in 2021[128] - The average selling price of homes delivered increased to $575.3 thousand in 2022, a 12% increase from $511.2 thousand in 2021[119] Operational Challenges - The company experienced a cancellation rate above historical averages in the second half of 2022, prompting adjustments in pricing and incentives[109] - The cancellation rate increased to 25% in Q4 2022, up from 9% in Q4 2021, indicating a significant rise in cancellations as a percentage of homes in beginning backlog[141] - The company experienced extended construction cycle times due to permitting delays, supply chain disruptions, and labor shortages, impacting new home deliveries[121] Expenses and Costs - General and administrative expenses increased to $292.3 million in 2022, a rise of 18.8% from $246.0 million in 2021[130] - Marketing expenses slightly decreased to $103.3 million in 2022, down from $104.4 million in 2021[131] - Commissions expenses decreased to $140.7 million in 2022, compared to $143.5 million in 2021, reflecting changes in commission structure[131] - Inventory impairments totaled $121.9 million in 2022, contributing to a decrease in gross margin from home sales[115] - Gross margin from home sales decreased by 70 basis points year-over-year, from 23.1% in 2021 to 22.4% in 2022, primarily due to $121.9 million in inventory impairments[126] Assets and Liabilities - The company’s total assets increased to $5.363 billion in 2022, up from $4.964 billion in 2021, marking a growth of 8.0%[226] - The company’s total liabilities decreased to $2.271 billion in 2022 from $2.366 billion in 2021, a reduction of 4.0%[226] - The company had outstanding senior notes totaling $1.5 billion as of December 31, 2022, with future interest payments totaling $1.3 billion[154] Dividends and Shareholder Returns - The company paid dividends of $2.00 per share in 2022, an increase from $1.67 per share in 2021[169] - The company made dividend payments of $142,417 in 2022, compared to $118,529 in 2021, reflecting a 20.1% increase[234] - The company did not repurchase any shares of its common stock under the repurchase program during the year ended December 31, 2022[170] Mortgage and Financing - The average FICO score improved by 1% to 744 in 2022, compared to 740 in 2021[148] - The average combined loan-to-value (LTV) ratio was 81% in 2022, a decrease of 3% from 84% in 2021[148] - Total loan originations decreased by 6% to $5,876 million in 2022 from $6,247 million in 2021, while principal increased by 5% to $2,746,903 million[148] - The company has a total capacity of $300 million under the Mortgage Repurchase Facility as of December 31, 2022[165] - The company utilizes forward sales of mortgage-backed securities to hedge against interest rate fluctuations, with changes in fair value recorded in revenues[267]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _____________________________________________ FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 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 84-06229 ...

Financial Performance - For the three months ended June 30, 2022, the company reported net income of $189.5 million, or $2.59 per diluted share, a 23% increase from $154.4 million, or $2.11 per diluted share, in the prior year[108]. - Home sale revenues for the three months ended June 30, 2022, were $1,450.8 million, a 6% increase compared to $1,367.8 million in the same period of the previous year[103]. - The gross margin from home sales increased by 370 basis points to 26.8% for the three months ended June 30, 2022, compared to 23.1% in the prior year[103]. - Homebuilding pretax income for the three months ended June 30, 2022, was $240.3 million, an increase of 28% from $187.5 million in the same period last year[114]. - Financial services pretax income for the three months ended June 30, 2022, was $18.7 million, a 4% increase from $18.0 million in the prior year[103]. - The effective income tax rate increased to 26.8% for the three months ended June 30, 2022, compared to 24.9% in the same period of 2021, resulting in an income tax expense of $69.4 million[150]. Sales and Orders - The dollar value of net new home orders decreased by 40% year-over-year, driven by a 48% decrease in the number of net new orders, partially offset by a 16% increase in the average selling price[109]. - The number of net new orders decreased by 48% to 1,404 homes for the three months ended June 30, 2022, compared to 2,714 homes in the same period of 2021[132]. - The cancellation rate increased due to a rise in mortgage interest rates during the first half of 2022, impacting net new orders[131]. - For the three months ended June 30, 2022, the cancellation rate increased to 10% from 6% year-over-year, attributed to rising mortgage interest rates impacting homebuyers[140]. - As of June 30, 2022, the backlog consisted of 7,426 homes valued at $4.44 billion, reflecting a 3% decrease in the number of homes but an 8% increase in dollar value compared to the previous year[141]. Assets