MDC(US:MDC)2025-02-11 22:27Home Sale Revenues - Home sale revenues for 2024 reached $5,285.4 million, a 17% increase from $4,520.3 million in 2023[109] - Home sale revenues for 2024 reached $5,285,366, an increase of 16.9% compared to $4,520,296 in 2023, but a decrease of 5.4% from $5,586,264 in 2022[223] Homebuilding Income and Expenses - Homebuilding pretax income for 2024 was $311.5 million, a decrease of 31% compared to $450.1 million in 2023, primarily due to increased selling, general and administrative expenses[114][118] - The company reported a net income of $323.2 million for 2024, a 19% decrease from $401.0 million in the previous year[114] - The gross margin from home sales decreased by 40 basis points year-over-year, from 17.8% to 17.4% for the year ended December 31, 2024[124] - General and administrative expenses increased to $344.975 million in 2024, a rise of $141.097 million compared to 2023, representing 6.5% of home sale revenues[128] - Total selling, general and administrative expenses reached $619.536 million in 2024, up by $189.642 million from 2023, representing 11.7% of home sale revenues[128] Homebuilding Assets and Inventory - Total homebuilding assets decreased by 8% to $4,679.8 million as of December 31, 2024, driven by a significant reduction in the Corporate segment[119] - The total number of unsold completed homes increased by 316% to 1,411, while homes under construction rose by 27% to 3,442, resulting in a total of 4,853 unsold started homes, a 59% increase[143] - The company owned and optioned a total of 25,993 lots as of December 31, 2024, marking a 16% increase from the previous year[144] - Total inventories increased to $3.75 billion in 2024, up from $3.30 billion in 2023, representing a growth of about 13.6%[221] - The company incurred impairment charges of $16.8 million against inventories of approximately $3.8 billion as of December 31, 2024[217] Financial Services Performance - Financial services pretax income increased by 24% to $93.9 million, driven by higher volume and capture rates in mortgage operations[114] - Financial services revenues for the year ended December 31, 2024, totaled $148.7 million, a 21% increase from $122.6 million in 2023[145] - Total mortgage loan originations increased by 35% to 7,317 loans, with principal amounting to $3.41 billion, a 39% increase from the previous year[147] - The capture rate for mortgage loans as a percentage of all homes delivered was 76%, up from 66% in 2023[147] Cash Flow and Liquidity - The company ended the quarter with total cash and cash equivalents of $837.9 million and total liquidity of $1.72 billion[113] - Cash and cash equivalents decreased to $605.7 million in 2024 from $1.48 billion in 2023, a decline of about 59%[221] - For the year ended December 31, 2024, net cash used in operating activities was $66.7 million, a significant decrease from cash provided by operating activities of $561.6 million in the prior year[169] - Net cash provided by investing activities decreased to $66.1 million in 2024 from $469.4 million in 2023, primarily due to a decrease in the beginning balance of marketable securities[170] - Net cash used in financing activities increased to $803.3 million in 2024 from $105.3 million in 2023, driven by an increase in distribution to Parent of $611.4 million related to the Merger[171] Market and Operational Changes - The company completed a merger on April 19, 2024, with SH Residential Holdings, LLC, which is expected to enhance operational capabilities and market reach[231] - The cancellation rate as a percentage of gross sales decreased to 17% in 2024, down from 25% in 2023[141] - The average active subdivisions decreased by 23% from 226 in 2023 to 173 in 2024[132] - The East segment experienced a 39% increase in net new orders, driven by an increase in spec home inventory[138] Tax and Compliance - The company recorded an income tax provision of $82.2 million for the year ended December 31, 2024, with an effective tax rate of 20.3%[148] - The company believes it was in compliance with all financial covenants included in the Revolving Credit Facility as of December 31, 2024[162] Insurance and Warranty Reserves - The company reported insurance reserves of $96.9 million for estimated construction defect claims as of December 31, 2024[213] - A 10% increase in claim frequency and average cost per claim would raise insurance reserves by approximately $20.3 million, while a 10% decrease would lower reserves by about $18.4 million[186] - The company has established reserves for construction defect claims based on actuarial studies, which may significantly impact financial results if payment experiences change[263] Debt and Financing - As of December 31, 2024, the company had outstanding senior notes totaling $1.50 billion, with future interest payments amounting to $1.19 billion[153] - The company entered into a new unsecured revolving credit agreement with a commitment of up to $900 million, which may increase to $1.40 billion upon request[159] - The total carrying amount of senior notes as of December 31, 2024, was $1,484,267 thousand, with a fair value of $1,340,119 thousand[307]