and Liquidity - Total cash and cash equivalents at the end of the quarter were $590.2 million, with total liquidity of $1.74 billion and no senior note maturities until 2030[106]. - Total homebuilding assets increased by 7% from December 31, 2021, to June 30, 2022, reaching $4,879.3 million[117]. - The company controlled 33,130 lots at the end of the quarter, representing a 4% decrease from the prior year[106]. - The company maintains a liquidity position with an effective shelf registration statement allowing for the issuance of up to $5.0 billion in securities, with the full amount remaining available[156]. - As of June 30, 2022, the company had outstanding senior notes totaling an aggregate principal amount of $1.5 billion, with future interest payments of $1.3 billion[158]. Operational Challenges - The company experienced production challenges due to supply chain disruptions and labor market tightness, impacting cycle times year-over-year[105]. - The total unsold started homes increased to 653, a 180% rise from 233 in the prior year, primarily due to the increased cancellation rate[142]. - The total owned and optioned lots decreased by 4% year-over-year to 33,130, reflecting a strategic slowdown in land acquisition due to market uncertainty[143]. Financial Services - Financial services revenues for the three months ended June 30, 2022, increased by 9% to $36.2 million, while the pretax income for financial services decreased by 24% to $10.7 million[145]. - Total mortgage loan originations decreased by 3% to 1,517 loans for the three months ended June 30, 2022, with principal amounting to $703.3 million, a 9% increase from the previous year[149]. - The capture rate as a percentage of all homes delivered was 60% for the three months ended June 30, 2022, up from 57% year-over-year[149]. - HomeAmerican's mortgage loans in process with interest rate lock commitments not yet closed totaled an aggregate principal balance of $871.8 million as of June 30, 2022, with $556.6 million not yet committed to a mortgage purchaser[184]. - The company had mortgage loans held-for-sale with an aggregate principal balance of $190.3 million at June 30, 2022, of which $55.1 million had not yet been committed to a mortgage purchaser[184]. Expenses - General and administrative expenses rose by $10.9 million to $72.9 million for the three months ended June 30, 2022, representing 5.0% of home sale revenues[128]. - The total selling, general and administrative expenses increased by $4.99 million to $133.8 million for the three months ended June 30, 2022[128]. - Cash used to increase housing completed or under construction was $468.3 million for the six months ended June 30, 2022, compared to $385.7 million in the prior year[176]. Financing Activities - The company incurred net cash used in financing activities of $164.6 million for the six months ended June 30, 2022, compared to net cash provided of $238.8 million in the prior year[178]. - The Revolving Credit Facility was amended to increase the aggregate commitment from $1.0 billion to $1.2 billion, with a potential increase to $1.7 billion upon request[165]. - As of June 30, 2022, the availability under the Revolving Credit Facility was approximately $1.14 billion[169]. - The company had deposits of $43.6 million in cash and $11.6 million in letters of credit securing option contracts to purchase 7,296 lots for an estimated total purchase price of $743.1 million[159]. Interest Rate Impact - Changes in interest rates do not affect the fair value of fixed-rate debt instruments, but they do impact earnings and cash flows for variable-rate debt[187]. - The company does not have an obligation to prepay its senior notes prior to maturity, mitigating interest rate risk impact on financial position[187].

Part I. Financial Information [Financial Statements](index=3&type=section&id=Item%201.%20Unaudited%20Consolidated%20Financial%20Statements) For Q1 2022, M.D.C. Holdings, Inc. reported total assets of **$5.06 billion**, net income of **$148.4 million** (up 34%), and positive operating cash flow of **$118.1 million** | Financial Metric | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | | :--- | :--- | :--- | | Total Assets | $5,059,114 | $4,963,528 | | Total Liabilities | $2,348,032 | $2,366,382 | | Total Stockholders' Equity | $2,711,082 | $2,597,146 | | Income Statement Highlights (Three Months Ended March 31) | 2022 (in thousands) | 2021 (in thousands) | | :--- | :--- | :--- | | Home Sale Revenues | $1,240,520 | $1,041,858 | | Net Income | $148,421 | $110,690 | | Diluted EPS | $2.02 | $1.51 | | Cash Flow Highlights (Three Months Ended March 31) | 2022 (in thousands) | 2021 (in thousands) | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $118,055 | $(57,957) | | Net cash (used in) investing activities | $(6,884) | $(5,749) | | Net cash provided by (used in) financing activities | $(126,280) | $336,342 | - Subsequent to quarter-end, the company agreed to acquire homebuilding assets of The Jones Company of Tennessee, L.L.C. for approximately **$117.3 million** in cash to scale Nashville operations[99](index=99&type=chunk)[100](index=100&type=chunk) [Segment Reporting](index=8&type=section&id=3.%20Segment%20Reporting) The company's Q1 2022 homebuilding revenues increased 19% to **$1.24 billion**, with pretax income up 66% to **$188.5 million**, while financial services pretax income declined 57% to **$13.4 million** | Homebuilding Revenues by Segment | Q1 2022 (in thousands) | Q1 2021 (in thousands) | | :--- | :--- | :--- | | West | $707,311 | $616,611 | | Mountain | $335,128 | $324,717 | | East | $198,081 | $100,530 | | **Total** | **$1,240,520** | **$1,041,858** | | Pretax Income by Segment | Q1 2022 (in thousands) | Q1 2021 (in thousands) | | :--- | :--- | :--- | | Total Homebuilding | $188,499 | $113,507 | | Total Financial Services | $13,383 | $30,805 | | **Total Pretax Income** | **$201,882** | **$144,312** | [Inventories](index=12&type=section&id=6.%20Inventories) Total inventories increased to **$3.93 billion** as of March 31, 2022, primarily driven by a rise in housing completed or under construction, with a minor impairment recorded in the West segment | Inventory Breakdown | March 31, 2022 (in thousands) | Dec 31, 2021 (in thousands) | | :--- | :--- | :--- | | Housing completed or under construction | $2,194,303 | $1,917,616 | | Land and land under development | $1,734,515 | $1,843,235 | | **Total Inventories** | **$3,928,818** | **$3,760,851** | - An inventory impairment of **$660,000** was recognized in the West segment for one subdivision during Q1 2022, with no impairments in Q1 2021[49](index=49&type=chunk)[50](index=50&type=chunk) [Commitments and Contingencies](index=20&type=section&id=16.%20Commitments%20and%20Contingencies) As of March 31, 2022, the company had **$383.8 million** in surety bonds, **$205.1 million** in letters of credit, and option contracts for **11,205 lots** with **$58.3 million** in at-risk deposits - The company has option contracts to purchase **11,205 lots**, secured by **$45.0 million** in cash deposits and **$13.3 million** in letters of credit[81](index=81&type=chunk) - Outstanding surety bonds and letters of credit totaled **$383.8 million** and **$205.1 million**, respectively, to support various operational obligations[78](index=78&type=chunk) [Lines of Credit](index=21&type=section&id=18.%20Lines%20of%20Credit) The company maintains a **$1.2 billion** unsecured Revolving Credit Facility with **$1.14 billion** available, and its financial services subsidiary uses a Mortgage Repurchase Facility with a **$178.2 million** obligation - The Revolving Credit Facility has a total commitment of **$1.2 billion**, with **$10.0 million** drawn and **$51.7 million** in letters of credit outstanding, leaving **$1.14 billion** available at March 31, 2022[86](index=86&type=chunk)[90](index=90&type=chunk) - The Mortgage Repurchase Facility had a repurchase obligation of **$178.2 million** at March 31, 2022, down from **$256.3 million** at year-end 2021[92](index=92&type=chunk) [Management's Discussion and Analysis (MD&A)](index=25&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management reported a resilient housing market in Q1 2022, with a focus on price increases leading to a **25.7%** gross margin, **$148.4 million** net income, and **$1.73 billion** in liquidity - The company's Q1 strategy focused on raising sales prices to offset cost increases and manage construction capacity, resulting in a **25.7%** gross margin, up **380 basis points** year-over-year[103](index=103&type=chunk) - Net income for Q1 2022 increased **34%** to **$148.4 million**, driven by a **66%** increase in homebuilding pretax income, partially offset by a **57%** decrease in financial services pretax income[107](index=107&type=chunk) - The dollar value of net new home orders increased **12%** year-over-year, driven by a **14%** increase in average selling price, while the number of net new orders decreased by **2%**[108](index=108&type=chunk) - The company ended the quarter with total liquidity of **$1.73 billion** and a debt-to-capital ratio of **35.5%**[105](index=105&type=chunk) [Homebuilding Operations Analysis](index=27&type=section&id=MD%26A%20Homebuilding%20Operations) Homebuilding pretax income surged **66%** to **$188.5 million** on **19%** higher revenues of **$1.24 billion**, driven by increased average selling prices and an expanded gross margin of **25.7%** | Home Deliveries & Revenue (Q1 2022 vs Q1 2021) | Homes Delivered | % Change | Home Sale Revenues ($M) | % Change | | :--- | :--- | :--- | :--- | :--- | | **Total** | **2,233** | **3%** | **$1,240.5M** | **19%** | | Net New Orders (Q1 2022 vs Q1 2021) | Homes | % Change | Dollar Value ($M) | % Change | | :--- | :--- | :--- | :--- | :--- | | **Total** | **3,151** | **(2)%** | **$1,836.8M** | **12%** | | Backlog (as of March 31) | 2022 | 2021 | % Change | | :--- | :--- | :--- | :--- | | Homes | 8,558 | 7,686 | 11% | | Dollar Value | $4,947.8M | $3,927.3M | 26% | - Gross margin from home sales increased **380 basis points** to **25.7%** in Q1 2022 from **21.9%** in Q1 2021, driven by price increases across nearly all communities[122](index=122&type=chunk) [Financial Services Operations Analysis](index=32&type=section&id=MD%26A%20Financial%20Services%20Operations) Financial services pretax income significantly decreased by **57%** to **$13.4 million** in Q1 2022, primarily due to mortgage operations' profitability returning to historical levels and a lower mortgage capture rate - Financial services pretax income decreased by **$17.4 million** (**57%**) year-over-year, mainly because mortgage operations profitability returned to more historical levels after a record Q1 2021[140](index=140&type=chunk) | Mortgage Operations Data (Q1) | 2022 | 2021 | | :--- | :--- | :--- | | Total Originations (Principal) | $605.8M | $616.0M | | Capture Rate (% of all homes delivered) | 59% | 72% | [Liquidity and Capital Resources](index=34&type=section&id=MD%26A%20Liquidity%20and%20Capital%20Resources) The company maintains a strong capital position with **$1.5 billion** in senior notes outstanding, **11,205** optioned lots, and **$118.1 million** in positive operating cash flow, ensuring adequate resources for future needs - At March 31, 2022, the company had outstanding senior notes with an aggregate principal of **$1.5 billion**, with no maturities within 12 months[151](index=151&type=chunk) - The company had deposits securing option contracts to purchase **11,205 lots** for a total estimated price of **$1.02 billion**[152](index=152&type=chunk) - Net cash from operating activities was **$118.1 million**, a significant turnaround from a **$58.0 million** use of cash in Q1 2021, primarily driven by net income and changes in working capital[169](index=169&type=chunk) [Market Risk Disclosures](index=38&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces interest rate risk, primarily in mortgage operations, which it hedges using derivatives like interest rate lock commitments (**$521.1 million**) and forward sales of mortgage-backed securities (**$378.5 million**) - The company's primary market risk is interest rate fluctuations, which impact its mortgage loans held-for-sale, interest rate lock commitments, and variable-rate debt[177](index=177&type=chunk) - To manage risk, HomeAmerican had **$521.1 million** in interest rate lock commitments and hedged its positions with **$378.5 million** in forward sales of securities at quarter-end[177](index=177&type=chunk) [Controls and Procedures](index=39&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2022, with no material changes to internal control over financial reporting during the quarter - Management concluded that disclosure controls and procedures were effective as of the end of the reporting period[182](index=182&type=chunk) - There were no material changes to internal control over financial reporting during the first quarter of 2022[182](index=182&type=chunk) Part II. Other Information [Legal Proceedings](index=40&type=section&id=Item%201.%20Legal%20Proceedings) Management believes ongoing legal actions arising from ordinary business operations will not materially affect the company's financial condition, results, or cash flows - In management's opinion, legal actions arising from the ordinary course of business are not expected to have a material adverse effect on the company's financials[184](index=184&type=chunk) [Risk Factors](index=40&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors previously disclosed in the company's 2021 Annual Report on Form 10-K were reported - No material changes from the risk factors included in the Company's 2021 Annual Report on Form 10-K were reported[185](index=185&type=chunk) [Share Repurchases and Use of Proceeds](index=40&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not repurchase shares under its program in Q1 2022, but withheld **32,926** shares for employee tax obligations related to restricted stock vesting - The company is authorized to repurchase up to **4,000,000** shares of its common stock but made no repurchases under this program during Q1 2022[186](index=186&type=chunk) - **32,926** shares were withheld in February 2022 to satisfy employee tax obligations upon the vesting of restricted stock[186](index=186&type=chunk)

Financial Performance - Home sale revenues for 2021 reached $5.10 billion, a 36% increase from $3.77 billion in 2020[110] - Gross profit for 2021 was $1.18 billion, with a gross margin of 23.1%, up from 20.8% in 2020[110] - The company reported a net income of $573.7 million for 2021, a 56% increase compared to $367.6 million in 2020[116] - Homebuilding pretax income for 2021 was $659.7 million, a 74% increase from $378.5 million in 2020, driven by improved pricing and operating leverage[118] - Total pretax income reached $751,694 thousand in 2021, a 64.2% increase from $457,512 thousand in 2020[293] - Basic earnings per share for 2021 was $8.13, compared to $5.33 in 2020, marking a 52.5% increase[228] - Basic earnings per share (EPS) for 2021 was $8.13, up 52.9% from $5.33 in 2020, while diluted EPS was $7.83, an increase of 51.5% from $5.17 in 2020[296] Sales and Deliveries - For the year ended December 31, 2021, total new home deliveries increased to 9,982 homes, up 22% from 8,158 homes in 2020[122] - The average selling price of homes delivered rose to $511.2 thousand, reflecting an 11% increase from $461.6 thousand in 2020[122] - The average selling price of new home orders increased by 11% year-over-year, contributing to an 11% increase in the dollar value of net new home orders[117] - The West segment delivered 5,732 homes with an average selling price of $517.2 thousand, a 30% increase in homes delivered and an 8% increase in average price from 2020[122] - The Mountain segment saw a 9% increase in homes delivered to 2,770, with an average selling price of $565.8 thousand, up 11% from the previous year[122] - The East segment delivered 1,480 homes, with a 22% increase in homes delivered and a 28% increase in average selling price to $385.5 thousand[122] Backlog and Inventory - The backlog at December 31, 2021, was 7,640 homes valued at $4.30 billion, representing a 15% increase in units and a 32% increase in dollar value from the previous year[114] - Total owned and optioned lots increased by 29% to 38,080 lots as of December 31, 2021, supporting future growth[148] - Homes completed or under construction rose by 31% year-over-year, with sold homes under construction increasing by 33%[147] - Total inventories reached $3,760,851 thousand, up 32.7% from $2,832,230 thousand in 2020[226] Financial Services - Financial services pretax income reached a record $92.0 million in 2021, a 16% increase from $79.0 million in 2020[110] - Financial services revenues grew by $16.4 million, or 12%, driven by a $10.5 million increase in the other financial services segment[149] - Total financial services revenues rose to $152,212 thousand in 2021, compared to $135,832 thousand in 2020, marking a 12.5% increase[293] - Mortgage loan originations increased by 10% to 6,247 loans, with principal amount rising by 23% to $2.62 billion[153] Expenses and Liabilities - Total selling, general and administrative expenses increased to $493.993 million, a rise of 22.5% from $403.218 million in 2020[133] - The company recorded an income tax provision of $178.0 million for 2021, resulting in an effective tax rate of 23.7%[154] - Total liabilities increased to $2,366,382 thousand, a rise of 35.6% from $1,745,008 thousand in 2020[226] - The company reported a loss on retirement of debt of $23,571,000 in 2021, with no such loss reported in 2020[234] Cash Flow and Liquidity - The company ended the year with total liquidity of $1.75 billion, lowering the debt to capital ratio to 36.5%[115] - Net cash used in operating activities was $208.0 million, compared to $23.1 million in the prior year, driven by increased housing inventory and land purchases[178] - Cash used to increase land and land under development was $497.4 million for the year ended December 31, 2021, significantly up from $15.0 million in the prior year, reflecting the acquisition of 15,435 lots[178] - Net cash provided by financing activities was $335.2 million for the year ended December 31, 2021, primarily due to proceeds from the issuance of senior notes totaling $694.7 million[180] Market Conditions and Risks - The average sale-to-close cycle time increased to approximately 36 weeks, up five weeks year-over-year due to supply chain disruptions and labor shortages[122] - The cancellation rate decreased from 19% in 2020 to 17% in 2021, with notable reductions in the East and Mountain regions[143] - The company assesses inventory impairment by comparing estimated future cash flows to carrying value, with significant reliance on Level 3 inputs such as future home sale revenues and construction costs[185] Stockholder Information - Dividends paid increased from $1.29 per share in 2020 to $1.67 per share in 2021, alongside an 8% stock dividend distribution[175] - The company’s dividend payments for 2021 were $118,529,000, compared to $89,008,000 in 2020, representing a 33.2% increase[234] Debt and Financing - The company accelerated the retirement of $250 million in senior notes with a 5.500% interest rate, originally due in January 2024, during the year ended December 31, 2021[162] - The Revolving Credit Facility was amended to increase the aggregate commitment from $1.0 billion to $1.2 billion, with a potential increase to $1.7 billion upon request[166] - As of December 31, 2021, the company had $10.0 million in borrowings and $40.1 million in letters of credit outstanding under the Revolving Credit Facility, leaving a remaining borrowing capacity of $1.15 billion[170]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _____________________________________________ FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File No. 1-8951 Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated fil ...